Global financial recovery chronology

A step by step overview tracking the significant events which contributed to the financial credit crisis and its global ramifications.

Links to complete chronology listings

2010 (at a glance)

Friday 30 December

• Companies raised £10.1 billion via initial public offerings on the London Stock Exchange in the past year, more than six times 2009’s £1.5 billion - but still nowhere near the record of almost £30 billion in 2006.

Thursday 29 December

• Banks in the eurozone increased their lending to companies in November, reversing a drop in the previous month and spurring hopes that the ongoing economic recovery will be buttressed by an extension of credit. Loans to companies in the 16-member eurozone rose by 0.2 per cent, or €11 billion month-on-month, data released on Wednesday by the European Central Bank showed.

Wednesday 28 December

• Banks could be forced to publish details of guaranteed bonuses after a group of global regulators said rewards at financial firms must be more transparent to help prevent another banking crash. City workers should also have their pay and bonuses linked to the longer-term performance, according to a consultative document issued yesterday by the Basel committee for banking supervision.

Tuesday 27 December

• The FTSE 100 has risen more than 10 per cent this year as the end of 2010 approaches, helped by the international nature of most of its constituents. Leading shares are poised for another bumper year in 2011 and could even test their record highs, according to City analysts, despite the continuing global financial problems and government austerity measures.

Thursday 08 December

• The amount raised in stock market flotations around the world this year is expected to break the 2007 record of $300 billion (pounds 190 billion), according to research from accountants Ernst & Young. Asian companies are behind a surge in the number of floats. Britain and Europe have done better than last year, but account for only a tiny proportion of new activity because of fears about the future of the euro and the sovereign debt crisis.

Tuesday 06 December

• Investors will increasingly switch to buying “risktargeting” funds that seek to primarily manage their level of risk, rather than their return, according to industry figures. A survey of 40 fund management groups, with $2,000 billion of assets, conducted by Skandia Investment Group, found 62 per cent believed demand for risk-targeting funds, often fund of funds vehicles designed to provide a given standard deviation of returns, will rise this year. None saw demand falling.
• It has been a good year for private equity. The debt market for buy-outs is frothier than it has been since the global financial crisis wiped out collateralised loan obligations and other toxic fixed income products in 2008. The demand for yield in a low interest environment has carved out a whole new market for high-yield bonds issued by companies that are raising an average of three to five times their annual earnings for buy-outs.

Friday 03 December

• The International Monetary Fund has warned that the fast-growing Indian economy could overheat, with high inflation and asset bubbles, but also praised the government’s economic policies to date. Dominique Strauss-Kahn, IMF managing director, said that some emerging economies, including India, were reaching the limits of “overpotential” as they recovered strongly from the global financial crisis.

Thursday 02 December

• Spain and Ireland are set to launch large-scale privatisation programmes. The Spanish government is looking at auctioning stakes in its national lottery operator and airports and Ireland will look at privatisations in its electricity and gas sectors as part of a joint European Union and IMF bail-out package agreed last week.

Tuesday 30 November

• India’s economy grew close to 9 per cent in the three months to the end of September, putting pressure on the central bank to continue its aggressive campaign of raising interest rates over the next two months. The economy’s acceleration by 8.9 per cent in the third quarter, considerably surpassed analysts’ expectations that growth would fall short of the 8.8 per cent year-on-year recorded in April to June.

Monday 29 November

• Comparisons to the weekend of September 13-14 2008 have been made frequently in the two years since the US investment bank Lehman Brothers was allowed to go bust. They were made again yesterday before Ireland agreed last night’s €85 billion (£72 billion) bail-out. But despite hopes that this will be the beginning of the end of Europe’s financial crisis, many think there are more jittery weekends to come.

Saturday 27 November

• Income-seeking investors are increasingly turning to emerging market bond funds offering strong yields and exposure to currency movements - but advisers warn that these funds can be much more volatile than traditional fixed-interest investments. Net inflows to emerging market bond funds totalled almost $40 billion in the first nine months of the year, according to EPFR Global, the data provider.
• On a day when Ireland’s crippled banks were subjected to downgrades by ratings agencies and its borrowing costs hit record levels, above 9 per cent, the Euro traded at two-month lows of $1.32 and bank shares across Europe tumbled.

Wednesday 24 November

• A monthly index released on Wednesday showed global goods trade slowing to a quarterly growth rate of just 0.9 per cent in the third quarter, the smallest expansion rate since the precipitous drop in trade in the second quarter of 2009.

Monday 22 November

• Capital raisings for growth have outstripped efforts by UK companies to repair balance sheets for the first time since the financial crisis began, in a sign that companies could be regaining confidence. According to research by Trowers & Hamlins, the City law firm, more than four-fifths of the money raised through secondary offerings in the third quarter of 2010 was earmarked for growth-related activities rather than bolstering shaky finances - compared with just 17 per cent in the same period a year ago.
• China has lambasted the US for its decision to launch another $600 billion in monetary easing, fearing that this round of “quantitative easing” may feed the flood of money rushing into mainland China from overseas. Asia’s primary convertible bond market is powering ahead. There is little bad news coming out of the region (apart from the prospect of further fiscal tightening in China), with strong economic growth and relatively stable capital markets.

Tuesday 16 November 2010

• A group of economists have launched a campaign against the Federal Reserve’s decision to increase its quantitative easing programme by $600 billion (£375 billion). They warned that QE2, as it is known, will simply exacerbate America’s economic woes.
• Argentina has won the green light from western governments to negotiate repayment of some $7 billion in defaulted debt without an International Monetary Fund review of its accounts, but rules out settling its bill in one year.

Monday 15 November 2010

• Global takeover activity is likely to pick up next year, according to some of Europe’s top deal-makers, but it will take until 2014 at least before it returns to the levels of the pre-crisis boom. A survey of 100 senior executives, personally involved in about a tenth of the $2 trillion (£1.25 trillion) worth of deals carried out in 2009, finds that just over half of them believe the gradual improvement in the world economy will see a further rebound in mergers and acquisitions (M&A) activity.

Sunday 14 November 2010

• The Government’s Independent Commission on Banking (ICB) has begun meeting top regulators and central bankers from around the world - to hear the views of the world’s most senior policy makers for its report on the UK’s finance industry. Sir John Vickers, chairman of the ICB, has already met Paul Volcker, former US Federal Reserve chairman, and its current head, Ben Bernanke, as well as holding talks with the top European Union officials in charge of regulating the financial sector.

Sunday 12 September

• Global banking regulators today sealed a deal to effectively triple the size of the capital reserves that the world’s banks must hold against losses, in one of the most important reforms to emerge from the financial crisis, known as Basel III.

Tuesday 7 September

• Europe must “accelerate the pace of structural reform over the next year to consolidate an uneven economic recovery”, José Manuel Barroso, President of the European Commission, told the European parliament in his first “state of the union” address today.
• Barclays has confirmed Bob Diamond, head of its fast-growing investment bank, as its next chief executive.

Wednesday 1 September

• The Securities and Exchange Commission warns credit rating agencies of their authority to bring fraud cases over conduct outside the US that has “foresee­able effects” in the country.

Tuesday 31 August

• The healing of the US banking sector picked up pace in the second quarter with lenders’ profits rebounding to pre-crisis levels amid falling loan losses, according to official data today. However, the earnings performance masked the wide gap between resurgent large banks and their struggling smaller rivals.

Monday 30 August

• Irish banks are gearing up to repay more than €25 billion of debt in the coming month, in what could prove an important test of investor sentiment towards the broader eurozone financial sector.

Sunday 29 August

• The European Central Bank is expected this week to extend emergency support for eurozone banks until early next year as it gauges how well the 16-country region might withstand a big US or global slowdown

Friday 27 August

• Postponing cuts in public and private sector debts would be “very dangerous” and risk a Japanese-style “lost decade”, Jean-Claude Trichet, European Central Bank president, has warned.

Wednesday 25 August

• Ireland accused Standard & Poor’s on Wednesday of a “flawed” analysis of the country’s debt position after its credit rating downgrade to AA- sparked a sell-off in Dublin’s bond markets.

Thursday 19 August

• California will be forced to issue IOUs to public workers and other creditors in lieu of cash in the next two months if a budget deadlock cannot be broken, the state’s financial controller has warned.

Wednesday 18 August

• The United Kingdom Listing Authority (UKLA) has loosened requirements on financial data, so that a listed company must provide a target in order to avoid suspension of the acquirer’s shares. It also said it would no longer allow listed companies to attempt to avoid the information provisions of the rules by creating a new holding company, or “topco”, used to take over both acquirer and target.

Monday 16 August

• China is on track to officially eclipse Japan as the world’s second largest economy this year in a symbol of Beijing’s rise and the shift in global economic and political power. New figures released today showed that China’s economy overtook Japan’s in the second quarter after Japanese gross domestic product unexpectedly.
• Angela Merkel, Chancellor of Germany, is sticking with plans to cut public spending and hold off tax cuts even as the Country’s recent growth spurt suggests that the economy this year could expand at twice the rate last forecast by Berlin.

Tuesday 10 August

• The US Federal Reserve has taken a first step toward extending its crisis-era monetary policy regime, as it downgraded its view of the economic outlook amid rising fears of a “double-dip” recession. They have agreed to begin reinvesting more than $150 billion (£95 billion) in annual proceeds from maturing mortgage-backed and agency securities into Treasury debt, halting plans to allow a natural shrinkage of the $2,300 billion balance sheet the US central bank built up during the recession.
• US regulators have increased their scrutiny of the country’s largest banks, digging deeper into riskier activities and pushing institutions to conduct more rigorous “stress tests” of their financial health.

Sunday 8 August 2010

• European and US banks appear to have won some ‘breathing’ space after earnings reports suggest a recovery was well under way. The banks have been under severe pressure over their exposure to faltering eurozone economies, their own financing difficulties and the regulations set to come into force on both sides of the Atlantic.

Thursday 5 August 2010

• Barclays launches a spirited defence of its approach of combining retail and investment banking under one roof. John Varley, chief executive, said Barclays’ so-called universal model had proved its resilience and profitability through the financial crisis.
• The eurozone’s economic recovery was surpassing expectations but it was too early “to declare victory”, state the European Central Bank. Evidence is mounting that the three months to September would see stronger growth than originally forecast, according to Jean-Claude Trichet, ECB president.

Wednesday 4 August 2010

• Goldman Sachs is preparing to shut down the unit that trades with the bank’s funds and move its traders to either an independent hedge fund or its asset management arm to comply with new US law and prevent an exodus of star employees.

Friday 30 July 2010

• The US public’s hope of getting repaid for the bail-outs of Bear Stearns and AIG in the financial crisis has increased after the Federal Reserve reported a paper profit for the first time on all the holdings of securities bought from the companies.
• Citigroup has agreed to pay $75 million to settle Securities and Exchange Commission charges that it failed to disclose to investors more than $40 billion in exposure to subprime mortgages.

Wednesday 28 July 2010

• India plans to start conducting twice-yearly stress tests on its banks, following in the footsteps of financial regulators in the US and Europe.
• Portugal has become the first eurozone country to agree to set aside cash – or other assets – against derivative transactions in a decision intended to reduce its funding costs.

Tuesday 27 July 2010

• Global banking regulators have reached a breakthrough agreement to tighten capital requirements and impose new worldwide liquidity and leverage standards, but softened some of their proposals and delayed others to at least 2018. The Basel Committee on Banking Supervision states that all but one of the 27 member countries had signed up to the new principles, which limit what banks can count as so-called tier-one capital – the only kind that can be counted on to absorb losses.

Sunday 18 July

• The International Monetary Fund is seeking commitments by as early as November to boost its lending resources to $1,000 billion from $750 billion to build safety nets that could prevent financial crises. South Korea, as this year’s president of the Group of 20 leading economies, is helping craft the plan.

Thursday 15 July 2010

• The US Senate has passed a landmark reform of Wall Street on Thursday, delivering President Barack Obama’s second big legislative victory and ushering in a raft of restrictions on banks. President Obama will next week sign into law the Dodd-Frank Act, bringing to a close a year-long effort to overhaul the US financial system and its regulators.
• Goldman Sachs agrees to pay a $550 million fine to settle US regulators’ accusations that it misled investors in a mortgage-backed security – a move that ends the highest profile regulatory case since the crisis.
• Italian Prime Minister Silvio Berlusconi’s government has won senate approval for its €25 billion austerity programme, overcoming dissent from the prime minister’s allies as well as opposition parties.

Thursday 8 July 2010

• New rules restricting bankers’ bonuses have been approved by European Union lawmakers. As a result, bankers will only be able to receive between 20 and 30 per cent of any bonus in upfront cash – the toughest restriction worldwide of this kind.
  
  The EU measures, part of a broader set of amendments to bank capital rules, were agreed between member states and EU parliamentarians last week.

Wednesday 7 July 2010

• The Bank of England has made nearly £10 billion in paper profits by buying UK government bonds as part of emergency efforts to pump money into the British economy.
  
  The buy-back programme that began in March 2009 and involved purchasing nearly £200 billion in gilts – has generated gains of £9.7 billion for the Bank, according to analysis for the Financial Times.

Tuesday 6 July 2010

• European commercial banks have begun using their holdings of gold to raise cash with the Bank for International Settlements, in a further sign of strains in the money markets on which many rely for funding.

Monday 5 July 2010

• China is considering stripping its $200 billion sovereign wealth fund of the country’s banking stakes, in a move that could free it of some restrictions when it invests in the US. Under the proposal, China Investment Corporation would no longer be responsible for holding the state’s majority stakes in the country’s biggest banks, such as Bank of China.

Thursday 1 July 2010

• Fears grew that the global recovery is faltering after a slew of data pointed to weaker global demand led by slower growth in China. Figures showed manufacturing output slowing across large parts of the world, posing further challenges to leading economies as they attempt to shore up shaky fiscal positions without falling back into recession.

Wednesday 30 June 2010

• New rules on capital requirements for banks and a cap on bonuses for bankers are the results of negotiations between the Council and the European Parliament which were concluded with a deal. Once this is finalised, the rules are expected to take effect in January 2011 for the bonus provisions and not later than 31 December 2011 for the capital requirements provisions.
• European Central Bank hopes of a smooth return of €442 billion of emergency loans it made to banks a year ago have been boosted after demand for three-month liquidity offered as an alternative fell far short of expectations.

Tuesday 29 June 2010

• US lawmakers have scrapped a proposed $19 billion bank fee as Democrats struggled to secure sufficient votes to pass the Wall Street reform bill. The new proposal involves ending early the $700 billion troubled asset relief programme and increasing the revenue raised by the Federal Deposit Insurance Corporation.

Friday 25 June 2010

• Members of the US Congress have voted to impose a tough proprietary trading ban on deposit-taking banks, new conflict of interest rules and a $19 billion levy on the industry.
• Plans by global regulators for banks to set aside billions of dollars in extra capital to cope with future crises are to be pared back after intense lobbying by the industry. Proposed short-term emergency funding measures will go ahead.
  
• The French government announced a further €3.5 billion of tax rises for 2011 as it sought to bolster confidence in its commitment to reduce its budget deficit. The latest announcement brings the amount France aims to raise from tax increases next year to €13.2 billion.

Tuesday 22 June 2010

• In an emergency budget designed to seize control of public finances strained by the biggest financial crisis in decades, UK Chancellor George Osborne outlined cuts for most government departments of 25 per cent by 2014-15. This represents one of the most drastic spending squeezes in any advanced economy in recent times.

Wednesday 16 June 2010

• US banks second-quarter results will be weighed down by a £1.35 billion bill to pay for the UK tax on bankers’. The amounts to be paid by US banks will contribute to a windfall of £2.5 billion from the levy, larger than expected by the British authorities.

  The tax forced banks to pay a one-off 50 per cent levy on all UK bonuses above £25,000, including those awarded in shares. Unlike some European rivals, most US banks paid the full amount, shielding bankers from the effects of the levy.

Tuesday 15 June 2010

• Spanish banks are borrowing record amounts from the European Central Bank as the country’s financial institutions struggle to gain funding from capital markets.

  Spanish banks borrowed €85.6 billion from the ECB last month, the highest amount since the launch of the eurozone in 1999.

Monday 14 June 2010

• UK sterling climbed on Monday after comments from Bank of England that inflation could stay higher for longer.

Thursday 10 June 2010

• Portugal’s finance minister said the country has no plans to use emergency European Union funding and is confident it can borrow at lower rates in international markets.

  The Institute of International Finance warned on Thursday that economic growth in the eurozone, the US and Japan would be cut by 3 per cent between now and 2015 if current proposals to force banks to hold more capital and liquid assets go forward unchanged.

Friday 28 May 2010

• Prudential is trying to renegotiate the $35.5 billion price tag on the Asian businesses of AIG, in a last-ditch attempt to head off a “no” vote on its planned takeover of AIA. Pru hopes to reduce the price to as low as $30 billion, according to reports.

  The takeover would make Prudential by far the biggest foreign insurer in the fast-growing Asian markets and the largest life assurer outside of China.

Tuesday 25 May 2010

• The Qatar Investment Authority, a sovereign wealth fund, has expressed interest in buying some of the US Treasury’s 27 per cent stake in Citigroup.The wealth fund’s interest in Citi comes as other wealth funds are shying away from banks – largely because of big losses on such investments in the past.

• Asian stocks are reported to be at a 10-month low and the Dow Jones Industrial Average is at one point below 10,000. The FTSE All-World index fell 1.6 per cent and commodity prices and the euro fell.

  Continuing concerns about the global impact of the eurozone debt crisis have now been joined by fears that the Korean peninsula may be sliding towards conflict.

Friday 21 May 2010

• Germany’s lower house of parliament have approved Germany’s contribution to a €750 billion stabilisation package for the eurozone.

Thursday 20 May 2010

• Shares on Asian, US and European markets all tumbled as a response to Germany’s partial ban on naked short selling and ahead of the vote on the US financial regulation bill. Disappointing US jobless data revived fears that the economic recovery could prove short-lived, helping push Treasuries higher and German bond prices to a record.

Tuesday 18 May 2010

• New rules for hedge funds and private equity funds operating in Europe has won the backing of European Union finance ministers.The move follows a similar endorsement by a group of EU lawmakers on Monday and means regulation of the industry in the region has moved much closer.

Monday 17 May 2010

• The European Central Bank has bought €16.5 billion of eurozone government bonds as part of an international rescue plan, amid widespread investor concern that the intervention is not sufficient to stabilise debt markets.The euro fell to its weakest level against the US dollar since April 2006 in spite of the €750 billion international support package and central bank intervention. The euro has fallen 14 per cent against the dollar this year.

Friday 7 May 2010

• Today it was confirmed that for the first time since 1974 there is a hung-parliament in Great Britain. Although the Conservative Party led by David Cameron won the most seats overall in the 2010 general election, they fell short of reaching the majority cut-off point of 326 seats. As a result there is no single party which has enough seats to win votes in Parliament. The party leaders are currently in talks to discuss the opportunities available for coalitions.

Thursday 6 May 2010

• The Greek Parliament voted in favour of various reforms and cuts in an attempt to cut the deficit and stabilise the country both financially and socially. Some of the proposals include public sector pay being frozen until 2014, VAT increase from 19 per cent to 23 per cent, an increase in the retirement age from 61 to 63 and taxes on fuel, alcohol and tobacco to rise by 10 per cent. These measures are also required to ensure that Greece receives the 110 billion euro rescue package agreed by the International Monetary Fund and the European Union Member States.

Thursday 29 April 2010

• Brazil’s central bank attempted to tackle rising inflation by raising interest rates by three-quarters of a percentage point. This has led to an overnight rise from 8.75 per cent to 9.5 per cent which is the first time since 10 September 2008 that the bank has increased its rates. Brazil has weathered the credit crisis admirably and only experienced a brief recession from which is has already recovered and its economy is growing.
• Greece’s 15 eurozone partners and the International Monetary Fund shall shortly present an emergency multi-annual loan programme for Greece. The package consists of €30 billion in the first year from the eurozone partners with an additional top-up of at least €15 billion from the IMF. Across three years, the package could see the total reaching figures as high as €100 billion-€120 billion.

Wednesday 28 April 2010

• The Republicans give the go-ahead to the US Senate to begin debating the financial reform bill in response to the Democrats’ decision to discard proposals to charge financial institutions $50 billion to pay for a resolution fund. The Republican-Democrat truce comes after the Republicans had consistently blocked any debate on the bill for three days running.
• Standard & Poor’s downgraded Spain from an AA plus rating to an AA rating. This debt downgrade dealt a blow to the Euro against the Dollar and has sparked new concerns that the Greek situation is spreading across the eurozone. The impact of the downgrade on Spain has been significant with its stock market falling by 3 per cent. Spanish bonds were also significantly affected. In total this week, Standard and Poor’s has downgraded three European countries, Spain, Portugal and Greece, with the Greek credit rating being downgraded to junk.

Thursday 15 April 2010

• Evidence of a strong Chinese economy had a positive impact on the markets, boosting risk appetite and pushing stocks to cyclical highs. However, the positive mood was tempered by a sharp sell-off in longer-term Greek debt and a fall in the euro – as news that Greece had asked the EU and IMF to discuss aid reminded traders about the unsustainable level of many developed nations’ debt burdens.

Tuesday 13 April 2010

• US President Barack Obama pushes President Hu Jintao of China to allow the renminbi to appreciate, as new figures showed that China’s foreign exchange reserves are growing at a slower rate than before. This has led analysts to consider the potential effect of a stronger renminbi not only on other Asian currencies, but also the wider consequences for currency markets as a whole.
• The International Monetary Fund has urged US and European regulators to consider imposing higher customised capital requirements on “systemically important” banks deemed “too big to fail”. The discussion of capital surcharges for big banks will prove controversial, with bankers arguing that large institutions should not be penalised by regulators because of their size. US and European governments have pledged to overhaul regulation to avoid a repeat of the huge public bail-outs of troubled financial institutions seen during the financial crisis.

Monday 12 April 2010

• Eurozone members agreed to provide up to €30 billion in loans to Greece over the next year during a teleconference of eurozone finance ministers. The loans will be supplemented by contributions from IMF that could yield an additional €15 billion according to European officials.

Friday 9 April 2010

• Following the loss of investor confidence on the bond markets, it seems inevitable now that Greece will have to seek a rescue package from the EU and International Monetary Fund (IMF) probably before the end of May 2010. The current instability of the markets at the moment means that the Greek government’s plans to rectify its financial crisis by borrowing are not viable. Both the EU and the IMF have prepared a bail-out plan for Greece under which it would provide €22 billion.

Thursday 8 April 2010

• The Bank of England has decided to maintain the 0.5 per cent UK interest rates partly due to the strong indications of growth at the year-end.

Wednesday 7 April 2010

• Financial reform legislation proposed by the US President is starting to gain momentum. Negotiations are continuing and a bill is expected to be signed by Barack Obama on the second anniversary of the Lehman collapse. Within the House of Representatives and the Senate and between Republicans and Democrats there is a growing recognition that there is an urgent need to enact legislation sooner rather than later to address the underlying issues of the financial crisis.
• The British Chambers of Commerce has published the results of its survey of 5,500 companies. The most prominent result shows that the economy has evaded a “double-dip recession” in the first quarter of this year.

Thursday 1 April 2010

• The Bank of England has issued a report stating that over the next three months, banks will continue to make personal loans and overdrafts available only to “better quality” borrowers. This contrasts to the banks’ willingness to provide mortgages and credit to businesses.

Wednesday 31 March 2010

• The Labour government introduce a tax on banker’s bonuses and has been promoting the need for a global tax to be imposed on banks. Similarly, the Conservative Party has also outlined proposals which include a levy on banks.
• In Germany, the government has launched a scheme through which future bail-outs will be funded by the banks themselves. It is envisaged that financial institutions will pay into a fund that will then be drawn on whenever there is a threat to financial stability. The scheme is expected to raise £1 billion and the UK and France may follow since both countries have recently been toying with the idea of imposing a levy on banks.

Monday 29 March 2010

• Surveys have shown that 85 per cent of companies are concerned that London is losing its competitiveness as a financial centre, but the UK financial services sector is set to enter a period of rapid growth. 48 per cent of firms are predicting that they will experience a rise in business volumes over the next three months but such positivism is tempered by the possibility of tighter regulations and new taxes being imposed on financial institutions in the UK.

Wednesday 24 March 2010

• UK Chancellor, Alistair Darling delivered an extremely political Budget at the expense of the rich and banks. Darling’s budget was strongly criticised. Economists have said that apart from tax increases and £9 billion in spending cuts, the Budget was vague.

Tuesday 16 March 2010

• UK Prime Minister, Gordon Brown personally intervened to defer the discussion and implementation of new European regulations on hedge funds and private equity houses in a move designed to stave off “certain defeat for Britain” at a meeting of finance ministers in Brussels.
• Spain, the current holder of the EU Presidency signalled that it intended to secure a deal on proposed legislation on the “alternative investments” sector before its term ends in June. This comes as a result of calls for regulation of hedge funds and private equity houses, through increased disclosure requirements to offset what is seen in some quarters as a systemic risk.

Monday 15 March 2010

• The credit rating agency, Moody’s Investor Service, will issue a warning to the US on Monday, containing words to the effect that unless the state of public finances (i.e. the federal budget deficit) improves faster than the current estimates of the Obama administration, there will be “downward pressure” on its AAA credit rating. Moody’s projections indicate that the extent of federal borrowing is so high that interest payments on government debt will be 15 per cent greater than government revenues, or approximately the same by the end of this decade.

Sunday 14 March 2010

• The Chinese Premier, Wen Jiabao, speaking at the National People’s Congress warned other countries not to press China on its currency policy with such pressure described as an attempt at protectionism. The statement came in light of accusations that the renminbi has been deliberately undervalued.

Wednesday 11 March 2010

• Due to concerns that the draft EU directive could adversely affect the hedge fund and private equity sectors, Gordon Brown and Nicolas Sarkozy met this week to find a compromise solution. The EU directive is aimed at tightening regulatory controls and both the UK and US fear that this will negatively impact on industries. Mr Geinther, the US Treasury Secretary, expressed concerns that the regulatory controls will “discriminate against US firms” but EU officials responded that the proposed directive was a measure taken in response to the G20 decision to enhance transparency in the financial system. The Uk’s opposition stems from fears that the implementation of the directive will hinder the business of London based hedge funds. The UK argues that a passport system should be operated so that hedge funds operating in one Member State can operate in any Member State.

Sunday 7 March 2010

• It has been decided that the 23 largest banks in the US that have over $100 billion of assets will be overseen by the US Federal Reserve rather than being supervised by a single regulator. This proposal has been put forward in an attempt to prevent a repeat of the Lehman bankruptcy and the burdensome bail out of AIG. Mr Geithner of the US Treasury told senators that only the central bank is capable of fully supervising these large institutions. However many senators are reluctant to allow the US Federal Reserve to retain its supervisory powers following its handling of the financial crisis.

Friday 26 February 2010

• Lloyd’s Banking Group reported a £6.3 billion underlying pre-tax loss for 2009, a slight improvement on the £6.7 billion deficit recorded a year earlier.

Thursday 25 February 2010

• Ben Bernanke, chairman of the US Federal Reserve today revealed the US Central Bank is looking into a number of questions relating to Greek currency transactions structured by Goldman Sachs and other companies.

Wednesday 24 February 2010

• Germany recorded a budget deficit of 3.3. per cent of GDP in 2009, well below the level for most of Europe’s larger economies. It is the first year since 2005 that Germany has breached the Maatricht stability and growth targets, intended to keep deficit spending by European Union members below 3 per cent.

Tuesday 23 February 2010

• US consumer confidence fell to the lowest level in 10 months on fears about a slow labour market recovery. US house prices meanwhile continued to straddle along, showing a small monthly fall in December 2009 while recording slowing annual declines

Thursday 18 February 2010

• For the first time since 1993, the UK Treasury found itself facing a deficit in the first month of the year. Despite public sector net borrowing totally $4.3 billion for January, the Treasury maintained that this figure was expected as is covered self-assessment income and capital gains tax for the period 2008-2009 which spanned the height of recession. They expressed confidence that the total deficit for the financial year will fall well below its target of £170 billion, resulting in spare funds for the Government - however this has in turn sparked political debate as to whether any excess cash should be directed towards cutting the deficit or increasing spending.

Wednesday 17 February 2010

• Germany’s Chancellor, Angela Merkel this week condemned investment banks for causing the financial crisis and for their suspected involvement in the debt crisis in Greece. In the meantime there is continuing civil unrest and turmoil throughout Greece with further industrial action planned for next week with no sign as yet that an EU rescue package is forthcoming. This follows Germany’s insistence that Greece must reduce its public spending before other EU countries step in.

Tuesday 16 February 2010

• The Chinese government’s sale of $34.2 billion in US Treasury Securities has resulted in Japan becoming the largest holder of US government debt, a position it has not held since September 2008. The biggest concern now facing the US is seeking out alternative finance from countries such as Japan and the UK.

Friday 12 February 2010

• Goldman Sachs and other banks may have to give up their bank status if they want to avoid Obama’s proposal to separate proprietary trading from commercial banking, known as the “Volcker Rule”. Markets are wondering how the rule would affect groups such as JPMorgan Chase, which have proprietary trading desks and private equity units. Executives at Goldman say that if the Volcker Rule is passed, it would probably sell its deposit-taking bank, which is an insignificant part of Goldman’s $900 billion - plus balance sheet.

Thursday 11 February 2010

• According to UK Prime Ministers Gordon Brown, the world’s leading economies are close to agreeing a globally coordinated bank tax after President Barack Obama’s move last month to raise $90 billion (£57.7 billion) from a US bank levy. He believes that the IMF will endorse a global levy before its April meeting in Washington in a move that could cost the financial services sector tens of billions of pounds a year. Downing Street hopes an agreement in principle can be arrived at by world leaders at the G20 summit in June, although the implementation of the levy and the detail of how it would work could take longer.

Wednesday 10 February 2010

• Encouraging economic data out of Asia and hopes for a German-backed rescue package for Greece led the FTSE World equity index to rise 0.2 per cent and Greek Bonds to soar, with yields plummeting. Germany is expected to take the lead in marshalling financial support for a Greek bail-out amongst fears that the crisis could spread to other eurozone states with big deficits such as Spain and Portugal. However countries outside the euro area, led by the UK and sweden, feel that the IMF would be better placed to organise the bailout.

Tuesday 9 February 2010

• Official figures have confirmed that China overtook Germany last year to become world export champion. German goods’ exports fell by 18.4 per cent in 2009 compared with the previous year - the biggest year-on-year fall since 1950, according to the federal statistics office. Overall, German exports last year were equivalent to $1,121.3 billion, which compared with the $1,201.7 billion exported by China.

Monday 8 February 2010

• Hector Sants has resigned as head of Financial Services Authority after three years as chief executive. He advocated banking reform, both in the UK and internationally but criticised the Conservatives’ plans to give theFSA’s supervisory role to the Bank of England and spin out consumer protection responsibilities to a new agency. The uncertainty over the FSA’s future will make it difficult to recruit a successor and even under the Tories’ reform plans, a merged regulator would take months, if not years to establish.