Grant: 24 hour Eures\x

Regling on European Financial Stability Facility

As chief executive of the European Financial Stability Facility, he oversees a €440bn ($554bn, £369bn) fund that can help eurozone states in difficulty, but which his political masters – the finance ministers of the European Union – hope will never be used.

Sakoui: Cash currency of risk averse investment

A survey of UK investors last month found their holding more cash in their portfolios than at any time since the aftermath of Lehman Brothers’ collapse in 2008. The Reuters poll showed that cash accounted for 8.7 per cent of their holdings.

The same poll found European investors with a 6.8 per cent cash holding. At the end of last year, those positions were about 5 per cent...

Bankers speculate that the trend is less pronounced among US investors as corporate bond issuance has been higher there and investors are less worried than those in Europe about the impact of government austerity packages

Spence: US growth strategy needed

Bad news summary...

To avoid an outbreak of protectionism, there has to be an alternative. President Barack Obama’s new export council, announced on Wednesday, is a step in the right direction. But a bolder move is needed: a broad public-private partnership to invest in the development of technology in parts of the tradable sector where there are opportunities to make advanced countries competitive. The goal must be to create capital-intensive jobs that have labour productivity levels consistent with advanced country incomes.

Wagsty: emerging market bonds jitters

Spreads over US Treasuries, which measure the risk premium applied to emerging market bonds, have followed a similar course. Before the global crisis, they touched a record low in 2007 of just 148 basis points. They then soared in the turmoil to as high as 865bps in late 2008, but dropped back dramatically to 231bps this April. The recent retreat to safety has seen spreads widen, to 327 bps by yesterday. But by historic standards that is still low.

Not surprisingly, emerging market borrowers have taken advantage of these low yields, raising 10 per cent more in the first half of 2010 than in the same period in 2009, which was itself a record year.

Hughes: emerging marketdebtpace

Emerging markets have been subject to inflows of hot money in the past, hitting their economies hard when the money left as quickly as it arrived. However, investors believe the financial crisis and shift in risk perceptions mean that this time it is different.

“Debt-to-GDP ratios in the developed world are about double those in emerging markets, and they’re growing,” said Sam Finkelstein, head of emerging markets debt at Goldman Sachs Asset Management.

“This makes emerging markets interesting because you’re picking up incremental spread [higher interest rates compared with developed world rates], and in return you’re actually taking less macroeconomic risk.”

Goldman’s dedicated emerging markets debt assets grew from $3.3bn in March last year to $13.2bn in March 2010.

Brown: SingaporeAsian derivatives clearing hub

...several executives said MAS had approached a number of international clearing houses, including the US-based group Intercontinental Exchange (ICE), which has Asia ambitions.

Other big international clearers such as LCH.Clearnet of the UK, the world’s largest clearer of OTC interest rate swaps, and Chicago-based CME Group may be approached as the plan progresses.

Any new clearing operation would compete with two existing exchange and clearing operations run by SGX, the Singapore exchange, and Singapore Mercantile Exchange (SMX), owned by India’s Financial Technologies group, which has been licensed and is due to launch shortly.