DAVOS, Switzerland (Reuters) – Central banks’ withdrawal of emergency U.S. dollar lending is a positive sign that financial markets are returning to health, the head of the Bank for International Settlements said on Thursday.

In interviews with Reuters and Reuters Insider Television, BIS general manager Jaime Caruana also warned commercial banks against being too greedy with profit targets as the financial environment improves.

Major central banks late on Wednesday said they will stop the emergency U.S. dollar lending introduced during the financial crisis, the first unified retraction of central banks’ extraordinary support for financial markets.

“To some extent that is a very positive indication that markets have started to work and have started to work properly,” said Caruana. “It is not necessary for the central banks to step in there.”

The expiry of “swap” arrangements central banks had set up with the U.S. Federal Reserve expire on February 1 and indicate growing confidence that the financial system is returning to health after extraordinary liquidity support and rate cuts by central banks and extra government spending.

“You have to reduce dependence, it’s very important that markets work themselves,” Caruana said.

The head of the BIS, which acts as a forum for central banks, said he would not give policymakers advice on when to raise policy rates.

BRUSSELS, Oct 14 (Reuters) – Spain’s Telefonica <TEF.MC> hopes to complete the acquisition of Brazil-based GVT <GVTT3.SA> in about two months if no counterbid emerges, the company’s chairman said on Wednesday.

“I really don’t know (whether there will be a counterbid). GVT is very complementary for Telefonica … (If there isnt any bid) the deal could be closed in something like two months,” Cesar Alierta said in an interview with Reuters Television.

Telefonica’s Brazil unit Telesp made a 6.5 billion reais

($3.78 billion) offer for GVT last week, topping a previous bid by Vivendi <VIV.PA> by 20 percent.

With regard to Telefonica’s interest in buying Telecom Italia’s <TLIT.MC>’s German broadband unit Hansenet, Alierta said talks are advancing and the final outcome should be seen before year-end.

“I think we are getting closer, but we will see in the coming weeks. I think whatever happens will happen before year-end,” he said.

TAX ADVANTAGES

BRUSSELS, Oct 14 (Reuters) – Spain’s Telefonica <TEF.MC> hopes to complete the acquisition of Brazil-based GVT <GVTT3.SA> in about 2 months if no counter bid emerges, the company’s chairman said on Wednesday. “I really don’t know (whether there will be a counter bid). GVT is very complementary for Telefonica… (If there isnt any bid) the deal could be closed in something like 2 months,” Cesar Alierta said in an interview with Reuters Television. Telefonica’s Brazil unit Telesp made a 6.5 billion reais

($3.78 billion) offer for GVT last week, topping a previous bid by Vivendi <VIV.PA> by 20 percent. With regard to Telefonica’s interest in buying Telecom Italia’s <TLIT.MC>’s German broad-band unit Hansenet, Alierta said talks are advancing and the final outcome should be seen before year-end. “I think we are getting closer, but we will see in the coming weeks. I think whatever happens will happen before year-end,” he said.

($1=1.721 Brazilian Real)

(Reporting by Niclas Mika; writing by Judy MacInnes; Editing by Hans Peters)

((judith.macinnes@thomsonreuters.com; 34 91 585 8340; Reuters Messaging: judith.macinnes.reuters.com@reuters.net)) Keywords: TELEFONICA/

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