BGFS Associates

The financial markets will have to wait until later this week for further news on the US bailout of financial institutions after the House of Representatives voted against the USD700 billion rescue plan for the financial industry announced by US politicians over the weekend.

It is anticipated that the US Senate will try to salvage the plan perhaps as early as tomorrow. Some changes are expected to the legislation to pacify Republicans who are pushing for a mandatory insurance programme. They may also push for the Securities and Exchange Commission to suspend mark-to-market accounting and require banking regulators to assess the real value of troubled assets. (continue reading…)

Inflationary pressures are continuing to command attention from the central banks and analysts alike.

Against this backdrop, the differing stances of the central banks have been assessed, with the European Central Bank (ECB) president, Jean-Claude Trichet, attracting praise for maintaining a steady hand on interest rates within the euro-zone to keep inflation under control. There is even talk of a rate rise in July to bring inflation down towards the Bank’s target of 2%.

While inflation in the euro-zone is sitting at a 16-year high of 3.6%, (continue reading…)

The credit crunch and interest rates continue to dominate the financial pages as the central banks attempt to stimulate economic growth while trying to temper inflationary risks.

In the UK, the Bank of England maintained the base rate at 5.25% last week on the back of inflation fears, however, there is still a belief by some analysts that there could be another two interest rate cuts this year to assist the economy. (continue reading…)

With the potential impact of the credit crunch still provoking discussion on the direction of equity markets and economic growth, what are the latest views on future movements?

Opinion on the possibility of a recession in the US still appears to be mixed. In the US, recession is usually defined as (continue reading…)

The debate on whether or not the global economy will slip into recession continues to take a substantial share of the financial pages.
One view is that talk of a world recession is overdone given that the global economy has experienced four years of annual growth (continue reading…)