Headlines

Brazil’s government accounts remained weak in November, with a budget deficit equal to 9.3 percent of gross domestic product, the country's central bank said today, according to the Wall Street Journal. The result is slightly improved from October’s 9.5 percent-of-GDP budget gap. Brazil’s gross debt was 65.1 percent of GDP, versus 64.9 percent of GDP in October, revised down from 66.1 percent, the central bank said.

Faced with sluggish domestic growth, Japan’s megabanks are expanding their role in financing global mergers and acquisitions, which hit a record level this year, the Wall Street Journal reported today. Japanese banks have long ranked among the world’s top cross-border lenders, and have lent many billions of dollars to Japanese companies also seeking growth abroad through acquisitions. Now the banks are increasingly financing deals that don't involve their compatriot companies.

Mauricio Macri clinched Argentina’s presidency last month by tapping into voters’ fatigue with a leftist political movement that had governed for more than 12 years, the New York Times reported today. But just three weeks into his four-year term, Macri’s sweeping economic changes are roiling Argentina, accentuating the divide he wanted to bridge. Macri’s government devalued the peso by nearly 30 percent in mid-December, to more than 13 pesos to the dollar from 9.8; it later strengthened slightly.

Thailand’s newly-minted central bank governor said Monday that the country’s economy is entering a difficult transition, and that he stands ready to tailor the bank’s policies to support more growth while strictly managing price pressures, the Wall Street Journal reported today.

Deutsche Bank AG agreed to sell its 20 percent stake in Huaxia Bank Co. to PICC Property and Casualty Co. as co-Chief Executive John Cryan advances plans to narrow the company’s focus and raise capital buffers, Bloomberg News reported today. The sale will generate as much as 25.7 billion yuan ($4 billion), Frankfurt-based Deutsche Bank said today. Cryan, who took over from Anshu Jain in July, is selling assets and reducing bonuses to help raise the company’s financial strength without tapping shareholders for funds.

Saudi Arabia today unveiled spending cuts in its 2016 budget, subsidy reforms and a call for privatizations to rein in a yawning deficit caused by the prolonged period of low oil prices, the Financial Times reported today. The Gulf kingdom has kept oil production at high levels in an attempt to force out higher-cost producers, such as shale, and retain its market share. But this year’s deficit ballooned to 367bn Saudi riyals ($97.9bn,) or 15 percent of gross domestic product, as oil revenues fell 23 percent to Sr444.5bn.

Lax lending and deadbeat borrowers nearly brought down the Spanish banking system a few years ago, the New York Times reported on Saturday. That’s why the remnants of some of the failed banks are resorting to a time-honored form of loans with can’t-miss collateral: pawnshops. Spain’s commercial banks, like Banco Santander and BBVA, have either bounced back from the crisis or they largely sidestepped it, buffered by their international operations. But the cajas that went bust trying to compete with the commercial banks have fared less well.

Russia's finance ministry has proposed to extend the National Wealth Fund's deposits in state development bank Vnesheconombank (VEB) for five years, Reuters reported today. The ministry also suggested that the government should extend the Fund's deposits in VEB at an interest rate of no less than 0.25 percent with a three-year grace period, the document published on the website for official drafts (www.regulation.gov.ru) showed. Read more.

Loan growth at Indian banks slowed in the six months through September while bad loans rose, signaling increased risks to lenders, the Reserve Bank of India said in a report, Bloomberg News reported yesterday. "Risks to the banking sector increased due to deteriorating asset quality, lower soundness and sluggish profitability,” the RBI, which is also the industry’s regulator, said in a report yesterday. Credit growth slowed to 9.4 percent in the period from 9.7 percent at the end of March, the central bank said.

The Bank of Japan still has policy options to continue its unprecedented monetary easing, Chief Cabinet Secretary Yoshihide Suga said in an interview days after the central bank announced it wouldn’t expand its main stimulus target, Bloomberg News reported yesterday. "I think they still have policies they can pursue," Suga said yesterday when asked about concerns the program could be reaching its limits.