9 Jan 2012: ECB to lower benchmark interest rates

INDICES POINTS CHANGE
FTSE 100 5651 Up 3bp
S&P 500 1278 Down 25bp
NIFTY 50 India 4744 Down 5bp

Major Stories

  • ECB may lower interest rates
    • Mario Draghi, ECB head, might cut its benchmark rates to under 1% to help banks further
    • UBS forecasts third consecutive annual Euro decline against Dollar
    • There is mixed opinion from analysts regarding the potential economic growth or decline in Europe for 2012
  • Basel rejects delay to liquidity buffers
    • According to Basel regulations, banks will be required to maintain easy-to-sell assets (atleast 10%) starting 2015 to guard against times of stress
    • There was a widespread plea from banks to delay this regulation’s implementation but this has been rejected
    • Currently, these assets include high-quality sovereign bonds only; it will be decided later this year, whether other securities such as equities, gold and securitisations can be added to the list of these easy-to-sell assets
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