The Central Bank of Kenya has cut the base lending rate by 200 basis points to 11 per cent from 13 per cent

The monetary policy committee said the drop in inflation from 6.09 per cent in August, to 5.32 per cent in September and further to4.14 per cent in October, together with stability in exchange rates and high level of foreign exchange reserves provided space for gradual easing of monetary policy stance.
Exchange rates ranged between 84.91 to the US dollar in September to 85.28 in October while reserves rose to Sh448 billion ($5247.9m) or 4.14 months of import cover.
“Given the considerations above the committee decided to reduce the central bank rate by 200 basis points to 11 per cent,” central bank said.
However volatile fuel prices,a large current account deficit and spillover effects of the global economic slowdown portends risks, the central bank said.

The 17-nation euro economy will expand 0.1 percent in 2013, down from a May forecast of 1 percent, the commission said today.

The European Commission said the euro-zone economy will virtually grind to a halt next year as the debt crisis ravages southern Europe and gnaws at theeconomic performance ofexport-driven Germany .
The 17-nation euro economy will expand 0.1 percent in 2013, down from a May forecast of 1 percent, the commission said today. It cut the forecast for Germany, Europe’s largest economy,to 0.8 percent from 1.7 percent.
“Europe is going through a difficult process of macroeconomic rebalancing and adjustment which will last for some time still,” European Union Economicand Monetary Commissioner Olli Rehn told reporters in Brussels. The economy is “sailing forward through rough waters.”
The economic falloff may make it harder for European governments to pull Greece back from the brink and deal with a possible aid program for Spain, leaving the debt crisis to fester for a fourth year.
Technically, the euro area will avert a recession, defined as two consecutive quarters of contraction, though the overall economy will still shrink 0.4 percent in 2012, ending a two-year expansion, the commissionsaid

Africa eyes Islamic finance and Banking

The inaugural Islamic Banking Summit Africa, which opened yesterday in Djibouti, saw more than 200 leaders in theinternational Islamic bankingand finance industry engagein critical discussions that focused on capturing the Africa opportunity in Islamic finance. The two-day event at the Djibouti Palace Kempinski, held under the official support of the Central Bank of Djibouti, kicked off with a keynote session which featured a special presidential address by Republic of Djibouti President Ismail Omar Guelleh and a keynote address by central bank governor Djama M Haid. "Africa is becoming an increasingly attractive destination for investments that are Sharia-compliant," said summit organiser and managing director David McLean. "Africa has now been re-positioned as the third fastest growing region in theworld, after the Middle East and Asia. "Over the last decade, trade between African countries and the rest of the world hasgrown significantly, with economic linkages with the Middle East, in particular, strengthening further," he said. "However, the Islamic finance industry is still in its infancy on the continent."

Mukhtar Ablyazov to face court over $5bn alleged fraud

Kazakh tycoon Mukhtar Ablyazov, the central character in a multi-billion pound fraud trial at the High Court, has been branded “cynical” and “devious” in a ruling ahead of his long-awaited trial. The former chairman of BTABank, who fled the UK after being found in contempt of court, will face trial on Wednesday over a $2bn (£1.25bn) alleged fraud, part of larger $6bn claim the bank is pursuing againsthim. The case will begin after a judge upheld the contemptof court finding that led a 22-month sentence being handed down against Mr Abylazov. In his ruling on Tuesday, Lord Justice Maurice Kay branded Mr Ablayoz “cynical” and “devious”. “Mr Ablyazov’s contemptuous disregard for court orders has not been limited to disclosure obligations,” said Lord Justice Kay. “It is difficult to imagine a party to commercial litigation who has acted withmore cynicism, opportunism and deviousness towards court orders than Mr Ablyazov.” Although lawyers for Mr Ablyazov said they would appeal the decision to the Supreme Court, the ruling means the central case against their client can now go ahead. If successful it would mean BTA Bank could seize billions of pounds alleged to have been moved through the UK and held offshore by Mr Ablyazov. The case has been going through the UK courts for three years, since Mr Ablyazov fled Kazakhstan claiming he was being persecuted by the Government

Australia's central bank kept its benchmark cash rate unchanged at 3.25 percent

Australia's central bank kept its benchmark cash rate unchanged at 3.25 percent, defying expectations for a rate cut, and said the impact of previous rate cuts would continue to stimulate activityfor some time and the outlook for the global economy was looking a bit more positive. The Reserve Bank of Australia (RBA), which has cut rates by 100 basis pointsthis year, also said inflation was "slightly higher than expected" though still consistent with the bank's medium-term target of 2 to 3 percent. "With prices data slightly higher than expected and recent information on the world economy slightly more positive, the Board judged that the stance of monetary policy was appropriate for the time being," the RBA said in statement, quoting its governor, Glenn Stevens. Consumer prices in Australia rose 1.4 percent inthe three months that ended in September from the June quarter, for a rise of 2.0 percent through the year, up from a rise of 1.2 percent through the year tothe end of the June quarter. Referring to this year's rate cuts, the most recent in October and September, the RBA said interest rates for borrowers were now below their medium-term average, savers were facing increased incentives to look for assets with higher returns, business demand for external funding had risen, the housing market had strengthened and share prices had risen. "Further effects of actionsalready taken to ease monetary policy can be expected over time," the RBA said, adding that the exchange rate remains higher than expected, given lower export prices and the weaker global outlook. Australia's Gross DomesticProduct expanded by an annual 3.7 pct in the second quarter, down from 4.3 percent in the first quarter. A return to "very strong growth in consumption is unlikely" though there are signs of ongoing growth, the RBA said, adding that overall economic growth had been running close to trend in the past year, helped by large increases in capital spending in the resource sector. However, the investment in resources is expected to peak next year, at a lower level than expected six months ago. The RBA said global economic growth is forecast to be a little below average for a time and risks to the outlook remain to the downside, mainly due to Europe where economic activity is still contracting. "Risks elsewhere seem more balanced," the RBA said, noting the U.S. was growing moderately while"recent data from China suggest growth there has stabilized."

JPMorgan loses bid totoss FHFA's mortgage debt lawsuit

JPMorgan Chase & Co lost abid on Monday to win the dismissal of a lawsuit by a U.S. regulator accusing the bank of misleading Fannie Mae and Freddie Mac in buying billions of dollars worth of risky mortgage securities. U.S. District Judge Denise Cote in Manhattan pared down parts of the lawsuit filed by the Federal Housing Finance Agency but allowed other claims to stand. The case was one of 17 lawsuits that the agency, as conservator for Fannie and Freddie, filed in September2011 against banks including Bank of America Corp and Citigroup Inc.

Stifel Financial agreesfor strategic merger with KBW

St Louis based brokerage firm Stifel Financial has agreed to acquire KBW in a cash and stock transaction estimated at $575m, to build its middle-market investment bank, with focus on the financial services industry. As per terms of the merger deal, approved by both boards of directors, KBW shareholders will receive$17.50 per share, comprised of $10 per share in cash and$7.50 per share in acquirer's common stock. Immediately on completion of the transaction, nearly$250m in excess capital on KBW's balance sheet is expected to be available to Stifel, the company said. The integrated entity will offer investment banking, sales and trading, and financial research through KBW's Keefe, Bruyette & Woods broker-dealer subsidiary, which will continue to trade as an independent subsidiary of Stifel. Thomas Michaud will join Stifel's board and management team upon completion of the merger and will remain as chief executive officer of the KBW business unit. Headquartered in New York,KBW trades through its broker dealer subsidiaries, Keefe, Bruyette & Woods, Keefe, Bruyette & Woods and Keefe, Bruyette & Woods Asia in the US, Europe and Asia.

MF Global customers sue PricewaterhouseCoopers in amended lawsuit

Global Holdings Ltd's broker-dealer have added accounting firm PricewaterhouseCoopers LLP as a defendant in a lawsuit stemming from the collapse of the brokerage. In an amended complaint filed in U.S. District Court in Manhattan on Monday, the customers of MF Global Inc accused PwC of failing to adequately audit MF Global's internal controls over customer funds. The complaint also repeated prior accusations against former officials at MF Global, including former Chief Executive Jon Corzine, who isaccused of violating the Commodity Exchange Act, which restricts the use of customer funds. Caroline Nolan, a spokeswoman for PwC, said itconducted its last audit of MF Global in March 2011 "inaccordance with professional standards." The audit at the time confirmed that MF Global had maintained its customer accounts in accordance with federal regulations, she said. "We will defend this lawsuit vigorously," Nolan said. The lawsuit also named as a defendant CME Group Inc ( CME ), the exchange that oversaw MF Global. Neither a lawyer for Corzine nor spokesperson for CME Group immediately responded to requests for comment on the case. An estimated $1.6 billion in customer funds went missingfollowing MF Global's collapse. MF Global filed for bankruptcy in October 2011. Investigations by the U.S. Department of Justice and Commodity Futures Trading Commission are ongoing. PwC had served as independent auditor of MF Global in 2010 and 2011, according to the complaint. The lawsuit, which is seekingclass action status, contends that PwC failed to examine MF Global's controls over customer funds. This amounted to professional malpractice and a breach of the auditors duties to the company and customers, the lawsuit said. "If PwC had properly executed its duties and evaluated and reported on 's control problems in March 2011, there would have been ample time for management to institute proper controls over customer funds," the complaint said. Lawyers for the plaintiffs are cooperating with James Giddens, the trustee for the liquidation of MF Global Inc.Under the deal, the plaintiffs' lawyers say Giddens has assigned to them certain claims against MF Global's directors and officers and PwC.

Inland Community Bank bought by American West Bank

AmericanWest Bank has purchased ICB Financial, theparent company of Inland Community Bank based in Ontario, California, to boost its presence in the region. Immediately after the completion of the deal, approved by ICB Financial shareholders in September 2012, Inland Community Bank merged and became part of AmericanWest Bank. Commenting on the acquisition, AmericanWest Bank chairman and CEO Scott Kisting said, "Now that we are one company, our toppriority is to get to know our new customers, employees and communities and to build on the legacy of providing each with outstanding service." The acquirer has now expanded its reach in five cities including Ontario, Duarte, Rialto, Pasadena and Los Angeles, bringing the bank's total number of branches to 80. FIG Partners served as financial advisor and Horgan,Rosen, Beckham & Coren, acted as legal counselor to ICB Financial, while AmericanWest Bank was advised by Skadden, Arps, Slate, Meagher & Flom. AmericanWest Bank is a community bank, which provides commercial and small business banking, mortgage lending, treasury management products as well as a full line of consumer products and services.

ECB board nomination delayed by spain

BRUSSELS (AP) -- The European Union's member states have failed to name Luxembourg' top central banker to the executive board of the European Central Bank after Spain raised objections to his appointment. The member states were expected to approve Yves Mersch joining the six-person board over the objections of the European Parliament on Monday, but officials said Spain unexpectedly voiced concerns. The issue will now be left the EU leaders at their Nov. 22-23 summit, or a later one in December. The EU Parliament voted against Mersch's appointment last month to protest the lack of women among the ECB's top echelons