The Moscow Times- Kazakhstan’s central bank said Friday that it was capable of stabilizing the country’s banking system after what it called a “speculative attack” by large hedge funds.<\/p>\n
“The National Bank of the Republic of Kazakhstan has … the necessary means and resources at its disposal and is also ready to undertake all necessary measures to maintain financial stability,” it said in a statement.<\/p>\n
The central bank broke its silence after a torrid week for Kazakhstan’s banks, whose heavy borrowing abroad has made them vulnerable to the global credit crunch triggered by the U.S. subprime mortgage crisis.<\/p>\n
The cost of credit default swaps offering insurance against possible default by Kazakh banks has blown out this week.<\/p>\n
Banks’ bonds and stocks have slumped after ratings agencies Standard & Poor’s and Moody’s this week put under review several Kazakh ratings, including those of the sovereign and leading bank Kazkommerts, for a possible downgrade.<\/p>\n
“The heightened concerns of international investors and creditors may represent, in our view, the result of a speculative attack by large hedge funds on the market for credit derivatives of Kazakhstan’s banks,” the statement said.<\/p>\n