Week of June 12, 2011 thru June 18, 2011

US's Cantor: Still Determined To Cut Spending By 'Trillions'

--House Majority Leader: Biden Talks Are 'Moving Forward'
--Hill Must Take Steps To End 'Fiscal Insanity' in DC
--Hope To 'Meet Or Exceed' Deficit Reduction Goals

By John Shaw

WASHINGTON (MNI) - House Majority Leader Eric Cantor Thursday said
he believes the budget talks led by Vice President Biden are "moving
forward," adding he remains determined to insist that the final
agreement "cut spending by trillions."

In comments on the House floor, Cantor defended the House GOP's
linkage of debt ceiling legislation and deficit reduction action.

FDIC's Bair Tells Congress Of Her 'Concern' For European Banks

--Big US Banks Say No Capital Surcharge is Appropriate
--US Regulators Hope Rest of World Goes Along With US

By Denny Gulino

WASHINGTON (MNI) - U.S. banks Thursday squared off against their
regulators, hoping House Republicans will help save them from pending
capital surcharges while outgoing FDIC Chairman Sheila Bair warned the
prospect for problems with European banks are "unsettlingly high."

"I am very concerned about the potential for the European banking
system to become a future source of financial instability," Bair told

Analysis: What Could Derail The Impervious IG Corp. Bond Mkt?

By Steven Levine

NEW YORK (MNI) - Weak U.S. economic data, heightened concerns about
a resolution to the Greece's sovereign debt woes, and the risk of an oil
price shock are among the scenarios that analysts warn could pose a
threat to the investment-grade corporate bond market.

On the other hand, domestic and global uncertainties such as;
European peripheral sovereign debt issues, Middle East and North African
regional volatility, as well as Japan's recent natural disasters do not
seem to have had a profound impact on that market.

Update: Liikanen: Risks To ECB Balance Sheet Are 'Manageable'

--Adds Detail To Version Transmitted At 1629 GMT
--Key ECB Concern In The Debt Crisis To Avoid Negative Spillover

LONDON (MNI) - The risks to the European Central Bank's balance
sheet are manageable and are not the reason behind the central bank's
views on how the sovereign crisis in the periphery of the zone should be
tackled, Bank of Finland Governor and ECB Council Member Erkki Liikanen
has said here.

"Central banks can sometimes make losses, we know it. But the risks
from the balance sheet point of view are manageable," he said.

Liikanen: Risks To ECB Balance Sheet Are 'Manageable'

--Key ECB Concern In The Debt Crisis To Avoid Negative Spillover

LONDON (MNI) - The risks to the European Central Bank's balance
sheet are manageable and are not the reason behind the central bank's
views on how the sovereign crisis in the periphery of the zone should be
tackled, Bank of Finland Governor and ECB Council Member Erkki Liikanen
has said here.

"Central banks can sometimes make losses, we know it. But the risks
from the balance sheet point of view are manageable," he said.

The ECB's main motivation in the sovereign debt crisis has been to

Liikanen: Risks To ECB Balance Sheet Are 'Manageable'

--Key ECB Concern In The Debt Crisis To Avoid Negative Spillover

LONDON (MNI) - The risks to the European Central Bank's balance
sheet are manageable and are not the reason behind the central bank's
views on how the sovereign crisis in the periphery of the zone should be
tackled, Bank of Finland Governor and ECB Council Member Erkki Liikanen
has said here.

"Central banks can sometimes make losses, we know it. But the risks
from the balance sheet point of view are manageable," he said.

The ECB's main motivation in the sovereign debt crisis has been to

US Boehner: Must Focus On Tax Reform,Not'Short Term Gimmicks'

--House Speaker: 'Not Prepared' To Support Payroll Tax-Cut Extension
--Rep. Boehner: Need Tax, Fiscal, Regulatory 'Certainty'
--Vice President Biden To Resume Budget Talks At 1 P.M.

By John Shaw

WASHINGTON (MNI) - House Speaker John Boehner said Thursday
that Congress should focus its efforts on broad individual and corporate
tax reform rather than pursuing "short-term gimmicks" to boost the
economy.

At a briefing, Boehner said that he is "not prepared" to support an
idea that is being pushed by some Democrats to extend the payroll tax

StatsCan: Foreigners Acquire C$8.223B Canadian Securities

--Investment in Canada Equities Lowest Since November

By Akhil Shah

OTTAWA (MNI) - Foreign investors added C$8.223 billion of Canadian
securities to their portfolios in April, Statistics Canada reported
Thursday. Comparatively, Canadian investors divested C$3.3 billion of
foreign securities from their portfolios in April.

Foreign investment was concentrated in Canadian bonds as
non-residents added C$4.9 billion worth of this security to their
holdings, making it the largest inflow since January.

Foreign investors acquired C$2.2 billion worth of Canadian private

Fed/Tsy Stress Global Convergence for Bank Cap Requirement

By Denny Gulino

WASHINGTON (MNI) - The Treasury Department and Federal Reserve
Thursday emphasized to Congress that the none of the world's large banks
banks can be allowed an advantage under capital adequacy rules still
under development.

Neither Fed Gov. Daniel Tarullo nor Treasury Under Secretary Lael
Brainard touched on -- in their testimony prepared for the House
Financial Services Committee -- the range of capital surcharges being
considered for banks deemed big enough to influence the financial
system, a battleground subject pitting the banking industry against

MNI Competition for May Housing Starts Tallied

NEW YORK (MNI) - The reading of 560,000 for the level of U.S.
housing starts at an annual rate Thursday morning from the Commerce
Department differed from the average forecast of 503,000 in the
three-month MNI Forecast Competition by 57,000.

Forecasters delivered their forecasts by the 10:30 ET Wednesday
deadline.

The next statistic to be estimated is the result for new home sales
next Thursday, for which the deadline for forecasts is noon Wednesday,
And the final statistic of the contest is next Friday's report on May