In a report published today by the Committee on Payment and Settlement Systems (CPSS), central bankers have highlighted the need for further action to reduce foreign exchange settlement risk. The report, Progress in reducing foreign exchange settlement risk, features the results of a major survey of how over 100 banks and other institutions active in the FX market manage the risks that can arise when settling foreign exchange transactions. It contains specific recommendations for individual institutions, industry groups and central banks to reduce and control remaining exposures that may still present systemic risk.

“The financial services industry has made significant progress in dealing with foreign exchange settlement risk. However, more can and should be done to tackle remaining exposures and to guard against the risk of reversing the progress that has already been achieved,” said Timothy F Geithner, President of the Federal Reserve Bank of New York and CPSS Chairman.

Foreign exchange settlement risk has long been a concern of the G10 Governors and the CPSS due to the implications for systemic risk. In the light of the survey’s results, central banks will explore ways to work with banking supervisors and other regulators to ensure that financial institutions adequately control their foreign exchange settlement exposures on an ongoing basis.

Nout Wellink, President of the Netherlands Bank and Chairman of the Basel Committee on Banking Supervision, said: “The Basel Committee welcomes this important report, and we have begun to discuss how best to work with the CPSS to encourage further progress.”

Mr Geithner also said: “Recent market conditions emphasise how important it is that the settlement infrastructure supporting financial markets is robust and reliable, so that markets have the confidence to function normally even in adverse circumstances.”

The survey results show that a comprehensive long-term strategy endorsed by the G10 central banks in 1996 to reduce the systemic risk arising from the way foreign exchange transactions were settled has achieved significant success. In particular, 55% of FX obligations are now settled using CLS Bank, a specialised service for settling FX trades on a “payment versus payment” basis. “This is an important accomplishment, but more needs to be done,” said the Chairman of the CPSS. Of the 45% of FX transactions still settled outside CLS, most use traditional mechanisms that are subject to foreign exchange settlement risk. Furthermore, half of all FX settlement exposures last overnight, not just intraday.

The report therefore recommends action by individual institutions, industry groups and central banks. Individual institutions need to ensure that the risk controls and incentives they have in place favour the use of risk-reducing FX settlement methods. Industry groups should continue to develop services for settling FX trades that will help to reduce remaining risks, particularly services for settling same day and certain next day trades. Central banks will work with supervisors to encourage continued progress by the financial industry.

Information for editors

The report is available on the BIS website, www.bis.org.

The survey was coordinated by the CPSS Sub-Group on Foreign Exchange Settlement Risk, the Chairman of which is Lawrence M Sweet, Senior Vice President of the Federal Reserve Bank of New York.

An earlier version of the report was issued in July last year as a consultation document.

What is the CPSS?

The Committee on Payment and Settlement Systems (CPSS) is a forum for central banks to monitor and analyse developments in payment and settlement arrangements and to consider related policy issues. The Chairman of the CPSS is Timothy F Geithner, President of the Federal Reserve Bank of New York. The CPSS secretariat is hosted by the BIS. More information about the CPSS and its publications can be found at http://www.bis.org/cpss/index.htm.

What is foreign exchange settlement risk?

Foreign exchange settlement risk is the risk that one party to an FX trade pays out the currency it sold but does not receive the currency it bought. It consists of both liquidity risk (the risk that the purchased currency is not received when due) and credit risk (the risk that the purchased currency is not received when due or at any time thereafter). In this situation, a party’s foreign exchange settlement exposure equals the full amount of the purchased currency. For more information about foreign exchange settlement risk and how it arises, see Settlement risk in foreign exchange transactions (BIS, 1996), which can be found at http://www.bis.org/publ/cpss17.htm.

What is CLS Bank?

CLS Bank provides a means of settling foreign exchange transactions on a “payment versus payment” basis. Established in 2002, it currently settles on average about $4 trillion each day in FX-related payment obligations in 15 currencies. CLS Bank is owned by private sector banking and other financial institutions. For more information, go to http://www.cls-group.com/.

What was the strategy launched by central banks in 1996?

In 1996, the G10 central banks endorsed a comprehensive long-term strategy to reduce the systemic risk that arose from the way foreign exchange transactions were settled. The strategy emphasised action by the private sector to tackle the problem. Specifically, it involved a three-track approach involving action by individual banks to control their foreign exchange settlement exposures, action by industry groups to provide risk-reducing multicurrency services and action by central banks to induce rapid private sector progress. The strategy was set out in Settlement risk in foreign exchange transactions (see above).

In a report published today by the Committee on Payment and Settlement Systems, central bankers have highlighted the need for further action to reduce foreign exchange settlement risk.

For further information, see the attached press release.

Regards,

Press & Communications

Bank for International Settlements

Press release: Central bankers call for more

action to reduce FX settlement risk

Publications, Service (Publications@bis.org)

Tue 5/13/08

Press, Service (Press.Service@bis.org)

Tue 5/13/08

CGES Russian Gas Seminar

CGES One-day Seminar

Natural gas – opportunities and challenges in

Russia

26th June 2008 at The Caledonian Club

London, SW1

CGES (marketing@cges.co.uk)

Tue 5/13/08

Register now.

CGES June Seminar

Natural gas – opportunities and challenges in Russia

26th June 2008 at The Caledonian Club, London

Click below for the full details:

Seminar programme

Registration form

Dear Colleague,

Register for the CGES One-day Seminar by 20th May 2008*.

With political change in Russia, it is timely to examine the new investment climate in the country’s oil and gas sector and the future of its gas supplies to Europe; Russian supplies of natural gas being so vital to the EU and the rest of the world. The CGES’ Seminar will cover crucial issues including:

How will changes in Russia’s laws on the subsoil and strategic resources affect current and potential investors?

Can Gazprom meet its future domestic and export supply commitments?

Is there a role for independent gas producers in Russia?

Utilising associated gas

Exploring the Russia/EU gas relationship from all points of view

Our guest speakers include:

HE Sheikh Zaki Yamani, Chairman, CGES

Ambassador André Mernier, Secretary General, Energy Charter Secretariat

Nodari Simonia, Member of the Russian Academy of Sciences & Advisor to Putin

Richard Nowinski, Lawyer, Tanfield Chambers, London & Visiting Professor at the Faculty of World Economics, State University, Moscow

Keun Wook Paik, Senior Research Fellow, Oxford Institute for Energy Studies

Grzegorz Pytel, Oil & Gas Expert, Sobieski Institute

Julian Lee, Senior Energy Analyst, CGES

How to register: As space is limited, register now.

The early-bird price includes the conference, documentation and lunch at The Caledonian Club.

There are three ways to register:

Online – Click here to register through our website.

By Fax – Complete and return the registration form to fax number +44(0) 207 235 4338.

By Email – Send your full details to marketing@cges.co.uk

Kind Regards

Jenni Wilson and Louise Peacock

CGES Marketing – Tel +44(0) 207

309 3610/5657

* For government, academic or group rates please email marketing@cges.co.uk.

Register now CGES June Seminar Natural gas – opportunities and challenges in Russia 26th June 2008 at The Caledonian Club, London

Click below for the full details: Seminar programme Registration form

CGES Russian Gas Seminar

CGES One-day Seminar

Natural gas – opportunities and challenges in Russia

26th June 2008 at The Caledonian Club, London, SW1

CGES (marketing@cges.co.uk)

Tue 5/13/08

Chatham House Newsletter –

May 2008

Thu 5/01/08

Chatham House’s May newsletter

Independent thinking on international affairs

Welcome to Chatham House’s May newsletter containing our latest news and events.

You can also view our more detailed printed newsletter which gives further information on forthcoming activities and events at Chatham House as well as more general news and announcements in relation to the institute.,SPECIAL EVENT INVITATION ***

In the first of a series of events ahead of the US Election, leading pollster John Zogby will present an insider’s view of the US polling process on 7 May. He will share his up-to-the-minute insights on the mood of the American electorate, the top issues in the campaign, and where the candidates stand in the latest polls.

This event is open to our newsletter subscribers but you must register to attend and registration will be closed when all spaces have been allocated.

Chancellor Announces New Group to Review Tax

Alistair Darling used a Chatham House conference speech to announce a new business-government working group to look at the long-term challenges facing the UK tax system. At the same event, David Nason, Under Secretary at the US Treasury, said that although regulation may ease downturns, it cannot prevent them entirely.

Press Release.

Revolution Needed to Meet Coming Food Demands
A revolution in agriculture is needed to meet a projected 50 per cent increase in demand for food by 2030, argues a new briefing paper, Rising Food Prices. Further, the question of ‘fair shares’ will emerge as a significant global issue as a burgeoning ‘global middle class’ consumes more grain by eating more meat and dairy products. Food Supply Project.

FBI Director Forecasts ‘Victory’

Over Terrorists
Robert Mueller told an audience at Chatham House that terrorism as a tactic would be defeated during his tenure as the head of the FBI. He said: ‘I don’t think it will be millennia or even generations. I think we’ll see victory on my watch.’ He also praised the relationship between the FBI and its UK counterparts. Video. Transcript.

Asia In Africa
A paper on India’s Engagement with the African Indian Ocean Rim States was published to coincide with the first India-Africa summit. The Africa Programme also jointly edited a special issue of the South African Journal of International Affairs, which explored the changing dynamics in the relationship between India and Africa. Asia in Africa project.

ALSO:

New Russia and Eurasia Programme Head

Chatham House is pleased to announce the appointment of James Sherr as Head, Russia and Eurasia Programme . Since the early 1980s, James has specialised in Soviet/Russian security policy and, since the mid-1990s, Ukraine, where he collaborates closely with official bodies, as well as the country’s large NGO community. More details.

President Bush Says NATO Must Transform Itself

The Bucharest Conference, organized by the German Marshall Fund, the Romanian Ministry of Foreign Affairs, and Chatham House, took place alongside the official 2008 NATO Summit in Bucharest. Keynote speakers included President George Bush, who called on the alliance to do more to transform itself for a new era of more disparate threats. Conference details. Policy Options for Biofuels Explored
Chatham House held an expert workshop last month to explore policy options for a sustainable biofuels sector. The session considered the complex opportunities and challenges posed by biofuels in terms of climate change, food production, biodiversity and rural development. A briefing paper will be published shortly. Read presentations.

New Briefing Papers on Economic Issues

New papers have been published on Prospects for an EU-Gulf Cooperation Council Free Trade Area and An EU-Korea Free Trade Area: Playing Catch-Up or Taking the Lead?, both by Jim Rollo, and Market Risks and the EU Economy by Max Watson.

Online Poll

A topical online poll is a new feature on the Chatham House website home page with previous questions including ‘Is NATO’s mission in Afghanistan succeeding?’ and ‘Is Britain really better placed than the US to weather the credit crunch?’. Vote in the current poll.

IN THE NEWS:

New World Order? Dr Robin Niblett, Director, Chatham House analyses Britain’s role on the international stage and the changing circles of influence that may disrupt Gordon Brown’s plans on BBC Today. Listen to the interview.

In a Post-Mugabe Zimbabwe, Just What is to be Done?
Alex Vines, Head, Africa Programme, assesses the situation in Zimbabwe and the role of the international community and in particular South African President Thabo Mbeki. Read article.

A selection of forthcoming events are listed below. The full list of forthcoming Chatham House events can be found on our calendar of events.

The events listed below are for members only.

What Change for Russia Under Medvedev?

Tuesday 20 May 2008 17:30 to 18:30
Richard Sakwa, Professor of Russian and European Politics, University of Kent
Dr Edwin Bacon, Head of the School of Politics and Sociology, Birkbeck College, London

ASEANS’s Role in an Emerging East Asian Regional Architecture

Thursday 22 May 2008 13:30 to 14:30
HE Dr Surin Pitsuwan, Secretary-General, ASEAN

Protect, Respect, and Remedy: An International Framework for Business and Human Rights

Thursday 22 May 2008 17:30 to 18:30
Professor John G Ruggie, Special Representative of the UN Secretary-General for Business and Human Rights

State-Building Strategies for the 21st Century

Friday 23 May 2008 13:30 to 14:30
Dr Ashraf Ghani, Chairman, Institute for State Effectiveness; Finance Minister, Afghanistan (2002-04)
Clare Lockhart, Co-founder and CEO, Institute for State Effectiveness

Independent thinking on international affairs

Chatham House’s May newsletter

Thu 5/01/08

Walter Bagehot (pronounced BAD-jit)

(3 February 1826 – 24 March 1877)

was a British businessman, essayist

and journalist who wrote extensively

about literature, government and

economic affairs.

Lombard Street (1873), explains the world of finance and banking and focuses particularly on issues in the management of financial crises

Formative years

Bagehot was born in Langport, Somerset, England. His father, Thomas Walter Bagehot, was managing director and vice-chairman of Stuckey’s Banking Company. He attended University College London, where he studied mathematics and in 1848 earned a master’s degree in intellectual and moral philosophy.[1].

Career

Bagehot was called to the bar but preferred to join his father in 1852 in his family’s shipping and banking business. He wrote for various periodicals, then for seventeen years edited The Economist newspaper which had been founded by his father-in-law (James Wilson). Becoming editor-in-chief in 1860, Bagehot expanded The Economist’s reporting on the United States and on politics and is considered to have increased its influence among policymakers. In honor of his contributions, the paper’s Britain section retains a column named for him.

In 1867, he wrote a book called The English Constitution that explored the nature of the constitution of the United Kingdom, specifically the functioning of Parliament and the British monarchy and the contrasts between British and American government. The book is considered a classic and has been translated into many languages.

Bagehot also wrote Physics and Politics (1872), in which he coined the still-current expression, “the cake of custom,” to describe the tension between social institutions and innovations. Lombard Street (1873), explains the world of finance and banking and focuses particularly on issues in the management of financial crises. In his contributions to sociological theory within historical studies, Bagehot may be compared to his contemporary, Henry James Sumner Maine.

Collections of Bagehot’s literary, political, and economic essays were published after his death. Their subjects ranged from Shakespeare and Disraeli to the price of silver.

Every year, the British Political Studies Association awards the Walter Bagehot Prize for the best dissertation in the field of government and public administration. The Economist regularly publishes a commentary on current affairs in the UK, entitled “Bagehot,” just as its “Lexington” addresses the US and “Charlemagne” Europe.

Works

• The Collected Works of Walter Bagehot: Volumes 1-15, ed. Norman S. John-Stevas, New York, Oxford U. Press, (1986) ISBN 0850580390

• Emily (Mrs Russell) Barrington, ed., The Works and Life of Walter Bagehot, in 10 vols. London, Longman, Green (1915) On line.

• The Postulates of English Political Economy, with a Preface by Alfred Marshall, London, Longmans Green & Co. (1885); Google Books, online

• Economic Studies, ed. Richard Holt Hutton, London, Bombay and Calcutta, Longmans, Green (1879); New York, Augustus M. Kelley (1998) ISBN 0678008523

Quotes

“The greatest pleasure in life is doing what other people say you cannot do.”

References

1. Richard Holt Hutton, “Memoir” and “Second Memoir” (from Dictionary of National Biography), in Mrs Russell Barrington, ed., The Works and Life of Walter Bagehot, London, Longman, Green (1915)

Literature

Brian Hanley, “‘The Greatest Victorian’ in the New Century: The Enduring Relevance of Walter Bagehot’s Commentary on Literature, Scholarship, and Public Life”, Papers on Language and Literature, (Spring 2004)

The Pursuit of Reason: The Economist 1843-1993, Harvard Business School Press, Boston, Massachusetts ISBN 0-87584-608-4 This article incorporates public domain text from: Cousin, John William (1910). A Short Biographical Dictionary of English Literature. London, J.M. Dent & sons; New York, E.P. Dutton.

Bagehot’s Rule

Bagehot called a seizing up of internal markets “a domestic drain” (of gold), and the flight of capital abroad “an external drain.” He wrote that “The two maladies – an external drain and an internal – often attack the money market at once.” And what, he asked, should be done when this happens?

Think backward 135 years to 1873, when Walter Bagehot, the eminent Victorian institutional economist and constitutional scholar, wrote “Lombard Street.”

The London capital market was the center of world finance under the gold standard. Bagehot described the intricacies of how money markets worked, including counterparty risks and all that – but he also prescribed how the Bank of England should confront major financial crises.

Bagehot called a seizing up of internal markets “a domestic drain” (of gold), and the flight of capital abroad “an external drain.” He wrote that “The two maladies – an external drain and an internal – often attack the money market at once.” And what, he asked, should be done when this happens?

“We must look first to the foreign drain, and raise the rate of interest as high as may be necessary. Unless you can stop the foreign export, you cannot allay the domestic alarm. . . . And at the rate of interest so raised, the holders – one or more – of the final bank reserve must lend freely.

“Very large (domestic) loans at very high rates,” Bagehot advised, “are the best remedy for the worst malady of the money market when a foreign drain is added to a domestic drain. Any notion that money is not to be had, or that it may not be had at any price, only raises alarm to panic and enhances panic to madness. But though the rule is clear, the greatest delicacy, the finest and best skilled judgment, are needed to deal at once with such great and contrary evils.”

How does Bagehot’s Rule apply to today’s credit crunch? Bagehot was worried about gold losses to foreigners that would cause domestic credit markets to seize up even more and, worse, weaken the pound in the foreign exchanges. Now, foreigners are disinvesting from private U.S. financial assets, which itself worsens conditions in American markets. Additionally, foreign central banks, to stem the appreciations of their currencies against the dollar, are building up large dollar exchange reserves – much of which are invested in U.S. Treasury bonds.

But U.S. Treasurys are the prime collateral for borrowing and lending in the multitrillion dollar U.S. interbank markets. Thus there is a foreign “drain” of prime collateral from the already-impacted private U.S. markets. The depreciating dollar also greatly exacerbates inflation in the U.S.

Consequently, there is a strong case for raising the fed funds rate as much as is necessary to strengthen the dollar in the foreign exchanges – as Bagehot would have it – and to cooperate with foreign governments to halt and reverse the appreciations of their currencies against the dollar.

By slashing interest rates too much in 2007-2008, the Fed has accentuated the foreign drain and thus made the alleviation of the domestic drain more difficult. Yet, despite this mistake, Bagehot would approve of other actions the Fed has taken to deal with the domestic drain by unblocking specific impacted domestic markets. These include (1) swapping Treasury bonds for less safe private bonds, (2) opening its discount window to shaky borrowers, and (3) maybe even rescuing Bear Sterns. He would also approve of the relaxation of capital constraints on Fannie Mae, Freddy Mac and so on, for mortgage lending. Yet these measures will be insufficient if the foreign drain continues.

To repeat Bagehot’s Rule: “very large (domestic) loans at very high rates are the best remedy for the worst malady of the money market when a foreign drain is added to a domestic drain.”

Walter Bagehot (pronounced BAD-jit)

(3 February 1826 – 24 March 1877)

British businessman, essayist, and journalist who wrote extensively about literature, government, and economic affairs.

Bagehot’s Lombard Street (1873), explains the world of finance and banking and focuses particularly on issues in the management of financial crises.

Global Stratification:

The world as stratified into nations,

classes and communal groups.

In the WW II death or concentration camps, a prisoner who was “more dead than alive” was dubbed a Muselmann. (“Muslim”)

In his 1982 book Auschwitz, Otto Friedrich gives the reader a theory of how the slang term Muselmann arose. Friedrich explains that India was imagined by the death and concentration camp inmates as an extremely poor country and that somehow the Muslims were conceived of as the bottom of the pile.

This reveals a kind of bizarre sense of global stratification which includes communal groups like Muslims.

Muselmann:

Archaic Muslim

Muselmann (pl. Muselmänner, from the German, meaning Mussulman (Muslim); in Polish Muzułman) was a term used among inmates of World War II Nazi concentration camps to refer to those suffering from a combination of starvation (known also as “hunger disease”) and exhaustion and who were resigned to their impending death. The Muselmann inmates exhibited severe emaciation and physical weakness, an apathetic listlessness regarding their own fate, and unresponsiveness to their surroundings.

The term possibly comes from the Muselmann’s inability to stand for any time due to the loss of leg muscle, thus spending much of the time sitting or kneeling, recalling the position of the Mussulman (Muslim) during prayers.

The term spread from Auschwitz-Birkenau to other concentration camps. Its equivalent in the Majdanek concentration camp was Gamel (derived from German gammeln – colloquial for “rotting”) and in the Stutthof concentration camp, Krypel (derived from German Krüppel, “cripple“).

The psychologist and Auschwitz survivor Viktor Frankl, in his book Man’s Search for Meaning, provides the example of an inmate who decides to use up his last cigarettes (used as currency in the concentration camps) in the evening because he is convinced he won’t survive the Appell (roll call assembly) the next morning; his fellow inmates derided him as a Muselmann. Frankl compares this to the dehumanized behavior and attitudes of the Kapos: both are examples where the desperate conditions in the camps like starvation and forced labor can bring out the worst in an individual.

References:

• Israel Gutman, Encyclopaedia of the Holocaust, New York: Macmillan 1990, vol. 3. p. 677 (Hebrew edition).

• Wolfgang Sofsky, The Order of Terror: The Concentration Camp, Princeton: Princeton University Press 1999, pp. 25, 199-205.

The Kingdom of Auschwitz, by Otto Friedrich was first published in 1982.

Works Cited:

Friedrich, Otto. The Kingdom of Auschwitz. New York: Harper Perennial, 1994.

“The Annapolis Summit legitimized

Genocide”‏

K Salam (kawther_salam@yahoo.com)

Wed 12/05/07

kawther.salam@gmail.com

Hello,

Here is a link to my latest article:

“The Annapolis Summit legitimized Genocide”

http://tinyurl.com/yufhqs

Here is a link to the theft house:

http://www.kawther.info/ga2/main.php?g2_itemId=13638

Here is a link to my article: “The Criminal Magistrate’s Court of Jerusalem”

http://tinyurl.com/33z6rs

Best Regards,

Kawther,

http://www.kawther.info

‏

http://www.kawther.info/wpr

“The Annapolis Summit legitimized Genocide”

K Salam (kawther_salam@yahoo.com)

kawther.salam@gmail.com

Wed 12/05/07

"Journal of World-Systems Research"
[JWSR]
new book on world-systems ecology

the world system and the earth system

jwsr-news@worldsystems.org

left coast press has just published

the world system and the earth system

edited by alf hornborg and carole crumley.

--
Christopher Chase-Dunn
Institute for Research on World-Systems
College Building South
University of California-Riverside
Riverside, CA 92521
951 827 2062
http://irows.ucr.edu/cd/ccdhmpg.htm

[JWSR] new book on world-systems ecology

Journal of World-Systems Research jwsr-news@worldsystems.org

Wednesday, December 6, 2006

http://www.pakdef.info/forum/forumdisplay.php?f=2

http://www.pakdef.info/whatsnew.html

PakDef Mission
Statement

Contributions:
usmanshabir@pakdef.info

Feedback: ereporter@pakdef.info

Pakistan Strategic

October 4, 2006

www.banqueaudi.com

Research AUDI Research@banqueaudi.com

http://www.banqueaudi.com/geteconomy/syria/SyriaEconomicReport.pdf

www.banqueaudi.com

www.banqueaudi.com