Oil industry braces for fallout from Libya

By JANE WARDELL
AP Business Writer

(AP:LONDON) Oil consuming nations have emergency reserves they can use to stabilize markets in case the violence in Libya and the wider Middle East escalates and crimps production, officials said Monday.

But international executives and analysts meeting in London were nervously watching developments in the oil-rich region, worried about the sharp shock political unrest is giving to crude oil prices.

Oil prices jumped on Monday because of the ongoing turmoil in Libya, where Moammar Gadhafi's son, Seif al-Islam Gadhafi, warned protesters on Sunday that they risked igniting a civil war in which Libya's oil wealth " will be burned." By early afternoon in Europe, benchmark crude for March delivery was up $3.10 to $89.30.

Libya alone exports at least 1 million barrels of crude a day. Even more worrying for markets is potential contagion, or the spreading of the political violence to other countries in the Organization of Petroleum Exporting Countries _ key exporters Saudi Arabia and Kuwait are considered potential flashpoints.

David Fyfe, head of the oil industry and markets division at the International Energy Agency, stressed that the IEA member countries reserves of 1.6 billion barrels of oil _ equivalent to some 4 million barrels per day for the next 12 months _ that could be brought onto the market if necessary. The IEA's 28 members are mainly oil consuming industrial nations such as the United States, Japan, Britain and Germany.

The IEA has used government stocks to steady the oil market only twice before, during the Gulf War in 1991 and after Hurricane Katrina hit the Gulf of Mexico in 2005.

" It's very much a last resort, but it's worth pointing out that it exists and has been used before when supplies have been disrupted," he said.

" It's a sort of insurance policy for the market. Our view is that it isn't something that should be used for price management," he said.

Fyfe said the situation in the Middle East and North Africa was " of real concern," noting that the region accounts for 60 percent of global oil resources and 40 percent of global gas resources.

" Compared to Tunisia (a minor crude exporter) or Egypt (not an exporter but a transit country), instability in Libya is a major concern to the oil industry," said analysts at JBC Energy in Vienna.

David Buik, markets analyst at BGC Partners in London, noted that Seif al-Islam Gadhafi's comments that there would be " rivers of blood" in Libya had also prompted a surge in gold prices to just above $1,400 an ounce.

" There was a feeling by unsettled investors of a need to take yet another flight to quality," he said.

BP has suspended operations and is evacuating around 40 expatriate staff and their families amid the escalating violence _ halting operations in the North African country just four years after the British company returned from a 30-year hiatus.

" Events in the Middle East are of intense concern as they continue to evolve," Ian Smale, group head of strategy and policy at BP PLC, said at International Petroleum Week, a key event on the oil industry's calendar.

" With specific regard to Libya, our first concern is our people and the security and integrity of our operations," Smale said at the Energy Institute-sponsored conference in central London.

Smale said Libya is not a major operating base for BP, but did not respond to questions about BP's partnerships with state-owned entities in the Middle East and North Africa.

BP signed a deal worth at least $900 million in 2007 to explore in Libya. It said it would monitor the situation on a daily basis and could not confirm when work would start again, but stressed that offshore operations in the region were still open and the closure would not impact oil production.

Italy's Eni gas and oil company said in a statment that it was evacuating nonessential personnel and family members of expatriate workers in Libya " as already scheduled following the early closure of schools in the country."

" At the moment, no problems at plants and operational facilities have been reported. The company's production continues as normal, with no effects on operations," Eni said, adding that it was reinforcing security measures for remaining employees and plants.

Royal Dutch Shell, whose operations in Libya are limited to exploration, said it has temporarily relocated dependents of expat staff out of the country.

In the United States, ConocoPhillips spokesman John McLemore said the company is monitoring the situation but had no comment on the security of its workers there. ConocoPhillips has a joint interest in an oil drilling operation in Libya along with Marathon Oil and Libya's state-run oil company,

Exxon Mobil Corp, which has licenses for offshore drilling near Libya but no active drilling now, said it did not discuss security matters. Occidental Petroleum Corp., the first U.S. company to resume operations in Libya when the U.S. government lifted sanctions against the North African country in 2004, did not immediately return a call seeking comment. Last year, Occidental produced 13,000 barrels of oil, gas and liquids per day in Libya.

Current unrest aside, Fyfe said that oil growth demand should slow this year to around 1.5 million barrels per day, down from 2.8 million barrels last year. He said there were a number of differences between now and the shortages and price rises that characterized 2008, including more spare capacity, more OPEC production and slowing oil growth after the post-recessionary bubble of that year.

(This version CORRECTS Corrects first paragraph to say consuming instead of producing countries, adds detail on contagion fears, US oil company operations in Libya.)

Leading party hopes for better deal on bailout

By ROBERT BARR
Associated Press

(AP:DUBLIN) Ireland's next government wants to spread the pain from the nation's bank collapse to investors in bank bonds, an ambition that could be popular with hard-pressed taxpayers _ but disrupt the nation's bailout agreement and worsen Europe's debt crisis.

There has been much talk in the campaign leading up to Friday's national election about " burning" the bondholders and subjecting their investments to sharp discounts, or " haircuts."

It recently happened in Denmark, where senior bond holders in Amagerbanken stand to lose 40 percent of their stakes. And it already has happened to investors in unsecured bonds of Anglo Irish Bank they lost 80 percent or 95 percent of their investment.

It's a popular idea in Ireland, but there are widespread doubts whether Enda Kenny _ leader of the opinion poll-leading Fine Gael party and Ireland's likely next leader _ can go further. The European Commission is opposed, and investment ratings agencies have fired warning shots this month by further downgrading Irish bank bonds.

Ireland's banks borrowed heavily on bond markets and loaned the money to real estate developers during the boom. Now the boom is bust, the real estate loans are not being repaid, leaving the banks crippled. Outgoing Prime Minister Brian Cowen's government decided to have taxpayers backstop the bank's debts, a major factor in forcing the government into seeking a bailout.

" I think it is an obscenity that you would in every instance expect the taxpayer to front up for what's happened in the banking system," Kenny said on the campaign trail last week.

His party also pledged to try to re-negotiate terms of the European Union-International Monetary Fund bailout that rescued the country from bankruptcy.

The details of his aims, though, are more modest. He says he wouldn't invest any more money in Anglo Irish Bank, now 93 percent owned by taxpayers, until holders of senior bonds " share that burden." Investors in other banks might be spared.

Fine Gael's aim in renegotiating the euro67.5 billion ($92 billion) credit line from the European Central Bank and the IMF is to get a more favorable interest rate, not to abandon the deal.

The EU's economics commissioner, Olli Rehn, has ruled out any revision of the bailout this year, though he sees room for maneuver in 2012 and beyond.

" I'm, of course, following the Irish debate closely, and I'm aware that in democratic politics we have freedom of speech and freedom of positions," Rehn said earlier this month.

He stressed that the EU's agreement is with the Irish state, not with a political party, " and we expect continuity and respect of the memorandum."

Propping up Anglo Irish Bank has been costly: taxpayers have put up euro34.3 billion, nearly 22 percent of Ireland's GDP and 60 percent of the euro57.5 billion in public money which is shoring up the banks.

Goodbody Stockbrokers in Dublin calculates that the five banks which received state aid have euro15.4 billion in outstanding senior unsecured debt and euro6 billion in outstanding subordinated debt.

Fine Gael has promised it will dissolve Anglo Irish Bank and Irish Nationwide Building Society by the end of this year. " Further losses incurred in this process will be shared with remaining bondholders," the party manifesto says.

The Labour Party, Fine Gael's potential coalition partner, also talks of bondholders sharing, while Sinn Fein, the party associated with the Irish Republican Army, has made " burn the bondholders" a part of its manifesto.

Seamus Coffey, an economist at University College Cork, says the bondholders increasingly are Irish-based _ a bit over half now compared to a quarter in 2008. While the identities of the holders are unknown, he said Monday, talk of " burning" bondholders " is becoming more and more ourselves."

Although the European Commission is opposed hitting all investors in senior bank debt, which stands ahead of all other creditors in the line for repayment, Elizabeth Afseth, an analyst at Evolution Securities in London, said that would be expected if Anglo Irish is put out of business. In a liquidation, " you see what's left and do what's appropriate," she said.

But if that is done with the implicit support of the EU, it would cause jitters for some of the shakier banks in weaker countries such as in Portugal and Spain, she said.

Just talking about haircuts for bank bonds has led the Fitch and Moody's ratings agencies to downgrade more Irish bonds to junk status.

" Moody's notes that the Irish government's willingness to provide support beyond what has been committed to date has become far less certain and more difficult to predict, resulting in a significant lowering of our support assumptions for all domestic Irish banks, and the subsequent downgrades of the unguaranteed senior unsecured debt ratings," the ratings agency said.

Fitch Ratings said bank debts and the government are intertwined, and a senior debt default could have " negative repercussions for the fragile euro zone bank funding markets beyond Ireland's border."

Oil jumps to above $90 as Libya protests spread

By PABLO GORONDI
Associated Press

Oil prices jumped by over $4 a barrel on Monday amid investor concerns that violent protests spreading in Libya could disrupt crude supplies from the OPEC nation and affect other oil-rich countries in the region.

By late afternoon in Europe, benchmark crude for March delivery was up $4.03 to $90.23 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 16 cents to settle at $86.20 on Friday.

U.S. markets, including Nymex floor trading, were closed Monday for the Presidents' Day holiday and the thin trading volumes had the potential to amplify price fluctuations.

In London, Brent crude for April delivery gained $2.37 to $104.89 a barrel on the ICE Futures exchange.

The spread between the Nymex and Brent contracts has narrowed slightly but still remains far above usual levels of a few dollars per barrel. Brent is considered to be more sensitive to possible disruptions of Middle East oil supplies, while large U.S. stockpiles of crude are one of the reasons for the lower Nymex quotes.

On Sunday, Seif al-Islam Gadhafi, son of Libyan leader Moammar Gadhafi, warned protesters that they risked igniting a civil war in which Libya's oil wealth " will be burned."

While Libya is among the one of the world's biggest oil producers and has the largest proven oil reserves in the whole of Africa. It produces around 1.6 million barrels of crude a day and exports 1.1 million barrels.

Oil companies like U.K.-based BP and Germany's Wintershall said they were temporarily suspending operations in Libya, while Italy's Eni said production continued normally. Some of the firms also began evacuating their foreign employees there.

" Compared to Tunisia (a minor crude exporter) or Egypt (not an exporter but a transit country), instability in Libya is a major concern to the oil industry," said analysts at JBC Energy in Vienna.

Earlier Sunday, anti-government demonstrations spread to the Libyan capital of Tripoli and protesters seized military bases and weapons. In the eastern city of Benghazi, about 60 people were killed, while more than 200 have died since the unrest began seven days ago.

Oil traders are also closely watching recent protests in Iran, which is the second-largest crude exporter in the Organization of Petroleum Exporting Countries behind Saudi Arabia.

" The concerns in the market go beyond Libya," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. " It's unlikely we're going to see any meaningful disruption of oil from the Middle East or North Africa, but the spread of this unrest has raised anxieties."

Experts also mentioned the possible spread of the political upheaval to Saudi Arabia as a possible threat to oil supplies and a bullish factor for oil prices. The kingdom which sits atop the world's largest proven reserves of conventional crude oil.

" The 'elephant in the room' that has the potential to really ignite the markets is Saudi Arabia," said senior commodity analyst Edward Meir at MF Global in New York. " We have to suspect that the government is watching the situation in Bahrain with some trepidation, as the Saudi leadership mirrors the Bahraini one in that most of its governing class are Sunnis, while the governed are Shiites."

The Shiite minority is primarily located in Saudi Arabia's eastern province, where the bulk of its oil is located.

Bahrain, where protesters are calling for the ouster of the ruling monarchy, on Monday suspended its Grand Prix, the first race of the Formula One season and the country's biggest international event.

In other Nymex trading in March contracts, heating oil rose 6.6 cents to $2.7789 a gallon and gasoline gained 5.87 cents to $2.61 a gallon. Natural gas futures advanced 5.6 cent to $3.932 per 1,000 cubic feet.

___

Alex Kennedy in Singapore contributed to this report.

WARNING: Obama’s $3.73 Trillion Budget Could Sink These Three ETFs

Though major indexes have reached (or nearly reached) pre-recession levels, there are still lingering concerns. Job creation–believed by many economists to be an indication of a sustainable recovery has been non-existent.

And though we have ousted the sub-prime mortgage issues and strengthened our dollar to some extent, we are still left with one other major issue: debt–over $14 trillion of it to be precise. To put that in perspective, a stack of $100 dollar bills totaling $1 trillion would stand roughly 740 miles high, meaning our current debt stack would be roughly 10,360 miles tall [see also 11 Rapid Fire ETF Ideas For 2011].

The government deficit has rapidly increased over the past decade, and is quickly becoming the single biggest concern for investors and government officials alike. Now, President Barack Obama has released his budget plan for the fiscal year 2012. The plan will aim to spend $3.73 trillion throughout the course of the year, in an effort to lower our deficit over the next decade. The aim of the budget plan is to make heavy allocations in 2012, and cut spending across the board for the rest of the decade, slowly lowering our annual deficit as the years go on and eventually lowering the total by $1.1 trillion dollars. As with any budget proposal, the plan was met with heavy opposition, as the biggest critics criticized the report for lacking specifics on how exactly it will be implemented, as well as lofty growth projections [see also Three ETFs For Obama’s Public Works Plan].

Specific Targets

The proposed plan will boost research on alternative energy such as solar and wind, while also increasing spending on education. A substantial portion of the budget will be focused on green technologies, and improving our air and water quality. “Mr. Obama’s budget would spend $584 million to support research and innovation into new and emerging environmental sciences, including a $24.7 million increase in grants tied to clean air and water,” write Janet Hook and Damian Paletta. The budget will also increase spending on Medicare and health services for veterans wounded in recent wars.

But what will garner the most attention will be the tough cuts the government has proposed. This will come in the form of less spending on sectors such as defense, and slowly winding down wars in Afghanistan and Iraq. Due to the massive size of the proposed budget, it will likely be a major mover for the market, and ETFs alike. Below, we outline three major budget cut proposals, and how they will directly impact ETFs in the future [see also Three ETFs To Own If Sarah Palin Is Right].

Oil

The budget will bring higher taxes to oil and natural-gas companies through the elimination of “tax preferences”, and will also feature a $500 million investment “to restructure the federal agency that regulates offshore drilling” in response to last year’s Deepwater Horizon Spill. Higher taxes will lead to a squeeze in profits, and with offshore drilling regulations ramping up in the U.S., it may be difficult for many major oil firms to gain permits to drill and access oil vital to their revenue streams.

SPDR S& P Oil & Gas Exploration & Production Fund (XOP): This ETF tracks an index which represents the oil and gas exploration and production sub-industry portion of the S& P Total Markets Index. The all-U.S. fund is home to many big names in oil/gas exploration, such as Chesapeake Energy (3.1%), Devon Energy (2.9%), and Valero Energy (2.8%). The fund invests in approximately 38 securities which focus on the medium and large cap sectors of the market. XOP is up over 10% in 2011, but it may see a major hit if the tax breaks for oil firms are eliminated and offshore drilling requirements are steepened [see also QE2 Slaughters Long-Term Treasury ETFs].

Water

Though Obama plans on improving water quality, (with $24.7 million increase in grants tied to researching clean water solutions) his budget will trim nearly $1 billion from the the Environmental Protection Agency’s Clean Water and Drinking Water State Revolving Funds, a 27% cut from 2010 levels. These funds subsidized both state and local water/sewage project, and cutting these subsidies could lead to higher water prices for consumers. A lack of subsidies will also take away incentives for new water infrastructure, and could create a major bottleneck in the industry [see also Inflation-Fighting ETFs Back In Focus].

PowerShares Water Resource Portfolio Fund (PHO): This fund measures an index that consists of companies that focus on the provision of potable water, the treatment of water, and the technology and services that are directly related to water consumption. The fund holds nearly all of its assets in U.S.-based firms, the majority of which are either small or medium cap companies. Investors in this ETF should carefully monitor what happens to government subsidies in the water sector, as they will directly weigh on this fund. Specifically, investors need to pay attention to any proposals which could make it more difficult for local areas to raise the necessary capital to improve their water related infrastructure, as many of the components of PHO thrive on these types of projects.

Biotech

Another proposal in the budget would “hasten the availability of generic biologic drugs by reducing the market exclusivity period for brand biologics to seven years from 12 years” notes Brent Kendall. Kendall goes on to point out that biologic drugs are differ from traditional drugs in that  “biologic drugs are complex and expensive medicines derived from proteins manufactured in living cells. Traditional drugs are made by mixing chemicals”. Along with a decrease in patent life, another proposal would eliminate controversial settlements where brand-name pharma firms pay generic competitors to halt patent challenges. This combination could prove deadly for biotech ETFs, as patent lives may be drastically reduced, and competition will ramp up on numerous drugs, potentially slashing profits for many firms [Try our free stock exposure tool here].

iShares Nasdaq Biotechnology Fund (IBB): IBB seeks to replicate the performance of the NASDAQ Biotechnology Index, which contains NASDAQ listed companies classified as either biotechnology or pharmaceuticals companies. Major holdings in this ETF include Gilead Sciences (5.1%), Alexion Pharmaceuticals (3.8%), and Genzyme Corporation (3.2%). With the fund holding roughly 90% of its assets in U.S. firms, Obama’s budget could have significant consequences for the biotech companies that make up this ETF. A shorter patent life and the end of patent settlements could sink these companies and ETF alike, potentially marking a tough road ahead for these companies should President Obama’s budget pass with this stipulation intact.

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Nomura On " The Irish Question" And What's At Stake In Friday's Huge Election

This past week emergency overnight borrowing at the ECB surged to record highs, and it was learned that it was Irish banks were at the trough.

Ireland, after a period of calm, is clearly back at the fore, and big elections set for this Friday should mean that Ireland will dominate the news all week.

The election is crucial since the opposition parties -- which are likely to dominate -- are not so keen on the IMF bailout/austerity deal agreed to by the current ruling Fianna Fail party.

Nomura's Dimitris Drakopoulos and Peter Westaway size up what's at stake in their note on " The Irish Question."

With a general election to be held on 25 February, there has been uncertainty on the likely winners’ intentions on renegotiating the EU/IMF packages and in particular on the possibility of haircuts to the debt of Irish banks. Based on current opinion polls, the main opposition party, Fine Gael looks set to overhaul the ruling Fianna Fail party and hold the balance of power, probably in coalition with the Labour party. Fine Gael and Fianna Fail are committed to the ongoing austerity measures, with nuanced differences (by contrast, Sinn Fein is opposed to IMF/EU austerity measures but, despite market worries, we believe it is unlikely to gain any influence). But Fine Gael has made it clear (as explained in its manifesto) that it wishes to renegotiate the terms of the loans from the IMF/EU. Among other things, it wants the European Financial Stability Fund (EFSF) to buy debt and equity in AIB and Bank of Ireland it also wants the US regulators to allow it to secure funding of up to $50bn from the Federal Reserve using the dollar assets of Irish banks and more interestingly it wants Ireland to be allowed to buy “insurance” from the EU against further losses in its banks. Without a renegotiation along these lines, Fine Gael has warned that it will unilaterally restructure the debt of Irish banks in greatest need of recapitalisation. The Labour party, a potential coalition partner, is also arguing for such haircuts (as well as for less aggressive austerity measures).

In its most recent statements, Fine Gael’s rhetoric has been slightly more nuanced, saying it will impose losses only on senior bondholders as part of a Europe-wide framework. Even so, this uncertainty about what lies in wait after the general election has undermined confidence in the Irish banking sector. CDS spreads have remained elevated and Irish bank deposits have continued to flow out. December data showed that there was a €35bn (21%) month-on-month decline in non-resident deposits, which followed outflows of €20bn in November and €10bn in October. Irish resident deposits also declined by €5bn in December and €6bn in November. To boot, the explicit discussions on senior defaults by the government and opposition statements led Moody's and Fitch to cut the rating of unguaranteed senior unsecured bank debt in the last two weeks, reducing further the ECB eligible collateral of Irish banks.

The analysts also take a look at the matter of haircuts, and one powerful point they make is that ultimately haircuts for bond holders would have little impact on the sovereign's overall debt sustainability (conspiracy theorists might note that OF COURSE someone writing from a bank would be a opposted to haircuts).

There would be no significant gains in terms of debt sustainability. As we argued, the amount of outstanding unsecured senior debt in unviable institutions is small. The debt reductioneven with a 40% haircut would not bring any considerable gains in terms of debt sustainability. We project the debt dynamics to remain unfavourable until at least 2015 (see Figure 1). The main negative contributions come from the primary deficit (12.6% of GDP on the debt ratio in 2011-14), which might take until 2015 to return to surplus from around -9% in 2010 and an unfavourable interest rate growth differential (contributing around 7% of GDP). show the challenge ahead: under our baseline scenario if Ireland returns to its 2011 debt to GDP of 113% by 2020 it would have to run primary surpluses of at least 3% of GDP after 2015.

Image: Nomura

Libyan Protesters Take Control Of Several Cities, Oil Companies Remove Workers, And Gaddafi Faces Mass Defections 

The latest from Libya isn't pretty for Gaddafi:

 

According to GulfNews editor Abdul Hamid Ahmad, Libyan protesters have now taken control of several Libyan cities, thanks to defections by by the military.

Clearly, if you thought Mubarak had a loyalty problem, Gaddafi's is much worse. There are reportss of defections not just at the military, but among various government workers, including diplomats at the embassy level.

Meanwhile, international oil companies are jetting out of town. BP has stopped exploration and ENI has pulled familiy members of workers,

Brent crude in London has hit $105.

We appear to be the last days of the Gaddafi regime.

I suspect the Fed can begin and may well have already begun some QE type stuff. They won’t announce it until later and I don’t believe they will have done so in a big way. But, if they announce on Nov 3 that they already are doing QE, this could be beneficial to asset prices – because I think that’s what they’re concerned about.

-The Federal Reserve Wants Inflation, October 2010

long-term interest rates can be expressed as a series of short-term interest rates, such that if you know long-term rates, you can calculate expected future short-term interest rates. This is important because it tells you what people believe the Federal Reserve is likely to do with interest rates in the future.

-MMT: Market discipline for fiscal imprudence and the term structure of interest rates

While Bernanke’s assertions are tenuous when viewed from a November 3 start date, note that in the passage above he said, “since we began the QE2 program in August … [t]he bulk of the increase in interest rates has been in the real side“.

While many want to use November 3 as the official start of QE2, note that the Federal Reserve first began buying bonds in August to hold the size of their balance sheet steady. It was on November 3 that the FOMC agreed to expand the their balance sheet via QE2.

Bernanke used August as his starting point of QE2, so we will also use it…

Since August, both of these tables show the 5-year inflation break-even rate is up more than nominal yields. This means all of the rise in nominal interest rates since last summer can be attributed to higher inflation expectations. This is exactly the opposite of Bernanke’s contention that “the bulk of the increase in interest rates has been in the real side“. In fact, none of the rise in yields since August has come from higher real rates.

By J James Reade, Lecturer, Department of Economics, University of Birmingham, and Ulrich Volz, Senior Economist at the German Development Institute

China is grappling with rising inflation. Annual consumer price inflation reached a 28-month high of 5.1% in November (Financial Times 2010a). And even though inflation figures for December were a bit lower, at 4.6% (Financial Times2011a), they still contained rising prices, especially of staple foodstuffs. There can be no doubt that inflation is a policy priority for the Chinese government.

On 8 February 2011, the last day of the Chinese New Year celebrations, the People’s Bank of China, China’s central bank, raised the one-year base lending rate for the third time since October, taking the lending rate to 5.81% (Financial Times 2011b). In January, it had already increased the required deposit reserve ratio by half a percentage point for all banks, lifting the reserve ratio to 19.5% for the country’s main lenders (Financial Times 2011c).

This flurry of measures shows China’s central bank determination to fight inflation. Its central bank has, over a long time, made great efforts in reforming the conduct of monetary policy with more market-determined interest rates designed to improve the allocation of credit. Yet this monetary reform towards the use of more price-based mechanisms has been impeded by a lack of independence. Indeed, much of the influence over Chinese monetary policy rests with the National Development and Reform Commission, which dominates decisions over macroeconomic policy (see e.g. Financial Times 2010b). The Commission has favoured quantitative measures aimed at steering the amount, rather than the price, of credit, effectively preventing the central bank from using its entire monetary toolkit.

A closer look at the conduct of Chinese monetary policy shows that hitherto the interest rate has hardly been used as an effective monetary policy tool (e.g. Koivu 2009, Reade, and Volz 2010). Rather, monetary policy has relied upon open market operations for sterilising foreign exchange intervention and changes in the reserve requirement ratio to affect output growth (the reserve requirement ratio was raised six times in 2010, and again in January 2011). Moreover, even after the abolition of credit plans, which formed the basis of bank lending until the end of 1997, the central bank continues to issue direct lending guidelines and orders to commercial banks under the so-called window guidance policy.

The sixteen articles

References