Investment Adviser Predicts Economic Stability For 2012

HUNTSVILLE, AL—Gary Saliba says the U.S. has seen tough times around once a decade since the 60's, but he's convinced companies will actually come out stronger in 2012 because of the trouble.

Local financial leaders say legislation hurts jobs, economy

A year and a half ago, U.S. legislators passed the most sweeping law to hit the financial industry since the Great Depression in response to the more recent Great Recession, with the intent to prevent it from happening again.

Japan to Allow Weapons Exports for International Projects

Dec. 27 (Bloomberg) -- Japan said it would ease some restrictions on weapons exports and allow them for international projects, resurrecting a proposal made last year to benefit the country’s defense industry.

U.S. stores hope for "Mega Monday" of brisk sales

(Reuters) - Shoppers found a mixed bag of bargains and so-so deals on Monday, as a day off for many Americans and warm, dry weather lured some out for what was likely to be the third busiest shopping day of the holiday season.

King Says Crisis Threatens Europe’s Economy as Stability Outlook Worsens

Mervyn King, vice chairman of the European Systemic Risk Board, said Europe’s sovereign debt crisis is threatening to hurt the real economy and the outlook for financial stability has worsened.

EU airline carbon move could spark trade war: China

(Reuters) - Beijing criticized a decision by Europe's highest court to allow airlines to be charged for carbon emissions on flights to and from the European Union, with state media warning on Thursday it could spark a trade spat and the foreign ministry urging talks.

Bernanke Money Policy Seen Achieving Goal as Savers Become Consumers Again

Federal Reserve Chairman Ben S. Bernanke finally may be catching a break: His easy-money policies are showing signs of speeding up the economic rebound three years after he cut interest rates to zero.

World economy at a 'very dangerous juncture': IMF chief

IMF chief Christine Lagarde warned Tuesday that the world economy is at a "very dangerous juncture," speaking of the potential impact on poorer nations during her first visit to Africa as head of the fund.

Draghi's Risky ECB Bet: Reject QE, Hope Merkozy Makes Bailout Fund Work

European Central Bank President Mario Draghi warned of the high price of leaving the Eurozone, telling the Financial Times member states would face the same structural problems outside the common currency, along with rampant inflation, from a weaker position.

Eurozone decline eases, recession still looms

New business surveys show the pace of decline in the euro zone’s private sector unexpectedly easing in December.

Gold Prices Struggle to Stay Near $1, 700

Gold prices fell Wednesday on negative economic news from China and Europe plus concerns that the world's No. 1 economy is barely advancing.

Financial 'Mapping' Could Help Avoid Crashes

LONDON -- The financial system could be made more stable if regulators were able to harness scientific advances in mapping complex networks, Bank of England policy maker Andrew Haldane said Tuesday.

Millionaire surtax: The go-to tax

NEW YORK (CNNMoney) -- Democrats say imposing a millionaire surtax to help pay for the cost of extending the payroll tax cut is only fair. Republicans say it would be a job-killer.

Federal Reserve ends meeting without major moves

WASHINGTON – The Federal Reserve says the U.S. economy has grown moderately as hiring and consumer spending have improved. As a result, it's holding off on any new steps to boost the economy.

Kids asking less of mall Santas in today's economy

More and more, Santas say the children on their laps are asking for less for themselves — and Santa is promising less as well.

Economy boosted by narrowing trade deficit

The U.S. economy, which has been picking up steam recently, got another boost from the latest trade numbers.

Euro crisis big risk to Canadian banks: BoC

OTTAWA (Reuters) - Risks to Canada's financial stability rose sharply in the second half of the year largely because of the European sovereign debt crisis, even though domestic banks remain stronger than in most other countries, the Bank of Canada said on Thursday.

EFSF To Sell Short-Term Paper As Part Of Bailout Funding

The European Financial Stability Facility announced an expanded funding profile Wednesday, with plans to start selling short-term paper with three-, six- and 12-month maturities.

AP sources: S&P could put eurozone on credit watch

BRUSSELS (AP) — Efforts to stabilize Europe's financial crisis were thrown into disarray late Monday as the 17 countries that use the euro braced for a possible downgrade of their credit ratings.

Austrian chancellor backs EU treaty change: report

VIENNA (Reuters) - Austrian Chancellor Werner Faymann backs changes to the European Union treaty that would create a political and economic powerhouse even at the cost of relinquishing some national sovereignty, he told a Sunday newspaper.

Why The Drop In U.S. Unemployment Is Only 'Half-Right'

November’s nonfarm payrolls report is out Friday, and the big news of a dip in the unemployment rate to 8.6% is splashing across the headlines.

Obama renews push for consumer bureau chief

WASHINGTON (CNNMoney) -- The Obama Administration is renewing its push for the Senate to confirm a director to run the Consumer Financial Protection Bureau.

Euro Nations Renew Talk of IMF Role

Europe’s effort to expand its bailout fund is falling short, forcing euro-area finance ministers to consider greater roles for the International Monetary Fund and the European Central Bank to insulate Spain and Italy from the debt crisis.

European Stocks Surge as Leaders Boost Efforts to Contain Crisis

European stocks surged, rebounding from their biggest selloff in two months, amid speculation policy makers are intensifying efforts to contain the debt crisis. U.S. index futures and Asian shares also rallied.

Citi, Genworth lead financial sector rally

NEW YORK (MarketWatch) — U.S. financial stocks rallied almost 4% in early Monday trade as investors cheered early strong consumer spending for the holiday season and reports that politicians are close to a decision on how to support the European economy.

Euro "Stability Union" could be achieved fast: Schaeuble

BERLIN (Reuters) - Euro zone countries could create a Stability Union to secure deeper fiscal integration relatively quickly, German Finance Minister Wolfgang Schaeuble said on Sunday.

Moody’s junks Hungary

Hungary has joined Portugal in the credit junkyard after Moody’s downgraded its foreign and local currency bonds to Ba1 from Baa3, ending 15 years of investment status.

Exclusive: Euro zone may drop bondholder losses from ESM bailout

BRUSSELS (Reuters) - Euro zone states may ditch plans to impose losses on private bondholders should countries need to restructure their debt under a new bailout fund due to launch in mid-2013, four EU officials told Reuters on Friday.

Direct tax collection poor at 40%, may add to slipping fiscal deficit target

NEW DELHI: The government's fiscal deficit target seems to be in fresh danger, with direct tax collections which contribute more than half of the central government's revenue being only 40% of the set target in the last eight months.

Wall Street tumbles more than 2% on Europe, recession worries

NEW YORK: US stocks tumbled on Monday, with the Dow turning negative for the year, as concerns about heavy debt loads both in the United States and Europe heightened worry about recession and increased volatility.

European Financial Crisis Occupies Voters' Thoughts as Spain Prepares to Vote

Spain looks to be on track to get a new prime minister today amid growing concerns the financial crisis in Europe will soon prove overwhelming for that nation as well. The country is currently led by Prime Minister Jose Luis Rodriguez Zapatero, who announced in April he would not seek a third term in office.

EU settles for 2% budget increase

The European Union has been forced to accept a 2% rise in its budget next year - much less than the increase it wanted of around 5%.

European financial crisis: A growing gap between France and Germany

ROME — Even as Europe’s debt crisis sharply escalates, the region’s two largest economies, Germany and France, appear increasingly divided over how and whether to deploy large-scale financial firepower to calm nervous markets.

Analysis: Puzzle over euro's "mysterious" stability

LONDON (Reuters) - As the euro crisis intensifies to the point of investors openly contemplating a fracturing of the single currency, perhaps the most puzzling performance all year has been the stability of the euro exchange rate itself.

‘Enough’s Enough’ on Undervalued Yuan: Obama

President Barack Obama kept up his pressure on China's foreign-exhange policy and trade practices, saying “enough’s enough” on what the U.S. views as a too-slow appreciation of the yuan.

Analysis: Chinese financial help could carry risk for Europe

HONG KONG (Reuters) - As a cash-strapped Europe scrambles to woo China's support for a financial rescue package, human rights groups and dissidents are warning that in taking such help, the West will sacrifice some leverage over China.

Geithner Says Europe Must ‘Move Quickly’

U.S Treasury Secretary Timothy F. Geithner said Europe remains the “central challenge” to global growth and must “move quickly” to restore financial stability.

EU determined to ensure eurozone financial stability

ZURICH: The European Union is "resolutely determined" to ensure the financial stability of the eurozone, the bloc's President Herman Van Rompuy said Wednesday.

Global Liquidity Is Having a Major Impact on Financial Stability and Economic Growth, Says Bank of Canada Governor Mark Carney

LONDON , United Kingdom , Nov. 8, 2011 /CNW/ - Large, abrupt fluctuations in global liquidity are having a major impact on global financial stability and economic growth, Bank of Canada Governor Mark Carney said today in a speech to the Canada-United Kingdom Chamber of Commerce. "Over the medium term, the continuation of such extreme liquidity cycles could ultimately threaten open capital markets and a free trading system if not better addressed," he warned.

Italian crisis: Silvio Berlusconi faces calls to resign

Italian PM Silvio Berlusconi is facing growing calls for his resignation, after apparently losing his majority in the lower house of parliament.

Regulators Name 29 Banks Critical to Global Stability

Global regulators on Friday named 29 banks so important to the world’s financial system that they require more capital and closer surveillance than rivals, plus a detailed plan to allow them to be wound down without taxpayer help if they hit trouble.

Italy Agrees to Allow I.M.F. to Monitor Its Progress on Debt

Acceding to pressure from European leaders, Italy “invited” the International Monetary Fund to look over its shoulder to ensure that Rome is carrying out reforms devised to keep the country from succumbing to Europe’s widening sovereign debt crisis, European Union officials said Friday.In an extraordinary move, Italy said it had offered to allow the fund to scrutinize its books every three months to make sure a $75 billion austerity package is carried out according to plan.

Canada's Banks Welcome Carney Appointment to Head Financial Stability Board

Canadian Bankers Association (CBA) President Terry Campbell today congratulated Bank of Canada Governor Mark Carney on his appointment as Chair of the Financial Stability Board (FSB).

Greece debate takes center stage at G20

Greece was the main topic of conversation here Wednesday after a surprise move by Prime Minister George Papandreou that called into question the latest effort to resolve Europe's debt crisis.

Greece to hold referendum on EU aid package

The European debt-relief plan, agreed to last week, has been thrown into doubt as Greece now says it will hold a referendum on whether to approve it.

Debt crisis not over says Trichet

Outgoing president of the European Central Bank (ECB) Jean-Claude Trichet has warned the eurozone debt crisis is "not over".

Brit and Irish banks escape €106bn recap

The EBA will use banks' figures at the end of September 2011 to calculate their capital and sovereign debt positions.

Europe Resolution Critical to Obama Re-Election

President Barack Obama’s path to re- election may pass through Berlin and Paris.

EU bailout fund chief says 'no deal' with China

he head of the European bailout fund dampened hopes on Friday that China would come to the rescue of the debt-stricken EU, but left the door open for a deal with the world's second-biggest economy.

Pay deals 'lag behind inflation'

UK  pay deals are failing to keep up with the cost of living, especially for public sector workers, according to new research.

Eurozone aims to ramp up rescue fund, details deferred

BRUSSELS/ROME: Euro zone leaders intend to multiply the capacity of their rescue fund around fourfold to one trillion euros but details of how they plan to draw a line under Europe's worsening debt crisis will not be nailed until next month, sources said.

Swiss banking secrecy has no place in globalised world'

Switzerland's bank secrecy laws and anonymous numbered accounts have a long and shameful history: They have been used to help criminals conceal illicit gains, to deny Holocaust survivors their stolen inheritances and to help the world's wealthy hide taxable income.

Central bankers must update outdated analytical toolkit

Gillian Tett has a nice post in today’s FT where she refers to two recent BIS Working Papers by Claudio Borio, that deals with the need for new tools and policies by central banks, post-crisis.

U.K. Stocks Rebound From Two Days of Losses; Lloyds, BSkyB Climb

Oct. 19 (Bloomberg) -- U.K. stocks advanced, rebounding from two days of losses, amid conflicting newspaper reports that Germany and France have agreed to further boost the euro area’s bailout fund, the European Financial Stability Facility.

Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc jumped more than 3.5 percent. British Sky Broadcasting Group Plc climbed after saying operating profit rose 16 percent.

Bailout: Revamping the fund

THE EUROPEAN Financial Stability Facility was created in panic in the course of a frantic weekend in May last year. Now it is set for a second overhaul in less than three months. This part of Europe’s “firewall” against the risk of contagion from Greece is designed to protect distressed sovereign states.

Financial stability equal to monetary policy, says Bernanke

Central banks should view financial stability as being just as important as monetary policy, the chairman of the US Federal Reserve suggested last night.

Speaking at the Federal Reserve Bank of Boston’s economic conference, Ben Bernanke  said he expects monetary policy will continue to be standard approach used by central banks to promote macroeconomic stabilisation.

France Risks Losing Top Grade on Bailout Fund

Proposals to beef up Europe’s bailout fund by offering to guarantee portions of the debt owed by the region’s weaker governments threaten to trash France’s top credit rating.

The nation’s 10-year notes are the fourth-worst performers this quarter -- behind Greece, Belgium and Ireland -- as traders speculate the European Financial Stability Facility will be used to insure the first portion of losses in the event of a sovereign default. France’s rating is under pressure, Moody’s Investors Service said yesterday, and investors now demand a record 105 basis points more to hold its bonds rather than German notes, up from 29 basis points in April.

EU Van Rompuy: Guaranteeing Financial Stability Key To Growth

BRUSSELS (Dow Jones)--European leaders are working on a "comprehensive package" to restore confidence in euro-zone debt markets and in the region's banks, European Council President Herman Van Rompuy said Monday ahead of a key summit.

"For weeks the commission and I have already been working on a comprehensive package to create more confidence in the financial sector and in the sovereign bonds of countries under pressure," he said alongside President Jose Manuel Barroso, president of the European Commission, the executive branch.

Europe's Bailout Fund Overcomes a Hurdle

It appears that the world can take its eyes off Bratislava.

Slovakia's largest opposition party, after a bit of parliamentary gamesmanship, cleared the way Wednesday for the country to endorse changes to the €440 billion ($600 billion) euro-zone bailout fund that European political leaders have deemed essential to the bloc's efforts to beat back the sovereign-debt crisis.

Wall Street set to slip ahead of key vote in Europe

Tuesday is shaping up to be a busy day on Wall Street.

Stock index futures suggest the market will fall at the start of trading as investors wait for the results of a key vote by Slovakia on a plan to expand the euro zone rescue fund.

All the other member states have ratified a plan to increase the size and powers of the European Financial Stability Facility bailout fund. Now all that remains is for Slovakia to have its say on the matter.

Greece Activates Bank Rescue Fund to Create New Proton Bank

Oct. 10 (Bloomberg) -- Greece's central bank activated a rescue fund set up under an EU-led bailout in May 2010 to restructure Proton Bank SA, with the Hellenic Financial Stability Fund becoming its sole shareholder.

Athens-based Proton will reorganize into a new lender called New Proton Bank which will have a 10.6 percent capital adequacy ratio, according to an e-mailed statement from the Greek Finance Ministry today. A separate Bank of Greece statement said the capital adequacy was well above regulatory thresholds.

Slovak party gives qualified EFSF support

A small Slovak party has said it will support the expansion of the eurozone’s temporary bail-out fund, but only if Slovakia refuses to take part in a permanent rescue mechanism that is due to be established by the bloc next year.

The Freedom and Solidarity (SaS) party had previously pledged to oppose changes to the European financial stability facility, threatening to derail its ratification in the Slovakian parliament.

Japan may buy more Euro bailout bonds-Nikkei

TOKYO, Oct 5 (Reuters) - Japan plans to buy more bonds issued by Europe's bailout fund to help contain the euro-zone debt crisis, the Nikkei business daily reported, as financial markets remain jittery about growing prospects for a default by Greece.

Japan, which already holds 20 percent of the total bonds issued by the European Financial Stability Facility (EFSF), will decide the purchase amounts and timeline based on issuance terms and market conditions, the daily said.

Beefed up euro zone fund unlikely to succeed

If as Albert Einstein observed insanity is “doing the same thing over and over again and expecting different results,” then the latest proposal for resolving the euro zone debt crisis requires psychiatric rather than financial assessment.

The sketchy plan entails Greece restructuring its debt with writedowns around 50 per cent and recapitalization of the affected banks. The European Financial Stability Funds (EFSF) would increase its size to a proposed €2-€3-trillion from its current €440-billion. This would enable the fund to inject capital into banks and also support Spain and Italy’s financing needs to reduce further contagion risks.

Bonds show muted reaction to German vote

Australian bonds have opened largely unchanged after Germany's parliament passed a crucial vote to increase its contribution to the European bailout fund, aimed at avoiding a eurozone recession.

Of 611 German MPs present, 523 voted in favour, meaning that Germany in the future will be guaranteeing loans to the bailout fund, the so-called European Financial Stability Facility, or EFSF, of up to 211 billion euros ($A294.57 billion) rather than 123 billion euros so far.

Funds Injection not panacea for ills of world economy

German lawmakers are expected to vote for a bigger bail-out today. However, the vote by the biggest European nation to boost the firepower of the European Financial Stability Facility (EFSF) alone will not permanently end the euro-zone debt woes, especially if European Union leaders continue to avoid the painful but necessary process that Asian countries underwent following the 1997 currency crisis.

Kasikornbank's market and economic research chief Kobsidthi Silpachai said both currency crises showed the dark side of currency peg and currency pool, which - for stability of their currencies - demanded that the countries lose their autonomy in monetary and fiscal management to the currency host country's authorities.

Merkel dismisses talk of increasing EU stability facility

Ahead of talks in Berlin last night, Greek prime minister George Papandreou insisted his government was making a “superhuman” reform effort and warned Germans that sniping about Greece was “frustrating”.

“After this period of pain, I promise you that we Greeks will soon fight our way back to growth and prosperity,” he told the Federation of German Industries. “If [Greek] people feel only punishment and scorn, this crisis will not become an opportunity – it will become a lost cause.”

Austrian finance minister: Debt forgiveness for Greece a ‘very last’ option.

VIENNA — Austria’s finance minister says she considers forgiving Greece part of its multibillion euro debt only a “very last” option for eurozone nations.

Maria Fekter also says such a move could not be implemented until next year when rules governing such a procedure come into effect.

EU fund could be expanded

EU monetary affairs commissioner Olli Rehn has said talks are under way to expand the region’s bailout fund, the European Financial Stability Facility (EFSF), so that it could insure trillions of euro in debt as it seeks to get on top of the euro zone financial crisis.

The International Monetary Fund annual meetings wrapped up in Washington yesterday with widespread concern over the euro zone sovereign debt crisis, but no immediate consensus on the solution.

‘Barrier’ Around Greece Needed: Merkel

German Chancellor Angela Merkel said euro-region leaders must erect a firewall around Greece to avert a cascade of market attacks on other European states that would risk breaking up the currency area.

Expanding the powers of the region’s rescue fund, the European Financial Stability Facility, as agreed by European leaders in July is necessary to avoid Greece’s problems from spilling over to other countries, Merkel said late yesterday on ARD television. The fund’s permanent successor, due to take effect in mid-2013, is needed “so we can in fact let a state go insolvent” if it can’t pay its bills.

40% of small businesses posting losses: Reserve Bank

The share of small unlisted firms making losses remains at above average levels, with about 40% of firms with assets under $1 million reporting losses in 2010 and 2011, according to figures from the Reserve Bank.

This is well above the 25% average over 2006 to 2008.

Releasing its Financial Stability Review, the central bank said while Australian businesses were better placed to deal with any downturn because they had had deleveraged during the GFC, it remained unclear how the European sovereign debt crisis and anaemic growth in the US would play out in the short-to-medium term.

ESRB says EU financial stability at risk, hurts growth

The knock-on effects from the European sovereign debt crisis have led to considerably higher risks of financial instability in Europe, the continent's super-watchdog, the European Systemic Risk Board said on Wednesday.

"Risks to the stability of the EU financial system have increased considerably," the ESRB said in a statement.

"The high inter-connectedness in the EU financial system has led to a rapidly rising risk of significant contagion. This threatens financial stability in the EU as a whole and adversely impacts the real economy in Europe and beyond."

Standard Chartered CEO: Financial Stability Still In The Distance

WASHINGTON (Dow Jones)--The Group of 20 industrial and developing nations should focus more on new threats to financial stability rather than look backward for the reasons that caused the financial crisis, Peter Sands, chief executive of Standard Chartered PLC (SNTDF, STAN.LN), said Friday.

"Clearly we haven't achieved financial stability.... There has been too much fighting the last war rather than dealing with the threats facing us going forward," Sands said at a panel in Washington assessing the work of the Financial Stability Board, the body that advises the G-20 on financial reform.

Fed’s Dudley Says Financial Stability Essential to Foster Economic Growth

Federal Reserve Bank of New York President William C. Dudley said the “unusually anemic” U.S. economic recovery from the credit crisis highlights the need for a regulatory overhaul to ensure financial stability.

“We must keep pushing this agenda forward and not be deterred by those that defend the status quo,” Dudley, 58, said today in a speech in Washington. “The extraordinarily poor economic outcomes we see today underscore the importance of building a financial system that is resilient in its ability to provide credit to households and business throughout the business cycle.”

Euro Stability Fund Will Pass: German Minister

Angela Merkel's coalition partner, whose party has formed the main political opposition to the extension of the European Financial Stability Facility within Germany, told CNBC Wednesday that he believes the new EFSF measures will pass next week.

Vice-chancellor and economy minister Philipp Roesler's remarks followed grumbling from his conservative party in recent months about the cost of bailing out Greece.

ESRB says EU financial stability at risk, hurts growth

FRANKFURT, Sept 21 (Reuters) - The knock-on effects from the European sovereign debt crisis have led to considerably higher risks of financial instability in Europe, the continent's super-watchdog, the European Systemic Risk Board said on Wednesday.

"Risks to the stability of the EU financial system have increased considerably," the ESRB said in a statement.

IMF Says Financial Stability Risks Have “Sharply” Risen

Financial stability risks have risen “sharply” in recent months, as slower economic growth, market turbulence in Europe, and the credit downgrade of the United States have weighed on the global financial system, according to new analysis by the International Monetary Fund (IMF).

The IMF said in its latest Global Financial Stability Report that “financial markets have begun to question the ability of policymakers to command broad political support for needed policy actions.” According to the report, balance sheets are “strained by mounting debt or assets that have lost value. ” It added that “the lack of progress to repair balance sheets has raised concerns about the financial health of governments in advanced economies, banks in Europe, and households in the U.S.”

BRICS countries bought EFSF debt: report

The BRICS emerging market powerhouses have already bought debt through the European Financial Stability Facility (EFSF) and could buy more, a potential help to struggling euro zone economies, a Brazilian newspaper reported on Monday.

"We're very pleased to see already some BRICS countries investing in our debt," Christophe Frankel, chief financial officer of the EFSF, told Valor Economico, Brazil's leading financial daily.

Financial Stability Rating® of Southern Title Insurance Corporation Withdrawn

Demotech, Inc. has withdrawn the Financial Stability Rating® (FSR) of A, Exceptional, assigned to Southern Title Insurance Corporation. This action was taken subsequent to the review of financial information and conversations with management. The Company has voluntarily suspended issuance of new policies and is focusing on the resolution of defalcations and claims received on previously issued policies.

Wen urges fiscal, financial stability in U.S.

DALIAN, Sept. 14 (Xinhua) -- Chinese Premier Wen Jiabao on Wednesday urged the United States to maintain fiscal and financial stability to protect investors' interests.

"We hope the U.S. will carry out appropriate economic policies and maintain fiscal and financial stability to protect the interests and confidence of investors," Wen said at the opening of the World Economic Forum's annual meeting in China's northeastern city of Dalian.

Central banks must consider foreign economies: report

(Reuters) - Central banks do not operate in a vacuum and must be mindful of the effects of their policies on other countries, a panel of top economists said on Tuesday.

In a Brookings Institution report that hinted at criticism of the Federal Reserve, the experts argued that spillover effects are important, and called for the formation of an international group to monitor them.

Geithner to urge bigger EFSF, rapid action: source

BRUSSELS (Reuters) - Treasury Secretary Timothy Geithner is likely to urge euro zone finance ministers on Friday to speed up ratification of changes to their bailout fund and consider boosting its size, an EU source said on Tuesday.

The official said Washington was worried that the euro zone was not acting fast enough to enhance the EFSF fund and that the stability of the global financial system was at stake.

Demotech Affirms Financial Stability Ratings® Assigned to National Title Underwriters

COLUMBUS, Ohio, -- Based on its review of the second quarter 2011 statutory financial statements, Demotech, Inc. has affirmed the Financial Stability Ratings® (FSRs) assigned to the companies within the Chicago/Fidelity Group, the First American Group, the Old Republic Group and the Stewart Group.

Slovak govt approves EFSF boost, risks from parlt

BRATISLAVA, Sept 7 (Reuters) - The Slovak government approved a plan on Wednesday to strengthen the euro zone's joint bailout fund, but it will face an uphill battle in parliament, whose consent is required to conclude the ratification process.

Euro zone leaders agreed in July to allow the European Financial Stability Facility (EFSF) to give precautionary loans to countries under attack in financial markets and, in some cases, to buy sovereign bonds.

Merkel Battles Bailout Blues

BERLIN—Signs are increasing that German Chancellor Angela Merkel may have to risk her political career to make sure that Germany delivers on its commitment to expanding the euro zone's bailout capacity.

Two mock votes among the center-right parties of the federal government late Monday suggested that she can scarcely rely on their support alone to guarantee the passage of a vote that would increase the lending capacity of the European Financial Stability Facility and allow it to take on the role of lender of last resort from the European Central Bank.

ECB tells EU to step up reforms, says bond-buying temporary

PARIS, Sept 5 (Reuters) - The current and incoming head of the European Central Bank demanded on Monday that European governments quickly implement a strengthening of a regional bailout fund and press ahead with wider reforms.

With some euro zone states dragging their heels in approving the reform of the European Financial Stability Facility agreed in July, ECB President Jean-Claude Trichet and Bank of Italy Governor Mario Draghi warned any delay risked worsening the euro zone's debt crisis.

Assembly grants BOK supervisory capability

The National Assembly yesterday approved a bill aimed at beefing up the Bank of Korea’s role in coping with financial instability.

On the last day of the extra session, the Assembly passed a revised bill governing the BOK in a 147 to 55 vote, allowing the central bank to keep financial stability as its policy priority, together with price stability.

Gold reserves reflect positively on Lebanon's financial stability: Salameh

BEIRUT: Lebanon’s Central Bank Governor Riad Salameh says Lebanon holds the second biggest gold reserves in the region, resulting in a positive impact on the country's financial stability.

“Lebanon has the second largest gold reserves among countries in the Middle East and we consider this as a pillar of monetary stability in the absence of key natural resources and a safe haven in times of crises,” Salameh reportedly said during a meeting with students of various nationalities who came to Lebanon from Hatron University in the U.S.

Euro Nations To Pay For Collateral On Greek Loans - Source

BRUSSELS(Dow Jones)--Euro-zone governments are likely to require countries that seek collateral for a new round of lending to Greece to pay for it, a senior euro-zone official said Wednesday.

The idea is part of a proposal from the European Commission and the European Financial Stability Facility, the euro zone's sovereign rescue fund, to resolve a dispute sparked by demands from Finland for collateral to secure additional lending to Greece. The proposal also calls for countries that want collateral to receive Greek bank shares owned by the Greek government as collateral, the official said.

Greece Only Discussing Cash Collateral With Finland

ATHENS (Dow Jones)--Discussions between Greece and Finland over a deal to provide Helsinki with collateral in exchange for the Nordic country providing fresh aid are focused only on cash collateral and don't involve any property rights, Greece's finance minister said Wednesday.

"We are only speaking about guarantees of a financial nature...and guarantees that do not include claims on property," Evangelos Venizelos said in a radio interview.

Germany okays Europe's latest rescue fund

BERLIN — Angela Merkel's German cabinet on Wednesday approved changes to the latest European rescue fund which now goes to parliament for ratification, officials said.

Extending the European Financial Stability Facility's (EFSF) mandate was agreed on July 21 by European leaders to alleviate the eurozone debt crisis.

German coalition lawmakers to propose compromise on EFSF

The opposition Social Democrats (SPD) and Greens said they would vote for the measure so its passage is certain. But political analysts warn that if Merkel fails to pass the measure with lawmakers from her own coalition, it could trigger a crisis of confidence and political turmoil.

"If Chancellor Merkel does not manage to get a majority of her own in the euro issue, the logical answer would be new elections," said SPD secretary-general Andrea Nahles.

Schaeuble warns coalition MPs to back EFSF reforms

Schaeuble also said he was optimistic that the coalition would get its own majority for the EFSF measures and not have to rely on backing from the center-left opposition of Social Democrats (SPD) and Greens.

"I'm confident that we'll get a broad majority -- not only in parliament but also in the coalition," he said.

Schaeuble also acknowledged that it was sometimes hard to keep pace with the developments in the sovereign debt crisis and that the conditions made it difficult at times to always come up with the right remedies at the right time.

Turkey, Ukraine Most Exposed to Crisis Repeat, Goldman Says

Turkey and Ukraine are more vulnerable to a repeat of the 2008 credit crisis than other nations in central and eastern Europe, the Middle East and Africa on concern their balance of payments will hurt financial stability, Goldman Sachs Group Inc. (GS) said.

Turkey has “accumulated substantial external imbalances” and an International Monetary Fund program has been sidelined in Ukraine, economists including Clemens Grafe and Ahmet Akarli said in an e-mailed report today. Russia would also be exposed, though “a more resilient banking system and increased ruble flexibility” should limit the impact, they said.

Scottish public sector 'should focus on financial stability'

Leaders in the Scottish public sector have been called upon to prioritise long-term financial sustainability in order to guarantee effective services in future.

Audit Scotland has published a report noting that Scottish public sector bodies are seeing the first wave of major spending cuts at present, increasing the need for major savings and forward planning.

Derivatives ‘Data Gaps’ May Hide Threats to Stability of Financial Markets

Regulators said they might not have enough information to assess the threat over-the-counter derivatives pose to the financial system.

Shortfalls in available data may undermine attempts to use so-called trade repositories as a tool to improve market oversight, the Committee on Payment and Settlement Systems and the International Organization of Securities Commissions said in a report published today.

Is Merkel Worried EFSF Vote May Go Wrong Way?

Throughout the European debt crisis, Germany Chancellor Angela Merkel has tended to stay calm; she has taken action only when market jitters threatened to get out of hand. But now she’s canceled her upcoming trip to Russia, a decision made at a time when markets are mostly rising.

Could Ms. Merkel’s behavior be cause for alarm? She does seem worried that German lawmakers may thwart plans to give new powers to the European Financial Stability Facility, the euro-zone bailout fund.

Global Markets Move, but Merkel Won't

Never say that euro-zone countries can't agree on anything. A consensus is rapidly forming: Germany should transfer to its euroland partners more of its hard-earned money, either by lending its impeccable credit to an issue of euro bonds, or contributing more to a much-enlarged European Financial Stability Facility.

This weekend, Belgium's finance minister, Didier Reynders, added his voice to the crowd demanding access to Germany's wealth. No surprise there: Belgium ranks third, right behind Greece and Italy, in the size of its debt relative to the size of its economy. True, it has a way to go before its almost 100% debt: GDP ratio catches up to Greece's (about 150%) and Italy's (about 120%), but its 10-year bonds now yield approximately twice the premium over German bunds that investors extract from France, and Moody's Analytics steadily upgrades the probability of a Belgium default.

Lawyers Make Matters Worse for the Euro

If politicians have been bad news for the euro then the lawyers are going to be even worse.

At every juncture there appear to be legal blockages to Germany’s participation in the bailouts for the peripheral debtors of the euro zone.

No Progress This Week On EFSF Collateral - EU Source

BRUSSELS (Dow Jones)--Euro-zone policymakers haven't made any progress this week on resolving Finland's demand for collateral for contributing to Greece's second bailout, according to a person familiar with the situation.

Euro-zone governments are discussing alternative forms of collateral that could meet Finland's requirements for participating in the bailout after a bilateral deal reached earlier between Greece and Finland was rejected by key member states, including Germany and the Netherlands.

German FinMin - EFSF urgently needs bond-buy powers

Aug 25 (Reuters) - Europe's rescue fund urgently needs to be empowered to buy bonds on the secondary market, German Finance Minister Wolfgang Schaeuble said on Thursday.

Minister drags Berlin into euro crisis collateral row

(Reuters) - A minister in Angela Merkel's conservative party propelled Germany into a debate about guarantees on bailout payments to Greece, backing a demand from Finland for collateral, but Berlin distanced itself from her comments.

Labour Minister Ursula von der Leyen, also a deputy president of the chancellor's Christian Democrats (CDU), told German TV on Tuesday that future bailouts should only be made against guarantees.

South Africa ‘Vigilant’ on Financial Stability, Gordhan Says

Aug. 23 (Bloomberg) -- South Africa remains “vigilant” on maintaining financial stability to keep the country’s banking industry stable and well capitalized in the face of global uncertainty, Finance Minister Pravin Gordhan said.

Lenders still need to cut fees, improve access to credit and implement international principles on executive compensation, Gordhan told a conference in Johannesburg today. About 63 percent of the adult population has a bank account, a figure the industry wants to increase to 70 percent.

Nowotny worried about EFSF timeline delay: report

(Reuters) - European Central Bank Governing Council member Ewald Nowotny is concerned that euro zone countries will not push through parliamentary approval of changes to their EFSF bailout fund as quickly as planned, an Austrian magazine quoted him as saying.

"I fear the envisaged date of the end of October won't hold," Profil quoted him as saying in its August 22 edition.

Fears mount of cuts in EU bank lending

Rising funding costs for European banks are stoking fears that they could be forced to cut back lending and drag down the already struggling world economy.

The spreads for credit default swaps – essentially the price to insure five-year bonds – have hit all-time highs in the past two weeks for the big French and Italian banks, as well as Spain’s Banco Santander. The index of five-year bank CDS’s is now trading wider than during 2008, when the collapse of Lehman Brothers froze interbank lending and sparked a credit crunch.

Osborne Says Euro Nations Must Act ‘Swiftly’ to Ensure Financial Stability

U.K. Chancellor of the Exchequer George Osborne said euro countries must act “swiftly” to deliver on their promises and ensure financial stability.

“A global crisis cannot be solved by countries acting alone,” Osborne wrote in an article for today’s Daily Telegraph newspaper. “Euro-zone countries must now act swiftly to deliver on what they have promised. Euro-area institutions need to do whatever is necessary to ensure financial stability in the euro area, as I am sure they will.”

G7 pledge on stability gets cool reception

By Alan Beattie in Washington and Joe Leahy in São Paulo

The statement on Sunday by the Group of Seven rich countries pledging to “take all necessary measures” to support financial stability was largely dismissed by market participants and economists, who said it was a bland attempt at reassurance with little policy content.

Higher collateral demands needed for bank stability

By Philip Aldrick, Economics Editor

The Bank of England should be given the power to regulate lending by demanding banks increase the extra collateral they place against risky assets in times of rising prices to prevent another credit crunch, according to a top official at the central bank.

Err, over here

AS THE August 2nd deadline for a resolution of America’s debt-ceiling row approaches, other news is being drowned out. America’s debt debacle provokes rubber-necking fascination but the euro crisis is still the bigger threat to financial stability.

Italy puts sixth loan tranche at risk

Parliaments may not have approved EFSF powers in time for the mid-September installment

Reports suggesting that Italy and Spain may not be able to contribute their share to the European Financial Stability Facility (EFSF) are generating worries about the payment of the sixth tranche of Greece’s bailout, due in September. At the same time there is continued uncertainty regarding the participation of the private sector.

P&C Industry Uniquely Poised to Hold its Own

COLUMBUS, Ohio, July 29, 2011 /PRNewswire/ -- In the unlikely event that the United States Government postpones the payment of interest or principal on obligations that come due in the near term, the Property & Casualty (P&C) insurance industry, as a whole, is uniquely positioned to hold its own.

Financial Stability Rating® of New Jersey Title Insurance Company Withdrawn

COLUMBUS, Ohio, July 28, 2011 /PRNewswire/ -- Demotech, Inc. has withdrawn the Financial Stability Rating® (FSR) of A' (A Prime), Unsurpassed, assigned to New Jersey Title Insurance Company. This action was taken subsequent to meetings and conversations with management earlier this year. The Company has suspended issuance of new commitments and is focusing on the resolution of defalcations and claims received on issued policies.

Global slump warnings if US triggers 'insane' default

A chorus of global banks has warned that Washington risks triggering a global slump and may suffer permanent loss of credibility by flirting with default on America's $14.3 trillion (£8.8 trillion) federal debt.

The dangers are almost as great if the US fails to lift the debt ceiling and avoids default by enacting the most drastic fiscal squeeze in modern history.

Smeal professor testifies before Congress on financial stability

University Park, Pa. – John Liechty, professor of marketing and statistics at the Penn State Smeal College of Business and director of the Center for the Study of Global Financial Stability, testified before the U.S. House Committee on Financial Services, Subcommittee on Oversight and Investigations, on July 14 regarding oversight of the newly created federal Office of Financial Research (OFR).

The European Financial Stability Facility: Q&A

Greece is set to lead the eurozone's first-ever default as European leaders agreed that the private holders of Greek debt will take a hit of €106bn over eight years. Here, we look at what the expanded EFSF is.

Financial Stability Ratings® of Encompass Floridian Companies Withdrawn

COLUMBUS, Ohio, July 21, 2011 /PRNewswire/ -- Demotech, Inc. has withdrawn the Financial Stability Ratings® (FSRs) of A' (A Prime), Unsurpassed, assigned to Encompass Floridian Insurance Company and Encompass Floridian Indemnity Company. These actions were taken at the request of the two Allstate subsidiaries. The withdrawal of these two FSRs reduces the number of carriers writing homeowners insurance in Florida that have been designated as Stable by Demotech to 51. Demotech continues to review and rate carriers writing all lines of business in all states.

Cobb receives highest ratings for financial stability

Cobb County -- For the 15th consecutive year, Cobb County has achieved "Triple AAA" ratings for its general obligation bonds from the nation's three major rating agencies -- Standard & Poor's, Fitch Ratings and Moody's Investment Service. Cobb is among the top 1 percent of counties nationwide with only about 20 counties achieving this feat.

Global capital surcharge to affect 28 big banks

(Reuters) - A global regulatory task force said on Tuesday its planned capital requirement surcharge to make the world's biggest banks safer will affect 28 banks initially.

The Financial Stability Board (FSB) did not name the banks in its consultation paper on the new surcharge, which it confirmed in a news briefing on Monday would be set at between 1 and 2.5 percent.

How Europe can restore financial stability

With last week’s tumult in Italian markets, the European financial crisis has entered a new and far more dangerous phase, threatening both European monetary integration and the global recovery. Last week’s drama surrounding bond auctions in Europe’s third-leading economy should convince even the most hardened bureaucrat that the world can no longer let policy responses be shaped by dogma, bureaucratic agenda and expediency. It is to be hoped that European officials can engineer a decisive change in direction, but if not the world can no longer afford the deference that the International Monetary Fund and non-European Group of 20 officials have shown European policymakers the past 15 months.

G20 task force expected to endorse bank surcharges

(Reuters) - Global regulators are expected to give the green light on Monday to two measures they hope will shield taxpayers from having to rescue failed banks again.

The Financial Stability Board (FSB) meets in Paris to endorse the capital surcharge and bank resolution proposals that will be put out to public consultation ahead of final approval by leaders of the world's top 20 economies (G20) in November.

FSDC to meet on July 27 to discuss growth prospects

The spectre of high inflation and a possible slowdown in the economy continue to weigh heavy on the government’s mind. The recently set up Financial Stability and Development Council is expected to discuss the issue in its next meeting.

The FSDC, which consists of the four financial sector regulators and is chaired by finance minister Pranab Mukherjee, is scheduled to meet on July 27, a day after the central bank RBI presents the first quarterly review of the monetary policy.

W.Va. Long Term Care Leaders Praise House Delegation for Support

The West Virginia Health Care Association praised members of the state’s U.S. House delegation after they signed a letter to the Centers for Medicare and Medicaid Services as that agency considers a proposal that would cut Medicare reimbursement to nursing facilities.

The letter, signed by Republicans Shelley Moore Capito and David McKinley and Democrat Nick Rahall and 149 other Representatives, urges the agency to consider the data before making these deep $4 billion cuts. These cuts were proposed in April and based on less than one year of data when the agency traditionally makes such decision based on a full year of data. If these cuts were adopted, it could put more than 100,000 employees in multiple professions at risk.

BOE's Haldane wants speed limits on fast trading

LONDON, July 8 (Reuters) - Speed limits would cool the "arms race" of ultra-fast trading that has sparked price "abnormalities" and may destabilise markets, a top Bank of England official said on Friday.

Andrew Haldane, executive director for financial stability, said in a 25-page speech in Beijing that rapid growth in so-called high frequency trading (HFT) has come to dominate stock markets and is raising "contagion" concerns.

The gift that people keep refusing

We are familiar with the concept of “the gift that keeps on giving.” Die-hard opponents of financial reform, who continue to regret that we adopted any significant legislative change last year to deal with reckless financial practices, have created what you might call “the gift that people keep on refusing.”

The gift is that of being designated as a “systemically important financial institution” by the Financial Stability Oversight Council, established by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Such institutions will be subject to a greater degree of regulatory scrutiny and required to hold more capital. Republican critics argue that the designation would signal that a company is “too big to fail,” which would be a license to raise investment funds and deposits more cheaply and would provide a competitive advantage over other firms.

Setting savings banks straight

Of the $17 billion secured by FSC for savings banks, $9.5 billion was used.

With eight suspensions and investigations into management scandals, savings banks have been a source of drama in the first half of 2011.

When Korea’s top regulator announced a series of measures to normalize the ailing sector during the latter half of the year on Monday, the “financial stability fund,” a new source of capital to prop up savings banks, drew notice.

Financial Policy Committee: who's who

The Telegraph profiles the members of the Financial Policy Committee, which is charged with ensuring financial stability by monitoring "broader risks in financial markets" and "identifying excesses and vulnerabilities".

Alarm bells for synthetic derivatives

Smoldering concerns internationally that exchange traded products (ETPs) could spark the next global financial crisis have come to a head with the release of a paper by the international Financial Stability Board that calls for greater attention from regulators worldwide.

The Financial Stability Board was established in April 2009 as the beefed-up successor in the wake of the 2008 global economic crisis to the Financial Stability Forum (FSF) which was founded in 1999.

Markets' hunt for returns poses financial stability risk

Markets' hunt for higher returns in an environment of low interest rates poses a risk to financial stability, warned Paul Fisher, the Bank of England policymaker.

"Investors know – and must remember – that there is no such thing as a free lunch, and that additional return involves additional risk," said Mr Fisher, the Bank's executive director of markets and a member of its interim Financial Policy Committee.

For governor, financial stability comes at a cost

Gov. Nathan Deal is in better shape financially after more than a year of turmoil, but he had to sacrifice his retirement income to get there.

Jimmy Allen, the governor's accountant and the manager of Deal's blind trust, told The Atlanta Journal-Constitution and The Associated Press on Thursday that Deal's total debt has been reduced by more than $800,000 and stands at about $1.3 million. That figure will fall dramatically in the coming weeks, too, as the governor is expected to sell off a major asset, Allen said.

Fed Governor Raskin on "The Road to Financial Stability"

At our event today on "Rebuilding the Road to Financial Stability" (co-sponsored by the Congressional Savings and Ownership Caucus and the Center for Financial Security at the University of Wisconsin-Madison) Federal Reserve Governor Sarah Bloom Raskin delivered a speech about her vision of economic inclusion.

We'll have the video of this up before too long, but I wanted to note that Governor's speech was as explicit a defense of an active, effective regulatory body for financial products as I have heard in some time. She echoed arguments that we have made previously about the symbiotic relationship between healthy consumers and healthy markets. It is a speech worth listening to.

Insurance industry praises Financial Stability Oversight Council nominee

WASHINGTON—President Barack Obama’s nomination of S. Roy Woodall to fill a voting position on the Financial Stability Oversight Council is drawing considerable praise from insurance industry observers.

The industry had long been concerned that the slot for a voting member representing insurance had remained vacant long after all other positions on the council—which oversees regulation of financial services institutions—had been filled. Insurers feared that a council would subject them to additional regulation should it deem insurers to present a systemic risk to the economy.

German Bund Yields Approach Five-Month Low as EU Ministers Meet

June 23 (Bloomberg) -- German 10-year government bond yields were within five basis points of their lowest since January as European leaders start a two-day meeting to discuss Greece's debt crisis and seek ways to avoid a default.

The yield stayed below 3 percent for a seventh consecutive day before data economists said will show the region's services and manufacturing industries grew at a slower pace in June. Risk signals for financial stability in the euro area are "flashing red" as the debt crisis threatens banks, European Central Bank President Jean-Claude Trichet said. The MSCI Asia Pacific Index fell 0.7 percent, while futures on the Euro Stoxx 50 dropped 0.6 percent.

Samruk-Kazyna plans to acquire up to 25% in Alliance Bank, BTA Bank, Narodny Bank and Kazkommertsbank, advisor to Kazakhstan prime minister says

Samruk-Kazyna, a Kazakhstan state-owned fund, is planning to acquire up to 25% of the ordinary voting shares in the four largest banks in Kazakhstan, said Alexander Mirtchev, one of the directors of Kazyna Fund and advisor to the prime minister of Kazakhstan.

Chile Government To Create Financial Stability Council - Report

SANTIAGO (Dow Jones)--In light of Chilean department-store retailer Empresas La Polar SA's (LAPOLAR.SN) financial woes, the government will set up a Financial Stability Council, El Mercurio newspaper reported Wednesday, citing the Finance Undersecretary.

The council, to be composed of the Finance Minister, the president of the central bank and sector regulators, will act as a coordinating task force in the event of a financial crisis, Finance Undersecretary Rodrigo Alvarez told the newspaper.

Greece's restructuring options narrow

LONDON, Jun 22 (IFR) - Greece could still start restructuring its sovereign debt using coercive measures before June 2013, even if the indebted country secures fresh bailout funding to tide it over to that date.

"The proposed new loans still assume that Greece will return to the market by 2014. However, that is unlikely," said one sovereign restructuring expert who spoke to IFR.

Euro Bounces Back Slightly On Report Of EFSF Expansion

NEW YORK (Dow Jones)--The euro experienced a bump up on a report Monday of an expansion of the European Financial Stability Facility, or EFSF, a fresh sign of support for the under-pressure currency.

Jean-Claude Juncker, head of the Eurogroup of finance ministers, said euro-zone officials will increase EFSF effective lending capacity to EUR440B.

Eurozone boosts current bailout fund

European finance ministers have raised their guarantees for the current rescue fund to allow it to lend out a total of euro440 billion ($626 billion), up from about euro250 billion currently.

The European Financial Stability Facility needs to guarantee more than its lending capacity to get a good credit rating and make the bonds it issues attractive to investors.

As Greek government teeters, IMF warns of threat to global financial stability

Decaying political support for budget cuts in Europe is threatening global financial stability and could undermine a recovery that is already weakening, the International Monetary Fund warned in a trio of reports Friday.

Nations throughout the continent have put in place government spending plans that reduce record high deficits and have made other changes to invigorate their economies. But growth has been slow to return, and the cuts to social programs and public payrolls are proving increasingly unpopular — and politically difficult to sustain.

U.K. Government Publishes Draft BOE Financial-Stability Powers

June 16 (Bloomberg) -- Chancellor of the Exchequer George Osborne published draft legislation that will hand powers to the Bank of England to police Britain's banks in the biggest regulatory overhaul since 1997.

The draft Financial Regulation Bill, which will now undergo pre-legislative scrutiny, will abolish the U.K.'s Financial Services Authority and transfer most of its powers to the central bank.

"This is a key milestone in the process of developing and implementing a new system of financial regulation, which will address the flaws in the 'tripartite' model that contributed to the financial crisis," Treasury Minister Mark Hoban said in an e-mailed statement in London today. "This is a detailed blueprint for regulatory reform setting out how the new structure will work."

Demand Seen for Portugal Bailout Bond

LONDON—The European Financial Stability Facility—the euro zone's temporary sovereign bailout fund—set final terms on its first bond to be issued in support of the Portuguese aid program.

Demand for the €5 billion ($7.22 billion), 10-year bond was solid, with order books reaching €8 billion, one of the banks running the sale said.

The bailout fund, which consists of €440 billion in loan guarantees, is one of the facilities set up to help support fiscally stressed European countries. It already has issued bonds for Ireland's bailout package, and functions alongside the European Financial Stabilization Mechanism—a €60 billion lending facility funded by the European Commission using the EU budget as collateral.

ECB Constancio: Restructuring Could Increase Contagion Risk

FRANKFURT (MNI) - The troubled peripheral Eurozone countries of Greece, Portugal and Ireland are clearly different from other Eurozone states, but the market calculus could change should a restructuring of Greek debt produce a contagion effect, European Central Bank Vice President Vitor Contancio said Wednesday.

At a press conference where he presented the ECB's Financial Stability Review, Constancio noted the recent increase in spreads on the sovereign debt of some other Eurozone countries. "I would not draw any conclusion from what has happened over the past few days," he said. "There is a very clear-cut distinction between those three countries and all the others."

ECB: Financial Stability Outlook "Challenging" On Contagion Risks

FRANKFURT (Dow Jones)--Contagion from the euro zone's debt crisis remains the key risk to financial stability in the single currency bloc, the European Central Bank warned Wednesday, reiterating its opposition to a debt restructuring.

"Despite improving global and euro area economic and financial conditions, the overall outlook for financial stability has remained very challenging in the euro area," the ECB said in its semi-annual Financial Stability Review.

BIS's chief: Policy mix needed for financial stability

ZURICH, June 10 (Reuters) - Appropriate monetary and fiscal policies are needed in addition to solid macroprudential regulation to foster financial system stability, the head of the Bank for International Settlements said. Jaime Caruana, General Manager of the Basel-based institution, said expectations for what macroprudential rules alone could accomplish should be modest: They could make banks more resilient in the event of a crisis but they would not necessarily contain the bubble building up.

German Government Parties Want Private Sector To Participate In Greek Aid

BERLIN -(Dow Jones)- Germany's governing CDU and FDP parties are working on a motion to bring into parliament demanding substantial private sector involvement in any new Greek aid package.

The parties' motion will likely also ask for some kind of restructuring of Greece's debt, at least on a voluntary basis.

Q+A-New bailout package for Greece from EU and IMF

(Reuters) - The European Union and the International Monetary Fund are preparing a second bailout package for Greece to give the debt-ridden country more time to put its finances on a sustainable path.

Talks are more complicated than a year ago because of reform fatigue in Greece and "solidarity fatigue" in several euro zone countries, which want to see private investors help this time.

Slovakia to back new aid to Greece if conditions met

Slovakia said Tuesday it would back a second aid package for its eurozone peer Greece if it meets conditions set by the European Union's rescue fund, refuting reports that it might block the loan.

"We didn't agree with the first loan to Greece (...) but we are part of the European Financial Stability Facility (EFSF) and there are rules for every country," Slovak Finance Minister Ivan Miklos told journalists.

Rescuing Greece: Has the Bill Just Gone Up Again?

According to Der Spiegel, Greece’s new bailout is going to amount to over €100 billion, a rather higher number than the €80 billion or so that has usually been mentioned.

That’s unlikely to thrill German taxpayers. They are also unlikely to be amused by the photo (from May 30) of Greek protestors with which the article (in German, shockingly) is illustrated. And all this matters. As this piece in Reuters reminds us, the politics of getting the bailout through will be tricky:

New CIS regional group on financial stability

New CIS regional group will be organized in the frameworks of financial stability of international council, founded by G20 summit in 2009.

“CIS interregional group will start working from now on,” stated Russian minister of Finance, Alexei Kudrin in the press conference, informs RIA Novosty.

Counterfeiting in Bulgaria becoming problem for financial stability of EU - minister

Bulgarian Interior Minister Tsvetan Tsvetanov has said that Bulgaria is becoming a concern for the financial security of the euro because of counterfeit money flooding the market and because of the lack of severe sentences for counterfeiters caught by the police.

The police conducted several high-profile operations targeting counterfeit mills but the men arrested were given suspended sentences by the judiciary, Bulgarian news agency BTA reported on June 3 2011.

Aurora Pacific Insurance, Inc. Earns Financial Stability Rating® of A, Exceptional, From Demotech, Inc.

COLUMBUS, Ohio, June 2, 2011 /PRNewswire/ -- Aurora Pacific Insurance, Inc. has earned a Financial Stability Rating® of A, Exceptional, from Demotech, Inc. This level of FSR is assigned to insurers who possess exceptional financial stability related to maintaining positive surplus as regards policyholders, liquidity of invested assets, an acceptable level of financial leverage, reasonable loss and loss adjustment expense reserves (L&LAE) and realistic pricing.

Australia's Future Fund Has No Plans To Buy EU Rescue Bonds

SYDNEY (Dow Jones)--Australia's Future Fund has no plans to buy the debt being issued to rescue ailing eurozone countries as the fund is currently steering clear of sovereign bonds, Chairman David Murray said in an interview.

In an effort to stabilize the heavily indebted peripheral nations, eurozone authorities are issuing debt through a temporary bailout fund, the European Financial Stability Facility, while the European Union itself is also part-funding the rescue.

Central Bank shows a promising picture despite losses in values

The Finance Stability Report by Turkey’s Central Bank, announced Monday, claims the profitability of Turkish banks will not continue to fall in the second half of the year, implying no further hikes in reserve requirements are on the way.

The financial stability report highlights the financial strength of the Turkish banking sector, in which some lenders posted loss in value and profitability during the first half of the year, due to the recent monetary policies of the Central Bank.

Cyprus Central Bank hosts round table debate on financial stability

The Central Bank of Cyprus will host a round table debate entitled “Towards Strengthening Financial Stability” on May 28, in the southern coastal town of Limassol.

A press release issued by the Central Bank said the public debate is organized in the framework of the annual meeting of Finance Ministers and Governors of the group of countries represented at the International Monetary Fund and the International Bank by the Netherlands. This meeting will be held in Cyprus on May 27-29.

Financial stability reforms are disastrously misconceived

Former monetary policy committee external member Professor Willem Buiter has hit out at the “misconceived” financial stability reforms, saying the Chancellor should have a key role in maintaining stability.

Under current plans, the Financial Policy Committee will be responsible for financial stability and will be chaired by the governor of he Bank of England.

Efama rejects concerns that ETF pose risks

Regulators’ concerns that exchange traded funds could present a potential threat to the stability of financial markets have been firmly rejected by Efama, the representative association for the European investment management industry.

In reply to a report criticising the ETF industry published in April by the Financial Stability Board, Efama said the existing Ucits regulatory framework governing ETFs in the European Union already contained “state of the art” risk management policies and procedures.

Buiter Says It’s a Mistake to Give BOE Bank Supervision Powers

Former Bank of England policy maker Willem Buiter said it’s a “mistake” to place full responsibility for financial stability with Governor Mervyn King, criticizing a government plan to overhaul banking regulation.

“The Bank of England is greatly overburdened and too powerful in this proposed construction, especially the governor and the two deputy governors,” Buiter said at a U.K. parliament hearing in London today. “The obvious solution is to remove prudential supervision from the bank.”

Bank’s ‘corporate governance’ under scrutiny

During the past two decades, the Bank of England has been transformed. While it still occupies a cavernous 18th century building in the City of London, designed by Sir John Soane, its functions and responsibilities are barely recognisable from those it discharged as recently as 15 years ago.

Brazil sets up financial stability board

The Brazilian central bank has created a Financial Stability Committee looking to monitor and coordinate responses to a build-up of systemic risk.

The committee will consist of the chairman and seven directors of the Central Bank, with each member having a single voting right.

Increased role for UK auditors under PRA

Auditors will have an increased role to play under the UK's Prudential Regulation Authority in a bid to boost the new watchdog's oversight of financial institutions.

The responsibility of third parties will be expanded under the PRA to improve the information the banking regulator will receive, as it aims to maintain system-wide financial stability.

EU, EFSF plan benchmarks totalling 15.3 bln euros

The European Union and the European Financial Stability Facility (EFSF) said on Thursday they had revised their debt issuance calendar to cover financial support for Portugal approved by EU finance ministers this week.

The EFSM and EFSF would go to the market between May 23 and July 15 to cover the first disbursements to Portugal and Ireland for a total of 15.3 billion euros ($21.8 billion), they said in a statement.

Regulators start review of global bank bonus curbs

Watchdogs plan to check up on big international banks directly to see if they have improved compliance with globally-agreed bonus curbs.

The Financial Stability Board (FSB) said in a statement its latest review will survey supervisors and regulators as well as "a sample of major firms directly."

The race to secure Tepco’s financial stability

The makeshift systems that Tokyo Electric Power has been using to stave off disaster at its crippled Fukushima Daiichi nuclear power plant are not pretty. At various times, the Japanese utility has tapped everything from riot trucks to a Chinese cement-pourer and a floating fishing park to pump cooling water into its overheating reactors and store the radioactive run-off.

Hedge funds are not ‘shadow banks’

We have been hearing a lot recently about the “shadow banking” sector. Senior bankers and lawmakers seem to have found a new bogeyman. The International Monetary Fund has called for enhanced oversight of “shadow banking activities”, while the G20 has instructed the Financial Stability Board to develop regulatory recommendations by the autumn.

Who will be covered by this new system of oversight? The term “shadow banking”, first coined in 2007, is usually meant to refer to a wide variety of non-bank financial institutions including money market funds, structured investment vehicles and insurance companies. The implication is that such organisations are engaging in bank-like activities out of the sight of regulators, creating unmonitored risks to the system.

Securing global economic security

Inflation is a significant factor of global economic security and has the innate capacity to upend carefully laid plans

Euro crisis solution lies in political arena

WORLD VIEW: The alternative visions of economists must focus better on what is possible internationally

IRELAND BADLY needs a strategy to handle the euro zone crisis, rather than reacting defensively to all its latest twists and turns. This requires a political as well as an economic understanding of the dynamics in play at European and national levels.

Framework For Cross-Border Financial Stability Needed, Says Zeti

KUALA LUMPUR, May 13 (Bernama) -- Bank Negara Malaysia is calling for action to develop a framework for cross-border financial stability as Islamic finance continues to expand beyond national boundaries, says Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz.

She said increasing internationalisation of Islamic finance has, to a significant extent, been facilitated by the expansion of Islamic financial institution operations beyond domestic borders.

More insurance bailouts possible: Reserve Bank

More insurance companies may require bailouts as a result of the Christchurch earthquakes the Reserve Bank said this morning, but it will likely be parent companies providing the cash rather than the Government.

At its twice yearly report on the health of New Zealand's financial system, the Reserve Bank this morning said the Christchurch earthquake had presented fresh challenges and increased domestic risks just as international markets were showing signs of improvement.

Bank of England official calls for action against City 'myopia'

Andrew Haldane at the Bank of England said the City's short-term bias held back important investment – and could be getting worse

A senior Bank of England official today called for government action to stem the rise of short-termist investment decisions taken in the City.

Greece May Want Bailout Fund to Buy Its Debt

Greek Finance Minister George Papaconstantinou said Saturday that Greece was exploring the possibility of having a European bailout fund buy its debt if the government is unable to access capital markets again next year.

"The markets continue to disbelieve in our country," Mr. Papaconstantinou told reporters. "We have to plan our next steps for 2012, for 2013."

U.S. Bank Leverages Unique Expertise to Improve Financial Stability

Today, United Way honored U.S. Bank with the 2011 Spirit of America® Award to recognize the company and its employees' commitment to improving the financial stability of individuals, families and local communities. Microsoft Corporation, Bank of America, Procter & Gambleand Dominion Resources, Inc.also received Summit awards for generosity, volunteerism and measurable community impact.

Asian Financial Stability Board to launch as early as May

An Asian version of the Financial Stability Board will be launched as early as this month, with Korea likely to assume the co-chairmanship of the organization to comprise major Asian countries including Korea, China and Japan.

The launch of the board will add further momentum to regional financial integration recently been pursued by Asian countries.

FSB must slow down on insurer Sifis

Think tank the Geneva Association has warned the Financial Stability Board to slow down its review of firms posing systemic risks to the financial system so that insurers do not face unfair requirements.

In a presentation in Kansas on Thursday, the think tank argues that the urgency of the FSB to complete a methodology judging which firms are systemically important could mean that insurers who pose a risk to the financial system may end up being overlooked.

Bernanke: Fed Moving to Promote Stability

By Michael S. Derby

The Federal Reserve is still working out how much information to disclose in future banking sector stress tests, central bank c said Thursday.

“We are not ready to issue proposed rules on that,” Bernanke said, but the Dodd-Frank financial oversight reforms specify “the Fed will release broad information from those stress tests.”

ADB asks members to focus on financial stability

Manila-based Asian Development Bank (ADB) has urged member governments to stay focused on building resilient financial systems.

ADB president Haruhiko Kuroda, in a statement released Wednesday, said much progress has been made in enhancing financial stability at national, regional and global levels. He added that much still needs to be done.

Financial Stability Board says standards being met

The Financial Stability Board (FSB) today published a report on the progress of its initiative to encourage the adherence of all countries and jurisdictions to regulatory and supervisory standards on international cooperation and information exchange.

The FSA's business plan sets out the future financial services regulation

The FSA has used its recently published 2011/2012 Business Plan as an opportunity to set out the steps it is taking towards regulatory reform, which must be finalised by 2013. It has listed the key areas for its incoming work programme which has been restructured to align with legislation currently before Parliament and the Financial Services Bill.

Keep track of what's in your ETF

I came across a new organisation last week - the Financial Stability Board. Maybe I should have been aware of its existence but as it was only set up two years ago, perhaps I could be forgiven for not having heard of it before.

The reason it crossed my radar screen was a report it published into exchange traded funds and how they might contain the seeds of the next market meltdown.

BOK: Accommodative Monetary Policy Must Be Adjusted

The Bank of Korea said Thursday it must adjust how accommodative its monetary policy stance is to ensure price stability, suggesting the central bank will continue to raise its policy rates to curb rising inflation.

"To prepare against an increase in world economic uncertainties due to the growth in global inflationary pressures and international financial market instability, the degree of monetary policy accommodativeness must be adjusted at an appropriate speed and extent, with an emphasis on ensuring that the basis for price stability is firmly anchored amid continuing sound economic growth," the BOK said in its biannual financial stability report.

‘RBI should have primacy on issue of financial stability’

The role of the Reserve Bank of India was central to the issue of financial stability and this could be jeopardised with the formation of a new agency — the Financial Stability Development Council, or FSDC, according to former RBI governor Y Venugopal Reddy.

Massillon Ward 3 candidates focus on financial stability

Four women want to fill the 3rd Ward council seat being vacated by mayoral candidate Kathy Catazaro-Perry, who is the sole female councilor on the nine-member legislative body.

Three Democrats and one Republican are up for the seat, which Catazaro-Perry has held for eight years.

Stability board warns of ETF contagion risk

The Financial Stability Board has warned of the rapid growth and increasing complexity of the exchange traded fund market.

The FSB, made up of the world’s central banks and financial regulators, was created in April 2009 from the Financial Stability Forum after leaders of the G20 countries called for an expanded membership beyond the G7 nations. It published a note last week which warned of a number of “disquieting developments” in the ETF market.

GP consortia face 'significant financial instability' unless they share risks

A number of GP commissioning consortia are likely to hit serious financial trouble unless their risks are shared across larger patient populations, researchers have warned.

The study published in the Journal of Health Services Research and Policy calculates that consortia in some areas will struggle to balance the 'legitimate' needs of their populations without overspending.

SARB: No insurance industry imbalances

No imbalances could be identified in the insurance sector during the last quarter of 2010, the Financial Stability Review (FSR) of the SA Reserve Bank (SARB) released Wednesday reported. The document takes account of economic and financial sector developments in the second half of 2010.

The FSR did however note that the local insurance industry faced several financial and administrative challenges in 2010 including the introduction of the Solvency Assessment and Management (SAM) system.

Basci Says Price, Financial Stability Remain Turkish Goals

Erdem Basci, Turkey’s new central bank governor, said he shared the goals of securing price and financial stability with his predecessor.

“Your vision is our vision,” Basci told outgoing Governor Durmus Yilmaz during a handover ceremony today in Ankara. Basci said he aimed to make the bank a leading monetary authority globally.

Banks' claims they will move abroad are 'empty threats' says Financial Stability Board boss Svein Andresen

Claims by banks that they will relocate to foreign shores in protest at strict new rules are largely empty threats, the global financial regulator has suggested.

Big banks in the UK and US have threatened to "migrate" if they are subjected to strict new regulations, taking tax revenues and future investment with them.

Delays, divergence threaten swaps crackdown: FSB

Global efforts to rein in the over-the-counter derivatives market are being threatened by worrisome delays and divergent approaches, an international policy-coordinating panel said on Friday.

The Swiss-based Financial Stability Board (FSB) said it was "concerned" that many members of the Group of 20 wealthy nations may not meet an end-2012 deadline to tighten oversight of the $600 trillion OTC market for derivatives such as swaps.

Selection of 'Systemic' Risk Firms Draws Critics

Lawmakers of both parties criticized regulators' efforts to determine which large firms could pose a risk to the financial system.

The Financial Stability Oversight Council, created by Congress last year as part of the financial-regulatory-overhaul law, is deciding which nonbank financial firms could have "systemic" effects if they got into trouble and possibly need a government bailout in a crisis. Such firms would be subject to stricter capital standards and regulation than before.

IMF: Government Debt, Capital Flows Threaten Financial Stability

Global financial stability has improved in recent months on the back of a strengthening recovery, but vulnerabilities remain due to high government debt levels in advanced economies that are putting pressure on banks' balance sheets even as the effort to repair the financial system remains incomplete, the International Monetary Fund said in a report Wednesday.

Financial Stability Board warns on exchange traded funds

Exchange traded funds pose a serious risk of causing a new financial crisis and should be put under the spotlight so that the signs of a market crash are spotted early, according to the Financial Stability Board.

The FSB, which represents the world's main regulators and central banks, said it had seen "a number of disquieting developments" in the market for ETFs and said funds must do more to ensure that investors fully understood the risks posed by them.

Government intervention makes housing booms and busts worse says IMF

An IMF report has linked government intervention in housing finance with property price swings.

Chapter 3 of the IMF ‘Global Financial Stability Report’ which is entitled ‘Housing Finance and Financial Stability-Back to Basics?‘ points out the importance of the housing sector to a country’s economy. It also says that a fast increase in mortgage credit is strongly linked to strong house price rises.

IMF calls for LTV caps

The International Monetary Fund is calling for limits on LTV ratios and for higher LTVs to only be made available to those who purchase mortgage insurance.

In the IMF’s Global Financial Stability Report, it argues that European regulators should be handed the power to introduce LTV caps.

Financial Stability Board warns of risk-taking due to low interest rates

Low interest rates have led investors to start taking risks that could create the conditions for a new crisis, according to the world's leading financial watchdog.

In a strong warning to regulators around the world, the Financial Stability Board said that investors were taking "non-standard" risks as they search for assets that offer them an attractive yield.

'Vulnerabilities' in global financial system: oversight body

ROME — The Financial Stability Board (FSB) on Tuesday warned of "vulnerabilities" in the global financial system including "pockets of weakness" in banks and higher risk-taking because of low interest rates.

The FSB also urged governments to take "immediate, concrete steps" to implement commitments on reforming the market for derivatives -- complex financial products seen as one of the factors in the global financial crisis.

Mexico Financial Stability Report Shows Banks Pass Stress Test

MEXICO CITY (MNI) - Mexico's banking system is so sound that even under stress it would maintain acceptable levels of capitalization, Mexico's Financial Stability Board said in its first annual report released Monday.

The board ran a number of "stress tests" on Mexico's financial system that found the biggest risks to stability are: an abrupt reversal in capital flows, European fiscal problems affecting local banks and an abrupt deceleration in economic activity.

'The strategy to preserve financial stability in the euro area is working'

Head of bailout fund Klaus Regling says Ireland’s debts are sustainable and default would be ‘unwise’

IRELAND’S EXPANDING bank rescue just got bigger, Portugal’s plight worsens by the day and Greece seems as far away as ever from salvation. But Klaus Regling, chief of the euro zone bailout fund, insists EU leaders have finally turned the corner in their titanic battle against the sovereign debt crisis.

Economy: IMF advises Cameroon on financial stability

Yaounde, Cameroon - The IMF has warned that Cameroonian financial stability can only be achieved through enhanced surveillance on and close monitoring of its financial institutions, according to an IMF mission which ended a working visit to Yaounde Thursday. Led by Mauro Mecagni, the mission visited Cameroon from 16 to 31 March, for consultations under the IMF Article IV for the year 2011. The IMF consults annually with each member government. Through these contacts, known as “Article IV Consultations,” the IMF attempts to assess each country’s economic health and to forestall future financial problems. The fund also operates the IMF Institute, a department that provides training in macroeconomic analysis and policy formulation for officials of member countries. During the visit, IMF officials met with the Cameroonian ministers of finance, economy, planning and regional planning, the Prime Minister, other top government officials and parliamentarians involved in budgeting.

Newcastle United targeting financial stability

NEWCASTLE UNITED are on the road to financial stability after the club filed its latest accounts.

The club today published its annual results which highlight the impact of relegation to the Championship in 2009.

UK holding back progress on global financial stability

A new report published today argues that the UK is subverting progress towards a safer financial system, and has become a major barrier to international efforts for reform.

The report, Subverting Safer Finance by think-tank nef (the new economics foundation), reveals that compared with other major financial centres, including even the US, the UK is part of the problem in key areas of financial reform, rather than leading the search for solutions.

“Financial stability holds the key to economic growth”

Union Finance Minister Pranab Mukherjee said on Sunday that a sound and resilient banking sector, well-functioning financial markets, robust liquidity management, and payment and settlement infrastructure had become pre-requisites for financial stability.

Dodd-Frank's Threat to Financial Stability

With the comment period now closed on its proposed rule, the Financial Stability Oversight Council (FSOC) is getting ready to outline the terms for deciding which nonbank financial institutions might cause instability in the U.S. financial system if they fail. As its staff works away on decision criteria, they should be offered one word of advice: stop.

The council was set up by the Dodd-Frank Act and is made up of virtually all the federal government's financial regulators. It is authorized to use such criteria as size, interconnectedness and "mix of activities" to decide whether, in effect, a nonbank financial institution is too big to fail.

Positive outlook for financial stability

THE outlook for domestic financial stability this year remains positive, supported by underlying strengths of the Malaysian financial system.

“Financial institutions have accumulated strong buffers totalling RM81.4bil to withstand external risks and domestic challenges, even under extreme scenarios of credit and market stress,” Bank Negara said.

Safeguarding the future stability of the Euro-ECB

On March 21st, in Salzburg Germany, the Member of the Executive Board of the ECB, Gertrude Tumpel-Gugerell, spoke at the Investment form about the Euro and its future. Ms. Tumpel-Gugerell started out the speech saying “it was the Austrian economist Joseph Schumpeter who stated that “a nation’s monetary system is a reflection of everything that the nation wants, suffers and is. … Nothing says what a nation is made of so clearly as what it does in terms of its monetary policy.” During the speech, she discussed the current economic situation; how the single currency has contributed towards the management of the financial market crisis; the overview of the financial market reforms in the European Union and an outline of what is still to be done to guarantee the stability of the euro over the long-term horizon.

Cobb Receives Highest Rating for Financial Stability

Fitch Ratings, an international rating agency, recently reaffirmed Cobb County's excellent financial management efforts by giving the county's general obligation bonds its highest rating of AAA.

Since 2008, Fitch Solutions has distributed Fitch Ratings' credit ratings, research and data through a variety of platforms. Fitch is dual-headquartered in New York and London with offices worldwide.

International Reviewers Few Non-Bank Structured Credit Disclosures

Countries still seem to differ in terms of whether they apply the same structured credit risk exposure rules to banks and to other types of financial institutions, according to officials at the Financial Stability Board (FSB).

The Group of 20 (G20) developed countries set up the FSB, Basel, Switzerland, to help develop strategies for increasing the stability of the world financial system.

Commission raises further €3.4bn for bailout

THE EU Commission has raised a further €3.4 billion for Ireland’s bailout but at a rising interest rate, bringing the total raised so far this year by European bodies to some €13.4 billion.

The commission said its bailout fund – the European Financial Stability Mechanism (EFSM) – raised the money at an issuance spread fixed at mid-swap plus 8 basis points. This was “at the tight end of the initial price guidance”, it said.

FSA identifies major economic risks to financial stability

The Financial Services Authority (FSA) has published its Prudential Risk Outlook (PRO), which aims to identify major risks to financial stability in the UK.

It identifies a number of risks that could impact firms in the UK, which it will then use to focus its policy in the FSA's business plan due to be published later this month.

Price of financial stability is eternal vigilance, warns Lord Turner

Lord Turner suggests banks dubbed too big to fail should be required to hold more capital than new thresholds agreed by the Basel committee on banking supervision.

Lord Turner, chairman of the Financial Services Authority, warned tonight (16th March) that the financial system faces new risks despite the global regulatory overhaul in the wake of the banking crisis.

Euro zone to raise EFSF guarantees, effective by summer

BRUSSELS - The euro zone is likely to agree on details of bolstering its bailout fund next week, and the reformed European Financial Stability Facility should be operational by the summer, euro zone officials said on Tuesday.

Euro zone leaders agreed on Saturday that the capacity of the European Financial Stability Facility should be raised to its full 440 billion euros from the current 250 billion, but left it up to finance ministers to work out how.

Problems not yet solved

THE Financial Times reports today that euro-zone leaders have reached a deal on a series of measures designed to solve the currency area's ongoing debt crisis. At first glance, the numbers look impressive. Euro-zone members will bulk up funding levels for the European Financial Stability Fund and its post-2013 successor, the European Stability Mechanism. The plan would also give the EFSF the ability to buy some government debt. Sovereign bond yields around the periphery are down this morning, presumably as a reaction to the agreement.