Ed Balls has warned that an emergency multibillion-pound package to inject lending into the British economy still fails to address the lack of economic confidence and demand. The shadow chancellor said the Bank of England's thinking still seemed to be driven by Montagu Norman, the governor who led it through the depression of the 1930s.
He said the measures announced on Thursday night at the Mansion House in London by the chancellor, George Osborne, and the bank's governor, Mervyn King, should have been implemented two years ago and would not work if businesses were not investing.
Osborne warned that the "debt storm" on the continent had left the UK and the rest of Europe facing their most serious economic crisis outside wartime. In a joint proposal between the Bank of England and the Treasury, banks will receive cut-price funds, provided they pass on the benefits to their business customers.
This new "funding for lending" scheme could provide an £80bn boost to loans to the private sector within weeks and alleviate growing fears of a second slump since the start of the financial crisis in 2007.
In a second scheme, within the next few days the bank will begin pumping a minimum of £5bn a month into City institutions to improve their liquidity.
Balls told Sky News: "Simply giving the banks billions of pounds doesn't translate into loans to business. If business is not investing and creating jobs and if our economy is not growing, that's the fundamental problem, and I've said consistently for two years that you can't do this simply by throwing money at the banks.
"You've got to accept that the fiscal plans of the chancellor haven't worked, they've backfired, they've taken us back into recession."
Speaking on BBC Radio 4's Today programme, Balls compared the government's fiscal policy to the 1930s depression era: "It failed then and it's failing now".
He said the announcements were a clear sign that the bank was worried. He did not dismiss the injection of cash for lending in principle, but argued that fiscal, as opposed to monetary policy was critical to recovery, pointing out that, apart from Italy, the UK was the only country in the G20 in recession.
The government has described the plans as an attempt to stretch its "plan A" to the limit. There has been concern from some banks that the plan does not change the dynamic as they will be expected to take the risk on the loans.
The treasury minister Mark Hoban told Today that the government's fiscal tightening had had no impact on growth. He said taxpayers' money would not be at risk as a result of the £80bn bank credit scheme.
Conservative MP Andrew Tyrie, chairman of the Commons treasury select committee, welcomed the plans: "The measures look as if they will encourage lending to businesses by ensuring liquidity is more easily available to banks."
Balls said: "The Bank of England's new funding for lending scheme is a significant admission that the government's existing policies have failed. Businesses will be desperately hoping it is more successful than George Osborne's Project Merlin and credit-easing schemes which have actually seen net lending to businesses fall."
He said Osborne's speech was dangerously complacent. "He is sticking with policies that have choked off the recovery, pushed up unemployment and are leading to £150bn of extra borrowing."
Balls also attacked Osborne over his remarks about a possible Greek exit from the eurozone.
"I was at the Mansion House last night and there was a frisson around the room when our chancellor started openly talking about whether Greece should leave the eurozone. I do not think that is a very wise or sensible thing to do," he told BBC Breakfast.
"I think Greece has got to sort out its issues – and that is a matter for Greece. What I am really worried about in the eurozone is that countries like Spain or Italy – which are huge, to which we as a country are very exposed – they have not sorted out their problems.
"Unless we get a global growth plan going, including in the eurozone, you can't turn this round. I am afraid that our government seems to be urging the wrong actions in Europe as it takes the wrong actions here in Britain too."
The shadow chancellor pointed out that Osborne had "snuck out another U-turn" in his speech, in particular to the objectives of the new financial policy committee at the bank.
"Labour and business organisations like the CBI have been calling for the new financial policy committee to have supporting economic growth as one of its key objectives. The chancellor voted against our amendment on this but in the face of an imminent defeat in the House of Lords he has now backed down."
Possible candidates as finance minister - Yahoo Finance
By Rajesh Kumar Singh
NEW DELHI (Reuters) - The Congress party is seen to be close to nominating Finance Minister Pranab Mukherjee to be the country's next president, creating an opening to take charge of an economy battered by policy gridlock, inflation, and sluggish investment.
In the March quarter, growth in Asia's third-largest economy skidded to a nine-year low of 5.3 percent even as inflation rose to nearly 7.6 percent in May.
Wide current account and fiscal deficits have battered investor sentiment and recently sent the rupee tumbling to a record low, raising the spectre of a balance of payment crisis like the one India faced in 1991.
Known as a Congress trouble-shooter, Mukherjee has been thwarted by a fractious ruling coalition from pushing through reforms, and it's not clear whether his successor would get better results.
In the absence of an obvious successor, talk in New Delhi also suggests Prime Minister Manmohan Singh could take the finance portfolio, possibly on an interim basis. Singh was finance minister during India's 1991 crisis, pushing through reforms that unleashed two decades of faster growth.
If he does opt for a full-time finance minister, there are several names doing the rounds. Following are profiles of some of the probable candidates that Prime Minister Manmohan Singh and his party chief Sonia Gandhi may look to replace Mukherjee.
JAIRAM RAMESH, 58, rural development minister
An economist, the MIT graduate is seen as close to the Gandhi family. He was one of the backroom players who shepherded the Congress party's election campaigns in 2004 and 2009.
Articulate and media savvy, Ramesh supports cutting fuel subsidies and opening up the supermarket industry, which he opposed earlier.
In a recent interview with a local business daily, he said time for "pussyfooting" on major economic reforms was over and the government needed to "take the bull by its horns".
To his advantage, Ramesh is able to build rapport with alliance partners as well as opposition parties. At a time when the government has been left hamstrung by unruly allies, Sonia Gandhi could settle for a person who can bring partners on board to push divisive reforms needed to revive the economy.
However, he carries an image of being anti-development. As an environment minister, he had red-flagged several mining and infrastructure projects on environmental concerns.
C RANGARAJAN, 80, chairman of the Economic Advisory Council to the Prime Minister
Seen as a dark horse in the running for finance minister, he is one of the most trusted aides of Prime Minister Singh.
Rangarajan has worn various hats both within and outside the government, and would bring long experience to the job. Unlike other contenders, he has generally avoided controversy.
He is widely perceived as a hawk who frowns upon expansionary fiscal policy and high inflation, and is an advocate for fuel subsidy reforms and long-pending financial sector reforms. He favours building consensus before allowing foreign investment in multi-brand retail and aviation.
However, Rangarajan is not seen as a political heavyweight, even though he was governor of Andhra Pradesh for six years and was a member of the Rajya Sabha. Congress is seen to prefer a politician who can deliver votes in the 2014 parliamentary elections.
ANAND SHARMA, 59, trade minister
A lawyer-turned politician, Sharma is perceived to be reform-oriented and enjoys the confidence of the Gandhi family.
He is credited with arresting the slide in India's exports after taking over as trade minister in 2009 through a combination of bilateral trade agreements and diversification of export markets. He has also overseen bold steps to liberalise trade ties with arch-rival Pakistan.
Sharma has been pushing for liberalising foreign direct investment rules and succeeded in getting the government's approval for allowing foreign direct investment (FDI) in multi-brand retail, an initiative thwarted by coalition allies. Permitting FDI in the aviation sector is the next big ticket item on his agenda.
Sharma's stature in the party could be a handicap. He is not seen as a political operator and does not bring a large base of political support. Blame for the embarrassing flip-flop on FDI in retail is often put at his doorstep.
P CHIDAMBARAM, 66, home minister
A familiar face and a senior party stalwart who held the post during the global financial crisis in 2008.
His deft handling of the situation then, helping India avoid the worst of the downturn, makes him a leading candidate to take over an economy mired in the doldrums.
Although it's been nearly four years since he moved over to the interior ministry, his heart is seen to be in his previous job. Former colleagues from the finance ministry recall him as having an eye for detail and cannot be bluffed.
Considered to be a reform-oriented taskmaster and a market friendly face, Chidambaram enjoys the confidence of both Prime Minister Singh and Sonia Gandhi.
But an image of "intellectual arrogance" has earned him detractors both within and outside the party.
He is also under siege. Opposition parties question his role in a multi-billion dollar telecoms scam that has undermined the Congress-led government. His family is under scrutiny over a controversial telecom deal. Chidambaram, himself, is battling charges of rigging his election to parliament in 2009.
MONTEK SINGH AHLUWALIA, 68, deputy chairman, Planning Commission
The Oxford-trained economist has been a key figure in Indian economic policy since the mid-1980s. He is an influential adviser to the prime minister and is also India's Sherpa for the G20 Summit.
A supporter of open markets, he has been pushing the government to implement long-pending reforms like ending controls on fuel prices, lifting caps on foreign stakes in the insurance sector and allowing in foreign supermarkets.
He is close to Singh and was a key member of the team that navigated the economy out of the 1991 balance of payment crisis.
Ahluwalia is said to harbour political ambitions and was seen as front-runner for finance minister in 2009, but was thought by Congress to be too market friendly. A lack of political base also went against him.
He has also been hurt by controversies, including the definition of a poverty line at 32 rupees a day.
(Reporting by Rajesh Kumar Singh; Editing by Tony Munroe and Ed Lane)
Money & Cost in China (3) - People's Daily Online
Bank Account
Can foreigners open a bank account in China? If yes, how?
Foreigners can open bank accounts in most banks in China. The process is fairly straight forward. A passport is required at whichever bank you choose. In addition, different banks may require different amounts of deposits when opening an account, which can be 100 CNY to 300 CNY. When you successfully open an account, a savings passbook is given, as well as a bank card. You can use the bank card to withdraw money from the ATMs.
There are many kinds of deposit, which one should I choose?
Generally speaking, there are two common ways for deposit: Savings Deposit and Time Deposit.
Savings Deposit: There are no limits on the amount and time of your deposit as well as withdrawal. A bank book with a bank card is issued after opening Saving Deposit. You can deposit or withdraw money in the Bank outlets or the ATM.
Time Deposit: There is a settled time and you can only withdraw your money on the date of maturity. The interest rate of Time Deposit is higher than Savings Deposit. There is no bank card for this kind of deposit.
If you are going to live in China for several years and the money you deposit is not in urgent need, you can choose Time Deposit, otherwise choose Savings Deposit.
when you open a new account, a certain amount of money will be needed to deposit in your account. It varies according to the bank and deposit you choose.
What are the major banks in China?
Here we list the service number and official website of some major banks. If you have any problem, you can call for help!
Bank of China: http://www.boc.cn/en/index.html(Service number: 95566)
Agriculture Bank of China: http://www.abchina.com/en/hq/index.jsp/lang=en/index.html (Service number: 95599)
Industrial and Commercial Bank of China:http://www.icbc.com.cn/icbc/sy/
(Service number: 95588)
Usually, in the big branches of these banks, English service is available.
India finance minister to step down - Financial Times
June 15, 2012 12:47 pm
Forex: AUD/USD holds above parity - FXStreet.com
FOREX-Euro slumps before crucial Greek vote - Reuters UK
Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.
NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.
WORLD FOREX: Eerie Calm Before Greek Elections; Sterling Stumbles - NASDAQ
-- Norwegian krone, Swedish krona and Japanese yen make last-minute safe-haven surge before Greek election weekend
-- Euro holds steady in nervous trading ahead of Greek elections
-- Sterling briefly dives as BOE launches fresh crisis-fighting liquidity measures
By Alexandra Fletcher
Sterling stole the show in early European trade in an otherwise quiet session ahead of the Greek elections, diving against other major currencies as the Bank of England announced a new liquidity facility to help shield the U.K. from euro-crisis fallout, fanning suspicions the central bank is preparing for a rate cut.
The pound shed some 0.3% against the dollar, trading to a low $1.5477 and the euro surged to the day's high of GBP0.8152 as London traders digested the news that the Bank of England will launch its first auction as part of a series of emergency liquidity measures that will offer six-month loans to U.K. banks in exchange for a wide range of collateral.
The announcement of the initiative has prompted expectations that the Bank of England might extend its asset purchasing program, or quantitative easing, at next month's monetary policy meeting, with Barclays--a prominent U.K. bank--shifting its view so that it now expects a boost to so-called QE at the central bank's July meeting.
Further fuelling sterling sellers, the BOE also signaled deepening gloom over the U.K. economy, and concern over euro- crisis fallout. In addition to the liquidity boost, it also kickstarted a new program to encourage banks' lending to businesses.
"The alarm [over the deepening of the euro-zone crisis] in official circles was evident in the new initiatives on bank support... It remains to be seen how effective these two measures will be, and in the meantime we believe there is a strong argument for augmenting them with more QE," said Simon Hayes, an economist at Barclays in London.
However, alarm bells didn't ring for long and sterling rebounded to levels seen overnight during Asian hours.
Elsewhere, the euro was trading steadily, holding onto some small overnight gains against the dollar ahead of the Greek elections this Sunday, the result of which could determine whether Greece stays in the euro zone or not.
Some investors were seeking out safe havens for their cash in advance of the vote that is seen as a referendum on Greece's membership of the common currency. The hunt for safety sent the Norwegian krone to a three-month high against the euro and the Swedish krona to the day's high. The Japanese yen also benefited from safe-haven flows, charging to a one-week high against the dollar.
Looking ahead, after a bad run of U.S. data Thursday, the U.S. June Empire State manufacturing survey is due at 1230 GMT, along with U.S. May industrial production data at 1315 GMT.
At 1005 GMT, the euro was trading at $1.2619 against the dollar, compared with $1.2633 late Thursday in New York, according to trading system EBS. The dollar was at Y78.68 against the yen, compared with Y79.35, while the euro was at Y99.29, compared with Y100.26. Meanwhile, the pound was trading at $1.5548 against the dollar, compared with $1.5563 late Thursday in New York. The ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at 81.786 from about 81.810.
-By Alexandra Fletcher, Dow Jones Newswires; +44 (0) 20 7842 9462, alexandra.fletcher@dowjones.com; @djfxtrader
(END) Dow Jones Newswires 06-15-120734ET Copyright (c) 2012 Dow Jones & Company, Inc.
No comments:
Post a Comment