The IMF (International Monetary Fund) is creating an emergency fund to help emerging markets weather the global financial crisis, making available $100 billion to countries in Africa, Asia and South America. BBC The US Federal Reserve announced a rate cut of half a percentage point, to 1%, and announced $30 billion in loans to four emerging markets to help them meet the “intense demand for dollars” in their markets. Financial Times
Russia’s richest person, Oleg Deripask of UC Rusal holding company, is receiving a $4.5 billion loan from the Russian government that will allow him to repay in full loans due to a syndicate of Western banks that include Bank of Scotland and Merrill Lynch. The loan is part of a package to Russia’s business leaders that could go to $50 bn. Financial Times
Switzerland (GenevaLunch) – Volatility was a key word Tuesday morning: European markets, including Switzerland’s stock market rose, but erratically, Tuesday morning after Asian markets recovered their Monday losses. The Swiss franc became a refuge currency, at a seven-year high against the euro.
Update, 12:40 Shares in Asia recovered after falling for the fifth day in a row, with Japanese bank shares at one point down 10-16%. The dollar rose to its highest in 2.5 years against the euro but then leveled off; the yen continued to rise despite a warning from the Group of Seven rich countries that “high volatility in the currency could be detrimental to stability” before it, too, eased. Reuters
The European Central Bank, which cut interest rates by 50 basis points 8 October, along with other central banks, is likely to do so again 6 November, according to the ECB president, Jean-Claude Trichet. Financial Times
The US White House has announced that it is inviting heads of state to participate in a G20 summit in Washington, DC, 15 November, just 11 days after the US election. Stock markets around the world slipped as the news fueled investors’ fears of a global recession. Financial Times
France has unveiled its bank rescue plan, with €10.5bn earmarked for six banks in an effort “to shore up their balance sheets,” reports the Financial Times.
Charles Milhaud, chairman of the Caisse d’Epargne in France, one of the country’s largest savings banks, has followed his director general and chief financial officer in quitting in the wake of a loss of 600m euros due to unauthorized transactions by traders. The bank’s merger with Banque Populaire, another savings group, is expected to go ahead. BBC
Groupe Caisse d’Epargne, one of France’s largest savings banks, lost €600m last week when some of its traders made unauthorized deals on equity derivatives trading. Financial Times
[Update, with headline change, 11:17) Geneva, Switzerland (Tribune de Geneve, Fre) – ACM (Advanced Currency Markets), world leader in currency trading based in Geneva, is not sweating out the current global financial crisis, with a record CHF187.5 billion in currency transaction in September 2008, director Nicolas Bang tells the Tribune in an interview.
The steep slippery slope of banking: where to next?
Bern, Switzerland (GenevaLunch) - The Swiss government, with the Swiss National Bank and the Federal Banking Commission, announced measures before the Swiss stock market opened Thursday to “further stabilize ” and “to sustainably strengthen confidence” in the Swiss banking system as a precaution against more meltdowns in global banking. At the same time UBS and Credit Suisse announced preliminary third quarter results, with UBS showing a profit of CHF296 million but net withdrawals during the quarter of CHF50 billion, while Credit Suisse announced an expected loss of CHF1.3 billion.
[IHT video] Alison Smale, managing editor at the International Herald Tribune in Paris, reviews the week behind us, reminding us of things that may seem to have happened a lifetime ago, when they were only 5-6 days ago, in a tumultuous week.
Zurich, Switzerland (GenevaLunch) – The Swiss stock market, like other major markets, opened lower this morning and prices continued to fall, with analysts saying the markets are trying to find the right balance.
UK Prime Minister Gordon Brown’s popularity at home appears to be rising, after a major dip, thanks to US and European governments endorsing his bank rescue plan. International Herald Tribune (ed. note: see GL story on Credit Suisse counseling the UK government on its plan)
London, England and Zurich, Switzerland (FT) – The UK prime minister, Gordon Brown, is working closely with a subsidiary of Credit Suisse, which beat out several other banks including UBS, for the mandate to advise the UK government on bailing out its three biggest banks.
Japan’s Nikkei was up 14 points, a one-day record gain, and European stocks appeared set to repeat Monday’s strong gains, with the largest gain at “Societe Generale SA [which] rallied 13 percent after posting a profit and saying it doesn’t need additional capital. Oil headed for its biggest two-day advance in three weeks” (Bloomberg) as financial markets around the world begin to react positively to more government intervention, ahead of the US pumping $250 billion into nine banks. CNN, Financial Times
Zurich, Switzerland (GenevaLunch) - The Swiss National Bank announced Monday morning that starting 15 October it will be holding US dollar auctions every Wednesday, a move coordinated with those of four other central banks to improve liquidity in global markets.
The global financial crisis has been happening so fast that it’s hard to keep up. The BBC’s special pages have a useful timeline with graphics. Also useful: its financial crisis jargon page.
