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–Federal Reserve Board Chairman To Testify on Jobs, Deficits and Econ
–Fed Chief Expected To Testify To Hill Banking Panels Later In Feb
–Panel To Seek Advice on Size, Timing, Composition of Debt Cut Plan
–House Budget Panel To Hear From CBO’s Elmendorf Feb. 10

By John Shaw

WASHINGTON (MNI) – Federal Reserve Board Chairman Ben Bernanke will
testify Feb. 9 to the House Budget Committee on economic, employment and
budgetary issues.

Bernanke’s testimony to the House Budget Committee will begin at 10
a.m. on Feb 9, which is a week from Wednesday.

Bernanke testified before the Senate Budget Committee Jan. 7 and
was pressed by lawmakers to assess the strength of the U.S.’s economic
recovery. The House Budget Committee seems likely to press this line of
questioning as well.

He was also asked by the Senate Budget Committee to describe what
kind of deficit reduction plan would be taken seriously by the financial
markets and how to begin to tackle the nation’s long-term fiscal
challenges.

Bernanke said the most important thing was for policymakers to
develop a “credible plan” that will begin to stabilize the debt-to-GDP
level, before eventually bringing it down.

“Stabilization is the first step,” Bernanke said. “Stabilization
would be a very important first step.”

The Fed chairman told the members of the Senate Budget panel that
“the stronger, more credible” the fiscal plan, the “less need to take
action in the short-term.”

Bernanke said a strong deficit reduction plan that addresses “very
serious long-term fiscal issues” in a credible way could be phased-in
gradually.

Bernanke said that financial markets are looking to see a
demonstration of “political will” from policymakers that the difficult
steps will be taken to reduce the budget deficit.

Several members of the Senate Budget Committee asked Bernanke about
the fiscal problems facing state governments and questioned if the Fed
might be willing to offer assistance.

“This is a political, fiscal issue,” he said, adding that he did
not see any circumstances in which the Fed would offer assistance to
state governments.

House Budget Committee Chairman Paul Ryan is likely to press
Bernanke to discuss the need for controlling federal spending. Other
members of the panel may press Bernanke to discuss the fiscal problems
of state governments.

Bernanke is expected to testify to both the Senate Banking
Committee and House Financial Services Committee later in February on
the Fed’s semi-annual monetary policy report.

** Market News International Washington Bureau: (202) 371-2121 **

[TOPICS: M$U$$$,MFU$$$,MCU$$$,MMUFE$,MGU$$$]

• change in leadership in Egypt not for the US to determine
• White House staff monitoring the effect the crisis may have on financial markets
• have not seen thus far that the crisis is causing disruption through the Suez

• little change for other types of loans
• Fed says banks ‘significantly more upbeat’ about expected improvement in delinquency, charge-off rates in 2011
• little change in standards for closed-end home mortgages but tighter terms for non-standard loans

Survey is for: January 2011
Released: January 31, 2010
Source: Federal Reserve
Loans standards for large and middle-market firms (annual sales over $50
million) for approximately three month period prior to report release.

All Banks # of Banks | % of Total
Jan-10 Oct-10 July-10 | Jan-10 Oct-10 July-10
Tightened considerably 0 0 0| 0.0 0.0 0.0
Tightened somewhat 1 1 2| 1.8 1.8 3.5
Remained basically unchanged 49 49 48| 86.0 86.0 84.2
Eased somewhat 7 7 7| 12.3 12.3 12.3
Eased considerably 0 0 0| 0.0 0.0 0.0
————————|————————
Total 57 57 57| 100.1 100.1 100.0
|
Large Banks # of Banks | % of Total
Jan-10 Oct-10 July-10| Jan-10 Oct-10 July-10
Tightened considerably 0 0 0| 0.0 0.0 0.0
Tightened somewhat 0 0 0| 0.0 0.0 0.0
Remained basically unchanged 26 27 25| 81.3 84.4 83.3
Eased somewhat 6 5 5| 18.8 15.6 16.7
Eased considerably 0 0 0| 0.0 0.0 0.0
————————|————————
Total 32 32 30| 100.1 100.0 100.0
|
Other Banks # of Banks | % of Total
Jan-10 Oct-10 July-10| Jan-10 Oct-10 July-10
Tightened considerably 0 0 0| 0.0 0.0 0.0
Tightened somewhat 1 1 2| 4.0 4.0 7.4
Remained basically unchanged 23 22 23| 92.0 88.0 85.2
Eased somewhat 1 2 2| 4.0 8.0 7.4
Eased considerably 0 0 0| 0.0 0.0 0.0
————————|————————
Total 25 25 25| 100.0 100.0 100.0

—————————————————————————–

Loans standards for small firms (annual sales under $50 million) for
approximately three month period prior to report release.

All Banks # of Banks | % of Total
Jan-10 Oct-10 July-10| Jan-10 Oct-10 July-10
Tightened considerably 0 0 0| 0.0 0.0 0.0
Tightened somewhat 2 2 3| 3.7 3.6 5.5
Remained basically unchanged 49 48 44| 90.7 85.7 80.0
Eased somewhat 3 6 8| 5.6 10.7 14.5
Eased considerably 0 0 0| 0.0 0.0 0.0
————————|————————
Total 54 54 54| 100.0 100.1 100.0
|
Large Banks # of Banks | % of Total
Jan-10 Oct-10 July-10| Jan-10 Oct-10 July-10
Tightened considerably 0 0 0| 0.0 0.0 0.0
Tightened somewhat 1 1 0| 3.4 3.2 0.0
Remained basically unchanged 25 26 22| 86.2 83.9 78.6
Eased somewhat 3 4 6| 10.3 12.9 21.4
Eased considerably 0 0 0| 0.0 0.0 0.0
————————|————————
Total 29 29 29| 99.9 99.9 100.0
|
Other Banks # of Banks | % of Total
Jan-10 Oct-10 July-10| Jan-10 Oct-10 July-10
Tightened considerably 0 0 0| 0.0 0.0 0.0
Tightened somewhat 1 1 3| 4.0 4.0 11.1
Remained basically unchanged 24 22 22| 96.0 88.0 81.5
Eased somewhat 0 2 2| 0.0 8.0 7.4
Eased considerably 0 0 0| 0.0 0.0 0.0
————————|————————
Total 25 25 25| 100.0 100.0 100.0

** Market News International Washington Bureau: 202-371-2121 **

[TOPICS: MAUDT$,MNSFED,MGT$$$,MFT$$$,MMUFE$,MGU$$$,MFU$$$]

US DATA: Tsy hsg scorecard says 30.030 permanent modifications were
reported for Dec and 39,615 trail loan mods were reported – more on the
MNI Main wire.

US DATA: Jan Fed sr loan officer survey “indicated that a modest
net fraction of banks continued to ease standards and terms for C&I
loans over the Q4 while banks reported small mixed changes in their
lending policies for other types of loans to businesses and households.
Similarly, the respondents reported a moderate increase in demand for
C&I loans but little change, on balance, in demand for other types of
loans. Regarding loans to businesses, survey respondents, particularly
large banks, reported having eased standards and most terms on C&I
loans, especially to large and middle-market firms. Banks mainly
pointed to a more favorable or less uncertain economic outlook and
increased competition from other banks or nonbank lenders as reasons for
easing. By contrast, standards on CRE loans were reportedly about unch.”

It strikes me that the Portuguese are trying to avoid assistance to avoid being put in the barrel with the Greeks…..didn’t realise there was such a class war !

Reuters quotes a board member of the Bank of Portugal as saying the Greek fiscal plan is not working. The conditions were imposed, unrealistic and cannot be sustained, according to Teodora Cardoso. The Markets perceives that, Cardoso said.

EUR/USD is giving back gains, now sliding to 1.3670 after triggering a few small stops below the 1.36895 level. 1.3635/40 is next support. Look for offers now in the 1.3685/90 area that had been providing support during the US session.

An FT poll finds Europeans want a German central bank president once Trichet’s term ends in October.

Markets too love German central bankers due to their hard-won inflation credibility.

Egypt has substantial reserves to avoid an external payments crisis but these could be seriously depleted within weeks if political protests continue, while its banks may struggle to cope with a rush of withdrawals.

Via the UK Telegraph

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