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To: goldsnow who wrote (23039)	11/16/1998 11:50:00 PM
From: Yiota	Read Replies (1) \| Respond to of 116762

Early Tokyo -2: Worries Over Russian Banks May Weigh On Mark The mark was trading at Y72.67, up from Y72.13 earlier and above Y72.04 in New York late Monday. The mark was quoted late in Tokyo Monday at Y72.97. Sterling was at $1.6750, down from $1.6762 earlier and below $1.6758 in New York late Monday. Sterling was at $1.6665 in Tokyo late Monday. The dollar is expected to trade between Y120.00-Y121.50 and DEM1.6600-DEM1.6750 for the rest of the Asian day. Earlier, Japanese short-term players snapped up dollars and Deutsche marks for yen, pushing up both currencies against their Japanese counterpart, said the trust bank dealer. But some said worries about Russian banks' ability to repay their obligations could weigh on the Deutsche mark after a Russian moratorium on foreign debt repayments ended Monday. "The mark looks immune to selling right now, but if Russian banks go bust, the Dow (Jones Industrial Average) will fall too, so the net effects on the dollar-mark are uncertain," said the trust bank dealer. There was little reaction to the release of the Bank of Japan's monthly report earlier Tuesday, as the market's attention is focused on the FOMC meeting, traders said. Traders said there wasn't much immediate reaction to news that Eisuke Sakakibara, Japan's vice finance minister for international affairs, denied a report that Japan would propose controls on short-term capital flows at the next meeting of deputy finance ministers from the Group of Seven nations. Asked about the report, Sakakibara told Dow Jones, "No, no, that's not true." -By Sonoko Setaishi 813-5255-2933; ssetaishi@ap.org (END) DOW JONES NEWS 11-16-98 08:25 PM --------------------------------- Russian Markets Shrug Off End Of 3-Month Debt Moratorium By Paivi Munter, Staff Reporter MOSCOW -(Dow Jones)- Russia's battered financial markets shrugged off the end of the moratorium on commercial debt payments Monday, though many expect the event to wipe out most of the country's banking sector. The ruble slipped only slightly Monday, closing at 18.7 to 18.8 against the dollar at the open trading session, compared with 18.20 to 19.01 rubles Friday. Meanwhile, Russian stocks even posted marginal gains, with the Russian Trading System (RTS) closing at 59.52 points, up 0.4% from 59.32 points Friday. However, trading volume was minuscule at $1.2 million, down from $2.6 million Friday. The government imposed a three-month moratorium on foreign commercial debt payments Aug. 17 when it defaulted on its treasury debt and let the ruble depreciate by about 60%. That left a lot of Russian banks, which had provided foreign investors with currency hedges, holding large debts. Many feared the moratorium's end would wreak havoc on Russian financial markets, since domestic commercial banks are estimated to owe western creditors as much as $7 billion in all. Although some market participants last week predicted the ruble would drop markedly at the end of expiry, there was no stampede to buy dollars for foreign debt payments Monday. When the payments came due, few Russian banks were actually seen to be honoring their obligations, market participants said. "Several banks had no intention of paying their debts regardless of the moratorium, so why should they buy hard currency?" said Dmitri Panteta, a trader at International Moscow Bank. Copyright (c) 1998 Dow Jones & Company, Inc. All Rights Reserved.

To: goldsnow who wrote (23039)	11/17/1998 6:25:00 AM
From: Alex	Read Replies (4) \| Respond to of 116762

Socialists Mount Attack on European Central Bank Germany joins France in undermining the euro GERMANY and France yesterday announced plans to create an economic policy apparently compromising the European Central Bank's independence. The broad thrust of their plan is likely to be endorsed by the 11 Socialist finance ministers in the European Union, who are preparing to sign a statement on Sunday calling for greater public investment more emphasis on growth, and for the European Central bank to have regular dialogue with politicians. But the move sparked open warfare with bankers. It is further proof that the "New Left" in Europe is pushing for greater political influence in the running of the euro and for higher spending to counter the economic downturn. Oskar Lafontaine, Germany's Finance Minister, said: "We are entering into a new phase of European politics. What is decisive is that not only do we have a single currency area but also that it is accompanied by a co-ordinated economic and financial policy." Member countries must take all possible measures to develop the right "policy mix" to promote growth, "as in the end only more growth leads to more employment". "We must drive forward tax harmonisation in Europe", he said, since Germany would not accept as a net contributor to the European Union's budget that the recipient countries "offer themselves on a large scale as tax havens". Mr Lafontaine was speaking after talks with his French counterpart, Dominique Strauss-Kahn. Their approach, and calls by Mr Lafontaine and others for the ECB and national central banks to cut interest rates, provoked an angry response from German bankers, who see it as the abandonment of the strict financial disciplines of the era of Helmut Kohl. Martin Kohlhaussen, the Federal Association of German Banks' president, reacted furiously, saying the new German government's repeated calls for lower European interest rates were a blatant attempt to influence the ECB. Mr Kohlhaussen, chief executive of Commerzbank AG, said: "It is not the debate as such that disturbs us, it is the way in which it is being conducted. Such an unconcealed public attempt to exert pressure not only damages the politicians and the Bundesbank, but in the end also harms Germany's financial centre." Both ministers insisted that their emphasis on the need for investment and growth did not call into question the EMU stability pact, under which single currency countries will face fines if they overshoot spending limits. "The pact is not in doubt. We in Germany have no problem meeting the pact criteria," Mr Lafontaine said at the meeting of the Franco-German economic council. But the drive for more emphasis on investment came amid growing pressure to consider allowing a flexible interpretation of the pact's rules. Neil Kinnock, the EU transport commissioner in Brussels, also called for greater emphasis to be placed on growth and for the ECB to talk to politicians about the overall direction of economic policy in the euro area. Jacques Santer, President of the European Commission, insisted that Brussels would defend the ECB against any attempt to question its independence from political control. The London Telegraph, Nov. 17, 1998