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Fed's Bernanke: Legacy of financial crisis remains

FXstreet.com (Barcelona) - Fed president Ben Bernanke delivered a speech on Friday at the Conference on Bank Structure and Competition in Chicago, in which he focused mainly on the issue of shadow banking. He did not touch upon monetary policy in his opening remarks.

The Fed head said that the debt crisis is still affecting the US financial system, which “continues to struggle with the economic, legal, and reputational consequences of the events of 2007 to 2009.” He remarked that since then the Fed has significantly increased its means of monitoring the financial system, in order to make better monetary policy decisions.

Nevertheless, despite the recent recovery, a risk of a run on money-market funds remains, the Fed chief warned. Another problem is posed by the companies' reliance on short-term wholesale funding markets.

"While the shadow banking sector is smaller today than before the crisis and some of its least stable components have either disappeared or been reformed, regulators and the private sector need to address remaining vulnerabilities," Ben Bernanke said.

Forex Flash: Time to short the GBP/USD? – RBS

According to the RBS Research Team, “We recommended establishing a short GBP/USD position. The relatively poor structural position of the UK, particularly against the US has remained unchanged and hence the strategy remains compelling. We now believe that short-term risk/reward has once again shifted in favor of re-entering the position for another run down below 1.5000.”
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Forex Flash: Early signs of acceleration of Japanese FX risk taking - Nomura

Nomura strategist, Yujiro Goto notes that flow data released today suggests signs of acceleration of Japanese FX risk taking, but the magnitude is still not huge compared with elevated expectation after the BOJ easing.
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