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.