The European Central Bank raised its key interest rate Thursday by a quarter of a point to 4.25%. The rate increase comes to quell inflationary pressures, even as growth across the EU shows significant signs of slowing.
Lehman Bros. plans to give employees 20% of their 2007 bonus in stock in an attempt to keep talent, sources say. Some market observers say Lehman's move signals that the investment bank is not planning to sell itself at a discount. Speculation has been mounting that Lehman may suffer a fate similar to that of Bear Stearns, prompting some Lehman executives to encourage the company to take action.
After formally acknowledging a glitch in one of its computer models, Moody's is planning to review all of its models and implement a uniform protocol for resolving computer errors instead of allowing individual units to handle the issues. Moody's said the bug on constant-proportion debt obligations is thought to be an isolated incident, but the agency hopes the changes will boost confidence in its system. Documentation reveals other computer glitches at Moody's that may have affected ratings.
SIFMA supported a proposal by the Municipal Securities Rulemaking Board to develop a centralized system for the collection and dissemination of critical market information about variable-rate demand obligations in a comment letter sent this week. Such a move would increase the amount of data available to market participants.
Souring market sentiment has forced a slip in corporate bond issuance over the past 10 days. The drop-off comes amid concerns over inflation and slowing growth. Last week marked the slowest week of issuance since the collapse of Bear Stearns in March.