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Global Effects of U.S.' Financial Mess

US Financial Quake Rocks Asia
http://www.time.com/time/world/article/0,8599,1847816,00.html

Europe Struggles for a Response to the Bank Crisis
http://www.time.com/time/world/article/0,8599,1847902,00.html

Iceland Teeters on the Brink of Bankruptcy
http://www.time.com/time/world/article/0,8599,1848073,00.html

Europe's Bank Scare
http://www.time.com/time/business...00.html?iid=sphere-inline-sidebar

U.K. Acts to Stem Bank Panic
http://www.time.com/time/business...3:g2:r3:c0.0282584&xid=Loomia

Europe Scrambles as the Credit Crisis Goes Global
http://www.time.com/time/world/ar...,00.html?iid=sphere-inline-bottom

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May we be strengthened with the ability, willingness and capabilities to be good ambassadors of Nigeria contributing to its uplifting, rather than its detriment. - Cxsm

admin · Site Admin Joined: 25 May 2007 Posts: 5404

Central Banks Make Emergency Rate Cuts
http://www.cnn.com/2008/BUSINESS/...arkets/index.html?eref=time_world

Britain Unveils $84B Bank Rescue Plan
http://www.cnn.com/2008/BUSINESS/10/08/uk.banks/index.html

Shares in British Banks Plunge
http://money.cnn.com/2008/10/07/n...ank.ap/index.htm?iref=werecommend
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May we be strengthened with the ability, willingness and capabilities to be good ambassadors of Nigeria contributing to its uplifting, rather than its detriment. - Cxsm

admin · Site Admin Joined: 25 May 2007 Posts: 5404

EU Finance Chiefs in Crisis Talks

7th Oct. '08

Japan's benchmark Nikkei-225 index initially dropped below 10,000 points

European Union finance ministers are to meet in Luxembourg for emergency talks on the world's financial meltdown. The ministers from all 27 member states hope to bolster money markets after a day of panic saw huge share index losses in Germany, France and the UK. A $700bn (£398bn) US bank bail-out and moves by several EU states to help their banks have not quelled fears. Asian markets were volatile on Tuesday as investors worried global government action may not resolve the crisis. J

apan's Nikkei index plunged more than 5% - shattering the psychological 10,000-point barrier for the first time in nearly five years - before bouncing back. Australia's financial market suffered before the country's central bank cut its official interest rate by 1%, prompting a rally. It was the largest cut for 16 years by the Reserve Bank of Australia. Share prices in China, Taiwan and South Korea also saw a turbulent morning's trading.

Earlier on Wall Street, the Dow Jones index fell 8% before regaining some of its losses. President George W Bush said it would take some time for the rescue plan to restore confidence to the financial system. EU leaders earlier issued a joint statement saying they will take the necessary measures to protect both Europe's banking system and individual depositors. In Luxembourg, the EU finance ministers aim to frame guidelines for guaranteeing public savings, correspondents say.

Since late last week, Ireland, Germany, Greece, Austria and Denmark have declared separately that money held by ailing banks will be safe. Analysts say the move has angered fellow EU member states who fear it could prompt savers to transfer their money into guaranteed institutions. Luxembourg's Prime Minister Jean-Claude Juncker said no major financial institution would be allowed to fail.

Jean-Claude Trichet, president of the European Central Bank, added: "We will continue to provide monetary markets with all the liquidity they need for as long as it is necessary." But Europe's fragmented response to the crisis so far has done little to reassure investors, correspondents say. The strains threatening the continent's economies have been felt most acutely in Iceland, where PM Gier Haarde made a national address warning his country it faced national bankruptcy. T

he tone was, at times, apocalyptic. In a late-night session, parliament passed emergency legislation to shore up the country's banking system after the national currency, the krona, fell 30% against the euro on Monday. Across Europe, central banks have already offered more than $74bn in short-term loans to banks in an attempt to make cash available.

Investors have not been bowled over by government intervention But while the idea of a European fund to rescue troubled banks has been floated, it has attracted too little support to go any further, says the BBC's economics correspondent Andrew Walker in Washington. He also says the financial crisis will come under the microscope at the International Monetary Fund meetings in Washington in the next week. Its analysts will say the global economy has been sandbagged by high commodity prices, the housing slump and the growing financial crisis.

IMF economists have already warned of an increased risk of a severe and protracted economic downturn. On Tuesday a banking reform bill is due to go before the UK parliament while German lawmakers are scheduled to hold an emergency session. In the US, both Mr Bush and Ben Bernanke, the chairman of the US Federal Reserve, are scheduled to speak later about the crisis.Meanwhile, Congress began hearings into the cause of the financial meltdown that triggered the rescue plan. Richard Fuld, the head of collapsed US investment bank Lehman Brothers, said federal regulators knew his firm had, like others, been caught up in a financial tsunami emanating from the mortgage markets.

The day after Lehman filed for bankruptcy, the government bailed out the insurance giant AIG, saying it was too big to fail. AIG executives are also testifying. The FBI is looking at Lehman, AIG and US mortgage giants Fannie Mae and Freddie Mac as part of a probe into possible corporate fraud. Meanwhile US utility companies reported a record rise in the number of customers defaulting on their gas and electricity bills. The largest increase in power cut-offs were in the states of Michigan (22%) and New York (17%), although rises were also reported in Pennsylvania, Florida and California.
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May we be strengthened with the ability, willingness and capabilities to be good ambassadors of Nigeria contributing to its uplifting, rather than its detriment. - Cxsm

admin · Site Admin Joined: 25 May 2007 Posts: 5404

Putin Turns on US 'Irresponsibility'

Anne Penketh,
Diplomatic Editor
2 Oct. 2008

Vladimir Putin has accused the United States of "irresponsibility" as he criticised its primary role in the economic and financial turmoil that has undermined the foundations of global capitalism across the world.

The Russian Prime Minister's remarks yesterday came after several European leaders, including the French President Nicolas Sarkozy and the German Chancellor Angela Merkel, said the spiralling crisis started by toxic housing debts in the US raised questions about the "Anglo-Saxon" way of doing business.

"Everything that is happening in the economic and financial sphere has started in the US," Mr Putin told a government meeting in Moscow. "This is a real crisis that all of us are facing. And what is really sad is that we see an inability to take appropriate decisions. This is no longer irresponsibility on the part of some individuals, but irresponsibility of the whole system, which as you know, had pretensions to [global] leadership."

The Russian stock market has collapsed by 50 percent from its peak last May as a result of the global uncertainty, coupled with investor nervousness following the Georgian crisis.

M. Sarkozy, speaking in Toulon a week ago, said: "A certain idea of globalisation is drawing to a close with the end of a financial capitalism that had imposed its logic on the whole economy and contributed to perverting it. The idea of the absolute power of the markets that should not be constrained by any rule, by any political intervention, was a mad idea. The idea that markets are always right was a mad idea." The German Finance Minister Peer Steinbrück said "the US will lose its superpower status in the world financial system". He hesitated to predict the long-term consequences of the upheaval, which he described as "above all a US problem" but said: "The world financial system is becoming multipolar."

Leaders of developing countries have also lashed out at the US over what Gordon Brown called the first crisis of globalisation, in the light of the Bush administration's failure to swiftly put an end to the bloodletting in the financial markets. "The managers of big business took huge risks out of greed," said the Costa Rican President Oscar Arias, whose economy is highly dependent on US trade. "What happens in the United States will affect the entire world and, above all, small countries like ours."

Another ally of Mr Bush, the Colombian President Alvaro Uribe, criticised Washington's failure to deal with the uncontrolled financial speculation. "The whole world has financed the United States, and I believe that they have a reciprocal debt with the planet," he said.

France and Germany are calling for greater EU intervention to regulate the markets, while Britain is wary of such a move. But Mr Brown used his UN speech last Friday to press for international regulators to set up "colleges" overseeing the megabanks with branches across the world.
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May we be strengthened with the ability, willingness and capabilities to be good ambassadors of Nigeria contributing to its uplifting, rather than its detriment. - Cxsm

admin · Site Admin Joined: 25 May 2007 Posts: 5404

Global Financial Crisis: Soludo, Finance Minister, Others Meet Senate Tomorrow

Tribune
Taiwo Adisa
20rh Oct. 2008

Finance Minister, Dr. Shamsudeen Usman, and the Governor of Central Bank of Nigeria (CBN), Professor Chukwuma Soludo, will tomorrow brief the Senate on the state of the country’s preparedness to withstand the rampaging global financial crisis.

Also to appear before the Senate on Tuesday are the Minister of National Planning, Senator Sanusi Daggash and the Chief Economic Adviser to the President, Dr. Tanimu Yakubu.

The decision to summon the top government officials to brief the Senate was taken following a motion moved by Senator Anthony George Manzo, drawing Senate’s attention to the global financial crisis, which he said had limitless implications for the Nigerian financial sector.

They will all address the Senate at plenary and are expected to provide the details of government’s preparedness for the global financial crisis and give details of how it affects Nigeria. Also related to that is the invitation sent to the Securities and Exchange Commission (SEC) over the meltdown in the securities sector.

Officials of SEC are expected to meet the Senate Committee on Capital Market headed by Senator Ganiyu Solomon. It was gathered that the Committee had sent a letter to the Director General of SEC, Mallam Musa al-Faki, to lead his team to brief the Senate committee at 12 noon.

Faki will answer questions on the continuing meltdown in the securities sector despite the recent government intervention and clarify how the global financial crisis had affected the sector.

The Senate has expressed worries that despite the injection of N1 trillion by the CBN last month, the economy has continued to look fragile, particularly in the banking and the securities sectors.

Senator Manzo, who moved the motion entitled “Global Credit Crisis and its Impact on Nigeria,” which led to the invitation of the top government officials, had given the example of the global cash crunch which has swept through the United States, Europe and some Asian countries.

In adopting the motion, the senators had urged the government to pump more money into the economy by paying all outstanding funds owed local contractors, rebuild the nation’s infrastructure by repatriating a part of the foreign reserves, reduction of interest rates and granting of rebates and reduction of interest rates to the manufacturing sector.

They also called for the expansion of investment in the agriculture sector to aid local food security.
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May we be strengthened with the ability, willingness and capabilities to be good ambassadors of Nigeria contributing to its uplifting, rather than its detriment. - Cxsm

admin · Site Admin Joined: 25 May 2007 Posts: 5404

China, India Feel Crisis; Britain Seeks Gulf Help
http://news.yahoo.com/s/nm/20081101/bs_nm/us_financial6

Hungary Saved from Bankruptcy by International Aid
http://news.yahoo.com/s/afp/20081..._ylt=AkEnmQInnoOcy5W0ejCshPrxrGIF

Brazil Mining Giant Vale Cuts Output Due to Global Crisis
http://news.yahoo.com/s/afp/20081..._ylt=AlzoRI3MXcLceljQFOfS0NCoOrgF

Evidence of a Recession Piles Higher with New Data
http://news.yahoo.com/s/ap/200811..._ylt=AunLseWfDczIXnGj55p.5qWb.HQA
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May we be strengthened with the ability, willingness and capabilities to be good ambassadors of Nigeria contributing to its uplifting, rather than its detriment. - Cxsm

admin · Site Admin Joined: 25 May 2007 Posts: 5404

Sour Economy Threatens Canadian Corporate Giving
http://news.yahoo.com/s/nm/200811..._ylt=AlxNw_thvdDAM9ZXRTeSmg5vaA8F
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May we be strengthened with the ability, willingness and capabilities to be good ambassadors of Nigeria contributing to its uplifting, rather than its detriment. - Cxsm

admin · Site Admin Joined: 25 May 2007 Posts: 5404

RBS to Slash 3,000 Jobs Worldwide
http://news.yahoo.com/s/afp/20081..._ylt=Aml_vLOZl3NRCvKZxBT.mb5vaA8F
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May we be strengthened with the ability, willingness and capabilities to be good ambassadors of Nigeria contributing to its uplifting, rather than its detriment. - Cxsm

admin · Site Admin Joined: 25 May 2007 Posts: 5404

GM Daewoo to Shut Down for Two Weeks Amid Sales Slump
http://news.yahoo.com/s/afp/20081..._ylt=ArlL.b1Tv3MhnW5JPWTMxW5vaA8F

Economic Turmoil to Hit Right Across Canada
http://news.yahoo.com/s/nm/200811..._ylt=AqQJdzkpqteiM8jk_LMeqsZvaA8F

Canada Mulls Selling CN Tower to Balance Books

Canada could slap a For Sale sign on Toronto's needle-like CN Tower and other national assets as a way to ease pressure on the federal budget in the midst of the financial crisis.

http://news.yahoo.com/s/nm/200811..._ylt=AsBZBawhRLrI7Hd4UuPnrb1vaA8F
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May we be strengthened with the ability, willingness and capabilities to be good ambassadors of Nigeria contributing to its uplifting, rather than its detriment. - Cxsm

admin · Site Admin Joined: 25 May 2007 Posts: 5404

Foreign Banks Recall $3bn Credit Line from Nigerian banks

Babajide Komolafe
20th Nov. 2008

In an apparent bid to shore up their balance sheet in response to the global financial crisis, foreign banks acting as correspondent banks to Nigerian banks recalled about $3 billion credit line from their local counterparts banks in the month of October. Meanwhile UBA PLC has successfully acquired a bank in Benin Republic for N20 billion.

The reduction of credit line by the foreign banks led to a sharp and unprecedented increase in foreign exchange purchase under the Wholesale Dutch Auction System (WDAS) during the month. From an average of about $300 million per month, foreign exchange sale short up to $3.4 billion during the month.

Money Market Association of Nigeria (MMAN), the umbrella body of banks' treasury disclosed this in its Financial and Economic report for October. It stated, "WDAS market for the month of October recorded lots of activities as Central Bank of Nigeria (CBNd, through its Trade and Exchange Department sold dollar to the tune of $3.4 billion compared to $290.00m sold in September, and $1.27bn sold in August.

It was the highest volume sold so far in a single month in the year 2008. Month-on-Month, it represented 1,529.3 percent over $206,569,766.49 sold in corresponding month in 2007. The increase in volume of foreign exchange sold in the month was hinged on the recalled of funds by the offshore corresponding banks in their efforts to minimize the impact of the global financial crisis on their balance sheet size."

A money market source who also confirmed this to Vanguard explained that the credit line represents money used by the corresponding banks to help the local banks to settle foreign currency denominated trade transactions of the customers. He said such credits are usually not recalled immediately but gradually. This time around because of the impact of the global financial crisis on their balance sheet the correspondent banks had to recall these credits immediately hence the huge outflow of foreign exchange during the month.

It would be recalled that the President of the Chartered Institute of Bankers of Nigeria (CIBN) and Group Chief Executive, Intercontinental Bank PLC, Dr. Erastus Akingbola alluded to this development while explaining the impact of the global financial crisis on Nigerian banks, during a visit to Vanguard Newspaper.

He stated, To say that it won't have effect on Nigeria, we would be oversimplifying the issue. We may say it won,t have direct effect because the product that caused the problem abroad was not sold in not in Africa at all not even southern Africa, the subprime mortgage and the economist put it two weeks ago, that for the first time isolation is paying off for Africa. Because we have been isolated from the world community they didn't not bring the product here.

"Having said that if those in the western world are having trouble and we rely on them for some of our confirming lines, some of our credit lines, direct dollar placements, and they themselves are looking for dollars it means they will have to reduce what they are making available to use.
That is one of the direct effect, the level of confirming lines to banks have reduced. But what they did was rather than say reduce it for every bank by 50 percent. They said what is the country confirming credit limit of a particular bank.

If the country limit of a bank was $1 billion before they will say reduce it by 50 percent to $500 million. So they reduce for some banks and add or retain what they have for some other banks. But at least as a nation we have gotten a reduction, we must agree to that effect."

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May we be strengthened with the ability, willingness and capabilities to be good ambassadors of Nigeria contributing to its uplifting, rather than its detriment. - Cxsm