Path: bloom-picayune.mit.edu!enterpoop.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.banks,americast.usa-today.banks From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: banks Wed, Sep 23 1992 Date: Wed, 23 Sep 92 04:36:28 EDT Message-ID: Lines: 120 09-23 0000 DECISIONLINE: Banking & Economy USA TODAY Update Sept. 23, 1992 Source: USA TODAY:Gannett National Information Network IMF WANTS FED TO STOP CUTS: World leaders are calling on the Federal Reserve to help stabilize currencies in Europe. In a speech Tuesday, International Monetray Fund managing director Michel Camdessus called on the Fed to stop cutting interest rates - and raise them when the economic recovery picks up a little. The goal: Close the gap between rates so investors stop globetrotting in search of higher yields. DROP MAY BE OVER ANYWAY: Some economists say the long drop in both long- and short-term interest rates is over anyway, even without the International Monetray Fund Tuesday calling for the Fed to stop cutting rates. Economist Richard Hoey at Dreyfus sees at most one more nudge downward in short rates - to 2.5% from 3% on the discount rate, the rate banks pay. Long rates, he says, have hit bottom. TURMOIL COULD BOOST EARNINGS: Europe's currency crisis could give some big banks a surprise earnings kick this quarter by boosting activity in foreign currency trading operations. As prices on most anything swing wider and wider, and volume goes up, those who make markets - in this case, the big banks - can widen margins. So not only do they make more money on the increased volume, but the money per trade is higher. BANK STOCKS AREN'T JUMPING: Although the European currency crisis could give some big banks an earnings kick by boosting activity, banks stocks aren't reflecting that possibility. "It's the kind of development that presents banks with tremendous opportunity," says analyst Richard Stillinger. But top currency-trading banks such as J.P. Morgan, Citicorp and Chemical are no higher. Only BankAmerica is up. PROPOSED ACQUISITION CHALLENGED: Two groups are challenging the Bank of New York Corp.'s proposed acquisition of 64 branches of Barclays Bank of New York. The Community Coalition for Fair Banking and Bronx-based Inner City Press:Community on the Move say Bank of New York is not abiding by the Community Reinvestment Act. The bank says its CRA rating is satisfactory. But the challenge could delay the closing. TRADERS GO AFTER FRENCH FRANC: Money traders Tuesday mounted a full-scale assault on the French franc. Some economists said the European currency exchange system appeared on verge of collapse. The Bank of France apparently spent billions in foreign exchange trying to prop up the franc by purchasing vast quantities of the French currency. But the franc remained under enormous pressure against the powerful German mark. GERMANY IN BILATERAL TALKS: German financial officials including Finance Minister Theo Waigel held bilateral talks Tuesday with leaders of other nations in Washington. A spokesman for Waigel would not name the other people in the meetings, which were scheduled to last all day. The spokesman said he did not know if the meeting were with other Europeans. TREASURY AUCTIONS 2-YEAR NOTES: Yields on two-year Treasury notes fell in Tuesday's auction to the lowest level since regular auctions of the securities began in 1974. The average yield was 4.00%, down from 4.30% at the last auction on Aug. 25. OLYMPIA & YORK GETS EXTENSION: A federal bankruptcy court judge Tuesday granted an extension to Oct. 2 for bankrupt Canadian real estate developer Olympia & York Developments Ltd. The extension of 11 days from the original deadline of Tuesday gives O&Y more time to provide creditors with financial statements and schedules. O&Y's unsecured creditors' committee opposed the extension. TREASURY BONDS ARE UP: The Dow Jones industrial average lost 39.98 points to 3280.85 Tuesday. The NASDAQ composite index fell 5.58 points to 583. The yield on 30-year Treasury bonds rose to 7.48% from 7.34%. The discount rate on three-month T-bills rose to 2.92% from 2.91% at Monday's auction. Light sweet crude oil dipped 4 cents to $21.88 a barrel on the N.Y. Mercantile Exchange. GOLD, SILVER RISE: Gold prices settled mostly higher Tuesday. On the New York Commodity Exchange, gold bullion for current delivery settled at $348.80 a troy ounce, up $1.30 from Monday. Republic National Bank said gold added $1.10 an ounce to a late bid price of $348.60. On New York's Comex, silver bullion settled at $3.822 a troy ounce from $3.807. In London, silver rose to $3.84 from $3.81. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens at 3280.85 Wednesday after closing down 39.98 Tuesday. The New York Stock Exchange composite opens at 229.48, down 2.41. The American Stock Exchange market value opens at 380.99, down 1.73. The NASDAQ OTC composite opens at 583.99, down 5.58. DOLLAR OPENS MIXED OVERSEAS: The dollar opens mostly up on Tuesday. It opens at 0.587 British pounds, up from 0.586; 5.100 French francs, up from 5.076; 1.493 German marks, up from 1.484; and 121.45 Japanese yen, up from 123.6. (As of 3 p.m. Tuesday. Source: First American Bank of New York.) 24-HOUR TELEPHONE INFORMATION: USA TODAY Money Hot Line. 95 cents a minute. 1-900-555-5555. Banking & Economy Editor: Beth Mann. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution purposes violates federal law. This article is copyright 1992 Gannett News Service. 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