G20 LEADERS TO CONCENTRATE ON BANK REGULATIONS - Pittsburgh in the US plays host later today to the G20. Leaders of the G20 nations last met in April when the underlying fear was of a return to a Great Depression style era. Since then the US Federal Reserve chairman Ben Bernanke has signalled that the economy there is out of recession. Over the next two days, the G20 will be looking at how well the $5 trillion global stimulus plan is being spent. There has been some success on cracking down on international tax havens while bank regulation and bankers' bonuses will also be discussed.
Chris Thornberg, an economist with Beacon Economics in California, disagrees that the US is out of recession and will be watching events in Pittsburgh today carefully. He says most of the summit's time will be spent debating financial re-regulation. He says the banking problems were global and that many of the abuses that were seen in the US were also seen on an international level and everyone is now paying the price. He says the world is also now realising that when these giant international organisations go wrong, the world has to make collective decisions on how to make things right again. But he says that, unfortunately, what should be a collective decision is not going to be with each nation having its own special interests. He says that if different nations go their each separate way, the whole re-regulation process will be weakened substantially.
MORNING BRIEFS - The Federal Reserve last night said the US economy is in recovery after a severe downturn. It has decided to slow purchases of mortgage debt to keep the pot of money set aside to buy them does not run out too soon. The Fed also left US interest rates at close to zero and said that it would continue to do so for what it said would be 'an extended time'. Economists are suggesting that will be at least until the end of this year and maybe into 2010.
*** Figures from the Financial Regulator show that insurance companies' sales and profits fell sharply last year. Underwriting profits in the Irish market plunged by almost 83% to €121.9m, while insurance companies' income from their investments fell to 95 and a half million from €369m in 2007 because of the slump in stock markets. On the sales side, income from insurance premiums last year was down 22% on 2007, to just under €36 billion. Life assurance premiums fell 26% to €28.5 billion.
*** Nintendo said today it was cutting the price of its Wii video game console by a fifth in Japan and the US, following similar moves by rivals Sony and Microsoft. The Japanese giant has been riding high in recent years after trumping rivals Sony and Microsoft in the battle for dominance of the multi-billion dollar home video game industry with its family-friendly Wii.
*** On the currency markets, the euro is worth $1.4745 and 90.09 pence sterling.