A conference call of G7 finance ministers concluded with promises of further European action over the coming weeks to calm markets as concern now focuses on the Spanish economy and its fragile banking sector.
The discussion among finance ministers and central bank governors focused on potential policy responses, “including the progress towards financial and fiscal union in Europe,” according to a brief statement released by Finance Minister Jim Flaherty’s spokesperson. The statement was virtually identical to one issued earlier Tuesday by the U.S. Treasury.
Both Mr. Flaherty and Bank of Canada Governor Mark Carney took part in the conference call.
Japanese finance minister Jun Azumi said the ministers discussed the situation in Europe.
“The European side stated that they will respond to it speedily,” he said, according to reports.
The private call was never officially announced, but Mr. Flaherty disclosed it would take place while speaking with reporters on Monday.
The next summit of G20 leaders – to take place later this month in Los Cabos Mexico – is once again shaping up as a deadline of sorts for European leaders. The planned agenda of last year’s G20 summit in Paris was largely derailed by Euro zone politics as European leaders grappled with Greece’s plan – later retracted – to hold a referendum on Europe’s bailout conditions.
The G20 summit will take place just days after the June 17 Greek election, in which voter decisions between pro and anti-bailout parties could hasten that country’s exit from the euro zone.
Spain is now the most pressing concern, as the region’s fourth-largest economy admitted for the first time Tuesday that it will need European help to shore up its banking sector.
Prime Minister Stephen Harper, who is in London for the Queen’s diamond jubilee celebrations, will be in Paris Wednesday to meet with French President François Hollande.
With a report from Jeremy Torobin
The Business Finance Store Discusses Considerations When Choosing a Bank for Small Businesses - Consumer Electronics Net
June 05, 2012 --
Santa Ana, CA (PRWEB) June 05, 2012
Bank of America recently announced in a press release that it hired more than 70 new business bankers throughout Northern California to assist small businesses. These new hires are part of the companys efforts to fulfill its promise of 1,000 small business bankers nationwide. Bank of America is seemingly attempting to court small businesses to bank with them. For a small business owner, this commitment to small business might seem attractive. However, there are many things to consider when choosing a bank to hold funds for a small business. In the recent blog post Shopping Around for a Bank: What Youll Need From Your Small Business Account, The Business Finance Store discusses things small businesses should consider when choosing an institution to do their small business banking.
Whether starting up a new business, moving to a new state or pursuing other changes, many small business owners find themselves in the position of looking for a new place to keep the funds that keep a small business running. In many cases, choosing the best local bank is as important for small business depositors as it is for individual consumers and families. Choosing the right bank can help make running a business significantly easier in the long run. Read more about how to choose a bank for small business banking at The Business Finance Store Blog.
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G7 finance chiefs gather round Spain’s sick bed - EurActiv.com
With Greece, Ireland and Portugal all under international bailout programs, financial markets are anxious about the risks from a seething Spanish banking crisis and a 17 June Greek election that may lead to Athens leaving the euro zone.
"Markets remain skeptical that the measures taken thus far are sufficient to secure the recovery in Europe and remove the risk that the crisis will deepen. So we obviously believe that more steps need to be taken," White House press secretary Jay Carney told reporters.
Canadian Finance Minister Jim Flaherty said ministers and central bankers of the United States, Canada, Japan, Britain, Germany, France and Italy would hold a special conference call, raising pressure on the Europeans to act.
"The real concern right now is Europe of course - the weakness in some of the banks in Europe, the fact they're undercapitalized, the fact the other European countries in the euro zone have not taken sufficient action yet to address those issues of undercapitalization of banks and building an adequate firewall," Flaherty told reporters.
The disclosure of the normally confidential teleconference came as European Union paymaster Germany said it was up to Spain, the latest euro zone country in the markets' firing line, to decide if it needed financial assistance, after media reports that Berlin was pressing Madrid to request aid.
A G7 source, speaking on condition of anonymity because of the sensitivity of the issue, said there were concerns about the risk of a bank run in Spain, which is struggling to recapitalize nationalized lender Bankia and smaller banks stricken by the collapse of a property bubble.
"There is concern on whether there will be a bank run in Spain that could have repercussions beyond the euro zone," the source told Reuters.
Spanish Prime Minister Mariano Rajoy is pressing for a direct European rescue for his country’s banks with moral support from the European Commission, but Germany appeared to rule out such a "bailout lite" for the euro zone's fourth biggest member.
A source with knowledge of the matter said Madrid is working along with European institutions to find a way to directly refinance banks using rescue funds without the government having to come under a full EU/IMF bailout programme.
"Right now the most urgent issue is the banks, and there are negotiations to refinance the banks directly without it being an intervention. It's a mechanism for all [European] banks, not just for Spanish banks," the source said.
Under current rules Spain can get a loan from the European rescue fund, or EFSF, but it would come with tough conditions and intrusive supervision, with a high political cost for Rajoy. The new permanent European rescue fund, the European Stability Mechanism (ESM), due to enter into force in July, can lend to banks but the request still has to be made by the state.
The source with knowledge of the matter said Spain believed the European Union's executive could take a plan for bank aid to a summit of the bloc's leaders on 28-29 June.
EU Economic and Monetary Affairs Commissioner Olli Rehn said Brussels was considering direct bank recapitalisation by the ESM to break the link between weak sovereigns and ailing banks, but it was not possible under the treaty currently being ratified by member states.
"This is not part of the ESM treaty for the moment, in its present form, but we see that it is important to consider this alternative of direct bank recapitalisation as we are now moving on in the discussion on the possible ways and means to create a banking union," Rehn said.
Germany, the main contributor to the bailout fund, opposes changing the ESM treaty to allow direct bank recapitalisation and has veto power. Berlin contends that only a formal programme approved by national parliaments permits proper international supervision of how aid funds are spent.
German finance minister Wolfgang Schaeuble firm on eurozone measures - Economic Times
G7 finance ministers confer on Europe's debt crisis - CBC
The euro traded lower Tuesday as traders reacted to a communique after a conference call among finance ministers of the world's seven wealthiest economies focused on trying to find a way out of Europe's debt crisis.
The common currency was down 0.35 per cent at $1.24 US late in the morning.
The U.S. Treasury Department said the conference among the finance ministers and central bank presidents ended with agreement to keep monitoring developments closely in the runup to a leaders' summit of the Group of 20 major economies on June 18-19 in Los Gatos, Mexico.
The statement said the talks considered how to forge a stronger financial and fiscal union in Europe.
Canada's finance minister, Jim Flaherty, disclosed Monday that the call, usually confidential, would be held today.
Taking central focus was Spain, whose own finance minister appealed Tuesday for European leaders to set up a method for its troubled banks to get direct financial help.
Cristobal Montoro warned that the country's high borrowing costs mean that it faces increasing trouble accessing credit markets.
"The door to markets is not open for Spain," Montoro said.
Data suggests slump ongoing
Lenders want to know whether that will prevent Spain from bailing out its troubled banking sector, which is weighed down by bad real estate loans.
Adding to the crisis was the uncertainty of how Greeks would vote in an election on June 17 that is widely seen as a referendum on whether the country will continue with the austerity measures that are a condition of continued international bailouts required to keep it part of the currency zone.
The urgency of finding a response to the crisis was underscored by data that suggested that services and manufacturing output in the eurozone slumped at the sharpest rate in almost three years last month.
London-based Markit Economics said its composite index of purchasing managers in both industries fell to 46 from 46.7 in April. A reading below 50 indicates an economy in contraction.
The G7 call came ahead of a summit of European leaders on June 28.
It’s expected the European Commission and the European Central Bank will propose a "banking union," which would oversee banks and perhaps even be granted the authority to bail out financial institutions directly. Now, they can only rescue national governments.
“There’s no divergence in views when it comes to how to tackle this crisis overall,” a spokesman for EU Commissioner Olli Rehn said in Brussels.
With files from The Associated PressForex: GBP/USD flat after the European open - FXStreet.com
FOREX.com Named Best Arabic FX Platform 2012 at Saudi Money Expo - Zawya.com
Dubai, United Arab Emirates, 5 June, 2012 - FOREX.com, the retail division of GAIN Capital (NYSE: GCAP), a global provider of online trading services, was awarded "Best Arabic FX Platform 2012" at the recent Saudi Money Expo held in Jeddah.
FOREX.com was given the prestigious accolade based on voting by investors and industry experts ranking the top FX brokers and educators in the region.
"We are delighted to receive this award, which recognizes our commitment to tailor and improve our services for our customers in the Middle East," said GAIN's Chief Product Officer Muhammad Rasoul. Mr. Rasoul added, "Trading volume from the region grew over 150% last year and, in anticipation of continued growth in the region, we recently launched an enhanced Arabic version of our FOREXTrader PRO platform, featuring Arabic language news and research, along with fully localized trading tools."
FOREX.com offers trading in more than 70 markets, including currencies, gold & silver, oil, natural gas, agricultural commodities, and global equity indices. In addition to the FOREXTrader Pro platform, FOREX.com also supports the popular MetaTrader (MT4) platform in Arabic, for traders who want to run automated strategies while enjoying the competitive pricing, stability, and service of a global market leader.
FOREX.com's Arabic service is regulated by the UK's Financial Services Authority, which provides clients with a robust regulatory framework and segregated funds protection.
"Traders today want a robust service that operates with strong regulatory oversight," added Mr. Rasoul. "Our FSA regulated service, along with our transparency as a U.S. public company, provides traders with a lot of confidence in choosing FOREX.com as their trading provider. Looking ahead, our goal is to expand our products and services for traders in the Middle East. This includes delivering new, innovative tools, expanding the trading markets we offer and, of course, continuing to provide superior customer service and trading execution."
For more information or to open up a complimentary 30-day practice account, traders should visit www.forex.com or www.forex.com/ar.
*Foreign exchange and CFD trading involves significant risk of loss, and is not suitable for all investors.
About GAIN Capital
GAIN Capital Holdings, Inc. (NYSE:GCAP) is a global provider of online trading services. GAIN's innovative trading technology provides market access and highly automated trade execution services across multiple asset classes, including foreign exchange (forex or FX), contracts for difference (CFDs) and exchange-based products, to a diverse client base of retail and institutional investors.
A pioneer in online forex trading, GAIN Capital operates FOREX.com®, one of the largest and best-known brands in the retail forex industry. GAIN's other businesses include GAIN GTX, a fully independent FX ECN for hedge funds and institutions, and GAIN Securities, Inc. (member FINRA/SIPC) a licensed U.S. broker-dealer.
GAIN Capital and its affiliates have offices in New York City; Bedminster, New Jersey; London; Sydney; Hong Kong; Tokyo; Singapore; Beijing and Seoul.
For company information, visit www.gaincapital.com.
© Press Release 2012
FOREX-Euro falls as minister spotlights Spain funding worry - Reuters
* Euro falls, erasing earlier gains as Spain worries grow
* Spain's Montoro says financial markets shut to Spain
* Market awaits G7 conference call on euro zone crisis
LONDON, June 5 (Reuters) - The euro fell on Tuesday, erasing earlier gains, on growing concerns about whether Spain can restore health to its banks as a minister said high borrowing costs meant Spain was effectively shut out of the bond market.
The comments by Treasury minister Cristobal Montoro highlighted the funding problems facing Spain as investors fretted the country may have to seek external aid.
Analysts said the euro's losses may be limited before an emergency conference call of Group of Seven financial policymakers on the euro zone debt crisis, although the chances of a significant breakthrough looked slim.
The euro fell 0.6 percent on the day against the dollar to hit a session low of $1.2415. It traded more than a cent below an earlier one-week high as investors cut back hefty bets against the currency.
"People will be happy to sell into moves above $1.25," said Anders Soderberg, currency strategist at SEB in Stockholm.
The euro has rebounded from a two-year low of $1.2288 hit on Friday, but Soderberg said its recovery was only "a short-term break in what now seems to be a well-established downtrend".
In addition to the concerns about Spain, investors are worried about the risk that a Greek election in two weeks could push Athens out of the euro.
The depths of the problems facing the euro zone were highlighted by a purchasing managers' survey showing the euro zone's private sector economy shrank in May at the fastest pace in nearly three years.
The common currency faced chart resistance at $1.2545, the 76.4 percent Fibonacci retracement of its decline last week, and at $1.2570, the 23.6 percent retracement of its longer-term decline from a February high near $1.35.
"I don't expect European policymakers to come to an agreement soon. I am ready to sell the euro around $1.2550," said a trader at a Japanese bank in Tokyo.
It also erased earlier gains against the yen and was last down 0.8 percent on the day at 97.08 yen, although this still left it above Friday's 11-year low of 95.59 yen.
Against sterling, the euro was down 0.25 percent at 81.02 pence, off an earlier one-month high of 81.405 pence.
CENTRAL BANK ACTION
The G7 talks prompted some market players to speculate that the European Central Bank could opt for some form of further monetary stimulus when it meets on Wednesday.
International Monetary Fund Managing Director Christine Lagarde said in an interview with a Swedish newspaper that the ECB had room for another interest rate cut.
There has been some talk of a rate cut, although a recent Reuters poll showed only 11 out of 73 analysts polled expected a move this month.
In a sign of increasing concern about the impact of the euro zone debt crisis, the Reserve Bank of Australia cut interest rates by 25 basis points on Tuesday.
The cut was less than some had expected, however, sending the Australian dollar higher. It was last up 0.1 percent against the U.S. dollar at $0.9733, extending its recovery from an eight-month trough of $0.9581 hit on Friday.
However, some see the Aussie trapped in a downtrend as they expect the RBA to cut rates further in coming months.
Traders will also be looking ahead to testimony by U.S. Federal Reserve Chairman Ben Bernanke on Thursday for any hints that Friday's weak U.S. jobs data could prompt a further bout of quantitative easing.
The dollar was down 0.15 percent against the yen at 78.20 yen, taking it closer to Friday's 3 1/2-month low of 77.652 yen though market players were wary about the possibility of Japanese authorities stepping in to stem the yen's rise.
Taiwan forex reserves down 1.5 pct in May - CNBC
TAIPEI, June 5 (Reuters) - Taiwan's foreign exchange reserves stood at $389.275 billion at the end of May, down 1.5 percent from the previous month, the central bank said on Tuesday.
Taiwan's reserves are the world's fourth-largest after China, Japan and Russia. The figures do not include gold.
The central bank also said the market value of securities and Taiwan dollar deposits held by foreign investors reached $201.1 billion, equivalent to 52 percent of foreign exchange reserves.
RESERVES M/M CHG FOREIGN HOLDINGS
(US$ bln) (pct) (pct of reserves)
2012
End-May 389.275 -1.47 52
End-April 395.07 +0.31 54
End-March 393.87 -0.14 56
End-February 394.43 +1.06 56
End-January 390.30 +1.25 53
2011
End-December 385.547 -0.62 48
End-November 387.968 -1.36 47
End-October 393.327 +1.00 51
End-September 389.174 -2.78 48
End-Aug 400.294 -0.12 53
End-July 400.76 +0.11 60
End-June 400.33 +0.40 62
End-May 398.683 -0.20 65
End-April 399.54 +1.76 65
End-March 392.63 +0.50 61
End-February 390.69 +0.93 60
End-January 387.111 +1.34 66
(Reporting by Jeanny Kao; Writing by Faith Hung; Editing by Michael Urquhart)
((jonathan.standing@thomsonreuters.com)(+886 2 2500 4881)(Reuters Messaging: jonathan.standing.thomsonreuters.com@thomsonreuters.net))
Keywords: TAIWAN ECONOMY/RESERVES
FOREX-Euro falls on Spain worries; no joy from G7 call - Reuters UK
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