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Monday, December 12, 2016

BACKDOC TIDITS, 12 DEC

ACKDOC:  WELL, THE START OF "THE RACE" MAY HAVE JUST GOTTEN MOVED UP!  
WE MAY BE STARTING THE RACE SOONER THAN PREVIOUSLY THOUGHT!
8@8 ,DOC   IMO

Government in the Sunshine Meeting Notice

Advanced Notice of a Meeting under Expedited Procedures

It is anticipated that the closed meeting of the Board of Governors of the Federal Reserve System at 12:00 PM on Monday, December 12, 2016, will be held under expedited procedures, as set forth in section 26lb.7 of the Board's Rules Regarding Public Observation of Meetings, at the Board's offices at 20th Street and C Streets, N.W., Washington, D.C. The following items of official Board business are tentatively scheduled to be considered at that meeting.

Meeting Date: Monday, December 12, 2016


Matter(s) Considered

1. Review and determination by the Board of Governors of the advance and discount rates to be charged by the Federal Reserve Banks.

A final announcement of matters considered under expedited procedures will be available in the Board's Freedom of Information and Public Affairs Offices and on the Board's Web site following the closed meeting.

For more information please contact: Michelle Smith, Director, or Dave Skidmore, Assistant to the Board, Office of Board Members at 202-452-2955.

Supplementary Information: You may contact the Board's Web site at http://www.federalreserve.gov for an electronic announcement about applications and other expedited items, as well as procedural and other information about the meeting.
Dated: December 8, 2016

Last update: December 8, 2016

https://www.federalreserve.gov/aboutthefed/boardmeetings/20161212advexp.htm

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BACKDOC:  THEY GIVE 72 HRS TO PULL IN SOME NOTES!  WOW!  SIMILAR TO INDIA'S CASH BASED ECONOMY!   DOC   IMO

Venezuela Orders Largest Bills Turned in Ahead of New Bank Notes

by Noris Soto

December 11, 2016 — 2:41 PM EST

Maduro says move to fight smuggling, currency attacks 100-bolivar bills must be out of circulation in 72 hours

Venezuela’s government ordered all 100-bolivar bank notes out of circulation within 72 hours, amid a hard cash shortage and the scheduled release this week of bigger bank notes.

“There has been a scam and smuggling of the one hundred bills on the border with Colombia. We have tried the diplomatic way to deal with this problem with Colombia’s government; there are huge mafias,” President Nicolas Maduro said on state television.
Maduro signed a new emergency economic decree to fight ”currency attacks” and an alleged “economic war.”

With the value of Venezuela’s largest banknotes reduced to a few U.S. cents by triple-digit inflation and the currency’s collapse on the black market, the country’s central bank said it will begin circulating higher-denomination notes by Dec. 15.

Venezuela’s consumer economy is largely cash-based and lines at automated teller machines are commonplace, and sometimes cash can’t be withdrawn at all.

https://www.bloomberg.com/news/articles/2016-12-11/venezuela-orders-largest-bills-turned-in-ahead-of-new-bank-notes


BACKDOC:  Shrinking FX market could pose stability risk: BIS

Hedge funds and speculative investors have pulled back from the $5 trillion a day global currency market and less risk-taking by banks as well as reduced trading on multi-player platforms is a risk to future financial stability, the Bank of International Settlements said on Sunday.

In analysis expanding on September's triennial report on the world's single biggest financial market, economists from the bank and Warwick Business School Professor Michael Moore pointed to changes the Basel-based central banks' central bank said should be of "first order" concern to regulators globally.

Activity in the $5 trillion a day market, they said, had in reality been falling steadily since peaking in late 2014, driven by changes in banks' business models, regulation and the impact of the shattering moves in the Swiss franc in January 2015.

"What happens in financial markets does not always stay in financial markets," BIS Head of Research Hyun Song Shin said. "Financial disruptions can have a real economic impact."

"How the evolving FX market affects risk-sharing is still uncertain, but this is a matter of first-order importance. Any major changes to liquidity conditions might have consequences for market risk and the effectiveness of the hedging strategies of corporates, asset managers and other foreign exchange end users."

The report in September showed global currency trading fell to a daily average of $5.1 trillion last April, a 5.5 percent from the $5.4 trillion average three years ago and the first broad contraction of the market since 2001.

BIS said the main driver of this had been a fall off in trading by hedge funds and other speculative investors, which they said had been pushed lower by the closure of some bank prime-broking businesses and trimming of others.

Prime-broking refers to the arrangements by which banks provide trading lines and the credit that speculators use to make big leveraged bets on currencies.

BIS also warned about risks from the market's major banks, as well as a new breed of non-bank electronic traders, raising the amount of flow that is "internalized" - i.e. matched off to other orders internally rather than traded with another party.

It said that also came with a weakened role for anonymous trading platforms like those run by Reuters News parent company Thomson Reuters (TRI.TO) and ICAP-owned EBS Brokertec (IAP.L) in favor of direct relationship based trade.

That, and the role for non-bank players who may not absorb as much risk when markets are volatile, may be contributing to flash crashes like those seen on sterling and other markets in the past couple of years.

"While relationship-driven ... trading... delivers lower spreads in stable market conditions, its resilience to stress may be tested going forward," BIS said. "There are also indications of rising instances of volatility outburst and flash events."

http://www.reuters.com/article/us-global-forex-bis-idUSKBN1400I8

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