Keep Us Strong WikiLeaks logo

Currently released so far... 97115 / 251,287

Articles

Browse latest releases

Browse by creation date

Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z

Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
ETRD EAGR ETTC EAID ECON EFIN ECIN EINV ELAB EAIR ENRG EPET EWWT ECPS EIND EMIN ELTN EC ETMIN EUC EZ ET ELECTIONS ENVR EU EUN EG EINT ER ECONOMICS ES EMS ENIV EEB EN ECE ECOSOC EK ENVIRONMENT EFIS EI EWT ENGRD ECPSN EXIM EIAD ERIN ECPC EDEV ENGY ECTRD EPA ESTH ECCT EINVECON ENGR ERTD EUR EAP EWWC ELTD EL EXIMOPIC EXTERNAL ETRDEC ESCAP ECO EGAD ELNT ECONOMIC ENV ETRN EIAR EUMEM ENRGPARMOTRASENVKGHGPGOVECONTSPLEAID EREL ECOM ECONETRDEAGRJA ETCC ETRG ECONOMY EMED ETR ENERG EITC EFINOECD EURM EENG ERA EXPORT ENRD ECONEINVETRDEFINELABETRDKTDBPGOVOPIC EGEN EBRD EVIN ETRAD ECOWAS EFTA ECONETRDBESPAR EGOVSY EPIN EID ECONENRG EDRC ESENV ETT EB ENER ELTNSNAR ECHEVARRIA ETRC EPIT EDUC ESA EFI ENRGY ESCI EE EAIDXMXAXBXFFR EETC ECIP EIAID EIVN EBEXP ESTN EING EGOV ETRA EPETEIND ELAN ETRDGK EAIDRW ETRDEINVECINPGOVCS EPEC ENVI ELN EAG EPCS EPRT EPTED ETRB EUM EAIDS EFIC EFINECONEAIDUNGAGM EAIDAR ESF EIDN ELAM EDU EV EAIDAF ECN EDA EXBS EINTECPS ENRGTRGYETRDBEXPBTIOSZ EPREL EAC EINVEFIN ETA EAGER EINDIR ECA ECLAC ELAP EITI EUCOM ECONEFINETRDPGOVEAGRPTERKTFNKCRMEAID EARG ELDIN EINVKSCA ENNP EFINECONCS EFINTS ECCP ETC EAIRASECCASCID EINN ETRP EAIDNI EFQ ECOQKPKO EGPHUM EBUD ECONEINVEFINPGOVIZ ENERGY ELB EINDETRD EMI ECONEFIN EIB EURN ETRDEINVTINTCS EIN EFIM ETIO ELAINE EMN EATO EWTR EIPR EINVETC ETTD ETDR EIQ ECONCS EPPD ENRGIZ EISL ESPINOSA ELEC EAIG ESLCO EUREM ENTG ERD EINVECONSENVCSJA EEPET EUNCH ECINECONCS ETRO ETRDECONWTOCS ECUN EFND EPECO EAIRECONRP ERGR ETRDPGOV ECPN ENRGMO EPWR EET EAIS EAGRE EDUARDO EAGRRP EAIDPHUMPRELUG EICN ECONQH EVN EGHG ELBR EINF EAIDHO EENV ETEX ERNG ED
KMDR KPAO KPKO KJUS KCRM KGHG KFRD KWMN KDEM KTFN KHIV KGIC KIDE KSCA KNNP KHUM KIPR KSUM KISL KIRF KCOR KRCM KPAL KWBG KN KS KOMC KSEP KFLU KPWR KTIA KSEO KMPI KHLS KICC KSTH KMCA KVPR KPRM KE KU KZ KFLO KSAF KTIP KTEX KBCT KOCI KOLY KOR KAWC KACT KUNR KTDB KSTC KLIG KSKN KNN KCFE KCIP KGHA KHDP KPOW KUNC KDRL KV KPREL KCRS KPOL KRVC KRIM KGIT KWIR KT KIRC KOMO KRFD KUWAIT KG KFIN KSCI KTFIN KFTN KGOV KPRV KSAC KGIV KCRIM KPIR KSOC KBIO KW KGLB KMWN KPO KFSC KSEAO KSTCPL KSI KPRP KREC KFPC KUNH KCSA KMRS KNDP KR KICCPUR KPPAO KCSY KTBT KCIS KNEP KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG KNNB KGCC KINR KPOP KMFO KENV KNAR KVIR KDRG KDMR KFCE KNAO KDEN KGCN KICA KIMMITT KMCC KLFU KMSG KSEC KUM KCUL KMNP KSMT KCOM KOMCSG KSPR KPMI KRAD KIND KCRP KAUST KWAWC KTER KCHG KRDP KPAS KITA KTSC KPAOPREL KWGB KIRP KJUST KMIG KLAB KTFR KSEI KSTT KAPO KSTS KLSO KWNN KPOA KHSA KNPP KPAONZ KBTS KWWW KY KJRE KPAOKMDRKE KCRCM KSCS KWMNCI KESO KWUN KPLS KIIP KEDEM KPAOY KRIF KGICKS KREF KTRD KFRDSOCIRO KTAO KJU KWMNPHUMPRELKPAOZW KEN KO KNEI KEMR KKIV KEAI KWAC KRCIM KWCI KFIU KWIC KCORR KOMS KNNO KPAI KBWG KTTB KTBD KTIALG KILS KFEM KTDM KESS KNUC KPA KOMCCO KCEM KRCS KWBGSY KNPPIS KNNPMNUC KWN KERG KLTN KALM KCCP KSUMPHUM KREL KGH KLIP KTLA KAWK KWMM KVRP KVRC KAID KSLG KDEMK KX KIF KNPR KCFC KFTFN KTFM KPDD KCERS KMOC KDEMAF KMEPI KEMS KDRM KEPREL KBTR KEDU KNP KIRL KNNR KMPT KISLPINR KTPN KA KJUSTH KPIN KDEV KTDD KAKA KFRP KWNM KTSD KINL KJUSKUNR KWWMN KECF KWBC KPRO KVBL KOM KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG KEDM KFLD KLPM KRGY KNNF KICR KIFR KM KWMNCS KAWS KLAP KPAK KDDG KCGC KID KNSD KMPF KPFO KDP KCMR KRMS KNPT KNNNP KTIAPARM KDTB KNUP KPGOV KNAP KNNC KUK KSRE KREISLER KIVP KQ KTIAEUN KPALAOIS KRM KISLAO KWM KFLOA
PHUM PINR PTER PGOV PREL PREF PL PM PHSA PE PARM PINS PK PUNE PO PALESTINIAN PU PBTS PROP PTBS POL POLI PA PGOVZI POLMIL POLITICAL PARTIES POLM PD POLITICS POLICY PAS PMIL PINT PNAT PV PKO PPOL PERSONS PING PBIO PH PETR PARMS PRES PCON PETERS PRELBR PT PLAB PP PAK PDEM PKPA PSOCI PF PLO PTERM PJUS PSOE PELOSI PROPERTY PGOVPREL PARP PRL PNIR PHUMKPAL PG PREZ PGIC PBOV PAO PKK PROV PHSAK PHUMPREL PROTECTION PGOVBL PSI PRELPK PGOVENRG PUM PRELKPKO PATTY PSOC PRIVATIZATION PRELSP PGOVEAIDUKNOSWGMHUCANLLHFRSPITNZ PMIG PREC PAIGH PROG PSHA PARK PETER POG PHUS PPREL PS PTERPREL PRELPGOV POV PKPO PGOVECON POUS PGOVPRELPHUMPREFSMIGELABEAIDKCRMKWMN PWBG PMAR PREM PAR PNR PRELPGOVEAIDECONEINVBEXPSCULOIIPBTIO PARMIR PGOVGM PHUH PARTM PN PRE PTE PY POLUN PPEL PDOV PGOVSOCI PIRF PGOVPM PBST PRELEVU PGOR PBTSRU PRM PRELKPAOIZ PGVO PERL PGOC PAGR PMIN PHUMR PVIP PPD PGV PRAM PINL PKPAL PTERE PGOF PINO PHAS PODC PRHUM PHUMA PREO PPA PEPFAR PGO PRGOV PAC PRESL PORG PKFK PEPR PRELP PREFA PNG PGOVPHUMKPAO PRELECON PINOCHET PFOR PGOVLO PHUMBA PRELC PREK PHUME PHJM POLINT PGOVPZ PGOVKCRM PGOVE PHALANAGE PARTY PECON PEACE PROCESS PLN PRELSW PAHO PEDRO PRELA PASS PPAO PGPV PNUM PCUL PGGV PSA PGOVSMIGKCRMKWMNPHUMCVISKFRDCA PGIV PRFE POGOV PEL PBT PAMQ PINF PSEPC POSTS PHUMPGOV PVOV PHSAPREL PROLIFERATION PENA PRELTBIOBA PIN PRELL PGOVPTER PHAM PHYTRP PTEL PTERPGOV PHARM PROTESTS PRELAF PKBL PRELKPAO PKNP PARMP PHUML PFOV PERM PUOS PRELGOV PHUMPTER PARAGRAPH PERURENA PBTSEWWT PCI PETROL PINSO PINSCE PQL PEREZ PBS

Browse by classification

Community resources

courage is contagious

Viewing cable 08LONDON2760,

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs

Understanding cables
Every cable message consists of three parts:
  • The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
  • The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
  • The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
To understand the justification used for the classification of each cable, please use this WikiSource article as reference.

Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08LONDON2760.
Reference ID Created Released Classification Origin
08LONDON2760 2008-10-31 13:47 2011-02-04 21:00 CONFIDENTIAL Embassy London
VZCZCXRO0169
PP RUEHAG RUEHROV
DE RUEHLO #2760/01 3051347
ZNY CCCCC ZZH
P 311347Z OCT 08
FM AMEMBASSY LONDON
TO RUEHC/SECSTATE WASHDC PRIORITY 0283
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
C O N F I D E N T I A L SECTION 01 OF 02 LONDON 002760 

SIPDIS DEPT FOR PDAS NELSON, MSAKAUE TREASURY FOR MURDEN, CARNES, E.O. 12958: DECL: 10/30/2015 

TAGS: ECON EINV UK

Classified By: Economic Minister Counselor Mark Tokola for reasons 1.4 b and d

1.(C) Summary: Political leaders must tackle not only the liquidity and solvency of financial institutions, but also must now confront significant currency volatility and a deepening cross-border contagion. While acknowledging there are no quick fixes, officials from two leading financial institutions - Stephen King, Chief Economist, HSBC and William Chalmers, Managing Director, Investment Banking Division, Morgan Stanley - identified several possible policy prescriptions in October 28th meetings with emboffs: injection of cash into economic systems, full disclosure of toxic assets, and the creation of a framework for a supra-national regulatory agent. They also explained why, in their view, government recapitalization efforts have failed to stabilize markets. End Summary. Currency Stability

2.(C) In today's turbulent times, cash is paramount and governments must ensure that as much money as needed is available, said King. Political leaders need to indicate that they are prepared to inject cash into the economy without limit and regardless of inflationary concerns to assuage fears of investors and prevent cash hoarding. He cautioned, however, that no one country should proceed unilaterally. Coordination among the G7 would limit the danger of cross-currency contagion. He also noted that central banks, ability to increase the money supply through open market operations has been only nominally successful during the crisis, given the paralysis of inter-bank borrowing. The European Central Bank (ECB) is also more hamstrung than the Federal Reserve in terms of increasing liquidity through cash injections, since the ECB is built to deal with inflation and has little authority independent of member state governments in matters of liquidity, King stated. In his view, governments need to bypass the banking system and inject liquidity directly into the economy via increased government project spending.

3.(C) The spillover of currency volatility on trade and the global de-leveraging process is also of significant concern, observed Chalmers. The valuation of toxic assets is more difficult when the currency in which those assets are denominated is unstable. He also argued that political leaders need to make both a verbal and concrete pledge to ensure currency stability. Without such an assurance, the contagion effect has the potential to cripple European banks.

4.(C) Governments also have been unable to control the speed of de-leveraging - the selling of commodities and assets to reduce risk and raise capital, said Chalmers. The market panic of recent weeks is evidence that statements by political leaders have proven to be ineffective in controlling the pace of de-leveraging. Political leaders need to issue a coherent, strong and combined message that measures in place will work and seek patience from investors and savers, he stated. Toxic Assets - Fuller Disclosure

5.(C) Many banks have not come clean about the extent of their toxic assets on their balance sheets, said King. Political leaders and regulators should underscore the need for greater transparency and establish mechanisms to force fuller disclosure, if not voluntarily done by the banks. He argued that there is a need for an independent authority to investigate each bank as well as a cross-border evaluation process.

6.(C) Fuller disclosure about assets is necessary but there is a potential trade off between greater transparency and liquidity, said Chalmers. The real value of assets, if disclosed, could make those assets illiquid. He also argued that non-regulated instruments - such as hedge funds - also need to be subject to greater transparency requirements. Regulatory Framework

7.(C) The industry expects more rigorous regulation, remarked King. But he warned that regulators need to really LONDON 00002760 002 OF 002 understand market instruments before developing and imposing new regulations. Some of these regulators need to have been market insiders and not just government technocrats. "Poachers need to become the ranchers," if governments are to stay ahead of market mechanisms.

8.(C) Going a step further, King said that the architecture of the global financial system needs to change so that there is a single global capital market with sovereign nations managing their individual economies. This will require a new global framework, a Bretton Woods Two, he said. He warned however, that if this is not done skillfully, there is a danger that nations will revert to capital market protectionism. This would have the same adverse impact on world economic growth as the Smoot-Hawley Tariff Act of 1930, but the mechanism would be through the capital markets rather than trade.

9.(C) Chalmers argued that there is a need for a supra-national structure in place of the independent, loosely coordinated responses of sovereign states. He stated that this could through greater formalized process of cooperation among national regulators - a "college of regulator" such as PM Brown has proposed - or through the ceding of some sovereign authority to a supra-national organization. Investors Remain Skeptical

10.(C) The gyrations of the world's financial markets demonstrate that recent policy decisions have not been correct, argued King. Interest rate cuts have had negligible effect since the real root of the crisis is solvency, not liquidity, he argued. Governments, recapitalization plans also have had a minimal effect since the markets are skeptical about whether the amounts will prove to be sufficient. What is the right amount of money - USD 700 billion, GBP 500 billion? queried King. The capital injections were needed to prevent institutions from going bust, but he warned that there are many Zombie Banks,, with crippling levels of loans to securitization, that still haven't come to light. How much could governments borrow to resuscitate these banks? he asked. Without an open-ended funding commitment for recapitalization, the markets will remain skeptical that there will be enough funding for the distressed banks.

11.(C) The lack of clarity of how and when governments will divest themselves from the troubled banks also is sending a negative signal to the market, said Chalmers. Potential investors in these banks want a timetable - such a timetable will also show confidence in the markets and that recovery is attainable, he argued. Visit London's Classified Website: XXXXXXXXXXXX LeBaron