IN BRIEF

US suffers net capital outflow in January

NEW YORK: Foreign investors, led by central banks, were net sellers of all U.S. securities in January but continued to buy US Treasuries, the Treasury Department said yesterday. China remained the largest single holder of US government debt, with US$889 billion in hand in January, down slightly from US$894.8 billion in December. Japan was second with US$765.4 billion in January. Official investors - primarily global central banks - were the biggest sellers, unloading a record net US$34.1 billion, the most since they sold US$26.3 billion in September 1998 following financial crises in Asia and Russia.

EU to propose framework to aid Greece

BRUSSELS: The European Union's executive said yesterday it was ready to propose a framework that could be used to aid Greece, despite signs of continuing reluctance from France and Germany to make concrete commitments. Ministers were expected to discuss the possibility of providing loan guarantees or bilateral loans to help Athens finance its debts if needed, but officials signalled no figure would be put on the amount of help that could be extended. European Monetary Affairs Commissioner Olli Rehn confirmed the Commission had succeeded in drawing up proposals for a mechanism that could be put to a meeting of the euro zone's 16 finance ministers in Brussels. Germany, Europe's biggest economy and the country that would be the linchpin of any support, is reluctant to bail out Greece, saying the country's priority must be to get its own finances in order and make deep structural adjustments to rein in spending.

German banks back EU-wide supervision

BERLIN: Germany's BdB banking association called for a pan-European approach to banking supervision even as it came out in favour of a national rather than Europe-wide bank rescue fund of under €!100 billion. Andreas Schmitz, president of the Association of German Banks, which counts among its members Commerzbank and Deutsche Bank, told reporters yesterday that the crisis had shown the need for better bank regulation. "In the longer run, supervision needs to be bundled on a EU-wide basis. That means giving up national responsibilities. This also requires effective crisis management at EU level and agreements on burden sharing," Schmitz said. More importantly, the quality of supervision needs to be improved, the BdB said, adding that German banks would be prepared to help fund "qualified" supervisors and help train supervisors.

Bank's policy meetings prompt caution

LONDON: Concerns about monetary tightening in China and caution ahead of US and Japanese central bank policy meetings this week weighed on financial markets yesterday, weakening stocks. The dollar strengthened a bit as a result. MSCI's all-country world index was off 0.3 per cent, with the pan-European FTSEurofirst 300 down 0.4 per cent and Japan's Nikkei closing up just 0.01 per cent. "There's a strong sense of wait and see in the market ahead of the meetings at the BOJ and the Federal Reserve, making trade rather range-bound," said Yutaka Miura, a senior technical analyst at Mizuho Securities. "At current levels, there is more profit-taking pressure and little active buying, except for short-covering." Finance ministers from the 16 countries using the euro, the Eurogroup, met in Brussels yesterday to discuss the Greek debt crisis. "The Brussels meeting is in focus today but we still think there is no quick-fix for the Greek problem. We still think the euro will go down overall," said SEB currency strategist Johan Javeus. Agencies