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To: Alex who wrote (19911)	9/27/1998 6:57:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116762

Alex, check this out- and you thought gold leasing is bad..Now Paper leasing... Japan considers U.S. treasury bond action-report 01:32 p.m Sep 27, 1998 Eastern TOKYO (Reuters) - The Japanese government is considering lending some of its government-held U.S. Treasury bonds to Japanese banks as an emergency measure to help domestic banks raise dollars, a major Japanese news agency reported Sunday. Kyodo News Service, quoting ''government sources,'' said that under the plan, Japanese banks would borrow U.S. Treasury bonds held by the Japanese government -- at low interest rates and without collateral -- to get dollar loans from foreign banks by using the bonds as collateral. A Japanese government spokesman had no comment on the report. Kyodo said the measure was a way to deal with ''financial instability'' that has led foreign banks to charge a ''Japan premium'' -- the extra interest Japanese banks have to pay on funds raised overseas -- or made foreign banks reluctant to give dollar loans to Japanese banks. ''The plan is aimed at reducing the 'Japan premium' and boosting Japan's sagging stock markets, which are being dragged down by sluggish bank shares, before the Sept. 30 fiscal half-year book closing date, according to the sources,'' Kyodo said. ''The Japanese government holds U.S. Treasury bonds worth more than 50 trillion yen ($367.6 billion), of which it is considering lending 10 trillion yen ($73.5 billion) at an annual interest rate of 0.05 percent and without collateral,'' Kyodo said. The news agency said that in exchange for lending its U.S. Treasury bonds to the banks on favorable terms, the government is planning to ask them to reduce their overseas assets and publicly release more information on their management. Earlier Sunday, the Nihon Keizai Shimbun, a major business daily, reported that Japan's Finance Ministry and the Bank of Japan (BOJ) have drawn up emergency measures to help Japanese banks raise dollars. The newspaper said that under the measures, the government would deposit a portion of its foreign currency reserves with Japanese banks unable to make dollar settlements. The newspaper said that the BOJ would provide dollars to the banks through ''exchange swap'' deals, in which the central bank will sell the banks' dollars and buy them back after a certain period of time. Copyright 1998 Reuters Limited.

To: Alex who wrote (19911)	9/27/1998 7:19:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116762

If world in crisis, who will speak for euro zone? 09:18 a.m. Sep 27, 1998 Eastern By Myra MacDonald VIENNA, Sept 27 (Reuters) - What will Europe do if there is a new downturn in the world economy, and the dollar slides against the euro? The answer is that nobody really knows. Indeed nobody is quite sure yet who would decide what action to take and then explain it abroad to Europe's main economic partners. EU finance ministers and central bankers failed this weekend to agree who should represent the euro zone, for example in the Group of Seven, after the launch of the single currency in January next year. The issue is crucial, not just for the sake of clarity, but also in determining the balance of power between central bankers and politicians, traditionally the most sensitive issue lurking behind Economic and Monetary Union. Until recently, the assumption was that the European Central Bank, the only supranational body in EMU, would by default speak for the euro zone, while EMU members France, Germany and Italy would in any case keep their G7 seats. But for countries like France which want a dialogue between the ECB and governments, rather than what one European source described as the current ''exchange of monologues,'' euro zone representation cannot be left to the ECB alone. Indeed official sources say the European Commission has been taking legal advice to find out whether the EU's Maastricht treaty could prevent the ECB from doing this. According to the treaty's article 109, it is up to governments to decide Europe's position in international issues and who should represent them. So, less than 100 days before the launch of the euro, EMU members have begun casting about for a compromise. Last week, France floated the idea that the big three economies in EMU, itself, Germany and Italy, could take turns at speaking for the euro zone at the G7. But that immediately provoked what one EU official described as ''allergic reactions'' from smaller EU countries. One solution would be for the current president of the euro-11, an informal council of EMU members, to attend the G7. But that would mean far too many Europeans at the G7 -- already Britain, France, Germany and Italy outnumber non-European members the United States, Canada and Japan. So, according to Luxembourg Economy Minister Robert Goebbels, France suggested an explosive alternative. National central bankers would simply stay at home. They would be represented by ECB head Wim Duisenberg and their absence would create three spare places -- one for Duisenberg, one for the president of the euro-11 and one other. ''When we have a European Central Bank why should the governor of the Bank of France be there?'' asked Goebbels. Out of the question, said the central bankers. ''Neither he (Bundesbank head Hans Tietmeyer) nor I will agree not to take part in the meeting,'' Bank of France governor Jean-Claude Trichet, speaking with uncharacteristic vehemence, told a news conference. French Finance Minister Dominique Strauss-Kahn refused to confirm that France had ever suggested ditching national central bank heads and noted that they would be needed in discussions on banking supervision and international payments. Aides rushed to explain that the real issue at the G7 was one of allotted speaking time rather that seating places -- a neat solution which may pave the way for a compromise at the next finance ministers' meeting in October. But the debate about the balance of power between the ECB and governments looks set to rumble on. France has been pushing for Europe to be ready to act to boost growth if the crisis in emerging markets worsens. That could eventually mean a cut in interest rates -- though ministers and central bankers have said there is no pressure right now for a reduction in Europe's core interest rate below the benchmark German repo rate of 3.30 percent. Germany, however, wants nothing which would smack of political interference in the independent central bank. And in any case, Europe's governments have to convince the ECB that they themselves are serious about maintaining tight fiscal policies, as most analysts believe the ECB would not cut if it thought budgets were too lax. Copyright 1998 Reuters Limited.