A $2.6tn European bank deleveraging could jeopardise financial stability, says the IMF. The fund warned that banks’ plans to shrink their assets by almost 7% over the next 18 months could hit economic growth, reports the FT. The fund has so far raised $320bn in extra ‘firepower’ funding after Poland and Switzerland made commitments on Wednesday, reports Reuters.
Asian stock markets fell ahead of debt auctions from Spain and France, says Bloomberg.
Lord Turner will launch a fresh push for shadow banking regulation in a speech on Thursday, where he will say there is proof that repo markets should be subject to similar rules applied to banks. He will also discuss the subject with Fed bank regulation chief Daniel Tarullo, says the FT.
BoJ governor Masaaki Shirakawa said he’s “committed” to continuing monetary easing and the Japanese economy has “stagnated,” even as a report on Thursday showed the fastest export growth in a year, reports Bloomberg. The yen fell against most of its peers on the comments.
Pershing Square Capital is planning a $4bn public flotation for a new fund in January 2013. Bill Ackman, the high-profile US activist investor who runs the $11bn hedge fund, plans to float the vehicle “on a major exchange”. The fund has already been set up in Guernsey and is known as Pershing Square Holdings, says the FT.
BP has settled with about 100,000 claimants over its Gulf of Mexico oil well blowout, which it expects to cost about $7.8bn although the amount is not fixed. The company has also asked the judge for a lengthy delay to any trial arising from remaining disputes, reports Reuters.
The SFO’s chief executive has quit unexpectedly: Phillippa Williamson resigned just days before the regulator’s director, Richard Alderman, was due to complete his four-year tenure on Friday, reports the FT.
Brazil cut its benchmark lending rate 75bp to 9%, its sixth consecutive rate cut as it fights a sharp economic slowdown, reports the FT.
Goldman Sachs is in talks to sell its Petershill portfolio to Asset Management Finance, according to sources, says NYT DealBook.
An impending round of big bank ratings reviews from Moody’s is being weighed up by Wall Street. Morgan Stanley could suffer the most in a round of downgrades, which Moody’s says could require it to post up to $6.5bn more collateral, says the FT. BlackRock said it would have to move some of its business if the downgrades went ahead, without specifying which banks it was referring to reports NYT DealBook. The decision is expected in the next month.
Cable & Wireless Communications is likely to cut its dividend, by as much as half, at its full-year results next month, according to sources. The company is one of the highest yielding stocks in the sector, with 16% compared to an 8% average, says the FT.
A potential value for a post-IPO Facebook of about $104bn was discussed in the talks to buy Instagram, according to sources, says NYT DealBook.
First quarter forex revenues fell at Bank of NY Mellon and State Street, at the same time as both are battling multiple state lawsuits alleging they overcharged for currency exchange services. However the banks’ executives said the revenue falls related to tougher market conditions rather than fleeing customers, reports the WSJ.
COMMENT AND CURIOS
More on the Chesapeake CEO’s $1.1bn loan. (Reuters)
“As far as we know… he remains at school at Harvard,” says a State Department spokesman about Bo Xilai’s son. (Bloomberg)
Editorial: Citi investors are right to reject Pandit’s pay. (Financial Times)
Not ‘if’ but ‘when’ for Spanish bailout. (Reuters)
Chinese moviegoers askance at deleted ‘Titanic’ 3D nude scene. (Bloomberg)
OVERNIGHT MARKETS: DOWN