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IMF raises alarm over Spain
June 22, 2011-- The IMF warned on Tuesday of "considerable" risks to Spain's battered economy, saying the authorities had responded robustly to the serious challenges but repairs were incomplete
Spain faced grave economic risks if it failed to crack down harder on spending, shake up the financial sector and loosen up the labour market, the International Monetary Fund said.
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Source: FIN24
Euro-securities will be explored: Rehn
June 22, 2011--- The European Commission has agreed to examine possible legislation to create bonds issued directly at eurozone level, EU economy commissioner Olli Rehn told the European Parliament on Wednesday.
"You have got a commitment from the commission to do a study on euro-securities within six months of the entry into force of the legislation," he said, referring to new laws aimed at reinforcing cross-border eurozone economic governance.
Legislation intended to punish countries which fail to meet common EU macro-economic targets consistently will be voted on by the European Parliament on Thursday.
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Source: EUbusines
BlackRock ETF Landscape: STOXX Europe 600 Sector ETF Net Flows - Week Ending 17-Jun-2011
June 22, 2011--For the week ending 17 June 2011, there were US$83.2 Mn net outflows from STOXX Europe 600 sector ETFs. The largest sector ETF net outflows last week were in healthcare with US$86.2 Mn followed by oil and gas with US$64.4 Mn net outflows while industrial goods and services experienced net inflows of US$67.3 Mn.
Year to date, STOXX Europe 600 sector ETFs have seen US$4.6 Mn net inflows. Banks has seen the largest net inflows with US$268.4 Mn, followed by healthcare with US$218.9 Mn net inflows while basic resources experienced the largest net outflows with US$190.5 Mn.
As of 17 June 2011, there is US$9.9 Bn AUM invested in the STOXX sector ETFs which is greater than the US$5.2 Bn open interest in the sector futures. The ETF AUM is greater than the open interest in the corresponding futures contract in 16 out of 19 sectors..
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Source: Global ETF Research & Implementation Strategy Team, BlackRock
Eurozone members will not let euro fail: Britain
June 21, 2011--- Countries in the eurozone have an enormous amount invested in the single currency and will not let the Greek crisis bring it down, British Prime Minister David Cameron said on Tuesday.
"The countries that joined the euro have an enormous amount invested in it and do not want it to, and will not let it, fail," he told reporters in London.
"They see it as an absolutely key part now of their national interest and identities and I would not doubt their resolve in any way."
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Source: EUbusiness
Euro area investment fund statistics
June 21, 2011--In April 2011, the amount outstanding of shares/units issued by euro area investment funds other than money
market funds was EUR 34 billion higher than in March 2011. This increase was due mainly to net issues of
shares/units.
The amount outstanding of shares/units issued by euro area investment funds other than money market funds increased to EUR 5,790 billion in April 2011, from EUR 5,756 billion in March
2011. Over the same period, the amount outstanding of shares/units issued by euro area money market funds decreased to EUR 1,071 billion from EUR 1,077 billion.
Transactions1 in shares/units issued by euro area investment funds other than money market funds amounted to EUR 26 billion in April 2011, while transactions in shares/units issued by money market funds amounted to EUR 6 billion.
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Source: ECB
STOXX Launches Currency Hedged Version Of European Benchmark Index
June 21, 2011--STOXX Limited, the market-moving provider of innovative, tradable and global index concepts, today introduced the STOXX Europe 600 Hedged EUR Index. The new index is a currency hedged strategy benchmark aimed at investors seeking exposure to the well-known STOXX Europe 600 Index, while at the same time looking to reduce the risk of currency fluctuations.
The new index is designed to act both as a proper benchmark for actively managed funds, and to underlie exchange-traded funds and other investable products.
“With the launch of the STOXX Europe 600 Hedged EUR Index, we are offering market participants a single, innovative and rules-based tool that enables them to follow the performance of the renowned STOXX Europe 600 Index, while at the same time limiting the risks of currency fluctuations,” said Hartmut Graf, chief executive officer, STOXX Limited. “This new index caters to the needs of our growing global client base, and thus marks another milestone in STOXX’s global expansion.”
The STOXX Europe 600 Hedged EUR Index replicates a hypothetical investment portfolio that is designed to represent the returns of the STOXX Europe 600 Net Return Index while hedging the currency risk, but not the underlying constituent risk. Market participants who employ a currency-hedged investment strategy are generally willing to forgo potential currency gains in exchange for the reduction in the risks associated with foreign exchange fluctuations. To achieve this, the index combines the performance of the underlying STOXX Europe 600 Index with a hypothetical, rolling investment into one-month foreign exchange forward contracts.
The underlying STOXX Europe 600 Index is reviewed quarterly in March, June, September and December. Daily history is available back to December 30, 1998.
Please see www.stoxx.com for further information on this index family.
Source: STOXX
Statistics on Mortgage Lending: June 2011 Edition
June 21, 2011--Since the beginning of 2007, some 300 regulated mortgage lenders and administrators have been required to submit a Mortgage Lending & Administration Return (MLAR) each quarter, providing data on their mortgage lending activities.
This latest edition covers the period from 2009 Q4 to the 2011 Q1. We publish statistics approximately 2½ months after the end of each quarter. Provisional dates are shown under future editions.
The MLAR covers both regulated and non-regulated residential lending to individuals. Regulated loans are secured by a first charge on residential property, where the property is for the use of the borrower or a close relative. Non-regulated lending includes buy to let, second charge and, in some cases, further advances on loans that were originally taken out before regulation came into effect.
Key statistics for Q1 2011 are as follows1:
The total value of outstanding loans reduced slightly from last quarter to £1,212bn in Q1.
New advances in the quarter totalled £33bn, 10% lower than in Q4 but 3% up on the amount advanced in Q1 2010.
New commitments totalled £35bn, 1% up on last quarter and 3% up on Q1 last year.
Lending for house purchase represented a reduced share of new lending this quarter, accounting for some 54% of new advances and 52% of new
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Source: FSA.gov.uk
GDP per capita in the Member States varied between 43% and 283% of the EU27 average
June 21, 2011--Based on first preliminary estimates for 20101, Gross Domestic Product (GDP) per capita expressed in Purchasing Power Standards2(PPS) varied from 43% to 283% of the EU27 average across the Member States.
In Spain, Italy and Cyprus, GDP per capita was around the EU27 average, while in France it was around 5% above the average. Germany, Belgium, Finland and the United Kingdom were between 10% and 20% above the average,
while Denmark, Ireland, Austria and Sweden were all around 25% above the average. The Netherlands was about one third above the average, while the highest level of GDP per capita in the EU27 was recorded in Luxembourg3.
Greece, Slovenia, Malta, Portugal and the Czech Republic were between 10% and 20% lower than the EU27 average, while Slovakia was around 25% below. Estonia, Hungary, Poland, Lithuania and Latvia were between 35% and 50% lower, while Romania and Bulgaria were around 55% below the EU27 average.
These figures for GDP per capita, expressed in PPS, are published by Eurostat, the statistical Office of the European Union. They cover the 27 EU Member States, three EFTA countries, four candidate countries and three Western Balkan countries.
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Source: Eurostat
OECD Economic Survey of Iceland 2011
June 21, 2011--Summary
Iceland is resolving the economic problems left by the financial crisis. It is well advanced in implementing the comprehensive programme agreed with the IMF. The economy stopped contracting by late 2010 and a consumption and business investment-led recovery is projected to gather momentum, lifting economic growth to 3 per cent by 2012. Inflation is projected to remain low and the underlying current account surplus to be sustained.
Much has been done to restore the financial sector to health. The banking system was recapitalised by the end of 2009 and steps have recently been taken to accelerate private-sector debt restructuring. Reforms have been made to regulation and supervision to address shortcomings exposed by the financial crisis. The Central Bank of Iceland (CBI) and the Financial Supervisory Authority (FME) have signed a co-operation agreement to strengthen macro-prudential supervision, although policy implementation could be more effective if the FME were merged into the CBI, thereby expanding the CBI’s responsibilities to include prudential regulation and supervision. A strategy to relax capital controls was recently adopted, with a period of liberalization likely to span several years.
The monetary policy framework needs to be strengthened. Monetary policy alone has not been very effective either in countering the credit cycle or in delivering price stability. To improve performance, the CBI should adopt an inflation targeting regime that places greater weight on smoothing fluctuations in the exchange rate and is supported by fiscal policy and macro-prudential regulation. In the event that Iceland joins the EU, it should seek to adopt the euro as quickly as possible.
The government has begun to put the public finances on a sustainable path. The budget deficit is set to fall below 3% of GDP in 2011, and a small surplus is projected by 2013. The fiscal framework has been strengthened but the government should go further by adopting a medium-term budget balance fiscal rule consistent with a debt target.
view overview of OECD Economic Surveys
ICELAND
Source: OECD
Eurozone current account shows EUR 5.1bn deficit
June 20, 2011-- The eurozone's current account balance worsened in April to show a deficit of 5.1 billion euros ($7.3 billion), the European Central bank said Monday.
The ECB also revised the figure for the month of March in the 17-nation area to a deficit of 3.0 billion euros from an initial estimate of 4.7 billion euros.
The current account on the balance of payments, which includes imports and exports in both goods and services plus capital transfers, is a closely tracked indicator of a country's or area's ability to pay its way in the world.
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Source: EUbusiness
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