BOE
The Bank Of England's (BOE) Financial Stability Report adopted a cautious tone, noting that, while Euro-zone sovereign debt issues had abated, markets we still not back to normal. The report noted that UK banks’ direct exposure to peripheral EU countries was modest, indirect exposure via European subsidiaries may present a problem.
“We have a completely open mind as to whether to do more asset purchases or not,” Bank of England Governor Mervyn King said. The pound dropped as much as 0.8 percent to $1.6616.
Mervyn King said the U.K. economy faces a “hard path” back to health and he has an “open mind” on further bond purchases, signaling officials aren’t ready to withdraw stimulus yet.
Read more: Mervyn King says BOE has ‘Open Mind’ on more bond purchases...
The Bank of England left rates unchanged as expected, but tinkered with the size of the asset purchase program, adding "only" GBP 25 billion to the QE measure rather than the expected GBP 50 billion. Expanding QE measures shows that the BoE is still concerned about the prospects for the UK economy.
Read more: Bank of England left rates unchanged as expected...
Bank of England Governor Mervyn King stepped up his call for governments to tackle the dangers posed by banks that are “too important to fail,” saying new capital rules won’t shield taxpayers from funding any future bailouts. “The massive support extended to the banking sector around the world, while necessary to avert economic disaster, has created possibly the biggest moral hazard in history,”.
Read more: BOE's King suggests splitting up largest banks to stem risk...
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Central Banks Interest Rates
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