InfoAnda - Exclusive: U.S. lets China bypass Wall Street for Treasury orders |

Pakistanis angry over detentions in Times Sq. case
Monday, May 24, 2010
ISLAMABAD – Relatives of three men detained by Pakistan for alleged links to the suspect in the attempted Times Square bombing say the men are innocent.
They

Taiwan denies boycotting Australian film festival
Thursday, August 6, 2009

AFP - Thursday, August 6TAIPEI (AFP) - - Taiwan's Beijing-friendly government on Wednesday denied boycotting an Australian film festival amid a row over the e

Merkel's support dips, regional ally resigns International
Thursday, September 3, 2009

By Sarah Marsh and Noah Barkin

BERLIN (Reuters) - Chancellor Angela Merkel suffered a double blow on Thursday as a senior party ally in east German

Minister seeks closure of anti-Berlusconi websites
Wednesday, December 16, 2009
ROME (AFP) - – The Italian government moved Tuesday to close down Internet sites encouraging further violence against Prime Minister Silvio Berlusconi, who

Asian markets mixed after Wall Street rally
Wednesday, March 18, 2009

By ELAINE KURTENBACH,AP Business Writer AP - Wednesday, March 18SHANGHAI - Asia's stock market rally seemed to be running out of steam Wednesday, despite an

Dairy farmers burn hay, dump milk in price protest | International | | 22 September 2009
Nepal's gentle giants do battle on the polo field | 5 December 2010
Iran open to more nuclear talks, says president | 24 January 2011

N.Irish police uncover large bomb in abandoned van | | 18 June 2010

Forum Views () Forum Replies ()

Read more with google mobile : Exclusive: U.S. lets China bypass Wall Street for Treasury orders |

Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Home Business Business Home Economy Technology Media Small Business Legal Deals Earnings Social Pulse Business Video The Freeland File Markets Markets Home U.S. Markets European Markets Asian Markets Global Market Data Indices M&A Stocks Bonds Currencies Commodities Futures Funds peHUB World World Home U.S. Brazil China Euro Zone Japan Mexico Russia India Insight World Video Reuters Investigates Decoder Politics Politics Home Election 2012 Issues 2012 Candidates 2012 Tales from the Trail Political Punchlines Supreme Court Politics Video Tech Technology Home MediaFile Science Tech Video Tech Tonic Social Pulse Opinion Opinion Home Chrystia Freeland John Lloyd Felix Salmon Jack Shafer David Rohde Bernd Debusmann Nader Mousavizadeh Lucy P. Marcus David Cay Johnston Bethany McLean Edward Hadas Hugo Dixon Ian Bremmer Lawrence Summers Susan Glasser The Great Debate Steven Brill Jack & Suzy Welch Frederick Kempe Christopher Papagianis Breakingviews Equities Credit Private Equity M&A Macro & Markets Politics Breakingviews Video Money Money Home Tax Break Lipper Awards 2012 Global Investing MuniLand Unstructured Finance Linda Stern Mark Miller John Wasik James Saft Analyst Research Alerts Watchlist Portfolio Stock Screener Fund Screener Personal Finance Video Money Clip Investing 201 Life Health Sports Arts Faithworld Business Traveler Entertainment Oddly Enough Lifestyle Video Pictures Pictures Home Reuters Photographers Full Focus Video Reuters TV Reuters News Article Comments (48) Counterparties: Today's Best Links An industry's "decades-long deception" The fire retardant industry engaged in a decades-long deception about its products, which are often filled with cancerous materials, the Chicago Tribune reports. Read more at Counterparties The euro zone's slow-motion bank run CEO pay now slightly more rational Sign up for the Counterparties newsletter! Follow Reuters Facebook Twitter RSS YouTube Read Exclusive: U.S. lets China bypass Wall Street for Treasury orders 3:35pm EDT "Battleship" bomb may hit studio's profits: analysts 20 May 2012 Facebook shares sink 11 percent as reality overtakes hype 4:36pm EDT Google's Schmidt challenges: no screen time for 1 hour a day 20 May 2012 "Pre-diabetes," diabetes rising among U.S. teens 3:23pm EDT Discussed 166 Iran attack decision nears, Israeli elite locks down 118 Obama presses ailing Europe to focus on growth 105 Americans split on Obama’s gay marriage decision Watched A look at the UK’s most beautiful face Thu, May 10 2012 Mount St. Helens eruption anniversary marked by images of recovery Fri, May 18 2012 Zuckerberg changes status to 'married' Sun, May 20 2012 Recommended Newsletters Reuters U.S. Top News A quick-fix on the day's news published with Reuters videos and award-winning news photography and delivered at your choice of one of four times during the day. Reuters Deals Today The latest Reuters articles on M&A, IPOs, private equity, hedge funds and regulatory updates delivered to your inbox each day. Reuters Technology Report Your daily briefing on the latest tech developments from around the world from Reuters expert tech correspondents. Subscribe Full List of Available Newsletters Pictures Reuters Photojournalism Our day's top images, in-depth photo essays and offbeat slices of life. See the best of Reuters photography. See more | Photo caption Quake in Italy A strong earthquake rocked a large swathe of northern Italy. Slideshow Anti-NATO clashes Police officers and protesters clash outside the NATO summit in Chicago. Slideshow Exclusive: U.S. lets China bypass Wall Street for Treasury orders Tweet Share this Email Print Related News Blind Chinese activist Chen arrives in New York Sun, May 20 2012 Blind Chinese activist arrives in United States Sat, May 19 2012 China cries foul after U.S. sets tariffs on solar imports Fri, May 18 2012 Spain beset by bank crisis, downgrades, bond pressure Thu, May 17 2012 Europe's banks on the brink Thu, May 17 2012 Analysis & Opinion How to resist Big Brother 2.0 Essential reading: Tax tension in Washington, and more Related Topics World » China » A bank clerk counts U.S. dollar banknotes on bundles of 100 Chinese yuan banknotes at a branch of a bank in Huaibei, Anhui province April 26, 2012. Credit: Reuters/Stringer By Emily Flitter NEW YORK | Mon May 21, 2012 3:35pm EDT NEW YORK (Reuters) - China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury's first-ever direct relationship with a foreign government, according to documents viewed by Reuters. The relationship means the People's Bank of China buys U.S. debt using a different method than any other central bank in the world. The other central banks, including the Bank of Japan, which has a large appetite for Treasuries, place orders for U.S. debt with major Wall Street banks designated by the government as primary dealers. Those dealers then bid on their behalf at Treasury auctions. China, which holds $1.17 trillion in U.S. Treasuries, still buys some Treasuries through primary dealers, but since June 2011, that route hasn't been necessary. The documents viewed by Reuters show the U.S. Treasury Department has given the People's Bank of China a direct computer link to its auction system, which the Chinese first used to buy two-year notes in late June 2011. China can now participate in auctions without placing bids through primary dealers. If it wants to sell, however, it still has to go through the market. The change was not announced publicly or in any message to primary dealers. "Direct bidding is open to a wide range of investors, but as a matter of general policy we do not comment on individual bidders," said Matt Anderson, a Treasury Department spokesman. While there is been no prohibition on foreign government entities bidding directly, the Treasury's accommodation of China is unique. The Treasury's sales of U.S. debt to China have become part of a politically charged public debate about China's role as the largest exporter to the United States and also the country's largest creditor. The privilege may help China obtain U.S. debt for a better price by keeping Wall Street's knowledge of its orders to a minimum. Primary dealers are not allowed to charge customers money to bid on their behalf at Treasury auctions, so China isn't saving money by cutting out commission fees. Instead, China is preserving the value of specific information about its bidding habits. By bidding directly, China prevents Wall Street banks from trying to exploit its huge presence in a given auction by driving up the price. It is one of several courtesies provided to a buyer in a class by itself in terms of purchasing power. Although the Japanese, for example, own about $1.1 trillion of Treasuries, their purchasing has been less centralized. Buying by Japan is scattered among institutions, including pension funds, large Japanese banks and the Bank of Japan, without a single entity dominating. Granting China a direct bidding link is not the first time Treasury has gone to great lengths to keep its largest client happy. In 2009, when Treasury officials found China was using special deals with primary dealers to conceal its U.S. debt purchases, the Treasury changed a rule to outlaw those deals, Reuters reported last June. But at the same time it relaxed a reporting requirement to make the Chinese more comfortable with the amended rule. Another feature of the U.S.-China business relationship is discretion: The Treasury tried to keep its motivation for the 2009 rule change under wraps, Reuters reported. Documents dealing with China's new status as a direct bidder again demonstrate the Treasury's desire for secrecy -- in terms of Wall Street and its new direct bidding customer. To safeguard against hackers, Treasury officials upgraded the system that allows China to access the bidding process. Then they discussed ways to deflect questions from Wall Street traders that would arise once the auction results began revealing the undeniable presence of a foreign direct bidder. "Most hold the view that foreign accounts only submit 'indirect bids' through primary dealers. This will likely cause significant chatter on the street and many questions will likely come our way," wrote one government official in an email viewed by Reuters. In the email, the official suggested providing basic, general answers to questions about who can bid in Treasury actions. "For questions more extensive or probing in nature, I think it prudent to direct them to the or Treasury public relations area," the official wrote. The granting to China of direct bidder status may be controversial because some government officials are concerned that China has gained too much leverage over the United States through its large Treasury holdings. For example, economist Brad Setser, who is a member of the National Economic Council and has also served on the National Security Council, has argued China's large Treasury holdings pose a national security threat. Writing for the Council on Foreign Relations in 2009, Setser posited that China's massive U.S. debt holdings gave it power over U.S. policy via the threat of a swift, large sale of U.S. debt that could send the market into turmoil and drive up interest rates. But Treasury officials have long maintained that U.S. debt sales to China are kept separate from politics in a business relationship that benefits both countries. The Chinese use Treasuries to house the dollars they receive from selling goods to the United States, while the U.S. government is happy to see such strong demand for its debt because it keeps interest rates low. A spokesman for the Chinese embassy in Washington did not respond to calls and emails seeking comment. The United States has, however, displayed increasing anxiety about China as a cybersecurity threat. The change Treasury officials made to their direct bidding system before allowing access to China was to limit access to the system to a specially designed private network connection controlled by the Treasury. China is among the most sensitive topics for bankers and government officials who court the country as a financial client because of its size and importance, and none would agree to comment on the record for this story. A former debt management official at the Treasury who did not want to be identified said that as China's experience in the U.S. Treasury market has deepened over time, Chinese officials may have felt more comfortable taking the reins in the management of their holdings. Their request to bid directly, in his view, came from a confidence that their money managers could buy U.S. debt more efficiently on their own than through Wall Street banks, which can often drive up the price of Treasuries at an auction if they know how much large clients are willing to pay. Such a practice that is not specifically illegal, though most traders would deem it unethical. Evidence of China's growing sophistication as a money manager in the U.S. markets is clear in its expansion of operations in New York. Its money management arm, the State Administration for Foreign Exchange (commonly called SAFE), has an office in Midtown Manhattan and a seasoned chief investment officer -- former Pacific Investment Management Co derivatives head Changhong Zhu -- in Beijing. A woman who answered the phone at SAFE's New York office said no one in the office was authorized to talk to the media. (Editing by Martin Howell and Steve Orlofsky) World China Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (48) Harry079 wrote: Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Back to top Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index Legal Bankruptcy Law California Legal New York Legal Securities Law Support & Contact Support Corrections Connect with Reuters Twitter Facebook LinkedIn RSS Podcast Newsletters Mobile About Privacy Policy Terms of Use AdChoices Copyright Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Thomsonreuters.com About Thomson Reuters Investor Relations Careers Contact Us Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

Other News on Tuesday, 22 May 2012
Italy police close in on school bombing suspect |
UK's Cameron urges euro zone action |
Exclusive: U.S. lets China bypass Wall Street for Treasury orders |
Comic Grillo shakes up Italian politics with shock win |
At least 11 Albanian university students killed in bus crash |
Mali president beaten during palace occupation |
Apple, Samsung CEOs in U.S. court talks on patents |
Whitney Houston's last record released for Sparkle |
Cannes film festival abuzz as dark tales shine |
Alain Resnais revisits classic Greek legend at Cannes |
Michael Jackson is still Bad, 25 years after album |
Jessica's got to connect to win, says Idol mentor Iovine |
Antiviral brings Cronenberg father-son act to Cannes |
Bardem shows plight of Saharawi in film documentary |
Putin shifts former ministers to Kremlin |
Greeks embrace some new myths about life with the euro |
Two dead in Beirut clashes after killing of anti-Assad cleric |
Bulgarian capital shaken by 5.6 magnitude quake |
Hollande's euro arguments nonsense: Austria's Fekter |
Facing edgy vote, Egypt army hikes diesel imports |
New Zealand to ban foreign-flagged fishing boats |
Ruling party candidate claims win in Dominican vote |
Obama sketches four-pronged strategy for Europe, sees EU consensus |
Insight: Morgan Stanley cut Facebook estimates just before IPO |
Apple still dominates world's top brands: study |
Facebook shares sink 11 percent as reality overtakes hype |
Apple seeks support for new spaceship-like campus |
Silicon Valley takes Facebook fizzle in stride |
House bows out with a funeral and plenty of twists |
Hunger Games village up for auction |
Alain Resnais revisits classic Greek legend at Cannes |
Antiviral brings Cronenberg father-son act to Cannes |
Exclusive: Tunisia to extradite former Gaddafi PM to Libya |
Afghans back Chicago deal, warn West to keep promises |
Insight: EU foreign policy chief Ashton stays out of the spotlight |
IAEA chief says nears deal with Iran ahead of 6-power talks |
Egypt underclass finds voice, voting against misery |
Mali coup leader condemns president beating |
Bissau junta says hands power back to civilians |
South Sudan says Sudan bombs, shells its territory |
Ukraine plans Euro crowd control, prostitution a problem |
Facebook drops again as pressure to perform mounts |
Google names new Motorola Mobility CEO |
After Yahoo deal, challenges abound for Alibaba |
Brad Pitt mob movie portrays broken American dream |
Singer Pete Doherty's film debut dubbed a crime |
Royal Opera's Falstaff: Big knight on a big horse |
Greece at new risk of being pushed off euro
Bodies of missing Tenn. mom, Jo Ann Bain, and daughter found
Female Breasts Are Bigger Than Ever
AMD Trinity Accelerated Processing Units Now in Volume Production
The Avengers (2012 film), made the second biggest opening- and single-day gross of all-time
AMD to Start Production of piledriver
Ivy Bridge Quad-Core, Four-Thread Desktop CPUs
Islamists Protest Lady Gaga's Concert in Indonesia
Japan Successfully Broadcasts an 8K Signal Over the Air
ECB boosts loans to 1 trillion Euro to stop credit crunch
Egypt : Mohammed Morsi won with 52 percent
What do you call 100,000 Frenchmen with their hands up
AMD Launches AMD Embedded R-Series APU Platform
Fed Should not Ignore Emerging Market Crisis
Fed casts shadow over India, emerging markets
Why are Chinese tourists so rude? A few insights

USD EUR - 1 year graph		BlogMeter 1.01