Barclays flagged Libor problems to Fed in 2007
LONDON/NEW YORK (Reuters) – Barclays alerted U.S. regulators as far back as 2007 to concerns that banks were rigging benchmark interest rates, according to documents released on Friday, but policymakers on both sides of the Atlantic did not appear to take decisive action, underscoring the chaos of the financial crisis.
The Federal Reserve Bank of New York was pushed to release the documents amid a furor that was touched off when Barclays late last month agreed to pay $453 million in fines for attempting to manipulate Libor.
Top officials briefed on Libor in April 2008: NY Fed
NEW YORK (Reuters) – Top U.S. officials were briefed in April 2008 on the possibility banks were under-reporting their borrowing costs, although an employee at Barclays raised concerns with the New York Federal Reserve Bank as early as August 2007, documents released by the New York Fed on Friday showed.
The New York Fed, the U.S. central bank’s eyes and ears on Wall Street, said an analyst with its Markets Group was told by an employee at London-based bank Barclays on April 11, 2008, that the bank was under-reporting its borrowing costs. The Barclays employee told the New York Fed that he believed other banks were doing the same, the regional Fed bank said.
Top U.S. officials briefed on Libor in April 2008–NY Fed
NEW YORK (Reuters) – Top U.S. officials were briefed in April 2008 on the possibility banks were under-reporting their borrowing costs, although an employee at Barclays raised concerns with the New York Federal Reserve Bank as early as August 2007, documents released by the New York Fed on Friday showed.
The New York Fed, the U.S. central bank’s eyes and ears on Wall Street, said an analyst with its Markets Group was told by an employee at London-based bank Barclays on April 11, 2008, that the bank was under-reporting its borrowing costs. The Barclays employee told the New York Fed that he believed other banks were doing the same, the regional Fed bank said.
Job polarization and the Great Recession
For three decades at least, the U.S. labor market has been stretched toward higher- and lower-skilled jobs, leaving fewer opportunities for those in the middle. This “job polarization” has benefited high-skilled sectors like engineering, computer science and finance on one hand, and low-skilled sectors like farming, health support and building maintenance on the other, according to a study by New York Fed researchers. In the middle – where the majority of Americans work in areas such as education, construction, administration and transportation – job growth since 1980 has badly lagged.
Between 1980 and 2010, high skilled job growth was 101 percent, while low-skilled job growth was 91 percent, the researchers found. Growth among “upper middle” jobs (community service, precision production, etc) was 46 percent over that time, while growth among “lower middle” jobs (machine operation, sales, etc) was only 20 percent. Proportionally, the pattern sharply reduced the largest segment of the workforce – the “lower middle” skilled – mostly because of technology and off-shoring of jobs that require less face-to-face contact than, say, lawyers (high skilled) or personal caregivers (low skilled).
Employers not rattled yet by “fiscal cliff”
NEW YORK (Reuters) – American employers are keeping their fingers crossed that politicians will steer away from a “fiscal cliff” of major tax hikes and spending cuts in early 2013, and, so far at least, have not gone back to a defensive recession-mode.
Executives are prepared to reduce hiring or staffing if need be, but they say they are counting on the U.S. Congress to strike a last-minute deal.
U.S. employers not rattled yet by “fiscal cliff”
NEW YORK (Reuters) – American employers are keeping their fingers crossed that politicians will steer away from a “fiscal cliff” of major tax hikes and spending cuts in early 2013, and, so far at least, have not gone back to a defensive recession-mode.
Executives are prepared to reduce hiring or staffing if need be, but they say they are counting on the U.S. Congress to strike a last-minute deal.
Fed’s Dudley eyeing U.S. jobs, Europe but mum on policy
NEW YORK (Reuters) – An influential Federal Reserve official said he modestly lowered his expectations for inflation in coming months, but added greater clarity on the U.S. jobs market and the European crisis was required before taking a firmer stance on the health of the U.S. economy.
New York Fed President William Dudley, a close ally of Chairman Ben Bernanke and a key barometer of the thinking inside the U.S. central bank, said on Friday employment growth has “slowed considerably of late” as the economy has lost momentum.
Repo market big, but maybe not *that* big
Maybe the massive U.S. repo market isn’t as massive as we thought. That’s the conclusion of a study by researchers at the Federal Reserve Bank of New York that suggests transactions in the repurchase agreement (repo) market total about $5.48 trillion. The figure, though impressive, is a far cry from a previous and oft-cited $10 trillion estimate made in 2010 by two Yale professors, Gary Gorton and Andrew Metrick. The Fed researchers, acknowledging the “spotty data” that complicates such tasks, argue the previous $10-trillion estimate is based on repo activity in 2008 when the market was far larger, and is inflated by double-counting.
Repos are a key source of collateralized funding for dealers and others in financial markets, and represent a main pillar of the “shadow” banking system. The market was central to the downfalls of Lehman Brothers and Bear Stearns in the 2008 crisis, and now regulators from Fed Chairman Ben Bernanke on down are looking for a fix. Earlier this year, the New York Fed itself said it might restrict the types of collateral in so-called tri-party repos, after being dissatisfied with progress by an industry committee.
‘Pretty high hurdle’ to QE3 -Fed’s Bullard
NEW YORK, June 22 (Reuters) – U.S. Federal Reserve
policymakers still see a “pretty high hurdle” before they would
unleash a third round of quantitative easing, or QE3, a top Fed
official said on Friday.
Speaking two days after the U.S. central bank decided to
take a more modest policy step to help the flailing economic
recovery, St. Louis Fed Bank President James Bullard said the
Fed has done “what it can do.”
NY Fed names Potter as head of markets group
(Reuters) – The Federal Reserve Bank of New York named Simon Potter, an internal director of economic research, as the new head of its division that conducts monetary policy in the marketplace for the U.S. central bank.
Potter, 51, starts as head of the New York Fed’s markets group on June 30, replacing Brian Sack, 41, whose resignation was announced in April.
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