News This Issue:

• IMF agrees extra cash for Argentina
• Japan government panel starts debate on BOJ policy
• China tighten grip on overseas operations of banks
• Asian Monetary Fund not a bad idea says US official
• Malaysia central bank to promote Islamic banking
• French drop hope of replacing Duisenberg
• Japanese regulator punishes Citibank
• World Bank appoints new vice president and treasurer
• Australasian union could see trade double
• Systemic risk heightened by consolidation says G10
• New appointments to the Federal Reserve Board

IMF agrees extra cash for Argentina
ARGENTINA - After 12 tense days of talks, the International Monetary Fund (IMF) agreed to increase its funding to crisis-hit Argentina by $8bn. The United States, the IMF's biggest shareholder and a vital ally of Argentina, welcomed the deal. But both the US and the IMF insisted that tough conditions were tied to the money. The new cash takes the IMF's commitments to Argentina to a total of $22bn. 22-Aug-2001

Japan government panel starts debate on BOJ policy
JAPAN - The Council on Economic and Fiscal Policy has started talks on the direction of monetary policy, set by the Bank of Japan, as a way of stemming deflation, and is likely to issue a set of proposals in September calling for further credit easing. 21-Aug-2001

China tighten grip on overseas operations of banks
CHINA - China unveiled rules on 20th August aimed at tightening supervision of the overseas operations of Chinese banks to prevent financial risk. 20-Aug-2001

Asian Monetary Fund not a bad idea says US official
ASIA - The administration of President George W. Bush would support the future establishment of an Asian IMF, a senior U.S. official said on 17th August. Deputy Secretary of State Richard Armitage said regional speculation about an eventual Asian Monetary Fund to confront economic crises like the 1997-98 meltdown "doesn't seem to me to be a bad idea". 17-Aug-2001

Malaysia central bank to promote Islamic banking
MALAYSIA - Malaysia's central bank said 15th August that it will organise a week-long nationwide campaign to promote Islamic banking and insurance from 26th Oct to 2nd Nov. Islamic banks and financial houses do not pay or charge interest as it is considered usury, which is banned under Sharia law. Bahrain also said, in July, that it plans to establish a US$50m liquidity management centre (LMC) to help meet the needs of Islamic banks and financial institutions. 15-Aug-2001

French drop hope of replacing Duisenberg
GERMANY - France is apparently abandoning its hopes of replacing Dutch European Central Bank President Wim Duisenberg with a French president in 2002, when half of his eight-year term will be up, reported Der Spiegel. However, it still wants a French candidate to succeed Duisenberg as president when the next eight year term begins in 2006. 13-Aug-2001

Japanese regulator punishes Citibank
JAPAN - The Japanese branch of Citibank, a part of Citigroup, the world's largest financial services company, has been punished by Japan's financial services agency, the country's chief financial regulator, for illegally helping clients to conceal losses. The punishment comes hot on the heels of fines levied on Goldman Sachs but these are not isolated cases. The FSA has been conducting visits to every foreign bank in Japan - as well as a number of domestic banks - and has meted out a range of punishments in recent years to Deutsche Bank, Lehman Brothers, Credit Suisse First Boston, Paribas, Societe Generale and West LB. 10-Aug-2001

World Bank appoints new vice president and treasurer
WORLD BANK - The World Bank has announced the appointment of Graeme Wheeler as Vice President and Treasurer effective from 3 August. He succeeds Afsaneh Mashayekhi Beschloss, who left the service of the Bank in May 2001. 3-Aug-2001

Australasian union could see trade double
AUSTRALIA - Australia could enjoy a doubling in trade with New Zealand if the two countries embarked on a path of currency union, a discussion paper presented to a Reserve Bank of Australia conference on 24 July concluded. 25-July-2001

Systemic risk heightened by consolidation says G10
G10 - Central banks of the G10 countries released a joint study in July on the impact of consolidation on financial risk, payment systems and monetary policy, which concluded that the probability of systemic risk has increased due to consolidation among banks. 20-July-2001

New appointments to the Federal Reserve Board
US - President Bush announced 10 July that he will nominate former community banker and Senate Banking Committee aide Mark Olson to the Federal Reserve Board. Mark Olson's nomination towed closely behind that of Susan Schmidt Bies, an economist who is executive vice president in charge of risk management at First Tennessee National Corp in Memphis. On 16 July, Roger Ferguson was sworn in for a second term on the board after his nomination was approved by the Senate by 97-2. 10-July-2001

Ex-Buba chief Poehl slams ECB communication policy
GERMANY - Former Bundesbank President Karl Otto Poehl was quoted on 14 August as saying the communication policy of the European Central Bank was clumsy and inflexible. Poehl, who was in charge of the Bundesbank throughout the 1980s, said the ECB has not made any policy mistakes and blamed its credibility problems on its poor communications policy. 14-Aug-2001

Eurostat launches online economic database
EU - The European Union's statistical office Eurostat has launched a "Euro-indicators" subscription database aimed at economists and other professionals, some of whom complain that detailed data are hard to obtain. 19-July-2001

High tech credit card scam spreads
ASIA - International criminal gangs are using high-technology to steal thousands of credit card numbers at a time from trusting shoppers. The scam - which emerged in south-east Asia but has now spread as far a field as Turkey - involves gangs inserting a recording chip into credit card terminals. The terminals are placed with unsuspecting retailers and the card information recorded each time a card is swiped. The adapted terminals have been placed by fraudsters posing as maintenance engineers. 14-Aug-2001

E-money strife
UK - Visions of a cashless 21st century were looking more like mirages this month as trouble was reported at two major internet payment companies - beenz and flooz. Winding up their operations, Beenz announced that redeemability of their currency will no longer be possible from August 26th 2001. The news came as Flooz suspended operations on their site. 10-Aug-2001

Credit card use doubles in South Korea
SOUTH KOREA - Apparently boosted by a range of government measures encouraging the use of creditor cards, the daily use of credit cards almost doubled in the first half of this year from a year ago, the Bank of Korea said in a report on trends in payments and settlements. 5-Aug-2001

Central Bank Institute
The Central Bank Institute (CBI), founded by the Federal Reserve Bank of Cleveland in January hosted two conferences in August: Conference on Money and Payments (Aug 6-9) and Conference on Monetary Economics (Aug 13-17). Papers from each of the conferences are available on the CBI's web-site at http://www.clev.frb.org/CentralBankInstitute/conferences.htm

Monetary Authority Of Singapore
Happy birthday to the Monetary Authority of Singapore (MAS) which celebrated its 30th anniversary in July. To mark the occasion the MAS hosted a central bankers' conference on 20th July. The forum, entitled "Central Banking in the New Economic and Financial Landscape", was attended by regional central bankers, economists and academics. MAS chairman and deputy prime minister Lee Hsien Loong delivered a keynote address about the historical development and future challenges of the MAS. Prime Minister Goh Chok Tong also paid his respects at the anniversary dinner saying that "MAS's accomplishments in the last 30 years have been one of the key drivers of Singapore's success" but that "we have to press on with the liberalisation and rationalisation of the financial sector".