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Posts tagged ‘Christine Lagarde’

Relief Around the World as US Avoids Debt Default.


Image: Relief Around the World as US Avoids Debt Default

IMF managing director Christine Lagarde.

BEIJING — The International Monetary Fund (IMF) appealed Thursday to Washington for more stable management of the nation’s finances as Asian stock markets rose after U.S. leaders agreed to avoid a default and end a 16-day government shutdown.

With only hours to spare until the $16.7 trillion debt limit was reached, Congress passed late Wednesday and President Barack Obama quickly signed legislation to allow more borrowing and reopen government agencies.

“World heaves sigh of relief as U.S. barely averts debt default,” said the Times of India newspaper in a headline.

IMF managing director Christine Lagarde welcomed the deal but said the shaky American economy needs more stable long-term finances. The deal only permits the Treasury to borrow normally through Feb. 7 and fund the government through Jan. 15.

“It will be essential to reduce uncertainty surrounding the conduct of fiscal policy by raising the debt limit in a more durable manner,” Lagarde said in a statement.

The Tokyo stock market, the region’s heavyweight, gained as much as 1.1 percent. Markets in China, Hong Kong and South Korea also rebounded from losses.

China and Japan, which each own more than $1 trillion of Treasury securities, appealed earlier to Washington for a quick settlement. There was no indication whether either government had altered its debt holdings.

China’s official Xinhua News Agency had accused Washington of jeopardizing other countries’ dollar-denominated assets. It called for “building a de-Americanized world,” though analysts say global financial markets have few alternatives to the dollar and U.S. government debt for trading and holding currency reserves.

Asian companies and investors had expressed confidence the United States would avoid a default. But had sold Treasurys to avoid possible losses if Washington delayed repayment. Others put off buying stocks that might be exposed to a U.S. downturn.

© Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Source: NEWSmax.com

IMF’s Lagarde Predicts Massive Disruption if Debt Ceiling Isn’t Lifted.


International Monetary Fund Managing Director Christine Lagarde said the Congressional deadlock over the U.S. debt ceiling is threatening the U.S. and world economies and cautioned against “creative accounting” to avoid default.

“If there is that degree of disruption, that lack of certainty, that lack of trust in the U.S. signature, it would mean massive disruption the world over,” Lagarde said in an interview with NBC’sMeet the Press” about the impact of not raising the borrowing limit. “And we would be at risk of tipping, yet again, into recession.”

Lagarde said the U.S. stalemate “transformed” the discussions of global finance officials gathered in Washington this weekend at the IMF annual meetings.

Editor’s Note22 Hidden Taxes and Fees Set to Hit You With Obamacare. Read the Guide to Protect Yourself. 

Senate leaders of both parties began negotiations to avert a default even as senators blocked legislation to prevent one, and talks between the White House and House Republicans hit an impasse.

With a partial government shutdown in its 13th day and a lapse in borrowing authority four days away, the best prospects for a deal shifted from the House to the Senate, where Majority Leader Harry Reid and Minority Leader Mitch McConnell held their first negotiating session since the shutdown began Oct. 1.

© Copyright 2013 Bloomberg News. All rights reserved.

Source: NEWSmax.com

US Default Could Have ‘Terrible’ Global Consequences.


U.S. Capitol
The sun sets behind the U.S. Capitol in Washington, Oct. 6, 2013. Republican House Speaker John Boehner vowed on Sunday not to raise the U.S. debt ceiling without a “serious conversation” about what is driving the debt, while Democrats said it was irresponsible and reckless to raise the possibility of a U.S. default. (Jonathan Ernst/Reuters)

The government shutdown isn’t the only battle facing government leaders. A more critical deadline, the raising of the U.S. debt ceiling, is Oct. 17.

If the nation’s borrowing limit is not raised, the United States could default.

Christine Lagarde, head of the International Monetary Fund, warns the consequences could be terrible worldwide. It could strip the dollar of its status as the world’s reserve currency.

Maury Fertig, chief investment officer of Relative Value Partners, agrees, saying a default “would be so catastrophic and such a self-inflicted wound that you can’t imagine we would let it happen.”

What would happen to the economy and the markets if there is no agreement to raise the debt ceiling? Seton Motley, president of Less Government, addressed that question and more, on CBN Newswatch, Oct. 4.

“But the fact is that every day we get closer to it the possibility increases, even though it’s remote,” he said.

Speaker of the House John Boehner’s office says he would not let the government default on its debt.

But Boehner’s spokesman says if the debt limit is raised, the U.S. needs a bill with cuts and reforms to get the economy moving again.

Source: CHARISMA NEWS.

IMF’s Lagarde Pleads: Fed Tapering Will Be ‘Arduous’ on Global Economy.


The head of the International Monetary Fund cautioned the world’s major central banks Friday not to withdraw their unconventional support for weak economies too soon. IMF Managing Director Christine Lagarde said stimulative policies are still needed in key regions, especially Europe and Japan, which have struggled with prolonged weakness.

Lagarde and many global central bank officials fear the increased risks of a sharp economic slowdown in emerging markets while the U.S. Federal Reserve is signaling that it could slow its bond purchases later this year if the U.S. economy continues to improve. The Fed’s bond buying has helped keep U.S. interest rates near record lows.

“Even if managed well,” Lagarde said of a central bank’s exit from easy-money policies, that could still present an “arduous obstacle course” for other countries. Lagarde said what’s needed is greater policy coordination and cooperation for the sake of the entire globe.

Editor’s Note: Put the World’s Top Financial Minds to Work for You

“No country is an island,” she said Friday at the Fed’s annual conference in Jackson Hole, Wyo.. “Looking at the wider effect is in your self-interest,” she said. “It is in all of our interests.”

Lagarde said central banks must carefully develop strategies for scaling back their efforts to keep borrowing rates low. Any pullback should be determined by the strength of individual economies, she said.

Unconventional monetary policy is still needed in all places it is being used, albeit longer for some than for others,” Lagarde said in her speech to the conference.

The anticipation of a slowdown in Fed bond buying has unsettled U.S. stock and bond markets and sent interest rates up. Rising U.S. rates have, in turn, triggered turmoil in some emerging economies, such as Turkey, India and Indonesia. Officials in those countries have tried to halt declines in the value of their currencies as investors have shifted money into higher-yielding investments elsewhere.

Lagarde took note of the market declines that have followed Fed Chairman Ben Bernanke‘s signal in June that the Fed could begin slowing its bond purchases later this year if the U.S. economy strengthens further.

She said finance officials should prepare contingency plans in case market turbulence worsens.

Some investors think the Fed could announce at its next meeting in September that it’s reducing its bond purchases. But comments from Fed officials at Jackson Hole suggested some disagreement within the central bank over the proper timing for a slowdown to begin.

Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, suggested in an interview with CNBC that he might be ready to endorse a bond-buying slowdown in September. But James Bullard, president of the St. Louis Fed, said he thought the economy remains too uncertain for a pullback next month.

“I don’t think we have to be in any hurry,” Bullard said in a separate interview with CNBC. “I think we want to take our time and assess what is going on.”

Bullard is a voting member of the Fed’s interest rate panel this year. Lockhart takes part in discussions but doesn’t have a vote this year. Their remarks mirrored the divided opinion that was evident in the minutes of the Fed’s July meeting released this week.

In her speech, Lagarde said the support being provided by major central banks is buying time for nations to implement key economic reforms.

“Push ahead with deeper reforms to lay the foundation for durable and lasting growth,” Lagarde said. “Do not waste the space provided by unconventional monetary policies.”

For example, she said troubled nations in Europe must repair their financial systems before credit can start flowing normally again.

Lagarde said some emerging market countries have taken steps to prepare for the shocks that could occur as the United States and other major economies withdraw their extraordinary support and borrowing rates rise to historically normal levels. But she said more work would be needed.

She said the IMF will provide support where possible, including emergency loans to countries that need them.

Editor’s Note: Put the World’s Top Financial Minds to Work for You

© 2013 Newsmax. All rights reserved.

By Newsmax Wires

IMF’s Lagarde urges governments to push ahead with banking reforms.


FRANKFURT (Reuters) – International Monetary Fund chief Christine Lagarde called on Tuesday for governments to shore up or wind down weak banks and push ahead with financial regulation reform to help the global economy recover.

In a speech in Frankfurt entitled “The Global Financial Sector – Transforming the Landscape”, Lagarde said she was concerned about the uneven implementation of bank regulation, “particularly the delay of Basel III in major jurisdictions”.

“Weak banks are still a drag on growth. Balance sheet repair needs to be tackled at the same time as regulatory reform, in a mutually reinforcing manner,” Lagarde said.

She said troubled banks needed to be recapitalised or wound down and for systemically relevant European banks the European Stability Mechanism (ESM) could be used as a backstop.

It was “unacceptable” that some banks were still considered “too-important-to-fail” and this needed to be fixed, she said.

(Writing by Paul Carrel; Editing by Catherine Evans)

Source: YAHOO NEWS.

ReutersReuters

IMF backs Cyprus bid to help small depositors – Lagarde.


FRANKFURT (Reuters) – The International Monetary Fund supports the Cypriot government‘s efforts to ease the pain for smaller depositors under a levy that is part of an international bailout for the island, IMF Managing Director Christine Lagarde said on Tuesday.

“We are also obviously extremely supportive of the Cypriot authorities’ intentions to introduce more progressive rates in the one-off levy or deposit-share swap within the agreed financial envelope of 5.8 billion (euros),” she told a conference.

Lagarde also said Cyprus needed to reduce the size of its banking sector and restructure it.

(Reporting by Paul Carrel, writing by Gareth Jones)

Source: YAHOO NEWS.

ReutersReuters

IMF official says good progress made in Egypt talks.


CAIRO (Reuters) – Egypt and the International Monetary Fund made very good progress in talks on Sunday, an IMF official said after meeting Prime Minister Hisham Kandil.

“We’ve had very good progress,” Masood Ahmed, Director of the IMF’s Middle East and Central Asia Department told reporters, describing the discussions as “very constructive”.

“The next step is that the technical work will continue,” he added.

Egypt is seeking a $4.8 billion loan from the IMF as the country grapples with a currency and budget crisis.

Source: YAHOO NEWS.

Reuters

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