Growth is on the up as interest rates stay low

This is the time of year when the key global institutions (the OECD, IMF and World Bank) review their forecasts for the year in view of how economic events have developed since they last published reports in the Spring.

The Paris based OECD has been especially busy this month with updates on their Spring assessment for global growth as well as some newly published views on the state of several major economies including the US.  No time to lose after ‘la rentree’.  Both reports make pretty good reading at a time when many headlines are still discussing the likelihood of a double dip in growth. 

Their autumn global update (to be found at: www.oecd.org ) admits to a slower level growth for the second half of the year but with longer term improvements on the cards and a reducing risk of a return to a downturn. 

To Basle or not to Basle....

The agreement reached at the weekend to implement new capital requirements for banks is the next step on the road towards reforming our international financial system.

The key components of the agreement are that:
a) banks will be required to hold capital reserves of up to 7% of their loans as a buffer against bad and under-performing assets.  This is an increase on the 2.5% that has been the norm in the past.  And was the woefully insufficient amount that was the norm in the recent crisis.
b) the new arrangements will be implemented from 1 January 2013 giving banks and regulators plenty of warning and time to make the changes.  Already a number of banks have announced their plans to raise capital to this end.

If fully ratified by the G20 at their meeting in November,