ECB monetary policy could temporarily ease inequality in Europe

The European Central Bank's ultra-easy monetary policy may actually reduce income inequality in Europe, ECB Vice President Vitor Constancio said on Tuesday, rejecting the argument that asset buys disproportionately benefit the wealthy.

Constancio said the ECB's stimulus measures lower unemployment and thus increase disposable income for Europe's poorest, compressing inequality, at least in the short term.

"This result confirms that, from the distributional perspective, the main impact of expansionary monetary policies is on the reduction of unemployment with positive effects on the reduction of inequality," Constancio said in Lisbon.

"(Monetary policy) measures can improve their welfare and contribute toward reducing income disparities, at least in the short-term."

But he added that such steps are likely to be temporary with the "hollowing out of the middle class" and the increasing polarisation of incomes likely continuing over the longer term.
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Wall Street slips as tensions with North Korea rattle investors

US stock indexes opened lower on Wednesday as investors turned risk averse following rising tensions between North Korea and the United States.

North Korea said it was considering plans to fire missiles at Guam, a US-held Pacific island, after President Donald Trump on Tuesday warned the nuclear-armed nation that it would face "fire and fury" if it threatened the United States.

Safe-haven assets gained following the mounting geopolitical tensions. Gold rose 1.2 percent, while the Swiss franc was on track to post its biggest single day rise in about two-and-a-half years.

Trump's comments also sparked a late afternoon selling on Tuesday, with the Dow ending a nine-day streak of closing records.

The CBOE Volatility Index, the most widely followed barometer of expected near-term stock market volatility, was up 1.03 points at 11.98 points, its highest level in a month.

"The geopolitical tensions have prompted a risk off trade amid investors," said Naeem Aslam, chief market analyst at Think Markets UK.

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Trump owes lenders at least $315 mn, discloses latest financial report

US President Donald Trump has reported hundreds of millions of dollars in income in a financial disclosure form, the media reported.

The numbers were reported in a 98-page disclosure form signed by Trump this week and made public by the Office of Government Ethics late Friday. The report covers January 2016 through April 15, 2017, reports CNN.

Trump reported $37.2 million in income in the past year from Mar-a-Lago, the private Florida resort where the President hosted his Chinese counterpart Xi Jinping. The club has doubled its membership fee in the past year.

The Mar-a-Lago income figure was $7.4 million higher than on his previous financial disclosure filing, in May 2016.

At his golf courses alone, Trump reported $288 million in income which includes $19.8 million from his club in Bedminster, New Jersey, where he has spent some weekends as President.

He also reported $19.7 million in income through mid-April at his luxury Washington hotel that opened last September, reports CNN.

Up to $7 million was reported in book royalties, including $1 million to $5 million from his book "Great Again: How to Fix Our Crippled America".

Nearly $11 million came from the Miss Universe pageant and an $84,000 pension from the Screen Actors Guild.

Trump brought in approximately $600 million to $650 million in employment assets and income.

However, the documents have it impossible to calculate precise totals, according to the Office of Government Ethics.
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RBI cracks whip on banks not game for asset recast

On a day when the government vested more powers in the Reserve Bank of India (RBI) in the war against bad debt, the central bank imposed a corrective action plan (CAP) on a wide range of restructurings exercised by banks.

Such a CAP was till now applicable for only the Joint Lenders’ Forum (JLF) mechanism. It is enforced to preserve the economic value of stressed assets. A specified timeline is framed by banks, with disincentives in the form of asset classification and accelerated provisioning where lenders fail to adhere to the JLF Framework.

Now, the CAP will be applicable for such schemes as a flexible structuring of project loans, change in ownership under Strategic Debt Restructuring and the Scheme for Sustainable Structuring of Stressed Assets (‘S4A’), etc.

“In this context, it is reiterated that lenders must scrupulously adhere to the timelines prescribed in the framework for finalising and implementing the CAP. To facilitate timely decision making, it has been decided that, henceforth, the decisions agreed upon by a minimum of 60 per cent of creditors by value and 50 per cent of creditors by number in the JLF would be considered as the basis for deciding the CAP, and will be binding on all lenders,” went the RBI notification on its website.

“Lenders shall ensure that their representatives in the JLF are equipped with appropriate mandates, and that decisions taken at the JLF are implemented by the lenders within the timelines.”

Also, the central bank put strict criteria for all participating banks in the process. “The stand of participating banks while voting on the final proposal before the JLF shall be unambiguous and unconditional,” RBI directed. “Any bank which does not support the majority decision on the CAP may exit, subject to substitution within the stipulated time line, failing which it shall abide by the decision of the JLF.”

Banks should implement the JLF decision without any additional conditionalities. And, bank boards “shall empower their executives to implement the JLF decision without requiring further approval from the board”.

Any non-adherence to the instructions and timelines specified under JLF will attract monetary penalties, RBI cautioned.

Earlier in the day, ICICI Bank's managing director, Chanda Kochhar, had complained that not all banks in a JLF adhered to decisions taken by consensus, and that they don’t stick to timelines on a resolution process, derailing the latter.

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RBI cracks whip on banks not game for asset recast

On a day when the government vested more power to the Reserve Bank of India (RBI) in the war against bad debt, the central bank imposed a corrective action plan (CAP) on a wide range of restructurings exercised by banks.

Such a CAP was till now applicable for only the Joint Lenders' Forum (JLF) mechanism. It is enforced to preserve the economic value of stressed assets. A specified timeline is framed by banks, with disincentives in the form of asset classification and accelerated provisioning where lenders fail to adhere to the JLF Framework.

Now, the CAP will be applicable for such schemes as a flexible structuring of project loans, change in ownership under Strategic Debt Restructuring and the Scheme for Sustainable Structuring of Stressed Assets ('S4A').

"In this context, it is reiterated that lenders must scrupulously adhere to the timelines prescribed in the framework for finalising and implementing the CAP. To facilitate timely decision making, it has been decided that, henceforth, the decisions agreed upon by a minimum of 60 per cent of creditors by value and 50 per cent of creditors by number in the JLF would be considered as the basis for deciding the CAP, and will be binding on all lenders," went the RBI notification on its website.

"Lenders shall ensure that their representatives in the JLF are equipped with appropriate mandates, and that decisions taken at the JLF are implemented by the lenders within the timelines."
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