20100421 1245 Global Economic News.

Federal Reserve Chairman Ben Bernanke called the issue of "too-big-to fail" financial institutions a major concern and said he wants regulators to have the power to wind-down large firms before they fail and cause considerable harm to the financial system. (Xinhua)

Easing financial and economic strains have led the IMF to cut its estimate of global banking writedowns from the financial crisis back down to US$2.3tr from US$2.8tr, but at the same time it warns that continued fragilities and growing sovereign risks could slow the recovery.

• The stability of the global financial system is not assured, despite the signs of improvement, and continued steps are needed including fiscal adjustment in major economies and making the US$600tr global derivatives markets safer and more transparent, a senior International Monetary Fund official said. The IMF cautioned that rising government debt has replaced financial industry stress as the biggest threat to the global economy. (Xinhua, Bloomberg)

The UK’s inflation rate jumped 3.4% yoy in March (3.0% in Feb), more than economists forecast and breaching the government’s upper limit for the second time this year after energy costs rose within weeks of the election. Economists had projected the prices would increase 3.1% yoy in March. Month-on-month, inflation rose 0.6% (0.4% in Feb). (Bloomberg)

Japan’s demand for services fell less than economists estimated in February, highlighting an economic recovery that is starting to benefit households. The tertiary index slipped 0.2% mom in February (+2.5% in Jan). Economists had projected for a 1.0% drop. (Bloomberg)

Japanese Finance Minister Naoto Kan said the central bank and government should work toward pushing inflation as high as 2% and reiterated his hope for an end to consumer price declines this year. “I think inflation targeting is an attractive policy. We could have a goal of 1% or something a little higher, like 2%, and work with the BOJ until that goal is met,” Kan said. (Bloomberg)

Bank of Korea Governor Kim Choong Soo said he’s undecided on whether to press the government to refrain from discussing the bank’s monetary policy. Government officials have repeatedly said that it’s too soon to raise borrowing costs in Asia’s fourth-largest economy. He also said the current benchmark rate of 2% is “appropriate.” (Bloomberg)

China ordered developers not to take deposits for sales of uncompleted apartments without proper approval and barred them from charging “abnormally high” prices, stepping up efforts to prevent a property bubble. Developers must disclose to the public all apartments available and prices, and start selling within 10 days of getting pre-sale approval, the Ministry of Housing and Urban-Rural Development said. It vowed to punish developers that “artificially” create supply shortages. (Bloomberg)

Taiwan’s export orders rose 43.7% yoy in March (36.3% in Feb), faster than economists expected as the global economic recovery boosted demand for computers and mobile phones. Market forecast it would increase 40.1% in March. (Bloomberg)

India’s central bank raised interest rates for the second time in a month and ordered lenders to set aside more cash as reserves, seeking to slow the fastest inflation among Group of 20 nations. The Reserve Bank of India boosted the three policy rates by a quarter point. The reverse repurchase rate rises to 3.75%, the repurchase rate to 5.25% and the cash reserve ratio to 6.00%. This decision matched the median forecasts. (Bloomberg)

The undervaluation of China’s currency and dumping of Chinese-made goods in the European Union (EU) are contributing to strains in trade relations between Beijing and the 27-country bloc, the EU’s trade chief said. But European Trade Commissioner Karel De Gucht said the EU would hold discussion with China to try to solve the disputes rather than take retaliatory action which could increase tensions. (Financial Daily)

The International Monetary Fund (IMF) cautioned that rising government debt has replaced financial industry stress as the biggest threat to the global economy and cut its estimate for asset writedowns by 19%. Banks reduced the value of loans and securities by US$2.28tr since 2007, two-thirds of which had been realized by the end of 2009, down from the IMF’s October estimate of US$2.81tr, it said. About 39% of the writedowns were in US banks, 29% in the euro area and 20% in the UK. (Bloomberg)