Asia

Central banks world-wide delivered sweeping interest rate cuts Thursday, even as the continuing turmoil in credit markets means cuts in rates are losing their power to curtail an accelerating global slowdown, The Wall Street Journal reported. Major European central banks, including the European Central Bank, the Bank of England and Sweden's Riksbank joined the central banks of New Zealand and Indonesia in making deep rate cuts. The goal: to stave off deep and painful slowdowns in the wake of financial market turmoil that has squeezed lending globally.
Read more
Ecuador’s government is considering various ways of repudiating its debt and will ask for loans from friendly governments like Iran should it lose access to credit markets, the country’s finance minister Maria Elsa Viteri said. Ecuador has threatened to default on $3.9 billion in bonds because it says a government-commissioned audit found evidence of criminal violations in connection with its issuance, Bloomberg reported. The government skipped a $30.6 million bond payment on Nov. 15, invoking a 30-day grace period.
Read more
In its latest effort to prevent Japan's economy from sinking further into recession, the Bank of Japan expanded its lending programs to ensure sufficient funds are available for companies ahead of the key year-end season, The Wall Street Journal reported today. The steps, announced after an unscheduled meeting of the BOJ's seven-member policy board, came as Japanese banks and companies are beginning to find it harder and more expensive to raise money in the financial markets.
Read more
The troubled German regional bank BayernLB said on Monday that it would shed more than a quarter of its workforce by 2013, with Asian operations slated to bear the brunt of a rigourous downsizing, Agence France-Presse reported today. A statement said BayernLB would eliminate 5,600 posts of a total 19,200 in a bid to save 670 million euros ($850 million) over the next five years. BayernLB “will be smaller and engaged in fewer activities, but it will emerge stronger, closer to its customers and less susceptible to incalculable risk," chairman Michael Kemmer was quoted as saying.
Read more
South Korea tackled one big problem, bank liquidity, after the economic crisis went global in recent months. Now another problem is creating uncertainty: high levels of household debt. South Korea in the past five years has built some of the biggest levels of household debt in the world, The Wall Street Journal reported. Household debt increased to 66% of South Korea's gross domestic product last year from 38% a decade earlier, according to a recent study by the International Monetary Fund. As the economy slows, the high level of household debt could lead to more delinquencies.
Read more
Morimoto Co., a property developer, filed for protection from creditors with 162 billion yen ($1.7 billion) of debt, bringing the number of bankruptcies among publicly traded companies in Japan to a postwar record, Bloomberg reported. The bankruptcy is the second-largest in Japan this year following Urban Corp.’s filing on Aug. 13. The company’s filing with the Tokyo District Court pushed the total in 2008 to 30, the most since World War II, based on information from Teikoku Databank Ltd., a bankruptcy research firm.
Read more
The International Monetary Fund approved a $7.6 billion loan for Pakistan on Tuesday to prevent it from defaulting on its debt and to help stabilize its economy, The New York Times reported. The loan, under discussion for more than a month, at first met strong resistance from the Pakistani government, which sought money on more generous terms from other countries. But Pakistan’s major allies--the United States, China and Saudi Arabia--insisted that it accept the loan and the IMF conditions before they offered assistance.
Read more
China's central bank slashed borrowing costs by the biggest margin in a decade, in a strong signal that government efforts to support the economy didn't end with the announcement of a massive stimulus plan just over two weeks ago, the Wall Street Journal reported today. The move, announced Wednesday, brings the benchmark one-year lending rate down by 1.08 percentage points to 5.58%, with the benchmark one-year deposit rate cut by the same margin to 2.52%, the People's Bank of China said in a statement.
Read more
About 30 percent of Indian industrial metal importers have defaulted on consignments after prices slumped by more than half, the head of a trade body said on Wednesday. "Most of the importers are hit severely. Some importers who had taken bigger risks are not able to clear consignments from the ports," Surendra Mardia, president of the Bombay Metal Exchange (BME), told Reuters in an interview. The BME, with about 500 members, is the biggest association of non-ferrous metal traders in India.
Read more
South Korea's financial watchdog said Wednesday it would set up a task force to advise troubled companies on corporate restructuring to help them ride out the credit crunch, Agence France-Presse reported today. The team of 43 experts will be formed Friday and work for one year, the Financial Services Commission said. South Korea has announced a series of steps to lessen the effect of the global slowdown, including $16 billion in loans to ease a dollar shortage for firms importing raw materials and exporting goods.
Read more