Mon, Dec 19, 2011 - Page 10 News List

World Business Quick Take

Agencies

BANKING

Stark slams bond buying

The European Central Bank’s (ECB) outgoing chief economist, Juergen Stark, again criticized the bank’s bond-buying program as a way of resolving the eurozone debt crisis, in an interview published on Saturday. “Don’t ask too much of the central bank,” Stark told the German weekly Wirtschaftswoche. “We have since May 2010 bought about 210 billion euros [US$273 billion] of bonds ... We can’t keep expanding our budget sheet with no limit.” Stark had previously spoken out against the program, saying it would not tackle the root problems of Europe’s debt crisis. His surprise announcement in September was widely seen by analysts and ECB watchers as a consequence of his opposition to the bond-buying program. In the interview, Stark said that the outcomes of the Dec. 8 summit of European leaders in Brussels should be implemented as soon as possible.

TRADE

Financing dries up

Trade finance is drying up amid the financial crisis, threatening jobs and economic growth, trade sources warned on Saturday. Banks like Credit Agricole and BNP Paribas — two of the 25 financial institutions most active in such financing — have recently reduced their trade financing business, said a trade source on the sidelines of a WTO ministerial conference. More than 90 percent of commercial transactions in the world require trade credit, but the crisis is forcing banks to hold on to capital and liquidity, as a result of which the lending market is drying up and credit becoming more expensive.

OIL

Iran, Russia to ink deal

Iranian and Russian companies could reach an agreement today to develop the Zagheh oil field in southwestern Iran, Mehr news agency reported, without citing its sources. National Iranian Oil Co and OAO Tatneft, an oil producer based in Russia’s Tatarstan Region, could sign a contract valued at US$700 million in Tehran, the agency said. The field would start by producing about 7,000 barrels of heavy crude a day, with output rising later to 55,000 barrels a day, Mehr said in the report published yesterday.

THAILAND

Flooding will not affect baht

The nation has recorded about US$2 billion of inflows stemming from insurance claims related to this year’s floods, central bank Governor Prasarn Trairatvorakul said. Those inflows had been balanced by outflows linked to overseas investment by local firms and the sale of emerging market assets by overseas investors, Prasarn told reporters yesterday. Companies affected by the flooding would start buying replacement machinery in the first quarter, boosting capital outflows, Prasarn said. The impact on the baht would be limited as some companies have opened foreign currency deposit accounts for insurance claims, and those funds would not be converted into baht. Other claims could be paid to parent companies outside the country, he said.

ITALY

Budget avoided Greek fate

The nation would have ended up like Greece had the government not pushed through a 30 billion euro (US$39 billion) emergency budget, Deputy Finance Minister Vittorio Grilli told Il Sole 24 Ore in an interview published today. Without the package, “Our future was Greece,” Sole cited Grilli as saying. Prime Minister Mario Monti and Development Minister Corrado Passera “are now working on a package of measures” to spur economic growth, Grilli told the newspaper.

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