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Central banks ready to act as world prepares for Greek poll

india Updated: Jun 16, 2012 02:31 IST
Central banks

Central banks from major economies stand ready to take steps, including coordinated action, to stabilise markets as world economies prepare for a possible financial storm or public panic after cliffhanger elections in Greece this weekend.

Britain announced it would flood its banking system with cash as the euro zone’s crisis casts a “black cloud” over the nation’s economy.

Officials from the G20 nations, whose leaders are meeting in Mexico next week, said that central banks were ready to take steps to stabilise financial markets —if needed — by providing liquidity and prevent any credit squeeze after Sunday’s election.

Canada is “ready to act” if the situation takes a serious turn for the worse or there is “an external shock,” a spokesman for Prime Minister Stephen Harper, said on Thursday.

The Bank of Japan left policy unchanged on Friday, keeping its financial firepower in reserve in case it is needed after the Greek election. China and India are both working on contingency plans, officials and sources said last week.

In Europe, authorities also laid plans for tackling turmoil such as if Greeks emptied their bank accounts should the SYRIZA party, which has promised to tear up the country’s bailout deal with the EU and the IMF, score a decisive victory on Sunday.

Euro zone Q1 job rate dips

BRUSSELS: The number of people in work in the euro zone fell again in the first three months of this year while imports of goods slid, highlighting the bloc’s troubled economy that is increasingly reliant on exports to prevent an even deeper slump.
Employment in the 17 nations sharing the euro fell 0.2% in the first quarter from the fourth, marking the third straight quarter of falling job rates as the impact of the bloc’s debt crisis is felt in European households.

Moody’s cuts 11 banks’ ratings

BRUSSELS: Moody’s has cut the ratings of 11 European banks and said it would cut again if Greece ditched the euro, kicking off a long-awaited round of downgrades for major European institutions.
It kept a negative outlook for Dutch bank and insurer ING Bank. Moody’s said it had cut the ratings by two notches to Aa2 for Rabobank Nederland, to A2 for ING, to A2 for ABN AMRO Bank, and to Baa2 for LeasePlan Corporation .

Spanish debt at 72.1% of GDP

Agence France-Presse
MADRID: Spain’s public debt rose to 72.1% of gross domestic product in the first quarter of 2012 from 63.6% in the same period a year earlier, the Bank of Spain said on Friday.
The government expects the public debt to reach 79.8% of GDP by the end of the year, a figure that does not include the impact of a euro zone loan of up to 100 billion euros ($126 billion) to ailing Spanish banks.
The Moody’s projected deficit would hit 90% this year.

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