Weidmann Says He Backs Lagarde Plan for ECB Strategy Review By Bloomberg



(Bloomberg) — Bundesbank President Jens Weidmann said he supports a review of the European Central Bank’s policy strategy, and repeated his oft-made warning that persistent monetary stimulus has side effects that mustn’t be ignored.

In a speech in Frankfurt, hours after ECB President Christine Lagarde said she’ll announce a review “in the near future,” Weidmann said it’s worth investigating new policy approaches that would allow officials to respond quickly in an economic downturn, while taking into account the potential costs and benefits.

“I fully agree with Christine Lagarde — the monetary-policy strategy should always evolve in a way that best serves our mandate,” Weidmann said. “Since our strategy has been in place since 2003, it may be worth collecting lessons from the financial crisis and the more recent past at the appropriate time.”

Weidmann, who sits on the ECB’s Governing Council, also discussed the advantages and limits of the central bank communicating its policy intentions — commonly referred to as forward guidance — and argued that the institution’s mandate doesn’t allow for the symmetric approach to inflation targeting advocated by some officials.

He warned against committing to hold interest rates lower for longer than implied by its goal, allowing consumer-price growth to overshoot, as policy makers will have to renege on their promise eventually once it accelerates. He said such an approach wouldn’t be in line with the ECB’s goal of keeping inflation “below, but close to, 2%” and may pose communication challenges and credibility risks.

“Furthermore, after a long period of low interest rates, holding interest rates lower for even longer would aggravate the risks and side effects of a very expansionary monetary policy,” he said.

The risks arising from financial imbalances is a topic of increasing concern — something the ECB alluded to in its Financial Stability Review this week.

German Optimism

The Bundesbank head pointed to the burden negative rates place on banks that primarily generate their income from deposit-taking and lending. The impact of the ECB’s new tiering policy that exempts some deposits from the charge “is likely to be perceptible, but modest,” yet the indirect effects for institutions engaged in maturity transformation and the flat yield curve matter more.

Turning to the German economy, Weidmann noted that the country avoided slipping into a technical recession this year, and pointed to “first tentative signs” that the downturn in its export-oriented industry could level off. Data earlier in the day showed that private and public spending, along with exports, steered Europe’s largest economy to a slight expansion last quarter.

Still, euro-area figures showed worrying signs that the region’s manufacturing slump, in which Germany has been worst-hit, might be spreading to the services sector. Weidmann was less pessimistic, but echoed Lagarde and other colleagues at the ECB in saying politicians should do more to promote growth.

“Near the effective lower bound of interest rates, fiscal policy is less at risk of crowding out private demand,” he said. “This makes it a potentially powerful instrument if economic developments were to take a marked turn for the worse — which, just to be clear, is not what is generally expected.”

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Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Oct. 28-Nov. 3 in Review By Cointelegraph


© Reuters. Cryptocurrency and Blockchain News From Brazil: Oct. 28-Nov. 3 in Review

Brazil has seen another tumultuous week in the cryptocurrency industry, as the alleged pyramid scheme Atlas Quantum upsets it customers yet again, another six individuals linked to the Unick Forest crypto scheme are arrested, and the founder of A2 Trader challenges Brazilian regulators to shut down his trading website.

Here is the past week of cryptocurrency and blockchain news in review, as originally reported by Cointelegraph Brasil.

Continue Reading on Coin Telegraph

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Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



RBNZ says Westpac unit has retained accreditation following compliance review By Reuters



WELLINGTON (Reuters) – The Reserve Bank of New Zealand (RBNZ) said on Monday that lender Westpac’s AX> local unit has retained its accreditation as an internal models bank following completion of an extensive remediation process.

RBNZ in 2017 had imposed a precautionary capital overlay on Westpac New Zealand in light of the regulatory breaches, and gave Westpac 18 months to remedy the failures or risk losing its accreditation as an internal models bank.

Deputy Governor Geoff Bascand said in a statement that Westpac was now operating with peer-leading processes, capabilities and risk models in a number of areas.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



AIG’s profit misses estimates on life unit review, catastrophe losses


(Reuters) – American International Group Inc (AIG.N) missed analysts’ estimates for third-quarter profit on Friday due to weakness in the insurer’s life and retirement unit and a difficult period for catastrophe losses.

FILE PHOTO: Banners commemorating the 100th anniversary of American International Group Inc. adorn the New York Stock Exchange in Manhattan, New York, U.S. October 10, 2019. REUTERS/Suzanne Barlyn

Pre-tax income from AIG’s life and retirement business fell 9% to $646 million as it booked a $143 million charge related to a review of its actuarial assumptions.

The unit and many other life insurers typically conduct reviews every third quarter of assumptions they made when writing policies many years ago. The process can end with extra cash having to be set aside to cover future claims.

Excluding the impact from AIG’s actuarial review, adjusted pre-tax income at the unit fell 3% due to an increase in the number of insured who died and lower alternative investment returns, the company said.

Shares of AIG, one of the largest U.S. insurers, were down 1.8% on Friday.

The insurer posted a profit of 56 cents per share, on an adjusted basis, well below analysts’ expectations for a profit of $1 per share, according to IBES data from Refinitiv.

AIG is in the midst of a turnaround effort, launched by Chief Executive Officer Brian Duperreault, who took charge in 2018.

The strategy largely involves the insurer’s general insurance unit, where Duperreault has been set to improve underwriting practices and scale back exposure to bad risks. He also deployed a reinsurance program to mitigate catastrophe losses.

Some of those changes involve AIG’s specialty commercial unit, Lexington Insurance, which reduced total casualty insurance limits by 58% during the quarter while increasing premium rates by more than 30%, AIG Chief Financial Officer Mark Lyons said in a call with analysts on Friday.

AIG’s net income attributable to common shareholders was $648 million, or 72 cents per share, in the third quarter ended Sept. 30, compared with a loss $1.26 billion, or $1.41 per share, a year earlier. reut.rs/36r6qzt

AIG’s net pre-tax catastrophe loss narrowed to $511 million in the quarter from $1.6 billion a year earlier.

The company also reported a narrower underwriting loss in its general insurance business – $249 million compared with $1.73 billion last year.

The insurer’s general insurance accident year combined ratio, excluding changes from losses incurred in past years, was 95.9, compared with 99.4 a year earlier.

A reinsurance program that AIG put in place to minimize earnings volatility during catastrophe season “played out as designed,” Duperreault said during the call on Friday.

Reporting by Bharath Manjesh in Bengaluru; Editing by Anil D’Silva and Paul Simao



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Head of international 737 MAX review, NTSB chair to testify before Senate


FILE PHOTO: National Transportation Safety Board Chairman Christopher Hart testifies before a House Transportation and Infrastructure hearing on the recent deadly Amtrak accident in Philadelphia, on Capitol Hill in Washington June 2, 2015. REUTERS/Jonathan Ernst

WASHINGTON (Reuters) – The chair of a panel of international regulators that harshly criticized the Federal Aviation Administration’s certification of the now grounded Boeing 737 MAX will testify Tuesday before a Senate committee, a statement from the committee showed.

Christopher Hart, a former National Transportation Safety Board chair who oversaw the review, will speak before the Senate Commerce Committee alongside current NTSB chairman Robert Sumwalt.

They will appear after the testimony of Boeing Co (BA.N) chief executive Dennis Muilenburg and John Hamilton, who is vice president and chief engineer for Boeing Commercial Airplanes. Muilenburg will then testify before a House panel on Wednesday.

Reporting by David Shepardson; Editing by Jan Harvey



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FAA failed to properly review 737 Max jet anti-stall system: JATR report By Reuters


© Reuters. FILE PHOTO: A worker walks past unpainted Boeing 737 MAX aircraft parked at Renton Municipal Airport in Renton

By David Shepardson

WASHINGTON (Reuters) – An international panel of air safety regulators on Friday harshly criticized the U.S. Federal Aviation Administration’s (FAA) review of a safety system on Boeing Co’s (N:) 737 Max jet that was later tied to two crashes that killed 346 people.

The Joint Authorities Technical Review (JATR) was commissioned by the FAA in April to look into the agency’s oversight and approval of the so-called MCAS anti-stall system before the fatal crashes.

“The JATR team found that the MCAS was not evaluated as a complete and integrated function in the certification documents that were submitted to the FAA,” the 69-page report said.

“The lack of a unified top-down development and evaluation of the system function and its safety analyses, combined with the extensive and fragmented documentation, made it difficult to assess whether compliance was fully demonstrated.”

Boeing’s top-selling airplane has been grounded worldwide since a March 10 crash in Ethiopia killed 157 people, five months after a Lion Air 737 MAX crashed in Indonesia, killing 189 people on board.

The JATR draft report, obtained by Reuters ahead of its release on Friday, also said the FAA’s long-standing practice of delegating “a high level” of certification tasks to manufacturers like Boeing needs significant reforms to ensure adequate safety oversight.

“With adequate FAA engagement and oversight, the extent of delegation does not in itself compromise safety,” the report said. “However, in the B737 MAX program, the FAA had inadequate awareness of the MCAS function which, coupled with limited involvement, resulted in an inability of the FAA to provide an independent assessment of the adequacy of the Boeing proposed certification activities associated with MCAS.”

FAA Administrator Steve Dickson said in a statement he would review the panel’s recommendations and take appropriate action following the “unvarnished and independent review of the certification of the Boeing 737 MAX.”

Boeing said it had no immediate comment.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Germany’s Aareal conducts strategic review following calls from investor


FRANKFURT (Reuters) – German real estate lender Aareal said on Monday it had embarked on a strategic review following calls from an activist investor to consider the sale of its software unit Aareon.

Hermann Merkens, Aareal’s chief executive officer, wrote in a letter to the shareholder, Teleios Capital Partners, that Aareon was a “key pillar” and that the bank was continuing to grow and invest in the division.

But Aareal also said the group was “assessing all relevant options”. It had made no decisions on the outcome and had no established preferences, Merkens wrote.

Last month, Teleios, which holds a 3.4% stake in Aareal, said investors may be better served through a full sale of Aareon.

A spokesman for Teleios declined to comment.

Reporting by Hans Seidenstuecker and Tom Sims; editing by David Evans



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Japan Inflation Hits 2-Year Low as BOJ Calls for Price Review By Bloomberg



(Bloomberg) — Japan’s key gauge of inflation dropped to the lowest level since 2017, the latest indication of the difficulty faced by the Bank of Japan in generating price growth as speculation grows that it may add to its stimulus as early as next month.

Consumer prices excluding fresh food rose 0.5% in August from a year earlier, matching economists’ median estimate, according to the internal affairs ministry. A drop in energy prices was the biggest factor in the slowdown.

Key Insights

  • Japan’s key inflation gauge hasn’t risen above 1% in years and is expected to remain subdued in the coming months as education costs weigh on prices.
  • Governor Haruhiko Kuroda Thursday ordered a review to see if developments overseas have the potential to kill off momentum in Japanese prices toward the BOJ’s 2% target. Compared with a month ago, Kuroda said he’s now “more inclined” to go ahead with easing.
  • Energy prices, which have been contributing less to price gains since October last year, fell overall for the first time since January 2017.
  • Stripping out the effects of a drop in energy costs, August’s inflation data may leave room for the BOJ to argue that prices are actually moving in the right direction. Consumer prices excluding both fresh food and energy rose 0.6% pace in August, exceeding economists’ forecasts for a 0.5% gain and above last year’s average pace of 0.4%.
  • “The BOJ will probably want to say price momentum is still upward,” said Hiroshi Miyazaki, a senior economist at Mitsubishi UFJ Morgan Stanley (NYSE:) in Tokyo. “But they’ve already been pushed into a corner by price and economic data and will have to think about additional easing.”
  • A 2 percentage point sales tax hike that comes into effect next month presents another risk the BOJ will have to manage. The last increase to the tax in 2014 triggered a contraction of more than 7% the following quarter. Consumer spending has been supporting economic growth during an export slump this year.

What Bloomberg’s Economists Say

“Any pickup toward the 2% target is going to take a long time. We think the Bank of Japan will need to prepare for a longer-term effort to stoke consumer prices with a more flexible operational approach to its stimulus.”

— Yuki Masujima, economist

Click here to read more

Get More

  • Overall consumer prices rose 0.3% in August, matching economists’ median forecast.
  • A 0.2% drop in hotel rates also weighed on inflation.
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Ailing ringgit bonds await lifeline from Malaysia policy review – Business News



KUALA LUMPUR: The case is growing for Bank Negara Malaysia to bolster the economy with another interest-rate cut — and to provide some much-needed encouragement for inflows to the ringgit bond market.

The central bank’s review this week will be scrutinised by global funds, with any hint of a dovish tilt likely to rekindle interest in Malaysian bonds. Slowing exports and tepid inflation have raised expectations that policy makers will need to consider adding to May’s quarter-point cut at some point in 2019.

Overseas investors sold a net $650 million of Malaysian bonds in the first five months this year, taking foreign holdings of the nation’s debt to the lowest since 2011. They’ve been pumping money into higher-yielding Indonesian debt and Thai notes, which are regarded as a haven play.

Ten-year Malaysian government bonds offered 3.63% as of 4:05pm Friday in Kuala Lumpur, a substantial premium to lower-risk Thai notes around 1.99%, but significantly lower than the 7.23% for similar-maturity Indonesian debt, and 6.67% for Indian notes.

The need for Bank Negara to resuscitate demand has been more acute since April, when FTSE Russell warned that it may drop ringgit debt from its benchmark global bond index, citing market liquidity problems.

While Tuesday’s policy review is unlikely to bring an immediate cut in rates, the policy statement will be parsed for indications that a lower benchmark is on the horizon.

Exports, which account for 70 percent of gross domestic product, have shown monthly contraction twice already this year, adding to the case for monetary easing. Public and private investment is waning and inflation has been stuck below 1% since mid last year.

At the last review on May 7, the central bank struck a broadly neutral tone, saying the 25-basis point reduction to 3% was intended to “preserve the degree of monetary accommodativeness.”

Twenty-one of 24 economists surveyed by Bloomberg expect Bank Negara to keep the benchmark rate unchanged on Tuesday. Three forecast a 25-basis point cut.

To be sure, even if the economy continues to slow, Bank Negara may try to stand pat until there’s greater clarity on how deep any U.S. interest-rate cuts will be. The ringgit’s weakness — it has underperformed most Asian currencies this year — may also give policy makers cause to wait. – Bloomberg

 





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Argentina Is Said to Seek More FX Control Before IMF Review By Bloomberg


© Bloomberg. Roman Escolano, Spain’s economy minister, speaks during a joint International Monetary Fund (IMF) and Bank of Spain conference in Madrid, Spain, on Tuesday, April 3, 2018. The conference aims to draw lessons, including for Europe, from Spain’s successful crisis responses and discuss policy options that ensure a sustained and inclusive economic path forward, according to their website.

(Bloomberg) — Argentina’s central bank has told the International Monetary Fund it wants to intervene more heavily in the currency futures market, just days before the fund’s board meets to consider the latest disbursement of a record $56 billion credit line.

The bank has asked for greater capacity to operate in futures because that’d help it keep the peso in check before presidential elections on Oct. 27, when Argentines may rush to buy dollars, according to three people with direct knowledge of the matter. The central bank’s press department declined to comment. An IMF spokesman declined to comment.

Trading futures has been a key tool for the central bank to manage the peso in recent weeks. The current agreement with the IMF allows the central bank to have a short futures position of $1.6 billion in July, $1.3 billion in August and $1 billion in September.

On Friday, the IMF said it reached a staff-level agreement with Argentina on its fourth loan review, paving the way for a next disbursement of $5.4 billion.

“Argentina’s economic policies are yielding results,” IMF Acting Managing Director David Lipton said in an emailed statement. The IMF board is scheduled to consider the latest disbursement on July 12, according to the statement.

Argentina agreed to the three-year, $56 billion stand-by deal with the IMF last year to help shore up its finances. The IMF said in April that Argentina’s economy is forecast to shrink 1.2% this year, following a 2.5% contraction in 2018.

(Adds central bank request in headine, first paragraph.)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.