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Financial Stability Rating® of New Jersey Title Insurance Company Withdrawn

COLUMBUS, Ohio, July 28, 2011 /PRNewswire/ -- Demotech, Inc. has withdrawn the Financial Stability Rating® (FSR) of A' (A Prime), Unsurpassed, assigned to New Jersey Title Insurance Company.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.