Weekly Global Financial News March 24-March 30

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China Tries Experiment In Defaults, By Wall Street Journal, Published: March 26

http://online.wsj.com/news/articles/SB30001424052702303725404579460971319858820

Chinese regulators are experimenting with allowing some debt defaults as a way to fend off reckless lending activities. At the same time, the authorities are stepping up monitoring of credit risks in China, as many corporate and government borrowers are struggling to pay off debt amid a slowing economy

China Banks Shift Tactics On Bad Debt, By Wall Street Journal, Published: March 28

http://online.wsj.com/news/articles/SB30001424052702304688104579464930824574914

Some of China’s largest banks are finding a new way to keep their loan-related losses low. They have started a new strategy of unloading soured loans to its investment-banking unit, which then would try to restructure the debt with the hope of recovering more than it paid for the loans.

Japan buyers rush to snap up gold as tax rise looms, By Financial Times, Published: March 27
http://on.ft.com/1g9IgqG
The increase in Japan’s sales tax to 8 percent has prompted investors to hoard gold bars not only for short term investment but also inflation hedge amid growing concerns over the failure of Abenomics.

Protests Add Woes to Formosa Debt as Dim Sum Booms: China Credit. By Bloomberg, Published: March 26
http://bloom.bg/1jwDYkV
Protests against closer economic ties with China are adding woes to Taiwan’s offshore Yuan debt market. Taiwan’s Formosa bonds are in little demand while Hong Kong’s Dim Sum bonds booms with more investment opportunities.

BOE to Sign Agreement With China on Yuan Clearing Next Week. By Bloomberg, Published: March 27
http://bloom.bg/1p8OnSV
The Bank of England is expected to be an offshore center for Yuan trading as it plans to sign an agreement with People’s Bank of China next week on Yuan clearing and settlement.

Fed’s Dudley warns against explicit global policy coordination, By Reuters, Published: March 27
http://reut.rs/1dX2YtS
A top U.S. Federal Reserve official prioritized the needs of domestic economies in deciding monetary policy, not effects on the rest of the world saying that explicit coordination is neither feasible nor desirable.

Brazil eyes euro, yen markets to finance domestic companies, By Reuters, Published: March 28
http://reut.rs/1gBeJee
Brazil is expected to diversify its global bonds to euro zone and Japan, from dollar-denominated, in an attempt to open new financing alternatives to companies investing in infrastructure sector.

China’s premier seeks to reassure markets with pledge of support for economy, By Reuters, Published: March 28
http://reut.rs/1mA6CSo
China’s Premier Li Kequing sought reassure global investors that Beijing had policies in store to support the cooling economy. The outlook for the world’s second-largest economy has dimmed in the wake of recent weak economic indicators and rising financial risks.

European Stocks Rise for Second Week on Confidence Data, By Bloomberg, Published: March 29
http://bloom.bg/1fx2YBn
European markets have turned bullish with sharp stocks rise, boosted by the improvement in several confidence indicators.

Bokyung (Bella) Kim

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