In a statement by US Treasury Secretary Jack Lew, President Barack Obama nominated Jim Yong Kim for a second term as president of the World Bank. A Treasury spokesman said the announcement was made at the beginning of the period for submitting nominations, to signal the president's strong support for Kim.
The World Bank will bring its first offering in China of bonds denominated in Special Drawing Rights to the market before month's end in Shanghai and authorise them to trade on China's interbank market. In a victory for China's effort to make the yuan an international currency, the bonds will be payable in yuan, and principal and interest on the debt, worth about $700 million, will be paid in yuan upon redemption.
Not all is harmony as China prepares for next month's Group of 20 summit, with a number of nations resisting China's push to acquire assets abroad. Such rejection is considered even more confrontational than disputes over trade, and Beijing objects to the implication that it can't be trusted.
Federal Reserve officials meeting with Fed Up, a coalition of community groups, said that if the central bank acts too slowly to raise interest rates, it could cause the economy to overheat and then fall into a recession. "If we do wait too long, this economy will create imbalances or overheat ... and when we react to that, that often leads to a recession or some other bad outcome," said San Francisco Fed President John Williams.
John Cryan, CEO of Deutsche Bank, wrote in Germany's Handelsblatt newspaper that the uncertainty caused by the European Central Bank's interest-rate cuts and bond-buying outweighs any benefits the central bank's actions might bring. "[C]ompanies are holding back due to the ongoing uncertainty with investments and are rarely requesting loans," he wrote.
The proposed merger between Deutsche Boerse and London Stock Exchange Group could increase derivatives-clearing risks, said Andreas Dombret, a board member of the Bundesbank. "When several clearinghouses come together in a single exchange operation, I see it with a certain amount of concern," he said.
Outflow from hedge funds totaled $25.2 billion in July, the highest amount for a month since February 2009, according to eVestment. Outflow has reached $55.9 billion this year, eVestment says.
The Securities and Exchange Commission has fallen behind other regulators in enacting post-crisis reforms and is feeling pressure from opposing interest groups on how to prioritize its agenda in the final months of Barack Obama's presidency.
The US Court of Appeals for the District of Columbia Circuit will hear arguments Oct. 24 on MetLife's designation as a systemically important financial institution, which a lower court has revoked. The case has a bearing on other nonbank SIFIs, which might sue if MetLife prevails.
R3 CEV filed for its first patent Tuesday for the Corda software behind its push to create a standard for the implementation of blockchain in the financial-services industry. The company hopes to launch the "alpha" version of its software by mid-2017.
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