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Daily Dispatches – a big week for central banks

Watching for guidance. (Image:Wikipedia)

Watching for guidance. (Image:Wikipedia)

All eyes will be on three of the world’s most influential central banks this week, with market watchers looking to see how interest rates policies will be amended, if at all, despite the general improvement in their relative economies.

The Sydney Morning Herald reports that the banks – Federal Reserve, the European Central Bank and the Bank of England – are all expected to repeat or refine their “forward guidance” that borrowing costs will remain extraordinarily low as long as growth is sub-par and inflation is not a threat.

Fed Chairman Ben Bernanke’s news conference after the US central bank’s policy meeting will come in for particular scrutiny for fresh clues over the timetable for tapering easy money, currently a staggering USD$85 billion a month.

Key figures that influence interest rate policy include the monthly employment data and they are expected to show that the economy added 185,000 jobs in July. 

UBS to pay Fannie and Freddie USD$885 million

The South China Morning post says that UBS, Switzerland’s largest bank, has agreed to pay USD$885 million to Fannie Mae and Freddie Mac to settle claims that it improperly sold them mortgage-backed securities during the housing bubble.

The world’s biggest audit?

The Financial Times reports that China will conduct an urgent audit of all government debt, underlining concerns over rising financial risks in the world’s second-biggest economy.

The National Audit Office said on Sunday that it had been instructed by the state council, China’s cabinet, to come up with a tally of how much money is owed by all levels of government from villages up to central authorities.

separate article on the website of the People’s Daily, the official newspaper of the Communist party, said the state council had called for the audit on Friday afternoon and that it had ordered the national audit office to halt other projects to start on the debt tally immediately.

Chunky decline for China

Bloomberg reports that economists are starting to investigate the possibility that China’s economy could slump to 3% in the next three years, down by more than half from its current level of 7.5%. The knock-on effect on global commodities would be severe – a copper price collapse of more than 60%, zinc cut by up to a half and oil down to USD$70 a barrel.

McEwan frontrunner for RBS job?

The Canberra Times says that Ross McEwan, the retail banking head of Britain’s Royal Bank of Scotland, is in pole position to be named as chief executive of the state-backed bank.

McEwan, a former honcho at Commonwealth Bank, is said to be the leading candidate following a six-week search. It is believed his name will this week be put forward to a four-stage process which could see him anointed as early as this week.  McEwan ran CBA’s retail banking arm for five years.

ANZ mulling Asia chief role

Meanwhile The Age reports that ANZ has gone back to the drawing board as it continues the search for a replacement for the architect of its Asian banking strategy, Alex Thursby, who left in April to take up the top job at the National Bank of Abu Dhabi.

A good place to have a heart attack

There’s never a good time or place to have a heart attack, but if you don’t want to cure to kill you with the financial burden of having remedial surgery, then India could be the place to get your ticker repaired.

Bloomberg reports that Devi Shetty – a heart surgeon turned businessman who has started a chain of 21 medical centres around India – has cut the price of artery-clearing coronary bypass surgery to 95,000 rupees (USD$1583) and wants to get the price down to $800 within a decade. The same procedure costs $106,385 at Ohio’s Cleveland Clinic.

Singapore stats

It’s an important week for Singapore economic data, according to The Business Times. Out this week are new numbers for Singapore June bank lending; Q3 business expectations in the Lion City, the June unemployment rate; and the July PMI.

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