In The News

Fed Casts Shadow Over India, Emerging Narkets

Mandakini Gahlot August 28, 2013
The US Federal Reserve has signaled intentions to reduce a huge bond-buying program that has pumped the US economy with stimulus funding. This in turn is prompting currency values to fall in emerging economies. Speculating that US interest rates may rise, investors are pulling money away from foreign investments in favor of US bonds. As a result, the rupee has fallen to a historic low in relation...

Latin America Reacts to Changes in Fed Spending

Krista Hughes June 20, 2013
Latin America has outperformed other emerging markets in attracting foreign investment. However, the significant liquidity of Latin American currencies means that Latin America is the “high beta,” abruptly reacting to what is happening in the US economy, suggests Krista Hughes for Reuters. The mere hint of reduced spending from the US Federal Reserve, signaling a potential rise in interest rates...

Kuroda Plans Bond Binge for Bank of Japan

Jun Hongo April 8, 2013
Incremental measures have not been enough to lift a stagnant Japanese economy. The central bank announced plans for ending Japan’s deflation – adding to the money supply by expanding purchases of government bonds and allowing purchase of riskier assets, reports Jun Hongo for the Japan Times. The strategy could double Japan’s monetary base and “will target longer-term debt, including JGBs with...

The EU as Last-Ditch Escape Artist

Jonathan Fenby April 1, 2013
Europe plays a dangerous game by tackling debt crises country by country. The latest economy to implode is a small nation that gained a reputation as an offshore banking center: Cypriot banks invested in Greek bonds and, after Greece imploded, required rescue – which comes at a cost. With deposits in Cypriot banks insured up to €100,000, holders of larger deposits may lose half their savings....

Moscow’s Mysterious Move on Cyprus

Owen Matthews March 28, 2013
Russian deposits may account for about one third of Cypriot bank accounts worth more than €100,000, which could be frozen and taxed by up to 25 percent as part of a EU bailout deal. Russian President Vladmir Putin has denounced such methods for rescuing the Cypriot economy and “many non-Russian commentators agree with Putin that raiding private savings risks undermining confidence in Europe’s...

Euro Crisis Poses Grave Dangers to EU Unity

Spiegel Staff March 26, 2013
During a banking crisis, political leaders try to maintain calm to prevent panic and a run on vulnerable banks that can’t possibly return deposits to customers all at once. But a bailout for EU member Cyprus could fracture the calm by even suggesting new precedents, especially early proposals to tap into all bank depositors’ savings accounts and ignore guaranteed protections on holdings up to €...

World Markets Roiled as Cyprus Bailout Deal Stalls

Eric Reguly March 18, 2013
Cyprus, with a population just over 1 million, is posing big challenges to global financial markets. The government failed to pass a €10-billion package that would have taxed bank deposits to pay for the rescue – 6.75 percent for deposits less than €100,000, 9.9 percent for those with more. “None of the euro zone’s sovereign and bank bailouts, from Ireland to Greece, has insisted that bank...