The Federal Reserve did not change the interest rates thus deciding to leave the central bank’s benchmark interest rate in a range of 0.25 per cent-0.5 per cent. The US central bank at its December, 2015 meeting had projected four rate hikes in 2016. However, new estimates released in the last week of March reduced that number to two. Fed officials also cut their expectations for economic growth and inflation. The Federal Open Market Committee now projects just two hikes in 2017, according to the latest Summary of Economic Projections. The Fed also cut its GDP growth outlook for 2016 from 2.4 per cent to 2.2 per cent and reduced 2017’s call from 2.2 percent to 2.1 percent.
Credit Suisse Group is stepping up cost cuts including eliminating 2,000 jobs at its Global Markets business to better weather challenging market conditions. They announced an increase to their 2018 cost reduction target from 3.5 billion Swiss francs ($3.59 billion) gross savings to at least 4.3 billion francs, driving their absolute operating cost base below 18 billion francs by 2018. For 2016, their aim to achieve 1.7 billion francs in cost savings. The Zurich-based bank had said in February it accelerated cost savings to lock in 1.2 billion of the targeted 3.5 billion francs by 2018, with around 4,000 jobs being cut. The latest moves bring job cuts to 6,000.
The European Central Bank is bailing out the region’s bond market and, in doing so, boosting beleaguered banks. The ECB’s announcement to increase corporate bond buying to 80 billion euros per month triggered a rush of companies stampeding to lenders and looking to finance deals. Anheuser-Busch InBev followed up on a $46 billion bond deal by issuing more than 13 billion euros of debt to European investors, a boost for banks in Europe that worked on the deal. Deutsche Telekom also priced a 4.5 billion-euro deal.
Citigroup raised Chief Executive Michael Corbat’s pay by an estimated 27 percent in 2015, a year in which the bank's profit more than doubled. Corbat earned an estimated $16.5 million in 2015, including deferred shares worth about $4.5 million. He earned $13 million in 2014. Deferred stock makes up about 30 percent of Corbat's bonus pay under Citi's executive compensation plan, which was overhauled three years ago amid shareholder pressure. Citi's net income more than doubled to $17.2 billion in 2015, its highest since 2006, as Corbat works through his plan to exit businesses where profits and prospects are not worthwhile.
The London Stock Exchange Group and Deutsche Börse have unveiled a deal that will create one of the world’s largest exchanges operators, trading more than €5.2tn in equities and more than 3,200 companies listed on its markets. A combination of Europe’s two largest exchange operators by market capitalisation will also create a regional rival in derivatives trading to take on the world’s largest markets operators, CME Group and Intercontinental Exchange of the US and Hong Kong Exchanges and Clearing.
Moody's Investors Service lowered the credit rating outlook of four Singaporean financial institutions to negative from stable, citing concerns over the banks' asset quality and profitability. The affected institutions are DBS Bank, DBS Group Holdings , Oversea-Chinese Banking Corp. (OCBC) and United Overseas Bank (UOB, according to Moody's. Moody's currently rates DBS Bank, OCBC, and UOB at Aa1, the second-highest long-term rating possible. DBS Group Holdings is rated at Aa2, a notch below the other banks.
David Lipton, the first deputy managing director of the International Monetary Fund (IMF) said that dangers to the world economy had risen since the IMF downgraded its 2016 growth forecast to 3.4 percent in January. Thus collective action is needed to boost the global economy, with volatile financial markets and low commodity prices creating fresh concerns about its health.