UK: Canada’s Carney chosen to replace King as Governor of BOE
Bank of Canada governor Mark Carney was unexpectedly named the head of the Bank of England as the U.K. government looked abroad for a candidate untainted by financial turmoil to lead the beefed-up central bank. Carney’s London posting comes after a series of trading scandals dented the capital’s status as the world’s leading financial centre, prompting a rejig of regulations that will test skills of the Canadian elected as the head of the world’s banking watchdog. His chief rival for the job, BOE Deputy Governor Paul Tucker, became entangled in the Libor rate-rigging scandal earlier this year. (Bloomberg)
EU: Italian consumer confidence falls to record low on recession
Italian consumer confidence fell to a record low this month as households grew more pessimistic about the economic outlook after the country’s fourth recession since 2001 entered its second year. The confidence index fell to 84.8, the lowest since the series began in 1996, from a revised 86.2 in October, the national statistics office, Istat, said in Rome. The reading was lower than the median forecast of 86.3 in a survey of 13 economists by Bloomberg News. The Italian economy shrank for a fifth quarter in the three months through September as export gains failed to offset the effects of weak domestic demand. (Bloomberg)
NZ: New Zealand annual trade deficit widens to most in three years
New Zealand’s annual trade deficit swelled more than economists forecast to the widest in more than three years as falling prices and a rising currency curbed returns from milk and butter exports. Imports exceeded exports by NZD1.4bn (USD1.1bn) in the 12 months ended 31 Oct, compared with a revised NZD875m shortfall in the year through September, Statistics New Zealand said today in Wellington. Exports fell 1.4% from the year ended 31 Oct 2011, while imports rose 3%. (Bloomberg)
CN: China search for PBOC chief spurs focus on finance regulators
China’s likely search for a successor to Zhou Xiaochuan as its central bank chief is spurring the focus on the nation’s banking and securities regulators as the incoming Communist leadership overhauls top government positions. Guo Shuqing, 56, and Shang Fulin, 61, have both run one of China’s four largest banks, worked as a deputy central bank governor and currently head regulatory agencies -- matching the profile of Zhou, 64, when he took the helm of the People’s Bank of China in 2002. As a securities regulator, Guo has accelerated the pace that predecessor Shang set for opening up to foreign investors, suggesting he could favor faster deregulation of financial markets. (Bloomberg)
US: Overnight rates surge in Fed’s Operation Twist
You wouldn’t know the Federal Reserve has done nothing but add to its record monetary stimulus from looking at short-term funding markets. The federal funds effective rate on overnight loans between banks was 0.16% on 21 Nov, up from 0.06% at the end of Sept 2011, the month Fed officials announced they would begin swapping short-term securities in their portfolio for long-term debt under Operation Twist. The rate for borrowing and lending Treasuries for one day through repurchase agreements also has surged. Higher overnight interest costs are a side effect of Operation Twist, which have persisted despite new accommodation. (Bloomberg)
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