Central banks back new regulation

Central bankers have backed new measures to strengthen supervision of the global banking industry. A meeting of the Bank for International Settlements (BIS), which consists of the world's central banks, pledged to increase bank's capital requirements. The plans should substantially reduce the probability and severity of economic and financial stress, the BIS said. But the BIS did not set out a timeline for implementation of the proposals.

The measures will be outlined in detail by year-end and be introduced in a way that does not impede the recovery of the real economy. The BIS meeting comes just after the finance ministers from the Group of 20 richest nations meeting in London backed a system that rewards long-term performance rather than short-term risk-taking.
Source: www.bbc.co.uk

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Downturn in US economy 'ending'

US Federal Reserve policymakers are increasingly confident the downturn in the US economy is ending, minutes from their latest meeting show. The assessment by recently re-appointed Fed Chairman Ben Bernanke and his colleagues struck a more upbeat tone than the last assessment in late June. But there was uncertainty about how quickly the economy would grow in 2010.

Unemployment, which is set to move above 10% this year, may impact on consumer behaviour, they warned. However the Fed said that consumer spending appeared to be levelling out and that the housing market was becoming more solid, while manufacturing was stabilising. The prospects for US exporters will also brighten, as the economies of other countries improved, the policymakers added.
Source: www.bbc.co.uk

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Boost for eurozone recovery hopes

Eurozone economic activity rose in August for the first time in 15 months, according to an influential survey. The latest Purchasing Managers' Index (PMI) figure rose to 50.4, raising hopes that the eurozone could soon emerge from recession. Any score above 50 shows an increase in economic activity. This is the first time the index has been above this benchmark score since May 2008. But separate figures show that retail sales in the eurozone fell in July.

Also on Thursday, the European Central Bank kept its main interest rate on hold at 1%. The disappointing retail sales figures also cast doubt on a quick recovery. Sales in the 16 countries that use the euro fell by 0.2% in July compared with the previous month, defying expectations of a rise in consumer spending. Weak sales of food, drink and tobacco, down 0.5%, caused the overall drop, the official Eurostat figures showed. There was no change in sales of other goods.
3rd September 2009, www.bbc.co.uk

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