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Reuters

  • IMF's Lagarde says Fed should not rush its rate rise decision

    Many emerging market economies are concerned that a Fed rate rise would trigger large outflows of capital from emerging economies into dollar-denominated assets, creating market turmoil that would hurt growth.

    Finance ministers and central bankers of the world’s 20 biggest economies discussed the issue thoroughly at a meeting in Ankara, Lagarde told a news conference after the talks.

    “It should really do it for good, if I may say,” Lagarde said. “In other words, not give it a try and have to come back.”

    “So, what we have said is, the IMF thinks that it is better to make sure that the data are absolutely confirmed, that there is no uncertainty, neither on the front of price stability, nor on the front of employment and unemployment, before it actually makes that move,” she said.

    “And that would call for being in the curve, rather than necessarily ahead of the curve or indeed behind the curve.”

  • Clinton says she paid staffer to maintain private email server

    After a campaign appearance in New Hampshire, Clinton told reporters the payments went to information technology specialist Bryan Pagliano, who this week declined to produce documents and testify before a U.S. House of Representatives committee about the server, invoking his constitutional right against self-incrimination.

    “With respect to personal services that he provided to me and my family, we obviously paid for those services and did so because, during a period of time, we continued to need his technical assistance. And I think that’s in the public record,” Clinton said.

    Clinton, a former U.S. senator and first lady who is the front-runner for her party’s 2016 presidential nomination, has been criticized for using the unsecured server to conduct government business when she was the top U.S. diplomat from 2009-13 as well as for how she handled classified information.

    Campaign spokesman Nick Merrill said on Twitter: “Bryan was hired by the Clinton family as a consultant in order to help out periodically with the management of the system in Chappaqua that hosted the family’s emails.”

    Chappaqua is the New York town where Clinton lives.

    The Washington Post earlier reported the Clintons paid Pagliano $5,000 for computer services before he joined the State Department, citing an April 2009 financial disclosure form he filed.

    Even after he arrived at the State Department in May 2009, the Clintons continued to pay Pagliano to maintain the server, the Post reported. The paper quoted a campaign official as saying the arrangement with Pagliano ensured that taxpayer dollars were not spent on a private server that was also used by Clinton’s family and aides to former President Bill Clinton.

    Pagliano was the IT director for Clinton’s unsuccessful 2008 presidential campaign and went to work for the State Department when Clinton took up the Cabinet post in the Obama administration.

    Clinton has in the past hired staff to work for her simultaneously in public and private capacities, most notably top aide Huma Abedin, the Post said.

    Clinton said on Friday she was sorry that her use of a personal email account while secretary of state had caused confusion, and blamed herself for “not thinking a lot” about the matter when she took the job.

  • Global concerns may shrink Wall Street's third-quarter estimates

    Wall Street expects a 3.4 percent decline in earnings for the S&P 500 .SPX for the quarter. Estimates have already fallen for 9 out of 10 of the benchmark index’s sectors so far this year, according to Thomson Reuters data.

    S&P revenue is expected to fall 2.8 percent for the quarter, led by steep declines in the energy and materials sectors. As companies tend to revise guidance around the end of the quarter, estimates may become even less optimistic.

    “Analysts will likely be pulling in their reins going into the quarterly reports and the pre-announcement season. This could happen fairly quickly,” said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.

    The dollar index .DXY, measuring the greenback against a basket of major currencies, has risen 0.8 percent so far this quarter after falling 2.9 percent last quarter. Ghriskey sees the currency’s strength hurting the competitiveness of U.S. exports against local products overseas and imports here, resulting in shrinking revenue and earnings for U.S. multinationals.

    In addition, demand is likely slower in many overseas markets with slowing growth in China and recessions in Brazil and Russia hurting both revenue and earnings.

    Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis, says that since the majority of S&P companies tend to beat earnings estimates every quarter, he will focus more on revenue than the bottom line, which can be tweaked with cost cuts and share buybacks to beat estimates.

    But Paulsen is not optimistic about the coming quarter.

    “It seems clear to me that top-line sales results will be a little disappointing again,” he said. “If you look at what’s going on in global economies, it doesn’t paint a real good picture of what top-line growth will be like. The question is: ‘How much of that is already factored in?’”

    U.S. telecommunications .SPLRCL, which is mostly insulated from global markets, is the only S&P sector that has shown improving estimates for both third-quarter earnings and revenue.

    With crude oil prices falling sharply, the energy sector .SPNY is faring the worst, with current expectations for a 62 percent earnings decline and a 33 percent revenue drop.

    Analysts expect the materials sector .SPLRCM to report a 11.8 percent earnings decline due to falling commodities prices and a 10.4 percent revenue drop. They see earnings for industrials .SPLRCI, which have big overseas exposure, falling 4.9 percent and revenue falling 5 percent.

    Many investors hope the equity market becomes less volatile after August’s sharp swings. But earnings weakness could make jittery market participants question valuations all over again.

    “A lot of people think the market will come back. If we see fundamentals that challenge that story, that could be a very significant part of this earnings season,” said Paulsen.

  • U.S. labor market shows some muscle despite slower job growth

    Nonfarm payrolls increased 173,000 last month after an upwardly revised gain of 245,000 in July, the Labor Department said on Friday. August’s gain was the smallest in five months as the factory sector lost the most jobs since July 2013.

    The jobs count, however, may have been tarnished by a statistical fluke that has often led to sharp upward revisions to payroll figures for August after initial weak readings.

    Indicating the hiring slowdown was likely not reflective of the economy’s true health, the jobless rate fell two-tenths of a point to 5.1 percent, its lowest level since April 2008.

    In addition, payrolls data for June and July were revised to show 44,000 more jobs created than previously reported, bringing the average job gains for the past three months to a solid 221,000. Average hourly earnings increased 8 cents, the biggest rise in seven months and the length of the average workweek also expanded.

    “The payrolls data is certainly good enough to allow for a Fed rate hike in September,” said Alan Ruskin, global head of currency strategy at Deutsche Bank in New York. “The big question is still whether financial market volatility will scupper the plans.”

    Stocks on Wall Street, which could be pressured by higher rates, ended down more than 1 percent. Prices for U.S. government debt rose, while the dollar fell marginally against a basket of currencies.

    While the mixed report did little to alter views that the U.S. economy remains vibrant despite volatile global financial markets and slowing Chinese growth, it could further complicate the Fed’s decision at a policy meeting on Sept. 16-17.

    In the wake of a recent global equities sell-off, financial markets significantly scaled back bets on a September rate hike over the past month. But Fed Vice Chairman Stanley Fischer told CNBC last week it was too early to decide whether the stock market rout had made an increase less compelling.

    “With this jobs report … the Federal Reserve finds itself in a real uncertainty jam,” said Mohamed El-Erian, chief economic adviser at Allianz in Newport Beach, California.

    MISSING FORECASTS

    Economists in a Reuters survey had forecast nonfarm payrolls increasing by 220,000 last month, but they had also warned that the model used to smooth the data for seasonal fluctuations is often thrown off at the start of a new school year.

    They said the data could be further muddied because of a typically low response rate from employers to the government’s payroll surveys in August.

    But the evidence of a tightening labor market added to a string of upbeat data, including figures on automobile sales and housing, that has suggested the economy was moving ahead with strong momentum after growing at a robust 3.7 percent annual rate in the second quarter.

    The decline in the unemployment rate brought it into the range that most Fed officials think is consistent with a low but steady rate of inflation, and would likely bolster their expectation that a pick-up in wages will help lift inflation toward their 2 percent target.

    A broad measure of joblessness that includes people who want

    to work but have given up searching and those working part-time

    because they cannot find full-time employment fell to 10.3 percent, the lowest level since June 2008.

    In August, construction payrolls rose 3,000 on top of the 7,000 jobs added in July. Mining and logging employment fell by 10,000 jobs, the eighth straight monthly decline.

    The sector has shed 90,000 jobs so far this year, with industries that support mining activity accounting for 80 percent of the drop. Oilfield giants Schlumberger (SLB.N) and Halliburton (HAL.N) and many others in the oil and gas industry have announced thousands of job cuts this year.

    Manufacturing payrolls slid 17,000 as sharp declines at metals, machinery and food industries offset a solid increase in employment in the automobile sector.

    The 0.3 percent increase in hourly earnings left them 2.2 percent above their year-ago level, still well below the 3.5 percent growth rate economists consider healthy.

    Aggregate weekly hours rose 0.4 percent, the largest gain since November. The combination of more hours and higher earnings left workers with a 0.7 percent increase in their take-home wages.

    Some analysts think average hourly earnings are being held back by falling wages in oil field services.

    But a tighter labor market and decisions by several state and local governments to raise the minimum wage should eventually translate into faster earnings growth.

    A number of retailers, including Walmart (WMT.N), Target (TGT.N) and TJX Cos (TJX.N), have increased pay for hourly workers since the start of the year.

    “Regardless of which meeting this year the Fed begins to raise rates, next year we expect core inflation to surprise on the upside, forcing the Fed into tightening policy more aggressively than the markets currently anticipate,” said Paul Ashworth, chief U.S. economist at Capital Economics in Toronto.

  • Austria, Germany open borders to migrants offloaded by Hungary

    Left to walk the last yards into Austria, rain-soaked migrants, many of them refugees from Syria’s civil war, were whisked by train and shuttle bus to Vienna, where authorities prompted arranged for thousands to head straight on to Germany.

    German police said the first 1,000 of up to 10,000 migrants expected on Saturday had arrived on special trains in Munich. Austrian police said over 6,000 had entered the country by midday with more expected in what has become Europe’s most acute refugee crisis since the Yugoslav wars of the 1990s.

    Munich police said Arabic-speaking interpreters helped refugees with procedures at emergency registration centers. The seemingly efficient Austrian and German reception contrasted with the disorder prevalent in Hungary.

    “It was just such a horrible situation in Hungary,” said Omar, arriving in Vienna with his family.

    In Budapest, almost emptied of migrants the night before, the main railway station was again filling up with new arrivals but trains to western Europe remained canceled. So hundreds set off by foot, saying they would walk to the Austrian border, 170 km (110 miles) away, like others had tried on Friday.

    After days of confrontation and chaos, Hungary’s government deployed over 100 buses overnight to take thousands of migrants to the Austrian frontier. Austria said it had agreed with Germany to allow the migrants access, waiving asylum rules that require them to register in the first EU state they reach.

    Wrapped in blankets and sleeping bags against the rain, long lines of weary migrants, many carrying small, sleeping children, got off buses on the Hungarian side of the boundary and walked into Austria, receiving fruit and water from aid workers. Waiting Austrians held signs that read, “Refugees welcome”.

    “We’re happy. We’ll go to Germany,” said a Syrian man who gave his name as Mohammed, naming Europe’s famously biggest and most affluent economy that is the favored destination of many refugees. Another, who declined to be named, said: “Hungary should be fired from the European Union. Such bad treatment.”

    Hungary insisted the bus rides were a one-off, even as hundreds more migrants gathered in Budapest, part of a seemingly unrelenting human surge northwards through the Balkan peninsula from Turkey and Greece.

    By contrast, the Austrian state railway company OeBB said it had added 4,600 seats for migrants by extending trains and laying on special, non-scheduled services.

    DESPERATE MIGRANTS FORCE HUNGARY’S HAND

    Hungary, the main entry point into Europe’s borderless Schengen zone for migrants, has taken a hard line, vowing to seal its southern frontier with a new, high fence by Sept. 15.

    Hungarian officials have portrayed the crisis as a defense of Europe’s prosperity, identity and “Christian values” against an influx of mainly Muslim migrants.

    Prime Minister Viktor Orban said on Saturday Hungary would deploy police forces along its border with Serbia after Sept. 15 and the army too if parliament approves a government proposal.

    “It’s not 150,000 (migrants coming) that some (in the EU) want to divide according to quotas, it’s not 500,000, a figure that I heard in Brussels, it’s millions, then tens of millions, because the supply of immigrants is endless,” he said.

    For days, several thousand camped outside Budapest’s main railway station, where trains to western Europe were canceled as the government insisted all entering Hungary be registered with asylum applications processed there as per EU rules.

    But the logjam broke on Friday when, in separate rapid-fire developments, hundreds broke out of a teeming camp on Hungary’s frontier with Serbia, escaped a stranded train, and took to the highway by foot chanting “Germany, Germany!”

    The government appeared to throw in the towel, mobilizing a fleet of buses to take them to the Austrian border.

    The scenes were emblematic of a crisis — about 350,000 refugees and migrants have reached the border of the European Union this year — that has left the 28-nation EU groping for solutions amid dysfunctional squabbling over burden-sharing.

    At an EU foreign ministers meeting in Luxembourg on Saturday, the usual diplomatic conviviality unraveled as they failed to agree on any practical steps out of the crisis. They are especially at odds over proposals for country-by-country quotas to take in asylum seekers.

    “Given the challenges facing our German friends as well, all of Europe needs to wake up. (The time for) reverie is over,” Austrian Interior Minister Johanna Mikl-Leitner said.

    “Now the continent of Europe is challenged. In this great challenge the entire continent has to give a unified answer. Whoever still thinks that withdrawal from the EU or a barbed wire fence around Austria will solve the problem is wrong.”

    British finance minister George Osborne said Europe and Britain must offer asylum to those genuinely fleeing persecution but also need to boost aid, defeat people-smuggling gangs and tackle the conflict in Syria to ease the migrant crisis.

    BOY’S BODY ON BEACH PRICKS EU’S CONSCIENCE

    Pressure to take effective action rose sharply this week after pictures flashed around the world of the body of a 3-year-old Syrian Kurdish boy washed up on a Turkish resort beach, personalizing the collective tragedy of the refugees. Aylan Kurdi had drowned along with his mother and brother while trying to cross by boat on a tiny rubber dinghy to a Greek island.

    Hungary has lashed out at Germany, which expects to receive 800,000 asylum seekers this year, for declaring it would accept Syrian requests regardless of where they enter the EU.

    Budapest says this has swelled the influx, and like some others in ex-Communist east European states — unused to taking in notable numbers of foreigners — it is resisting calls by some western EU leaders for each of the bloc’s 28 members to accept a quota of refugees. The discord continued on Saturday.

    “What happened is the consequence of the failed migration policy of the European Union and the irresponsible statements made by European politicians,” Hungarian Foreign Minister Peter Szijjarto said on arrival at the Luxembourg meeting.

    The flow of migrants risking rickety boats to cross the Mediterranean, or baton-wielding police on Balkan borders, shows no sign of abating despite more trips by sea ending in disaster.

    Over 2,000 have died at sea so far this year, including 30-40 on Friday who were reported drowned off Libya’s coast.

    The Greek coastguard said on Saturday that about 13,370 migrants and refugees had been ferried from Greece’s eastern islands to Athens since Monday.

    A record 50,000 hit Greek shores in July alone and were ferried from islands unable to cope to the mainland by a government already floundering in financial crisis and keen to dispatch them promptly north into Macedonia, whence they enter Serbia and then Hungary.

    Hungary said on Saturday it had recorded some 165,000 entering so far this year.

    Determined to stem the tide, Hungary is building a 3.5-metre (11.5-foot) high fence along its border with Serbia. On Friday, the Budapest parliament adopted measures the government says will effectively seal the frontier to migrants as of Sept. 15.

    They include “transit zones” on the border, where asylum seekers would be held until their requests are processed and, if denied, they would be deported.

  • Coalition attacks Yemen capital after UAE, Saudi soldiers killed

    Medical sources at hospitals in the capital Sanaa, which has been under effective control of the Iranian-allied Houthi militia for almost a year, said about 24 civilians were killed in the city as a result of the attacks.

    WAM said the UAE air force struck a mine-making plant in the Houthi-dominated Saada province in northern Yemen, as well as military camps and weapon stores in the central Ibb province, causing “heavy damage”.

    Apart from 45 Emiratis and five Bahrainis, Saudi state-run Al Ekhbariya TV reported on Saturday that 10 Saudi soldiers were also killed in the attack in Marib province on Friday, quoting Brigadier-General Ahmed al-Asiri, the coalition spokesman.

    Asiri told Al Arabiya TV that four Yemeni soldiers were also killed in the attack on the coalition base in Marib.

    Friday’s death toll was the highest for the coalition since it began its assault on the Houthis in March, and is one of the worst losses of life in the history of the UAE military.

    The UAE has played a key role in a Saudi-led Arab coalition fighting the Houthis after they pushed Yemen’s President Abd-Rabbu Mansour Hadi into exile and took over much of the country.

    UAE forces assisted fighters loyal to Hadi in driving out Houthis and their allies from the southern port city of Aden, in a key victory for the coalition.

    In Aden, a government official said the police resumed their duties on Saturday with the help of the UAE after their work was suspended for more than five months due to the war.

    In Sanaa, residents said the Houthi-controled Defence Ministry building and the command of the special security forces were among the targets hit in further strikes by Saudi-led forces overnight.

    The bodies of the Emirati soldiers killed in the attack on their base in Marib were taken to Abu Dhabi aboard an air force transport plane. Funerals were being held on Saturday. The UAE government has announced a three-day mourning period.

    Bahraini officials said the five soldiers killed in the attack were also being buried on Saturday.

    UAE Minister of State for Foreign Affairs Anwar Gargash told Al Arabiya that the troops were killed when a surface-to-surface missile struck a weapons storage facility at the Marib base.

    Saudi Arabia and the UAE have reported several deaths of soldiers in Yemen since March, but the total death toll for the coalition was not clear.

    “HORRIFIC EXPLOSIONS”

    More than 4,000 Yemenis have died in the same period.

    Abu Dhabi shares Riyadh’s view that the Houthis are proxies of Shi’ite power Iran, accusing it of trying to expand its influence in Arab lands in Yemen, Syria and Iraq. The Houthis, who belong to the Zaydi branch of Shi’ite Islam, deny acting on behalf of Tehran and say they revolted against corruption.

    Hadi loyalists, backed by the Saudi-led coalition, had been massing troops and weapons in Marib in preparation for an assault on the capital, which the Houthis seized in September last year.

    “The incident itself does not change the balance that is there,” Gargash said in an interview with Al Arabiya TV. “Marib will fall to the coalition,” he added.

    Residents in Sanaa fear the coalition will step up its raids even further to retaliate for the attack.

    “I was close to the raid that hit the command of the special security forces, the explosions were horrific, I felt that the ground was shaking beneath me and people were running away out of fear,” said Shawqi, a taxi driver.

  • For diabetes in obesity, weight-loss surgery beats medication

    Half of the patients treated with weight-loss surgery in the study were diabetes-free at five years, said Dr. Francesco Rubino of Kings College London in the UK and colleagues in a report in The Lancet.

    “The five-year mark is an important mark in many diseases,” Dr. Rubino told Reuters Health by phone. “The fact that some patients at five years are basically disease-free is a remarkable finding.”

    In 2009, he and his colleagues randomly assigned 20 obese patients with type 2 diabetes to receive medical treatment, 20 to receive a type of weight-loss surgery called a gastric bypass, and another 20 to undergo a weight-loss operation called a biliopancreatic diversion.

    Eighty percent of patients who had surgery had their blood sugar under good long-term control, versus about 25 percent of patients treated with drugs only.

    All of the study groups had a reduction in cardiovascular risk. But the surgery-treated patients had a 50 percent lower risk of heart and blood vessel disease than those treated with drugs only, and they needed fewer drugs for treating high blood pressure or high cholesterol.

    The improvements in blood sugar control and heart disease risk weren’t related to how much weight patients lost.

    “What really is causing the remission of diabetes after surgery remains mysterious,” Dr. Rubino said. What is known, he added, is that the intestines produce a host of hormones involved in regulating metabolism. Reconstructing the gastrointestinal tract so that food bypasses the stomach and small intestine may help restore normal metabolic control, he explained.

    Like any surgery, weight loss operations carry risks. An international study published earlier this, for example, found that after two years, people randomized to have gastric bypass surgery had better control of their type 2 diabetes than people assigned to a medication group, but they also had a higher risk for infections and bone fractures. (See Reuters Health story of May 21, 2015.)

    And some patients may gain back some of the weight they lost.

    Still, doctors are increasingly referring to this type of surgery as “diabetes surgery,” rather than obesity surgery, said Dr. Philip Schauer, the director of the Cleveland Clinic Bariatric and Metabolic Institute and a bariatric surgeon, in a telephone interview with Reuters Health. Dr. Schauer did not participate in the new study.

    “There are some people, this study shows, that can go into remission for up to five years or more,” he said. “We hesitate to use the word ‘cure,’ but it’s pretty darn close to a cure, about as close to a cure as you can get.’”

    Dr. Schauer pointed out that about half of patients with type 2 diabetes are unable to control their blood sugar with medication and lifestyle measures. Based on the new findings, he said, bariatric surgery should be offered to these patients if they are moderately obese, for example with a body mass index (BMI) of 35. (BMI is a measure of weight in relation to height.)

    Currently the National Institutes of Health states that patients should have a BMI of 40, or a BMI of 35 with obesity-related illness, such as type 2 diabetes, in order to be eligible for weight loss surgery.

    “There are still many insurance companies today that will not pay for this surgery for any reason,  fat burner whether it’s for obesity or diabetes. It means that they are denying people effective treatment,” Dr. Schauer said. “This study is going to make insurance carriers and third party payers rethink their coverage policies regarding bariatric or diabetes surgery, as we prefer to call it.”

  • Justin Bieber shows vulnerable side as comeback gets under way

    The approach appears to be working. His new single “What Do You Mean?” on Thursday notched up more than 21 million streams on Spotify globally in just five days, setting a new record for the music app.

    Bieber, now 21, broke down in tears at Sunday’s MTV Video Music Awards show after singing the song. The sobs, he told Jimmy Fallon on “The Tonight Show,” were authentic.

    “Honestly, I just wasn’t expecting them to support me in the way they did. Last time I was at an award show I was booed,” Bieber told Fallon on Wednesday.

    Bieber is back on the promotional trail before the November release of his first album of new material in three years, most of which were marked by bad behaviour off stage and a string of court cases that risked damaging his image as a family-friendly teen heartthrob.

    Bieber found fame as a 13-year-old and went on to become a global pop phenomenon with hits like “Baby” and “Believe.”

    He said in January that he wanted to shed the “arrogant” and “conceited” attitude that led to arrests for careless driving, pelting a neighbour’s home with eggs, assaulting a photographer, and abandoning a pet monkey at a German airport.

    “I just had a bunch of knuckleheads around me,” he told Fallon of his wild child period. “That was pretty much it. You have to figure out what you are OK with, and what you’re not OK with, but you have to test the waters. I just happen to be in front of a spotlight and they caught all those moments.”

    In the first of a week long promotion on NBC’s “Today” show on Thursday, Bieber’s work with the Make a Wish Foundation was highlighted in interviews with two young female fans who got to meet him when they were seriously ill. He will perform a free “Today” show concert in New York City on Sept. 10.

    The 21 million streams for “What Do You Mean?” broke Spotify’s record for the biggest first week streams for a single. The previous record holder was One Direction’s “Drag Me Down,” Spotify said.

  • G20 promises transparency on rate moves as global economy disappoints

    Many emerging market economies are concerned that when the U.S. Federal Reserve raises borrowing costs, investors will withdraw from other markets and buy dollar assets, weakening other currencies and creating turbulence as capital flees.

    Officials from emerging markets wanted the communique from finance ministers and central bank governors of the Group of 20 biggest economies, meeting in Turkey, to say that a U.S. rate rise now would be a risk to growth.

    But the draft avoids such wording.

    “We note that in line with the improving economic outlook, monetary policy tightening is more likely in some advanced economies,” the draft communique, seen by Reuters, said.

    “We will carefully calibrate and clearly communicate our actions to minimize negative spillovers, mitigate uncertainty and promote transparency,” said the draft, which may yet change before it is finally agreed on Saturday.

    An earlier version of the text said policy tightening in developed economies “may remain one of the main sources of uncertainty in financial markets”.

    “In one of the wild formulations it said that this was the biggest threat to the world economy. This was killed immediately and forever,” a Russian source said earlier.

    The text welcomed strengthening activity in some economies but said that global growth fell short of expectations, although it expressed confidence a recovery would gain speed.

    It also indirectly addressed Chinese moves that weakened its yuan currency in August, in a sign these were not seen as a competitive devaluation to prop up Chinese exports.

    “We reiterate our commitment to move toward more market determined exchange rate systems and exchange rate flexibility to reflect underlying fundamentals, and avoid persistent exchange rate misalignments,” it said.

    “We will refrain from competitive devaluations and resist all forms of protectionism.”

    Slower growth in China and rising market volatility have boosted the risks to the global economy, the International Monetary Fund warned ahead of the G20 meeting, citing a mix of potential dangers such as depreciating emerging market currencies and tumbling commodity prices.

    But the G20 had been seen as unlikely to come up with any concrete new measures to address the spillover from instability in the world’s second-largest economy, or to call directly on Beijing to address structural issues such as rising bad debts.

    EASY MONEY

    Luxembourg Finance Minister Pierre Gramegna, whose country holds the rotating presidency of the European Union, shrugged off the prospect of U.S. interest rate hikes.

    “We cannot live all the time on easy money … One has to be realistic that at one point in time the curve of interest rates will have to change,” he told Reuters.

    “This G20 comes at a very good time because it gives the Fed an opportunity to gauge all the elements at stake.”

    Bank of Japan Governor Haruhiko Kuroda said any Fed rate rise would be a positive sign for the global economy, despite the unease in some emerging markets that such moves could cause capital outflows and currency volatility.

    “If the U.S. were to raise rates, that would speak to the underlying firmness and growth in the U.S. economy, and that would actually be a plus for the global economy,” he said.

    One specific idea being examined at the Ankara meetings is a proposal from a group of financial stability experts to adopt a two-stage approach for introducing Total Loss Absorption Capacity (TLAC) buffers for big banks, a G20 source said.

    The buffer is a new layer of debt big banks like Goldman Sachs and Deutsche Bank AG must issue to write down in a crisis and bolster their capital.

    The proposal would introduce a buffer of 16 percent of a bank’s risk-weighted assets from 2019 and 20 percent from 2022, the source said.

    The United States had pushed for 20 percent, while some in Europe had been arguing for 16 percent on the grounds that their banks were still recapitalising after the financial crisis.

    The draft pencilled in that a deal should be ready for the endorsement of G20 leaders at their summit in southern Turkey in November, but some countries were concerned there would not be enough time to reach a final agreement by then.

    There was no clear pronouncement on China’s desire to have the yuan included in the International Monetary Fund’s Special Drawing Rights basket of currencies, but the draft said G20 finance chiefs expected progress in November, when the IMF has a board meeting on the issue.

    “China has moved in the direction in currency and monetary policy … that is necessary if they want to achieve the goal of getting China into the IMF currency basket,” German Finance Minister Wolfgang Schaeuble told reporters, welcoming Beijing’s near 2 percent yuan devaluation last month.

    China is keen for the symbolic boost it would get from the yuan’s inclusion.

    Bundesbank chief Jens Weidmann said he is open to discussion on including the yuan in the IMF basket, and said recent financial turmoil in China should not pose a lasting danger to the global economy.

    “The currency basket should in principle reflect relative global economic strengths,” he told Reuters, but added China must fulfil the conditions for inclusion.

    One delegate said it was possible that the likely failure of the U.S. Congress to approve an IMF quota reform that would give China and other emerging markets more say could work in Beijing’s favour on the SDR issue.

    The reasoning goes that benefiting the leading emerging economy, China, could help offset the perennial failure to boost emerging market quotas.

    However, IMF members will also be examining whether China’s heavy intervention in the yuan market was befitting of a freely convertible reserve currency, the delegate said.

    One option being floated was the idea of giving China a more limited share of the SDR basket at first until its convertibility and market orientation improved.

  • Family jokes and school struggles, film shows private side of Malala

    According to Pashtun tradition, Malalai of Maiwand spurred her countrymen to victory against British troops in 1880, taking to the battlefield to rally a demoralised Afghan force with a verse about martyrdom. She was later struck down and killed.

    The legend is recounted in “He Named Me Malala”, a new documentary about Yousafzai, now 18, whose attack while riding a school bus shocked the world.

    “You named her after a girl who spoke out and was killed. It’s almost as if you said she’d be different,” director Davis Guggenheim tells Yousafzai’s father, Ziauddin, in the film.

     “You’re right,” he replies.

    Filmed over 18 months, the intimate portrait shows a teenager more at ease on the world stage – speaking at U.N. headquarters in New York – or addressing students in Syrian refugee camps than with classmates in Britain where she was flown for surgery.

    “In this new school, it’s hard,” she says, admitting a lack of shared experiences with the other girls.

    While much is known about Yousafzai’s advocacy work, the documentary lifts the lid on her family life in central England with much humour generated by her two brothers.

    “She’s a little bit naughty,” says Yousafzai’s youngest brother, who she introduces as “a good boy” in contrast to her other brother who she calls “the laziest one”.

    She giggles when asked if she would ever ask a boy on a date.

    BE SILENT OR STAND UP

    Using archive footage and voice recordings of Islamist leader Fazlullah, the documentary captures the steady crackdown on freedoms in Yousafzai’s native Swat Valley, including schools destroyed by bombs and music CDs burned.

    Encouraged by her teacher father, Yousafzai began blogging for the BBC at the age of 11. Writing anonymously, she described life under the harsh edicts of the Taliban, bombed-out schools, executions under the cover of dark and girls’ education limited to reading the Koran.

    She later made public appearances in Swat Valley, calling for girls’ right to an education.

    “My father and my mother both inspired me to believe in myself. In a society where women’s rights are not respected, my parents gave me examples,” Yousafzai said at a screening of the documentary in Washington DC this week.

    “There’s a moment where you have to choose to be silent or to stand up,” she says in the film. “My father only gave me the name Malala, he didn’t make me Malala. I chose this life and now I must continue it.”

    Ziauddin Yousafzai said the film was not the story of one family but millions suffering because of war and conflict, adding that millions of Syrian children had been deprived of an education.

    “When you meet these girls, their passion and taste for education it is remarkable. They want to learn,” he said in Washington.

    “In the global south, in developing countries, most of the children fight every day to get educated. Many families have sold their whole property – their cows, their farm and everything to get their children educated.”

    Yousafzai’s Malala Fund, which support girls’ secondary education, wants the film to be shown in schools to inspire students to stand against bullying, racism and human rights violations.

    The movie opens in theatres in the United States from Oct. 2 before it is released in Britain later in the month.