Economic Update – UK Rates Unchanged, Debt Limit, Basel III Update, Blast at Paris IMF Headquarters

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BBC: UK interest rates kept on hold at 0.25%

  • UK interest rates have been kept unchanged at 0.25% by the Bank of England’s rate setting committee.
  • However, one of the nine who sit on the Monetary Policy Committee (MPC), Kristin Forbes, expressed concern about inflation and voted to raise rates.
  • It was the first time since July last year that the vote to maintain rates had not been unanimous.
  • Analysts said it indicated the Bank of England could be closer to raising interest rates than they had thought.

  • Since President Barack Obama signed the “Bipartisan Budget Act” on Nov. 2, 2015 there had been no legal limit on the amount of money the federal government could borrow until now.
  • As of Nov. 2, 2015, the federal debt subject to the legal limit stood at $18,452,108,000,000. As of the close of business on Tuesday, the latest day reported, it stood at $19,865,505,000,000.
  • That means the federal debt increased by $1,414,397,000,000 during the approximately 16 and a half months that Congress removed any legal limit on it.

BIS: Proposed guidelines for the identification and management of step-in risk

  • The Basel Committee on Banking Supervision has today issued a consultative document on the Identification and management of step-in risk.
  • The proposed framework will help to mitigate potential problems at shadow banks from spilling over to banks. This work is part of the G20’s initiative to strengthen the oversight and regulation of the shadow banking system with the aim of mitigating systemic risks, in particular, those arising from banks’ involvement with shadow banking entities.
  • The revised framework is issued for a 60-day consultation period with a focus on the supervisory reporting templates and any issues that require clarification. The Committee does not envisage making significant changes to the revised framework below, which it views as near-final. The Committee welcomes comments from the public on the proposals described in this document by Monday 15 May 2017
  • (Note: This confirms that Basel III will not be finalised before the upcoming French Presidential Election).

CNBC: Lagarde says blast at Paris IMF office “cowardly act of violence”

  • International Monetary Fund chief Christine Lagarde condemned an explosion at the IMF’s Paris office on Thursday as “a cowardly act of violence.”
  • The explosion, after a letter was opened, “caused injuries to one of our staff,” Lagarde said in a statement.
  • “I condemn this cowardly act of violence and reaffirm the IMF’s resolve to continue our work in line with our mandate. We are working closely with the French authorities to investigate this incident and ensure the safety of our staff,” she said.
  •  The Paris police department said the explosion was was caused by a homemade device. “It was something that was fairly homemade,” police chief Michel Cadot told reporters.
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