Canada's Carney says more work needed to rebuild trust in banks

LONDON, Ontario (Reuters) - Banks and regulators must do much more to rebuild the trust in the financial system that was shattered in the recent crisis, Bank of Canada Governor Mark Carney, head of the G20's Financial Stability Board, said on Monday.

Bank of England mulls negative interest rates

Paul Tucker, the Bank’s deputy governor for financial stability, raised the possibility in front of MPs after expressing concerns that current policies are not “reaching as far into the SME [small and medium sized enterprises] sector as we would like”.

Egypt to reopen IMF loan talks next month as crisis bites

CAIRO (Reuters) - Egypt will reopen talks with the IMF next month on a $4.8 billion loan, a minister said on Monday, and the government laid out plans to reverse a slide in currency reserves and tackle the dire state of public finances.

Italy's Silvio Berlusconi slams Europe's 'lords of austerity'

ROME: Italy's Silvio Berlusconi on Saturday said Europe's "lords of austerity" had tried to get rid of him, speaking in apparent breach of rules for candidates to stay silent the day before elections.

ECB's Asmussen: G20's credibility is at risk

BERLIN (Reuters) - The Group of 20's credibility is at risk because it has been primarily equipped to deal with crises and is less effective during normal times, European Central Bank board member Joerg Asmussen said on Friday.

Budget Cuts Seen as Risk to Growth of U.S. Economy

WASHINGTON — The fresh round of federal spending cuts scheduled to begin next week would slow economic growth in the next year, though not nearly as much as going over the so-called fiscal cliff might have, economists said.

BoE governor backed more stimulus for UK economy

LONDON (AP) — The Bank of England expressed growing concern over Britain's economy and came surprisingly close to backing another monetary stimulus in a move that piled further pressure on the pound.

S&P warns risk of Cyprus default "material and rising"

Reuters) - Cyprus faces a "material and rising risk" of defaulting on its sovereign debt, especially if the euro zone and International Monetary Fund do not come up with aid, rating agency Standard & Poor's said on Wednesday.

G-20 toughens stance against efforts to influence exchange rates

Group of 20 finance chiefs sharpened their stance against governments trying to influence exchange rates as they sought to tame speculation about a global currency war without singling out Japan for criticism.

G-20 Signals Support for Japan Stimulus Without Yen Talk

Global finance chiefs signaled Japan has scope to keep stimulating its stagnant economy as long as policy makers cease publicly advocating a sliding yen.

G20 leaked communique doesn't single out Japan

Finance ministers of the G20 nations meeting in Moscow may not criticise Japan for weakening the yen, a leaked draft communique has indicated.

G20 host Russia struggles with chronic investor mistrust

LONDON: A $2 trillion economy, a seat at the top table of world powers and a stock market that trades at valuations cheaper than Pakistan - G20 host Russia is still struggling to gain the trust of international capital.

World Bank chief economist calls on G20 to coordinate policies

WASHINGTON (Reuters) - The World Bank's new chief economist on Tuesday urged Group of 20 finance leaders to better coordinate economic policies in order to prevent a possible global currency war.

G20 should give clear signal there is no currency war: Timothy Adams, IIF Chief

WASHINGTON: Finance ministers from the Group of 20 nations should send a clear signal to financial markets this week that they are coordinating policies and not embroiled in a "currency war," the head of a global banking group said on Monday.

EU leaders agree 3% budget cut deal in Brussels

EU leaders have reached an agreement on the budget for 2014-20 after lengthy talks in Brussels.

China's foreign trade surges by 25 per cent in January

BEIJING: In signs of China's export markets rebounding, its foreign-bound shipments rose by 25 per cent, the fastest pace since April 2011, in January, a report said.

Aso Says Pace of Yen Depreciation Too Fast as G-20 Set to Meet

Japanese Finance Minister Taro Aso said the pace of the yen’s weakening has been too fast, speaking a week before a meeting of global finance chiefs where Japan’s currency stance is forecast to be an issue.

European leaders inch towards deal on EU budget

European leaders are inching towards a deal on the EU's new seven-year €1tn (£860bn) budget that should allow David Cameron to argue he has succeeded in forcing a real cut in Brussels spending.

Give Greece a chance, says Angela Merkel's challenger Peer Steinbrueck

ATHENS: Greece must be given time to clean up its troubled finances, Peer Steinbrueck, the head of Germany's Social Democrats who will challenge Chancellor Angela Merkel in elections later this year, said on Wednesday.

G20 should focus on debts, not Japan-bashing: Russia

MOSCOW (Reuters) - Russia's top financial diplomat said the Group of 20 should focus on making new commitments to curb borrowing, and not rush to judge Japan's bid to reflate its economy when policy makers meet this month.

Will G-20 Counter Power of Uncertainty?

In 2009, G-20 leaders met in Pittsburgh and emerged with a mandate ‘to be the premier forum for international economic cooperation,' endowing the G-20 with a leading economic role on the global stage. It appeared at the time that the leaders of the G-20 had successfully defeated pessimism. However, the rising tide of global economic turmoil and problems ranging from sovereign indebtedness to consumption and saving imbalances have created a ‘perfect storm' that is far from abating.

The question before the G-20 summit in Cannes this year is whether to just distribute life jackets or endeavor to overcome political differences and set forth a concrete, viable roadmap that genuinely addresses the range of outstanding global economic security risks. Such a roadmap could go a long way towards countering the uncertainty that has gripped the global economy.

Although it is difficult to measure the economic effects of uncertainty, Professor Steven Davis at the University of Chicago Business School has created a ‘policy-related economic uncertainty index’ which underscores the fact that policy uncertainty exacerbates market volatility and has a negative impact on economic growth and the prospects for recovery. His data reveals that there were clear jumps in index values around the Lehman bankruptcy and TARP legislation, the Eurozone crisis and the U.S. debt-ceiling dispute. Looking ahead, Professor Davis’ estimates show that an increase in policy uncertainty foreshadows large and persistent declines in aggregate outcomes, with peak declines of 2.2 percent in real GDP, 13 percent in private investment and 2.5 million in aggregate employment.

Given these projections, as G-20 leaders struggle to address a range of economic issues that threaten global recovery, they might consider that continued policy paralysis exacerbates uncertainty and undercuts market confidence. Adding to the general sense of economic anxiety is the feeling that policy makers continue to be misdiagnosing the underlying problem.

For example, with regard to the immediate hurdle of the sovereign debt crisis, leaders appear to be primarily addressing a symptom – lack of liquidity, rather than the underlying cause - a lack of solvency. Only last week Germany’s Angela Merkel stated, ‘The path is closed for using the ECB to ease liquidity problems.' At the same time, two top Federal Reserve officials argued that the U.S. Central Bank should again consider resuming purchases of mortgage backed securities, in other words, QE3.

Admittedly it is difficult to distinguish between illiquidity and insolvency when dealing with countries; but there is, in fact, a difference and the responses to each can have crucial repercussions. Pumping liquidity in the ocean of debt will not improve solvency; instead it carries the danger of added inflationary pressures which further feeds economic turbulence. While debt restructuring may be unpalatable to creditors, it is, in all likelihood, a reality. Facing up to this reality with a transparent and viable plan can help diminish the uncertainty that is paralyzing private sector activity and fueling volatile market sentiment.

Furthermore, uncertainty often breeds fear and fear begets the temptations of protectionism. In this context, G-20 leaders could consider openly embracing the fact that tackling the economic issues that are plaguing the global economy does not mean reducing economic openness and integration in the world economy.

Richard Fisher of the Federal Reserve Bank of Dallas underscored the belief that uncertainty is a leading driver of stalled economic recovery when he said: “Right now, nobody knows what the tax regime is going to be. Nobody knows what the spending patterns are going to be. No one knows how much regulatory change is going to take place. The greater the clarity, the more you remove a factor of uncertainty. Even if (businesses) don't like it, they'll figure out a way to navigate their way through it. Right now, there are no decisions being made. And it undermines confidence.” While he was referring to circumstances in the U.S., his sentiment is just as applicable to much of the global economy.

At the end of the day, resolving the challenges facing the global economy requires a political solution. While it is difficult to determine whether such a solution will completely counter uncertainty, we do know that from whatever perspective one considers the choices to be made, they will not be easy ones. But difficulty is not a reason for inaction. Developing and implementing a viable roadmap that will help policy makers and business leaders navigate the maelstroms of this storm will go a long way towards reinvigorating sustainable economic growth and strengthening global economic security.

Alexander Mirtchev is President of the Royal United Services Institute for Defence and Security Studies (RUSI) International, President of Krull Corp., and a member of the Atlantic Council's Board of Directors and Strategic Advisors Group. This commentary was originally published on RealClearWorld.

Oil-dependent Kuwait growth to slow: Report

KUWAIT CITY: Oil-driven economic growth in the Gulf state of Kuwait is forecast to slow down this year and in 2014 as crude output is expected to remain flat, the National Bank of Kuwait said in a report today.

George Osborne wants 'Royal Bank of Scotland to meet Libor fines from bonuses'

Chancellor George Osborne has insisted that any fines imposed on the Royal Bank of Scotland over the Libor scandal must be met from bankers' bonuses.

Fed officials see brighter global economic outlook

(Reuters) - Two top Federal Reserve officials painted a picture of cautious optimism on Friday for the U.S. economy in 2013, helped by stronger global growth as the central bank aggressively prints money to curb the nation's lofty rate of unemployment.

UK manufacturing expands for second month

UK manufacturing had an promising start to the year, with activity expanding for a second month in a row in January and output growing at the fastest pace since September 2011 despite the snow.

Growth in Consumer Spending Slows

WASHINGTON — American consumers increased their spending in December at a slower pace, while their income grew by the largest amount in eight years, the Commerce Department said Thursday.