Top Interest Rate Headlines 04-26-11: Stimulus by Fed Is Disappointing, Economists Say

Stimulus by Fed Is Disappointing, Economists Say
By BINYAMIN APPELBAUM, The New York Times
The Federal Reserve’s experimental effort to spur a recovery by purchasing vast quantities of federal debt has pumped up the stock market, reduced the cost of American exports and allowed companies to borrow money at lower interest rates.
http://jlne.ws/dEv3H7

Sarkozy Supports Italian Official to Lead Central Bank
By LIZ ALDERMAN and JUDY DEMPSEY, The New York Times
The high-level politicking over who will be the next president of the European Central Bank moved closer to resolution on Tuesday when President Nicolas Sarkozy of France said he would support a respected Italian monetary official, Mario Draghi, to succeed Jean-Claude Trichet when he steps down later this year.
http://jlne.ws/gl4Iwr

Why Do We Have a Debt Ceiling Anyhow?
By David Wessel, WSJ.com
On the face of it, a federal debt ceiling seem strange. Congress passes spending bills and tax bills, and those decisions lead to bigger or smaller deficits — or once upon a time surpluses — depending on what happens with the economy. The decision to borrow more or less is a consequence of those tax and spending decisions. With Congress once against arguing about raising the debt limit, one might wonder how this peculiar practice began.
http://jlne.ws/eqyYLr

UBS Prime Brokerage Chief Gray Out, Nomura's Wannenmacher In
FIN Alternatives
UBS has lost its Asia-Pacific prime brokerage chief, David Gray. Gray, who has spent the last 17 years with the Swiss bank, has left the firm, UBS said. It is unclear what his future plans are.
http://jlne.ws/hpC5DP

Home prices fall for 8th month in February: S&P/Case
Reuters
Single-family home prices fell for an eighth straight month in February, inching closer to an April 2009 trough, a closely watched survey said on Tuesday.
http://jlne.ws/eq00hr

The Yale Law Journal Online - Failure Is an Option: An Ersatz-Antitrust Approach to Financial Regulation
By Jonathan R. Macey & James P. Holdcroft, Jr.
We distinguish the economic problems when large financial institutions (“banks”) become insolvent from the political challenges that exist before banks are distressed. These political problems arise because policymakers would like to be able to precommit while a bank is still healthy to refrain from bailing out the bank later, should it become distressed.
http://jlne.ws/ec8Flv

Primary dealers warn on debt-ceiling-breach impact
By Steve Goldstein, MarketWatch
The Treasury Borrowing Advisory Committee, which represents the primary dealers of U.S. Treasurys on Wall Street, on Tuesday warned over the impact of not raising the debt ceiling in a letter to U.S. Treasury Secretary Timothy Geithner.
http://jlne.ws/iffL9i

Spanish borrowing costs jump; Greek debt shunned
By Paul Day and William James, Reuters
Spain's short-term borrowing costs jumped on Tuesday as euro zone markets returned from the Easter break still fretting about a potential Greek debt restructuring with knock-on effects on other sovereigns. France meanwhile became the first euro zone state publicly to endorse the candidacy of Bank of Italy governor Mario Draghi to succeed Jean-Claude Trichet as president of the European Central Bank later this year.
http://jlne.ws/fZfaOZ

Stimulus by Fed Is Disappointing, Economists Say
By BINYAMIN APPELBAUM, The New York Times
The Federal Reserve’s experimental effort to spur a recovery by purchasing vast quantities of federal debt has pumped up the stock market, reduced the cost of American exports and allowed companies to borrow money at lower interest rates.
http://jlne.ws/dEv3H7

Geithner: Lock in reforms with multi-year framework
By Kristina Cooke, Reuters
Congress and the White House could buy time to make the difficult decisions needed to cut the U.S. budget gap if they can agree on a broad deficit reduction framework, Treasury Secretary Timothy Geithner said on Tuesday.
http://jlne.ws/gtVXbI

Caution urged on bank foreclosure fines
By Tom Braithwaite, Financial Times
Banks will be fined for failures that led to the foreclosure debacle but regulators should avoid “dangerously large” penalties, according to one of the top officials participating in fractious settlement talks.
http://jlne.ws/hmWNan

Greece's Budget Deficit Higher Than Expected
By MATTHEW DALTON And LAURENCE NORMAN, Dow Jones
Greece's budget deficit in 2010 was 10.5% of gross domestic product, significantly higher than forecast by either the Greek government or the European Union authorities, Eurostat, the EU's official statistics agency, said Tuesday.
http://jlne.ws/fqlRSZ

MPs attack Treasury on lack of influence over bank lending
Money Marketing Online
MPs have criticised the Treasury's "lack of effective sanctions" against Royal Bank of Scotland and Lloyds Banking Group when the banks failed to meet lending targets for small businesses under the Asset Protection Scheme.
http://jlne.ws/gGPPWM

Private clients regain confidence in UBS
By Haig Simonian in Zurich, Financial Times
UBS’s recovery from the credit crisis continued apace in the first quarter as investment banking reaped the benefits of its rebuilding and private banking clients regained confidence in the Swiss group’s prospects.
http://jlne.ws/icVSmH

Loan figures raise doubt over bank earnings
By Suzanne Kapner and Francesco Guerrera in New York, Financial Times
Sluggish loan growth and ultra-low interest rates are depressing US banks’ revenues, compounding investors’ fears that future earnings will remain under pressure in spite of the domestic economic recovery.
http://jlne.ws/eNxd7O

Goldman Creditor Group Files Lehman Liquidation Plan to Rival Paulson's
Bloomberg
Goldman Sachs Group Inc. (GS) and other creditors of Lehman Brothers Holdings Inc. including Morgan Stanley (MS) and Credit Suisse Group AG (CSGN) filed a liquidation plan for the defunct company that would give more money to their group than two other proposals for allotting $61 billion among creditors.
http://jlne.ws/gKHcIx

HSBC to close retail operations in Russia
By Courtney Weaver in Moscow
HSBC is to close down its retail operations in Russia, making it the second foreign bank to leave the state-dominated sector in as many months. The decision by HSBC, on the back of a similar plan at Barclays, comes as both rethink their global strategy to cut back on operations that are a drag on group profitability.
http://jlne.ws/gQgrgF

Former Banco Santander Analyst Agrees To Settle Insider Trading Charges
Press Release
The Securities and Exchange Commission today announced that former Banco Santander S.A. analyst Juan Jose Fernandez Garcia of Madrid, Spain, has agreed to pay more than $625,000 to settle insider trading charges against him. The SEC accused Garcia in August 2010 of illegally trading in advance of a corporate takeover by a company that Santander advised.
http://jlne.ws/hl0juJ