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The European Central Bank raises the key interest rate to 4% a 10th increases in a row. This takes the euro to $1.07 for a dollar in September 2023.

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Regional banks lose more than a third of hteir stock values in Ohio, the southeast and western states. In some cases banks have lost half their value. These banks will neede another $65 billion on top of the $120 billion they have raised so far according to a Goldman Sachs report. The declinig market for commercial real estate will also hit these banks.

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Consumers are taking on new loans for cars and purchases such as refrigerators, but at the same time businesses and consumers are paying off debt at a faster rate. The sharp decline in the Euribor rate in 2015 is good news for Spanish consumers and business as most loans are tied to the Euribor rate. Yet memories of the severe downturn in the Spanish economy are leading to consumers reducing debt with reluctance to take on new loans. The result is that even though Spain's economy is expected to show 3% growth in GDP in 2015, the loan levels at Spanish banks are expected to remain flat in 2015 over 2014. The IMF says GDP will not reach precrisis levels till 2017, reflecting how deep this downturn has been in Spain. IMF forecasts show that debt held by Spain's businesses and households will be double economic output till about 2020.

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Pressure on Scholz and Germany from European allies to allow sending of Leopard tanks to Ukraine before spring offensives begin. 

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Because not much money is being spent the velocity of money as measured by the ratio of GDP to M2 money supply is at a low not seen since 1991, in the 4th quarter 2008. If GDP shrinks in the 1st quarter 2009 at 6% annualized rate as expected, then M2 velocity will be the lowest since 1987, even with the accelerating growth of money supply growth. The M2 money supply, a measure of money in the system including time deposits has grown by $767 billion or 10% in the past year accoding to the Fed. Money that is not being spent is building up in amountain of cash reserves. Banks have about $679 billion in reserves of cash, and this matches the $653 billion by which money supply has increased during that time as aresult of the Fed's repeated infusions. This suggests that inflation is not the risk that it would appear to be, even with the governments huge spending plans and the Fed's efforts to add so much liquidity. Says one economist, the money multiplier is just not working and is broken. Will consumers start borrowing and spending again. Not as long as they are so overstretched and with job losses mounting. And will banks continue to cautious and slow to led? Most likely as long as the bank's balnce sheets are broken, and the bad assets remain on them. This may explain last weeks efforts by the Fed to buy Treasury bonds upto $300 billion and more efforts to get credit flowing again by buying up mortgage securities and raising the ceiling to $1.25 trillion for purchases. cash...

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Price rise of 3.7% in Japan and central bank plans to increase rates further in 2023.

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Mark Carney, Governor of the Bank of England, in meetings with bankers and business leaders says Britain should remain in the single market 2 years after exit from the European Union, according to the Sunday Times. Theresa May plans for Britain to exit the EU in 2019. The reason is that this would protect business as it adjusts to leaving the single market, a kind of transition or Brexit buffer period. This period "really informs what businesses need to do because you transition and restructure during that window," Carney told a House of Commons Treasury Committee. About the changes in the politics in the U.S. and Europe Carney has said about basic fairness in bankers language- "market fundamentalism can devour the social capital needed for capitalism" to work, referring to the moral failures in operations of the banks by 2009 and how it hit the middle and working class incomes and wealth.

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Mnay people who have engineering degrees and jobs which pay 60,000 to $75,000 in the auto companies are now visiting food banks as they exhaust their unemployment benefits. They live in suburbs of Detroit, in Rochester Hills, in Dearborn Heights, in Taylor and so on. THe unemployment rate has reached 14.1% and there are more layoffs ahead. THis is also affecting the health care business as companies cut benefits. By the end of of 2009 100,000 residents will have lost their benefits, according to the state's unemployment insurance agency. THe US Department of Agriculture provides 20% of the food aid in the state to food banks and is watching the situation closely. In May, the caseload of the Michigan Food Assistance Program, which adminsters the USDA's food stamp aid for the state rose to 719,000 households, up 3.1% in April and nearly triple the figure in 2000. THe USDA has doubled its shipments to Gleaners, a food bank, which says it is stretched, as it does not serve the once affluent suburbs....

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For the first time coordinated rate cuts of half a percentage point by the Fed, the ECB and the Bank of England. Yet markets in the swung wildly on Tuesday, October 7, 2008, opening down 200 points then up 200 points after a 500 point drop on the previous day Monday. Asian markets got hammered with steep selloffs as the crisis showed no signs of abating. Previously the ECB had resisted lowering rates saying the crisis was more of an American one with secondary effects in Europe, but the squeeze in the credit markets in Europe and the same fears of banks refusing to lend to one another ocurred in Europe over the last few days so the ECB has reconsidered its view. Meantime emerging markets like Russia and Brazil and other countries are getting hammered. Most Asian markets had already closed by the time the coordinating central banks had acted, Japan's Nikkei declining b 9.4% in its worst one day loss since 1987 and the Hong Kong Hang Seng went down by 8.2%.

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Reliance Power's total capacity is expected to reach 5000 megawatts by Dec. 2012. The company plans to install total capacity of 35,000 MW. It is building a 3,960 MW thermal project at Tilaiya in Jharkhand state, eastern India. Another plant of the same capacity is being built at Chitrangi in Madhya Pradesh, central India. About 75% of the funding will be through debt. Relince is in talks with U.S. and Chinese banks to fund the $8.35 billion for these 2 projects. Loans agreements are in place for $5 billion from the Export-Import Bank in the U.S. and $12 billion from Chinese banks, funding that is coming as part of buying equipment from the U.S. and China.

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An analysis done for the Wall Street Journal by real estate portal Zillow.com, shows the median down payment in nine major U.S. cities rose to 22% in 2010 on properties purchased with conventional mortgages. Banks favor higher down payments today because it reduces the chances of delinquencies. Median down payments were at about 20% in 1990, then the payments declined in the nine cities Zillow looked at: Chicago, Stockton, Las Vegas, Miami, Phoenix, San Diego, San Francisco and Tampa. The drop went as far as 4% in 4th quarter 2006, and in some places close to zero. Experts say these are the markets where more home buyers are under water. A 2009 study by the Federal Reserve Bank of St Louis shows that buyers with smaller down payments are more likely to default in unfavorable economic situations. A contributing cause of the 2008 sub-prime mortgage crisis was the very low down payments. Federal Deposit Insurance Corporation chairwoman Sheila Bair, says she supports minimum 20% down payments....

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A new central bank governor Hafize Erkan, increases interest rates from 8.5% to 16% in June 2023 to tackle inflation of about 40%.

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Imposing losses on senior bond holders is acceptable under EU law during a liquidation process, say experts. Having them take losses in a restructuring would require changes to European and national laws. The uncertainty this creates coud hurt Spain's larger banks such as Santander and BBVA, which have so far not been affected by the crisis. A new European banking supervisory authority could insist on losses for senior bond holders to reduce the amount needed from the EFSF or ESM rescue funds.

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A mystery about the $1 billion in cash that was presented as existing in the Satyam accounts but actually nonexistent was solved by investigators. It turns out that when the banks were contacted each of them said those deposits supposedly there were not there. The documents that auditors looked at were forged bank documents of deposits.

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Ring-fencing the retail operations of UK banks from possible losses in the investment banking activities was part of proposals by the Independent Commission on Banking in the UK. Now a parliamentary commission calls for periodic reviews of such ring-fences to ensure this separation is actually still in place, and not been diluted or otherwise removed by bending the rules to favor banks because of lobbying by the banks. It says "over time the ring-fence will be tested and challenged by the banks. Politicians too could succumb to lobbying from banks and others, adding to pressures to put holes in the ring-fence." The report emphasized that a lot more needs to be done to restore standards in banking, especially after recent reports of LIBOR and other revelations of market rigging and corruption. The emphasis in the report is for banks "to be discouraged from gaming the rules."

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Richard Fisher, president of the Dallas Federal Reserve Bank, has a three part proposal for tackling the "too big to fail" problem and concentration of 70% of the U.S. banking assets in a few banks. It calls for Market Discipline to be exercized in a way that the Dodd-Frank legislation fails to do. This is to be accomplished by having deposit insurance and the Fed's discount window apply only to traditional commercial banks, not the nonbank affiliates and parent holding companies. Customers, creditors and counterparties of all nonbank affiliates and the parent holding companies would be asked to sign a disclosure accepting that there is no government guarantee. In addition the largest financial holding companies would be restructured so that all their corporate entities would fall under a speedy bankruptcy process. Fisher does not clarify how he would do this restructuring. The Fisher idea come after changes in the banking industry through internal management restructuring following trading losses, legal settlements and the passage of a Swiss referendum called the Minder Initiative on compensation. Fisher suggests the U.S. Fed and regulatory authorites in other countries should push for further restructuring and calls for action beyond the limited results from 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. He is critical of Dodd-Frank's often ambiguous and lengthy worded legislation- 849 pages for the law and 9000 pages for the regulations written to implement the law. Fisher emphasizes the point that its hard to implement a law and enforce rules when its not clear and is difficult to understand....

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The Volcker Rule goes into effect in July 2012. Under the rule proprietary trading operations of banks must be divested by 2012, with banks getting an additional three years to comply for specific situations. The financial industry is pushing back against the rule with comment letters from industry firms. Mr. Volcker outlined his response in his letter of comments to the objections raised by financial firms. To the objection that this would reduce liquidity in the market and raise corporate borrowing rates, Vocker says that too much liquidity is a problem because firms tend to bid up asset prices in the hope that they can always find buyers.

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German Defense Minister Christine Lambrecht says Germany will send anti-aircraft tanks to Ukraine. She said "we are working together with our American friends in training Ukrainian troops on artillery systems on German soil." 

The decision by Russia to launch a new offensive in the south and east of Ukraine after the stalling of the Russian forces near Kiev, has led to a shift in American policy to decisively counteract the Russian moves into Ukraine with weapons and training assistance. WIth both Republicans and Democrats determined to support president Biden in this decision, Defense Secretary Lloyd Austin and Foreign Minister Blinken visited Kviv and then landed at Ramstein Air Force Base to coordinate the efforts from Germany.