Federal Reserve Chair Janet Yellen is scheduled to address the central bank's annual economic symposium in Jackson Hole, Wyo., on Aug. 25. She intends to focus on financial stability.
The US Federal Deposit Insurance Corp. is suing Deutsche Bank, Barclays, Rabobank and other European lenders in a London court over alleged manipulation of the London Interbank Offered Rate.
Steven Peikin and William Hinman, both lawyers appointed to senior positions at the Securities and Exchange Commission, have ties to and holdings in major corporations that could pose conflicts of interest, according to government documents. "Steve and Bill are subject to and complying with all applicable ethics laws, rules, and regulations, and both are working with the agency's ethics counsel as needed," SEC spokeswoman Judith Burns said.
A group of bondholders in Spain's collapsed Banco Popular have lodged a challenge in EU courts against regulatory decisions that they say led to its unnecessary demise. Their lawyer is appealing for the decisions to be annulled, claiming that comments from the European Securities Board and EU officials were a breach of professional secrecy and led to a run on the bank that wiped out the value of their bonds.
Hiromichi Mizuno, chief investment officer of Japan's $1.4 trillion Government Pension Investment Fund, has issued a warning on the increasing use of passive index-tracking, which he says distorts the signals from markets worldwide and makes asset allocation more difficult to manage reliably. Mizuno adds that the fund, which is the world's largest, intends to make more use of active managers despite their questionable performance record.
Emerging market funds saw withdrawals of $1.6 billion in the week ending 16 August, ending five consecutive months of gains, as money managers reacted to heightening geopolitical tensions.
Mark Gilbert writes that it may be simpler and less expensive to amend the structure of the London Interbank Offered Rate, which is due for termination in 2021, rather than replace it with a new interest-rate benchmark that has yet to be agreed upon. He suggests it could be adjusted to embrace data gathered from real-time daily transactions, such as bond clearing prices, credit default swaps and the commercial paper market.
The euro dipped briefly Thursday after the minutes of the European Central Bank's July rate-setting meeting revealed concern over the currency's strength. The central bank, however, attributed the currency's rise this year to reduced political risks in the eurozone and a brighter growth outlook.
Although Britain's 2.6% inflation and 4.4% unemployment suggest an interest-rate increase may be warranted, closer inspection indicates that the Bank of England's cautious approach is justified, writes Daniel Moss. Wage growth is at 2.1% and consumer price gains are at 2.6%.
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