Archive for the ‘Bank’ Category

China, India wary of taint of global economic crisis

November 1, 2008

Two powerhouse emerging market countries felt the sting of the global financial crisis on Saturday as India unexpectedly cut its main short-term lending rate again and China said it was now feeling a slowdown.

The developments followed signs elsewhere this week that world markets were stabilizing, with interbank rates falling and U.S. stocks posting their best week in 34 years.

“The impact of the crisis on China has just started to appear as China has already seen a sharp slowdown in industrial profit growth and fiscal income,” a senior Bank of China (BOC) executive said in Shanghai on Saturday.

Shoppers walk through Bern's Westside shopping centre, which ... 
Shoppers walk through Bern’s Westside shopping centre, which was designed by architect Daniel Libeskind, on the opening day, in Bern October 8, 2008.(Stefan Wermuth/Reuters)

The global economy will likely enter recession next year with the United States, Europe and Japan posting negative growth, Executive Vice President Zhu Min told a financial conference.

“That will have a huge impact on China,” he said.

Zhu also said currency volatility was expected to add further pressure on China’s banks, which have enjoyed robust profits for years as the country boomed. Earnings growth is now slowing as the economy cools from the impact of the crisis.

“The uncertainties in the world’s currency markets have exposed the Chinese banking sector to higher foreign asset risk,” Zhu said.

A central bank spokesman said Beijing was no longer imposing strict limits on bank lending as it sought to preserve growth in its economy, in which the overseas market is important.

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http://news.yahoo.com/s/nm/20081101/ts_nm/us_financial6_115