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Capital requirements: much work still to be done on new Basel standards
September 14, 2010--The new capital requirement standards agreed by the Basel Banking Committee on Sunday tackle some of the right issues, but need much more work to transpose them into laws that ensure a global level playing field, reduce risk and do not hamper economic growth, says an own-initiative resolution approved by Parliament's Economic Affairs Committee on Monday.
The resolution gives a foretaste of the position that Parliament could take later this year on the European Commission proposals to update the Capital Requirements Directive (CRD IV), which is to transpose the Basel standards into EU law.
"This is an awareness raising resolution. It sends a clear message that developing the Basel standards without proper preparation is not something acceptable", said author of the resolution Othmar Karas (EPP, AT) just before the vote. "A binding decision for Europe will only be reached when there is agreement between the Council and Parliament on the Commission's legislative proposals" he added.
The key points raised in the resolution are that:
there has been no cumulative impact assessment of the effect on banks of the new Basel standards, and all other regulations currently in force or under preparation,
no analysis has been undertaken of the effects on the real economy of the figures agreed in Basel. The Commission should produce a comprehensive assessment of the consequences of the new standards,
European specificities regarding corporate financing need to be taken into account in the Commission's legislative proposal. A "one size fits all approach" could stifle economic recovery,
the definition of what is to be considered as "capital" is still pending. The Commission must look closely at the eligibility criteria for core tier 1 capital when it draws up the CRD IV proposals,
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Source: European Parliament
Turkey Growth Equals China as GDP Recoups Lehman Loss
September 14, 2010--Turkey’s economy grew an annual 10.3 percent in the second quarter as record-low interest rates helped push output above the level it reached before the 2008 collapse of Lehman Brothers Holdings Inc.
The increase, which matched China’s as the fastest expansion in the period among the Group of 20 major economies, followed growth of 11.7 percent in the first quarter, the state statistics agency in Ankara said today on its website. The median estimate of seven economists surveyed by Bloomberg was 9 percent. The economy grew 3.7 percent from the previous quarter after seasonal adjustment.
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Source: FT.com
Swiss franc soars on rate rise forecast
September 14, 2010--The Swiss franc hit parity against the dollar for the first time in 10 months on Tuesday and threatened to hit a record high against the euro as one of Switzerland’s leading banks forecast an imminent interest rate rise from the Swiss National Bank.
UBS predicted that the SNB would deliver a 25 basis point rise in interest rates at its policy meeting on Thursday, contrary to a virtually unanimous consensus among other observers for unchanged rates.
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Source: FT.com
Industrial production stable in both euro area and EU27
September 14, 2010--In July 2010 compared with June 2010, seasonally adjusted industrial production1 remained stable in both the euro area2 (EA16) and the EU272. In June3 production fell by 0.2% in the euro area, but rose by 0.1% in the EU27.
In July 2010 compared with July 2009, industrial production increased by 7.1% in the euro area and by 6.8% in the EU27.
These estimates are released by Eurostat, the statistical office of the European Union.
Monthly comparison
In July 2010 compared with June 2010, production of non-durable consumer goods rose by 0.1% in both zones. Capital goods grew by 0.1% in the euro area, but decreased by 0.2% in the EU27. Production of energy fell by 0.1% and 0.4% respectively. Intermediate goods declined by 0.3% in the euro area and by 0.1% in the EU27. Durable consumer goods dropped by 0.6% and 0.8% respectively.
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Source: Eurostat
Deutsche Börse: Five new Amundi ETFs launched on Xetra
August 14, 2010--Four new listed equity index funds and an additional bond index fund issued by Amundi have been tradable in Deutsche Börse’s XTF segment since Tuesday.
ETF name: Amundi ETF ex AAA Govt Bond EuroMTS
Asset class: bond index ETF
ISIN: FR0010892190
Total expense ratio: 0.14 percent
Distribution policy: non-distributing
Benchmark: EuroMTS ex-AAA Government Index
ETF name: Amundi ETF CAC 40
Asset class: equity index ETF
ISIN: FR0007080973
Total expense ratio: 0.25 percent
Distribution policy: non-distributing
Benchmark: CAC 40 Index
ETF name: Amundi ETF S&P 500
Asset class: equity index ETF
ISIN: FR0010892224
Total expense ratio: 0.15 percent
Distribution policy: non-distributing
Benchmark: S&P 500 Index
ETF Name: Amundi ETF Nasdaq-100
Asset class: equity index ETF
ISIN: FR0010892216
Total expense ratio: 0.23 percent
Distribution policy: non-distributing
Benchmark: Nasdaq-100 Index
ETF name: Amundi ETF EURO STOXX Small Cap
Asset class: equity index ETF
ISIN: FR0010900076
Total expense ratio: 0.30 percent
Distribution policy: non-distributing
Benchmark: EURO STOXX Small Index
The new bond index ETF, Amundi ETF ex AAA Govt Bond EuroMTS, allows investors to participate for the first time in the performance of the EuroMTS ex AAA Government Index. The underlying index tracks the value of euro-denominated government bonds issued in the euro zone and with a rating below AAA.
The Amundi ETF S&P 500 enables investors to track the performance of the S&P 500 Index, which is weighted according to free float market capitalization and in turn tracks the performance of the 500 largest US stock corporations. The Amundi ETF Nasdaq-100 tracks the performance of the top 100 tech companies (based on market capitalization) that specialize in sectors such as telecommunications, computer hardware and software and biotechnology.
The Amundi ETF CAC 40 enables investors to participate in the performance of the top 40 French companies. The fourth equity index ETF, Amundi ETF EURO STOXX Small Cap, tracks the performance of the 200 smallest euro-zone companies based on free-float capitalization.
The product offering in Deutsche Börse’s XTF segment currently contains a total of 702 exchange-listed index funds, making it the largest offering of all European stock exchanges. This selection, together with an average monthly trading volume of around €14 billion, makes Xetra Europe’s leading trading venue for ETFs.
Source: Deutsche Börse
EU nearly doubles eurozone growth forecast
September 13, 2010-- Europe nearly doubled its growth forecast Monday to at least 1.7 percent for 2010, highlighting recovery in Germany but warning about rising strains in Ireland's banking system.
The European Union raised its core eurozone growth prediction on data from its seven biggest members, having forecast just 0.9 percent in the spring, but was at pains to remain prudent.
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Source: EUbusiness
EU interim forecast: Recovery progressing in an uncertain global environment
September 13, 2010--The economic recovery in the EU has gained ground of late. GDP growth in the second quarter of 2010 was particularly strong, and more balanced towards domestic demand than previously anticipated. While activity is still expected to moderate in the second half of the year, the outlook is for a slightly improved quarterly profile compared to the spring forecast, due to the spill-over of some momentum from the second quarter. For 2010 as a whole, real GDP growth is now projected at 1.8% in the EU and 1.7% in the euro area, a sizeable upward revision. The recovery remains fragile however, with uncertainty high and developments across Member States uneven. The Commission's inflation forecast for 2010 is broadly unchanged since the spring, at 1.8% in the EU and 1.4% in the euro area.
EU Economic and Monetary Affairs Commissioner, Olli Rehn said: The European economy is clearly on a path of recovery, more strongly than forecast in the spring, and the rebound of domestic demand bodes well for the job market. However, uncertainties remain and safeguarding financial stability and continuing fiscal consolidation remain key priorities. At the same time, we need to frontload structural reforms to lift our growth potential. The sooner and stronger we act on this front, the more certain we can be of sustained growth and job creation.
Growth forecast for the EU and euro area revised up
Reflecting a better than expected first half of the year, and the spill-over of some of this momentum into the second, real GDP is forecast to grow by 1.8% in the EU and 1.7% in the euro area in 2010 (an upward revision of around ¾ percentage point compared to the spring forecast). This aggregate picture is based on updated projections for France, Germany, Italy, the Netherlands, Poland, Spain and the United Kingdom, which together account for about 80% of EU GDP. At the disaggregate level, developments remain uneven across Member States, with the German and Polish economies performing strongest. This unevenness reflects differences in production structures, the scale of adjustment challenges and ongoing rebalancing within the EU and euro area.
Global recovery loosing momentum
With support from inventory building and stimulus measures waning, the global recovery is set to go through a soft patch in the second half of the year, though a 'double-dip' seems unlikely. Despite this softening, global GDP (excl. EU) is projected to grow by some 5% in 2010, a ¼ pp. higher than in the spring forecast. This follows from the fact that economic activity was stronger than anticipated in the first part of the year. As in the spring, the outlook is for an uneven recovery, with robust growth in emerging economies but a still fragile situation in several advanced economies.
view the Interim forecast full document
Source: Europa
CESR publishes two feedback statements in the field of Credit Rating Agencies
September 13, 2010--Feedback statement on CESR consultation on enforcement practices.
view Feedback statement on CESR consultation on common standards for assessment of compliance of credit rating methodologies
Source: CESR
Markit Announces Roll Of Markit iTraxx Asia Pacific Indices
September 13, 2010--Markit, a leading, global financial information services company that owns the Markit iTraxx indices, today announced that the Markit iTraxx Asia ex-Japan and Markit iTraxx Australia will roll into their 14th series on September 20 2010. The Markit iTraxx Japan will roll into its 14th series on September 21 2010.
The following changes have been made to the Markit iTraxx Asia Pacific family of indices:
The composition of the Markit iTraxx ex-Japan remains unchanged.
The composition of the Markit iTraxx Australia remains unchanged.
Three constituents have been replaced in the Markit iTraxx Japan index.
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Source: Markit
FESE European Equity Market Report
September 13, 2010--FESE publishes for the ‘European Equity Market Report’ which gathers data from all the market segments operated by FESE members (including Regulated Markets and Multilateral Trading Facilities) as well as from the major MTFs operated by investment firms in the European market. The FESE Statistics Methodology used in the Report has been agreed by all the trading venues involved, both RM and MTFs.
view the European Equity Market Report - Year 2010 (updated with August figures)
Source: FESE
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