Britain could be forced to help bail-out some of Europe's crisis-hit economies with tens of billions of pounds, it is feared.
Gordon Brown is under mounting pressure from MPs on all sides to ensure that only eurozone countries contribute to a bail-out of Greece, whose economy is teetering on the brink of collapse, writes the Telegraph.
The Prime Minister will this morning arrive in Brussels for a crucial European leaders' summit amid fears that the UK could get dragged into a full European Union bail out plan. Full story...
CHINA HAS ORDERED managers of its vast currency reserves to withdraw from risky dollar assets and retreat to core debt guaranteed by the US government, a clear sign that Beijing is battening down the hatches for fresh trouble on global markets, according to the Telegraph.
A Communist Party directive leaked to the Chinese-language edition of the Asia Times said dollar reserves should be limited to US Treasuries or agency mortgage debt such as Freddie Mac that enjoys Washington's implicit backing.
BNP Paribas said the move has major implications for global risk assets. "The message from Beijing is that we don't like this environment," said Hans Redeker, the bank's currency chief. Full story...
THE FEDERAL RESERVE will take a new approach to setting US interest rates as it begins to tighten monetary policy in response to an economic recovery, writes the Independent.
The central bank's chairman, Ben Bernanke, acknowledged yesterday that traditional tools for manipulating interest rates may not be effective since hundreds of billions of dollars in extra liquidity was pumped in to prevent the financial system from collapse during the credit crisis.
His remarks, prepared for a hearing on Capitol Hill on the Fed's "exit strategy" from more than two years of emergency measures, suggest that the central bank's regular statements on monetary policy could look very different in the future. Full story...
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