Business news for Mon, 17 Dec 2007 & with word banks. 36 news.

The Fed makes billions of dollars available to banks in an auction hoping to ease credit-crunch concerns.

ORLANDO, Florida (Reuters) - Treasury Secretary Henry Paulson said on Monday that moves by some big banks to bring off-balance sheet investments tied to subprime mortgages back onto their books would help ward off a widespread credit crunch.

HSBC Holdings Plc, Europe's biggest bank by value, aims to start three new funds on the Chinese mainland next year as it taps into the country's rising demand for investment products. "We will see a strong growth and I would be surprised if we didn't see at least US$2 billion of new funds flowing in," Rudolf Apenbrink, chief executive officer of HSBC Investments Hong Kong Ltd, said in an interview with Bloomberg News. HSBC already manages three funds worth US$1.5 billion on the mainland under the joint venture HSBC Jintrust Fund Management Co. It expects to receive regulatory approval for its fourth fund soon and will apply for the qualified domestic institutional investment, or QDII, quota in May, Apenbrink said. Financial companies, including banks, fund managers and insurers, invest abroad using QDII quotas. To cope with managing more funds, HSBC Jintrust plans to recruit as many as 20 new employees next year, Apenbrink said. The company has about 100 employees.

THE Chinese mainland will let its commercial banks invest in UK stocks and funds in the first expansion of the country's international investment program outside Hong Kong. The nation reached an agreement with the UK financial regulator for investments by the banks under the qualified domestic institutional investor, or QDII, program, the China Banking Regulatory Commission said on its Website yesterday. The government is loosening restrictions on overseas investment to counter inflows from a record trade surplus that have driven up local stock and property prices, Bloomberg News said. The mainland will "soon" come to a similar agreement with the United States authorities, the regulator said. "Expanding the number of markets that QDII funds can invest in helps raise banks' investment and risk management capacities, and also helps investors diversify their risk," the statement said, without providing further details. The release didn't say when QDII funds

SHANGHAI stocks tumbled yesterday, led by banks and property developers. The Shanghai Composite Index, which covers yuan-denominated A shares and hard currency B shares, fell 2.62 percent to end at 4,876.76, the biggest drop in two weeks. It had reached an intraday high of 5,007.35. Turnover rose to 102.65 billion yuan (US$13.87 billion) from 82.82 billion yuan on Friday. Gainers outnumbered losers 450 to 362 while 88 stocks were unchanged. "A massive drop of big-caps, including lenders and property developers, has led the local stock market to a slump," said Chen Huiqin, an analyst with Huatai Securities Co. "However, the recent correction from a high of 6,100 to the current level, a 20 percent drop, would probably create some opportunities for both institutional and individual investors." Banking stocks dropped on concern a slowdown in the property market will drain demand for housing loans. China Merchants Bank Co, the nation's sixth-largest lender in

CHINA International Capital Corp, the country's first joint-venture investment bank, has acquired a US$5 billion quota under the qualified domestic institutional investor scheme, a senior foreign exchange management official said. Sun Lujun, deputy head of the capital project department under the State Administration of Foreign Exchange, said by early December, the forex market regulator had verified a total of US$23 billion as QDII quotas for China Southern Fund, Huaxia Fund, Harvest Fund and China International Fund. Sun said that through the end of October, 16 QDIIs had put on the market 154 QDII products. Sun added that US$28.6 billion were actually remitted abroad for QDII operations by the end of the month. The total indicates that capital flows accelerated sharply over the past few months as only US$4 billion or so were remitted between April 2006 and March 2007. In May, QDII banks were approved to invest in Hong Kong stocks.

THE Japan Bank for International Cooperation, the government's main overseas lender, is to lend US$3 billion to the Abu Dhabi National Oil Co to secure a stable supply for Asia's biggest economy, which imports most of its oil needs. The bank raised about a third of the loan amount from the Mizuho Financial Group Inc and other Japanese banks, Bloomberg News said. Abu Dubai Oil, known as ADNOC, will use the loan for oil exploration and building pipelines as well as facilities to boost crude output "With the UAE's oil structured into the loan, crude supplies to Japan are more assured," Hidetoshi Shioda, a senior energy analyst at Mizuho Securities Co, said. "It also benefits the UAE, as Japan will take steady supply for a longer period of time." Japan wants to map out a supply plan after crude prices set a record last month. The loan agreement will be signed this week, when ADNOC's Chief Executive Officer Yousef Omair Bin Yousef is in Tokyo, together with Abu

If commodity inflation starts to cause broader price rises, central banks will not be able to, and should not be expected to, slash rates to stave off recession

Chinese citizens will be able to buy shares and mutual funds in London and New York through their local banks after a regulatory reform

Chinese banks will be allowed to invest funds in Britain's stock market, regulators said.

China's central bank has asked big banks to set aside dollars rather than yuan to meet the last four increases in their required reserves.

The firm sees deepening credit troubles for the battered sector.

DealBook has a great little item reviewing the performance of the various investment banks this year. With the exception of Goldman Sachs, it is has hardly been a stellar year for i-banks and judging by the current mood in both London and New York next year will probably be worse.

Banks that lent to failed hedge fund Basis Yield Alpha, run by Australia's Basis Capital, are likely to get all their money back and there could be a payment to investors, the fund said

LONDON (Reuters) - Investors buffeted by the credit crisis will enjoy no pre-Christmas lull as central banks began putting a pump-priming plan into action on Monday while critical results from major American banks loom later in the week.

Savings rates on some leading accounts could be cut by up to 0.5% in the space of a month as banks inflict a double blow on savers

The Federal Reserve is providing $20 billion in loans to banks as part of an unprecedented auction process to ease a global credit crisis and make sure financial institutions can keep lending to their customers.

Officials from Merrill Lynch, Bear Stearns and other major banks are in talks to bail out a struggling bond insurance company that has guaranteed $26 billion in mortgage securities, according to two people briefed on the situation, because the insurer's woes could force the banks to take on billions in losses they had insured against.

Fortune's Andy Serwer thinks it's time some banks headed to the altar.

Centro shares drop by 76 per cent Banks forced to write off billions Aussie investors caught off guard