America’s Federal Reserve kept interest rates at a level close to zero. The Fed’s accompanying statement, which markets were keenly awaiting for any sign of a shift in policy, reiterated its intent to keep rates “exceptionally low” for an “extended period”.
The Bank of England decided to inject a further £25 billion ($42 billion) into the British economy through its quantitative easing programme, raising the cumulative total to £200 billion. The extra asset purchases will be made over the next three months, a slower rate than before.
At a conference in London several leading bankers criticised new proposals for regulating banks that are “too big to fail”. Josef Ackermann, head of Deutsche Bank and chairman of the Institute of International Finance, defended large banks as the “most efficient” means of providing financial services to multinationals.
In an effort to diversify its foreign reserves, India bought 200 tons of gold from the IMF during October, which will nudge the country into the top ten gold-holders worldwide. The news sent the price of gold to another high.
UBS made an unexpected loss in the third quarter, as net outflows from clients mounted in its private-banking business. The Swiss bank earlier this year reached a settlement with American authorities over “secret” accounts.
CIT, a lender to small businesses, filed for bankruptcy protection under a reorganisation plan that had been accepted by most of its bondholders. The move was widely anticipated as CIT struggled with $30 billion in debt, which its restructuring will reduce by a third. The company received a $2.3 billion bail-out last year—money that is now unlikely to be returned to taxpayers.
(From The Economist)
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