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Floyd Norris comments on finance and the economy at nytimes.com / EconomiX.
Off the Charts: Trade Recovery Since Credit Crisis Has Been Uneven
WASHINGTON (Reuters) - World Bank President Robert Zoellick said on Tuesday He Will Step Down in June, raising questions as to whether the United States For The First Time Will throw open the job It Has Its Own've always Claimed.
"I'm Honored To Have Led Such a world class institution with So Many talented and Exceptional people," Zoellick Said in a statement history Announcing plans. Earlier, ET HAD is with the World Bank's 25-member board to inform em history of decision.
Speculation has-been rife in recent months over Who might take the job When Zoellick departs. Possible U. S. candidates include Secretary of State Hillary Clinton and White House Economic Adviser form Larry Summers.
Zoellick, a Republican, Would Be Potentially a strong candidate for a senior position if a Republican Takes the White House in presidential elections in November.
While the Obama administration HAS Said it supports open and transparent selection year process to fill positions lead in global institutions, it is Unlikely to forfeit the top job at the World Bank in year election year, development experts said.
Emerging Market and Developing Countries Have campaigned hard in recent years to break Europe's grip on the International Monetary Fund and the United States's hold on the World Bank top positions.
Officials from large economies like Brazil emery said on Wednesday the selection process for Zoellick's Successor Should Be based on qualifications and not nationality. However, They Acknowledged That U. S. Given congressional pressure the job will Probably Remain in the hands of an American.
Last year, emery market economies made an aggressive push to fill the IMF top job in a bitter contest won by France's Christine Lagarde.
"II do not know whether the president HAS spoken with Mr Zoellick and I do not have Any information as possible for you Regarding Successors," White House press secretary Jay Carney Told reporters traveling with President Barack Obama on Air Force One.
"Asked specifically about Clinton or Larry Summers may have candidates, Carney Said," There is a lot of speculation in the press about this and Other jobs ... I am not going to confirm Any of it. ".. ......
Nancy Birsdall, Who heads the Center for Global Development in Washington, said on paper is the United States-committed to opening up the selection process to all, goal politique pressure from congressional leaders US Will Keep the job in US hands free 3-in-1 credit report.
"The election year timing puts the White House in year Especially unenviable position. There is a risk the World Bank That Could Become a Highly partisan hot-button issue US, have too Often the a has been, "Birdsall wrote in a recent blog.
Development groups Said It Was Time to open the job to Other countries.
"The way the World Bank president picks icts Needs to change," Said Elizabeth Stuart, policy adviser for Oxfam, the Global Development Group. "The Bank Operates only in developing countries, so Any candidate not supported by a Majority of These Countries Would plainly LACK Legitimacy."
STEADY AT THE HELM
Zoellick form U. S. chief trade negotiator and Deputy Secretary of State, World Bank Became president in July 2007 amid a staff revolt Against then president Paul Wolfowitz After revelations ET Had a Role in Giving historical companion, a bank employee, a raise.
Immediately He Turned the bank's focus on ict development agenda, warning of a brewing food and energy price crisis, social unrest Which was stirring in the Poorest of the world share.
As the bank Looked for Ways to help cushion the impact of Countries skyrocketing Food Prices, Global Financial Crisis has as threatened to Undermine More than a decade of strong growth in emerging and Developing Countries.
Under Zoellick, World Bank Lending laundry charges sharply to $ 44 one billion in fiscal year 2010 from $ 13.5 in 2008 one billion, Reflecting Needs laundry charges by fast-rising emery and Developing Countries in Asia, Africa, Latin America and the Middle East.
Zoellick aussi secured $ 86.2 Approval for year one billion capital package, the first in over 20 years. He championed more voting power for convincing Countries and Emerging Economies as China, Brazil and others to contribute more to the World Bank Funding.
Despite budget strains in Developed world, Zoellick secured over $ 90 in pledges one billion DURING tough negotiations to replenish the World Bank's fund for the Poorest countries.
In speeches He Has Pointed To The Rise of Emerging Economies as new poles of growth, Outlined The Need for a new approach to aid, while emphasizing the Need for better governance in regions Such as the Middle East Where street protests toppled That Dictators in Tunisia, Egypt and Libya.
(Additional reporting by Glenn Somerville and Laura MacInnis; Editing by James Dalgleish and Jeffrey Benkoe)
World Bank's Zoellick to step down in June
HONG KONG (Reuters) - Three Years After China Launched icts MOST ambitious experiment yet to Give icts currency more global clout, market watchers Some are writing icts epitaph, Saying Beijing is not loosening grip on the yuan icts fast enough to Attract Sustained interest.
Purpose Others say incremental exchange in Chinese are règlements Creating more channels for investors to move domestic and offshore yuan Between Markets, pointing to a Growing Market in Hong Kong That Beijing is using as a testbed for far-reaching Reforms Which Could one day see the yuan Become a global reserve currency.
"The landscape for the better Has Changed," Said Tee Choon-Hong, head of regional capital markets, North Asia at Standard Chartered Bank, referring to the recent introduction of new guidelines allowing companies to invest in China Yuan.
While Many of the deals Earlier in the offshore yuan market (CNH) Were driven by speculation That Would China allow faster appreciation of the yuan, Tee and others Said That is no longer the single driving factor behind the market's growth.
Multinationals Such as heavy equipment maker Caterpillar (CAT.N) are eager to plow more money Into the country to fund expansions. While capital controls still make it tough to get back Into the offshore yuan China, Their gesture of selling yuan-denominated bonds is Unlikely to go unnoticed by Beijing.
"That HAS A market calculated previously blown hot and cold due to shifts in expectations yuan gain Has Made the transition to a more sustainable growth trajectory," Said Tee, Who shepherded McDonald's (MCD.N) first RMB bond in Hong Kong in July in 2010.
For the offshore yuan market, that 'marks a sea change. It is now the more Developed, liberal counterpart to China's domestic market still tightly controlled, and recent show Reforms Authorities are more confident about prospects icts.
Indeed, Some economists argue the rapid expansion and That development of the offshore yuan market Could Give Beijing to speed up enough confidence Broader Reforms domestically, by Giving sophisticated investors more access to mainland Relatively Underdeveloped Markets, though full convertibility of the yuan may still be has long way off.
Conversely, unruly expansion of the offshore market alarm Could Chinese Policymakers Into thinking They Were losing control of the currency, and prompt steps to take 'em to stamp out volatility.
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Latest CNH Tracker: https://r.reuters.com/tuj56s
Breakdown of yuan swap lines: https://link.reuters.com/dab46s
Offshore yuan deposit growth: https://link.reuters.com/raw46s
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TRADE FLOWS FLOURISHING
London, New York and Other Major Global Financial Centers are eager for a piece of the Fast Growing Market in yuan-denominated assets, end Hong Kong's status as a special region of China is Likely to Ensure It Will Be the Biggest bénéficiaire of further Top moves by Beijing to internationalize the currency.
Offshore Yuan Deposits in Hong Kong Have Already banks expanded by a factor of 10 in Two years, though still equivalent to They Are Less Than One percent of China's yuan total bank deposits.
December monthly figures for trade settlement and offshore yuan Deposits are a case in point for the market's potential.
Even as a more Than 6 percent monthly drop in CNH Deposits in December to 588 one billion yuan ($ 93 billion) grabbed headlines, monthly trade volume settled option in yuan Jumped to icts Highest level since the Market Began in June 2010, indicating indication two-way trade flows Between the mainland and Hong Kong are flourishing credit report.
That is a big change. Growth of the offshore yuan market has been calculated previously leaned larger number of mainland Importers of Their Settling more bills in yuan Because of the cheapness of the dollar and Abroad Relying on yuan-hungry investors to buy yuan debt, or so-called "dim sum" ; bonds, sold in Hong Kong.
Goal ace Hopes of hefty appreciation in the yuan Melted After a global market selloff in the second half of 2011, Giving a jolt to the nascent heavy CNH market, Beijing Realized That It Was Equally important to allow the yuan to flow back Into the mainland to keep the yuan trade settlement alive.
Recently, the pace of These Reforms HAS only accelerated.
In less Than Two Months, Beijing HAS taken the covers off a long-Awaited cross border investment scheme (RQFII), has streamlined yuan-denominated inward foreign direct investment scheme, signed swap lines with more Countries and Eased règlements and trading limits on yuan transactions for banks in Hong Kong.
Daryl Ho, head of market development at the Hong Kong Monetary Authority, the central bank's territoire, Said at a FinanceAsia conference last week worried about He Was not December's drop in deposits.
"There are now more bilateral flows in yuan and That Is increasingly a healthy sign," Ho said.
Reforms: CHINESE STYLE
The settled option centage of trade in yuan to China total trade HAS grown to Nearly 7 percent in 2011 Compared to less than 1 percent in the June quarter of 2010.
Beijing aims signs have more trade deals and extends yuan swap lines with Other countries, companies and investors are demanding work more access to renminbi assets to Give Them Their year incentive to switch to yuan trade settlements from US dollars.
Last Wednesday, China more Than Doubled icts swap line with Malaysia one billion yuan to 180, Taking the total amount of swap lines signed with trading partners to icts Nearly 1.5 trillion yuan, Representing a quarter of global trade ict. [ID: nK7E7ND00O] ..Have Some Of Those DEMANDS aussi come from Countries seeking behavior to Diversify Their currency reserves. Japan wants more access to Chinese Markets to boost trade and help its moribund economy, while Nigeria HAS Hopes to hold as much as 10 percent of reserves in yuan icts. [ID: nL4E8D81WX]
And China is Heeding Those calls. A long-Awaited Plan to allow Hong Kong-based Financial Institutions to Invest in Their CNH produit finally Took off the mainland in December with Authorities Granting allowances amounting to one billion yuan 20.
Chordio Chan, head of Investments at Bank of China Hong Kong (2388.HK), the Territory's only clearing bank for renminbi transactions, Beijing Said Will sign more swap lines and award RMB yuan more investment quota this year to boost the offshore market.
In Developing Hong Kong as offshore trading hub for year icts currency, while Maintaining a tight grip on the yuan at home, China Turned HAS has longstanding, evolutionary model of offshore foreign exchange Markets upside down.
Countries Such as the United States and Germany Developed Markets Their domestic long Before the use of Their currencies flourished overseas.
Under Beijing's plan, Chinese banks and companies learn to handle Cdn Their currency and interest rate exposure without the risk of lasting damage to mainland Causing Markets, Sebastian Mallaby and Oli Wethington Said in year essay published in Foreign Affairs.
"The System Can Be tweaked and tested Before It is rolled out on the mainland, and In the Meantime, it may generate price signals Useful to China's government." For a link: https://r.reuters.com/raf56s
(Editing by Kim Coghill)
Analysis: China offshore yuan market booms Even As yuan bets fade
(Reuters) - When commodities brokerage MF Global imploded, the FBI and Federal Prosecutors Were quick to launch year investigation to Pursue what Seemed Obvious Regulators and lawmakers to outspoken: Laws Were Broken and Were-committed crimes.
Three months More than later, it is far from clear That Will anyone facing criminal charges over the disappearance of more than $ 600 million in customer money have spiraled Towards MF Global brokerage's bankruptcy in the final, frantic days in the last week of October.
So far, the investigation is not MF Global tracking the early progress of Other high-profile scandals Financial Such as Refco, where 'form Chairman Phil Bennett WAS Arrested Within days of the disclosure That the future firm HAD beens Losses hiding for years.
Lawyers and people familiar with the investigation of the MF Global firm run by train That Was Goldman Sachs head Jon Corzine Say That Even Though the hunt is still on to find Out Whether or Not Officials at MF Global Intended to pilfer customer money in a desperate bid to keep the brokerage from failing, at this point the trail is cold Growing.
To date, scant evidence of criminal intent HAS emerged in company emails, no form or Have Sought current employed to cut a deal to provide statement Testimony about potential wrongdoing and seasoned defense lawyers say They Are not seeing tell-tale signs the of a criminal investigation hot .
A source familiar with the work of Louis Freeh, the trustee for MF Global holding company filed for Chapter 11 That bankruptcy protection, says investigators Have yet to find evidence of fraud in the multi-faceted and complex investigation.
The source, Who Declined To Be APPROBATION Because Freeh's office is still icts Conducting inquiry, Says There Was Plenty of "chaos" at MF Global in ict waning days, but "no evidence of fraud." Is a form Freeh Director of the Federal Bureau of Investigation.
Ellen Davis, Spokeswoman for the Office of the Manhattan US Attorney, Declined to comment. Randall Samborn, a Spokesman for the Office of the US Attorney in Chicago, aussi Declined to comment.
Criminal and Regulatory Investigations can of course shift gears at Any Time if new information to light horns. Adding up the goal at this piece of the internship inquiries, the odds look long of criminal charges stemming from the collapse ever of MF Global Because of the Lack of bad motives or intent to steal or year deceive, the legal standard for a criminal case.
One securities lawyer in New York who is not Involved in the box for the past Said That month or so it's been "radio silence" when it Comes to the work of the FBI and Prosecutors in Chicago and New York. Usually When year investigation heats up, the rumor mill So does, the lawyer said.
Also, people familiar with the situation Said, Some executives employed and Who in the normal course of year investigation Would Have Been Interviewed by Authorities at this workshop have-nots beens Asked to provide statement Their version of events.
Others point out That if There Was Likely To Be a criminal case, it Would Be That was unusual number of executives are still working for the holding company and Cooperating with the staff of trustees and lawyers working for Freeh James Giddens, the trustee for MF Global Inc. broker-dealer unit. The executives include Chief Operating Officer Bradley Abelow, Chief Financial Officer Henri Steenkamp and Edith O'Brien, treasurer in the firm's Chicago office. Their lawyers how to Have Declined on the case.
OVERCOME BY PANIC
More Recently, Giddens, Who Was Appointed Under The Securities Investor Protection Act (SIPA) that helps investors fail When Brokerages, Threw more cold water on the likelihood of criminal charges Any Being filed. In a report to the bankruptcy court judge on February 6, Giddens painted a picture of chaos and panic at MF Global in the week Before bankruptcy. Order the postponement fired, return not Suggest Any evidence of criminal wrongdoing original.
He Said MF Global "staff may not Have Been Immediately aware of" Developing a shortfall in customer segregated funds During The final week of October. He aussi Said the company's computers "had Difficulty Keeping Up with the Unprecedented volume of transactions" and some "Were Recorded transactions erroneously or not at all easy payday loans."
Said Would Giddens history investigation continues in coordination with the Department of Justice and Securities and commodity market Regulators. There aussi Growing Collaboration Between the So-Called SIPA trustee and Freeh's staff.
"From our perspective at MF Global Holdings, We Have seen nothing to this point That Would disagree with the SIPA Trustee's report cites chaos That During The last days of the company, but no evidence of fraud," the source familiar with Freeh's trustee Said work.
To be sure, the FBI and Federal Prosecutors are still Conducting interviews and Many More There are still emails to review. Defense lawyers said no one from the Justice Department statement Any Given HAS THEY Consider the matter closed.
If Prosecutors decided not to file criminal charges, There Is The Possibility of still always civil enforcement action by the US Commodity Futures Trading Commission and the Securities and Exchange Commission, where 'the burden of proof is different. The CFTC and the SEC Declined to how one civil action.
One regulator with knowledge of the MF Global Investigations Said "it's just too Preliminary" to determined the likelihood of a criminal case. The current regulator Said about 50 gold form MF Global employed Have Been Interviewed and That There Were Being scrutinized 10.000 emails. The regulator WAS not authorized to speak about the Publicly box and not Asked To Be Identified.
CUSTOMER MISSING MONEY
Still, the Lack of intensity is a far cry from what it Was in November and December. Indeed, Many Observers Were Surprised That Corzine testified on Capitol Hill in December about the collapse of the firm. Some legal analysts Said Corzine, New Jersey to form aussi governor and US senator, putting Could Be Himself in legal jeopardy by answering hostile questions about the missing money from customer history form Washington colleagues.
In mid-November, CFTC commissioner Bart Chilton, all purpose Said WAS a crime-committed at MF Global. Interview with Reuters in a year then, hey said: "This Is not just a lost and found inquiry, it's a full-on effort to get to the bottom of what has Massive Appears To Be hide-and-seek ploy."
Last week, Chilton Said Bankruptcies Were "inherently messy." In an email to Reuters, He Said: "The issue now is what comes out of the Cdn job clean-up crews do to get money back and Their Customers to fully punish Those That Have Broken the law may. "
Criminal boxes Cdn take a long time to Develop and bring charges. It Took Federal Prosecutors in New York Nearly oven years to file charges this month a group of train Against Credit Suisse traders accusé of hiding billions of dollars in Losses on subprime mortgage-backed securities.
MF Global's collapse has-beens Compared with bankruptcy in 2007 the future of Chicago brokerage Sentinel Management Group Inc., though much smaller That Was a firm. The CFTC and the SEC charged the company's Two of principals with Improperly mixing customer money with the firm's account - much like investigators think Happened with MF Global.
The form Sentinel executives are still fighting the regulator's allegations Nearly oven years later in Chicago federal court. No criminal charges filed Have Been. The Spokesman for the Office of the US Attorney in Chicago Declined to comment.
There is a statute of limitations of five years to bring a charge of conspiracy and five years for a charge of wire fraud. Most, if not all, defense lawyers believe in the adage "never say never" when it Comes to investigations of Potentially Criminal Conduct Even If They Are laden with complexity.
Among Them is Michael Weinstein, a Justice Department lawyer form now in private practice in New Jersey with Cole, Schotz, Meisel, Forman & Leonard law firm. "It's premature, it just is," Weinstein said. "People are disappointed, They Want Justice next day. Thesis in order kinds of boxes you do not just Have It. "
(Additional reporting by Philip Shishkin, editing by Matthew Goldstein and Edward Tobin)
Analysis: Criminal probe trail going cold at MF Global