The International Monetary Fund on Wednesday denied a report in Japan’s Nikkei newspaper that the Group of 20 nations were planning to assemble a $600 billion IMF lending facility that could be used to bolster euro zone countries.
“There has been no such discussion with the IMF,” an IMF spokesman said in response to the Nikkei report.
Separately, a G20 official also said the report was untrue.
U.S. consumer credit increased in October, an indication that Americans are taking on debt to pay for goods and services while prices rise faster than wages.
Consumer credit increased by $7.65 billion to $2.457 trillion, the Federal Reserve said Wednesday. Economists surveyed by Dow Jones Newswires had forecast a $6.5 billion expansion in consumer credit. September’s figure was revised down to a $6.88 billion increase from the originally reported $7.39 billion.
October’s rise was driven by an increase in nonrevolving credit, which includes student loans, perhaps suggesting that more people are returning to school as unemployment remains high. Total nonrevolving credit, which also includes car loans, rose $7.28 billion in October to $1.665 trillion.
The Fed report said revolving credit, which includes credit-card debt, expanded by a more modest $366.2 million to $792.34 billion.
The consumer-credit report doesn’t include numbers on home mortgages and other real-estate secured loans. But the data are important for the clues to behavior by consumers.
(Reuters) – Standard & Poor’s warned on Wednesday that it could cut the credit ratings of the European Union and large euro-zone banks if a mass downgrade of euro-zone countries materializes.
S&P said on Monday it may downgrade nearly all 17 euro-zone countries if EU leaders fail to agree on a solution for the region’s debt crisis during Friday’s summit.
The potential downgrade of the European Union has no impact on the ratings of other EU countries that are not part of the euro zone, a spokesman for S&P said. However, the move would likely increase the EU’s borrowing costs, making it more costly for it to fund financial aid programs for member states.
S&P placed the European Union’s AAA credit rating on credit watch negative, noting that euro-zone members, or countries that are part of the region’s monetary union, contributed about 62 percent of the EU’s total budgeted revenues in 2011.
“Our review will focus on the financial ability of euro-zone member states to support the EU’s debt service should the institution face a period of financial distress,” S&P analysts Frank Gil and Moritz Kraemer said in a report.
If euro-zone countries are downgraded, the European Union could have its rating cut by one notch, they added.
The European Union and the European Atomic Energy Community borrow on capital markets under a joint program to issue up to 80 billion euros in medium-term notes in order to finance member states through various channels.
In another follow-up to its warning on Monday, S&P said some of the euro zone’s largest banks, such as BNP Paribas and Deutsche Bank, could have their ratings cut following a potential downgrade of euro zone countries.
Economics/FedSpeak:
- 7:00 a.m. ET: Bank of England interest-rate decision
- 7:45 a.m.: European Central Bank interest-rate announcement
- 8:30 a.m.: ECB chief Mario Draghi explains all in a press conference.
- 8:30 a.m.: New York Fed President William Dudley speaks.
- 8:30 a.m.: Weekly jobless claims. Economists expect claims to fall to 395,000 from 402,000 the week before.
- Also, Tim Geithner meets Mario Monti in Milan.
Earnings: We get results from:
- Costco
- Altera
- Brown-Forman
- Pall