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Showing posts from December, 2007

Bank of Canada cuts interest rates

The Bank of Canada today announced that it is lowering its target for the overnight rate by one-quarter of one percentage point to 4 1/4 per cent. The operating band for the overnight rate is correspondingly lowered, and the Bank Rate is now 4 1/2 per cent. The Bank is likely to trim rates again in January, although the tone of today’s press release does not hint at a significant easing campaign. The Bank is still officially concerned about upside risks to inflation (given a very low jobless rate), but the credit squeeze and a possible U.S. recession are the dominant concerns now. The Bank of Canada lowered interest rates yesterday, and took some pressure off the nervous borrowers and hard-pressed exporters and manufacturers feeling the sting of the soaring Canadian dollar. But the central bank also issued a dark forecast, raising concerns about weakening demand in the U.S. economy and continuing turmoil in global financial markets. Canada's big banks followed suit, lowering thei

AIG to Start Mortgage Guarantees in India

American International Group Inc., The New York-based insurer plans to enter mortgage guarantee business in India according to Sunil Mehta, country head and chief executive for AIG in India. India, Asia's third-largest economy, expects to invest about $500 billion building roads, ports and power plants in the next five years to spur economic growth. AIG has 7,500 employees in India and runs eight businesses, including money managing, aircraft leasing, property development and life and general insurance.

UK Mortgage lenders told to prepare for worse

The financial watchdog of UK (The Financial Services Authority or FSA) has issued one of its strongest warnings on the state of the mortgage market and credit conditions, telling lenders to prepare for worse times and secure adequate liquidity, even at high prices . It urged lenders to cut back on granting new loans to build up their financial strength, the FSA also warned them not to race to repossess the homes of customers in difficulties. It also pointed to potential difficulties for other borrowers next year when 1.4m short-term fixed-rate mortgages will need to be refinanced. The FSA requires firms to treat their customers fairly and have a written approach to dealing with customers in arrears. The FSA acknowledged that lenders would find it difficult to take a sympathetic approach to borrowers in the current environment. It is to inspect the approach of up to a dozen major lenders by the end of March and those which have breached the rules over arrears will face fines, public