Latest articles from Comment

BoC sets 5% target for bad loan ratio

June 2, 2004

Bank of China (BoC), the largest of China’s big four state-owned banks, has announced that its non-performing loans ratio will be down to around 5% by the end of 2004 as it plans to bring in a strategic investor later this year in preparation for its IPO. This significant reform of the bank’s ownership structure reflects the Chinese authorities’ determination to reform the big four banks which account for 55% of China’s bank assets.

Germany’s VDH takes control of European covered bonds dispute

June 2, 2004

German mortgage banks are campaigning to develop a common legal definition and standard for covered bonds. The dispute was sparked last year by three UK banks issuing covered bonds which do not legally qualify as this asset class.

India’s new government promises to continue economic reform

June 2, 2004

India’s Congress Party will lead an alliance of political parties that will form the next government after it emerged the surprise victor in the country’s national elections in early May. Voters shunned the previous regime led by the Bharatiya Janata Party whose economic reforms appear to have left a large majority of rural Indians unmoved.
Manmohan Singh, the former finance minister, will be the new prime minister after Congress party president Sonia Gandhi turned the job down.

China seeks to lower economic heat without extinguishing it

June 2, 2004

China is set to use medicine strong enough to cool down its investment fever, but not so potent as to bring the economy to a standstill. Banks are at the forefront of this austerity campaign, acting on the orders of the central government to choke off credit supply to overheated sectors.

Russia and Ukraine ratify UEA

June 2, 2004

The Ukrainian and Russian parliaments ratified an agreement, at the end of April, to create a free-trade Unified Economic Area (UEA). The pact, tying the two fast-growing economies more closely together, has forged the European Union of the east.

Returning the IMF to the centre

June 2, 2004

It’s time to embrace the multilateral policy challenge and recognise and enhance the IMF’s central role therein, says Mohamed A El-Erian.
Over its 60-year history, the International Monetary Fund (IMF) has repeatedly adapted to changing global conditions. In maintaining an important role in the international economic system, it helped countries navigate the shift away from the Bretton Woods regime of fixed exchange rates in the 1970s; it sought to moderate the impact of the two oil shocks in 1973/74 and 1979/80; it helped solve the generalised 1980s debt crisis in Latin America; and it responded to the crisis that broke out in east Asia in 1997, spread to eastern Europe and risked engulfing Latin America.

Laying Europe’s building blocks

May 3, 2004

Philippe Maystadt, president of the European Investment Bank, tells Karina Robinson of the need to convince citizens that there’s no gain without pain.

The cutting edge of debt tools

May 3, 2004

Agence France Trésor has been a pioneer of European inflation-linked bonds. Natasha de Teran interviews chief executive Bertrand de Mazičres about the development of these debt instruments.

Deutsche adrift at sea as captain is caught in storm

May 3, 2004

Steering a mighty ship when the captain is partly absent can have its problems. This month we look at the challenges facing the giant Deutsche Bank and assess its progress while chief executive Josef Ackermann continues to be consumed by a distracting court case in Düsseldorf. Deutsche needs its captain.

German efficiency deserts banking sector

May 3, 2004

With an already fragmented banking sector and state-owned banks reluctant to change, Germany will remain behind its European peers.

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