Most Fed officials say slower rate hike pace appropriate 'soon'

WASHINGTON –– A majority of US Federal Reserve policymakers found that a slower pace of interest rate hikes would "likely soon be appropriate," the central bank said Wednesday.

The Fed has embarked on an aggressive path to cool demand and bring down prices as inflation in the world's biggest economy surged to the highest level in decades, raising the benchmark borrowing rate 6 times this year.

With inflation hovering around 7.7 percent, the latest policy meeting in early November produced a fourth consecutive three-quarter point interest rate hike, a major rise.

This brings the rate to a range between 3.75 and 4 percent, the highest since January 2008.

But "a substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate," according to minutes of the November meeting released Wednesday.

"A slower pace in these circumstances would better allow the committee to assess progress toward its goals of maximum employment and price stability," the minutes said.

Participants of the meeting noted that it would take time for the full effects of policy to be realized, and a few found that easing the pace of interest rate hikes could lower risks of instability in the financial system.

In a sign of diverging opinions, some cautioned the impact of rate hikes could "exceed what was required" to bring down inflation.

FEW SIGNS OF ABATING

But policymakers agreed at the meeting earlier this month that inflation was "unacceptably high" and well above the longer-run goal of 2 percent.

Annual consumer inflation came in at 7.7 percent in October, down from a blistering high 9.1 percent in June but still underscoring a heightened cost of living.

With surging consumer prices showing "little sign thus far of abating," some officials found that policy might have to be tightened more than anticipated.

They maintained that a period of slower growth would help reduce inflationary pressures.

Despite signs of slowing activity as the Fed's rate hikes trickled through the economy, officials saw that the labor market remained tight, with elevated wage growth.

New home sales posted a surprise increase last month as well, while demand for big-ticket American-made goods picked up more than expected, data released on Wednesday showed.

"Policy makers appear set to slow the pace of rate hikes," said economist Ryan Sweet of Oxford Economics.

But he noted that the Fed's path toward a soft landing is increasingly narrow, adding that the Fed's staff economists see "the odds of a US recession in the next year as basically a coin flip."

A growing number of voices, including some Fed officials, have advocated for smaller steps in the coming months.

Last week, Federal Reserve Governor Christopher Waller said signs of easing inflation pressures and a slowing US economy could allow the central bank to dial back its pace of rate hikes.

Fed Vice Chair Lael Brainard also said last week that it would likely be "appropriate soon" for the Fed to slow the pace of rate increases, adding that it would take time for tightening so far to flow through to the economy.

Agence France-Presse 

US to slap record $8.9-B fine on BNP Paribas

NEW YORK – French bank BNP Paribas has agreed to pay US authorities a $8.9 billion fine to avoid being tried in court for dealing with US-blacklisted countries, sources close to the matter told AFP.

The deal ends months of haggling which saw French President Francois Hollande pressing his US counterpart Barack Obama to intervene and lighten the punishment.

Agreement on the record fine, approved by the bank’s board of directors at a special weekend meeting in Paris, is due to be announced Monday after markets close at the New York Stock Exchange around 4:00 pm (2000 GMT).

The US Justice Department and New York banking regulator Benjamin Lawsky will make separate announcements, another source said, also speaking on condition of anonymity.

BNP declined requests for a public comment.

At least $2 billion of the fine will go to Lawsky, who is temporarily suspending parts of BNP’s dollar-handling business in the United States — key to any major bank’s US operations — for all of 2015.

Sources said the suspension would take place progressively since BNP has operations underway.

BNP, France’s largest bank, has until December 31 to find a bank that agrees to make dollar payments on its behalf.

The deal forces BNP to plead guilty to the bank’s deals from 2002 to 2009 with countries that Washington has blacklisted like Cuba, Iran and Sudan.

The investigation probed more than $100 billion of transactions, finding that $30 billion of that amount were concealed in order to skirt the sanctions.

Too tough on BNP?

BNP has a strong enough capital base to handle the penalty, but the size of the fine and the temporary suspension of parts of its dollar-handling business — key to any major bank’s US operations — will mean a significant hit on its earnings.

BNP chief executive Jean-Laurent Bonnafe reportedly wrote to employees on Friday conceding the bank will be “punished severely,” but stressing that “this difficulty … will not impact our roadmap.”

US authorities have already forced BNP to dismiss three senior officials allegedly linked to the sanctions violations, including its chief operating officer.

Lower bank officials could also be fired as part of the settlement.

Sources say the settlement could include a year-long suspension of the bank’s dollar clearing for oil and gas trading activities in Switzerland, Singapore and France, and suspension of dollar clearing on behalf of other banks and some clients.

That would likely be a blow to the bank’s bottom line. In 2013 BNP reported total profits of 4.83 billion euros ($6.59 billion) on revenues of 38.8 billion euros. It has already set aside $1.1 billion to cover losses from the case.

BNP has been largely quiet about the allegations and potential penalties during months of negotiations.

Critics have accused Washington of being especially tough with foreign banks, and BNP in particular, while treating US banking transgressions more lightly.

In punishing US banks for financial crisis-related violations, negotiated fines have run into the billions but none has had to plead guilty, an act which could lead to the loss of a banking license.

In 2012 Dutch bank ING paid a relatively paltry $619 million financial crisis, and Britain’s Standard Chartered $670 million. HSBC, which was also accused of complicity in money laundering, paid $1.9 billion.

None were forced to plead guilty or halt certain banking operations.

But US authorities have become much tougher on banks that are less cooperative in investigations.

‘Negative consequences’

In May, Credit Suisse pleaded guilty to helping Americans evade taxes and was fined $2.6 billion, over three times the $780 million fine US authorities imposed on fellow Swiss bank UBS for the same charges in 2009.

Analysts say the size of the BNP fine relates to the size of the business it did with Sudan and Iran, several times larger than that handled by ING and Standard Chartered.

The BNP controversy has been a thorn in US-France relations. French officials warned in early June that it could cause problems for the huge transatlantic trade treaty under negotiation between the European Union and the United States.

“Evidently… this risks having negative consequences,” Foreign Minister Laurent Fabius ominously warned.

Hollande also raised the issue with Obama during a dinner in Paris.

Fabius said that Hollande had told Obama the case is “very important for Europe and for France,” saying if BNP is weakened it would “create a very negative interference in Europe and its economy.”

But even before the dinner, Obama had signaled he would stay out of a legal issue.

“The rule of law is not determined by political expediency,” he said.

source: business.inquirer.net

Citibank offers debt payment relief to those displaced by Bohol-Cebu quake

MANILA, Philippines — Global banking giant Citibank has offered debt payment relief to credit cardholders and personal loan customers who were victimized by the recent 7.2-magnitude earthquake that devastated Central Visayas.

Similar to credit accommodations implemented by Citi twice in the past when storm Ondoy and southwest monsoons ravaged greater Metro Manila, Citi announced that clients affected by the recent earthquake might ask for a relief of at least 30 days to settle their outstanding balances.


To avail themselves of this leeway, the affected clients are advised to call the 24-hour CitiPhone at 995-9999.

Qualified cardholders and personal loan customers will be entitled to an extra 30 days to settle their outstanding balance from their most recent payment due date. Late payment charges will be waived, and interest charges may be waived on a case to case basis.

Batara Sianturi, Citi Philippines CEO explained that this move would ensure continued access to credit for affected customers.

“This is not the first time that Citi extended payment relief to provide assistance to our customers. Through this program, we hope to give our clients time to settle their card bill or loan account and enjoy continued access to credit, which should be very useful to them in their current situation.”

The first time that Citi offered debt payment relief was during typhoon Ondoy, when Metro Manila was brought to a standstill, with many areas inundated by floods and homes destroyed. At that time, Citi’s payment holiday was extended to targeted areas hardest hit by Typhoon Ondoy. The second time was last year following the extensive flooding brought about by the southwest monsoon.

Citi has branches in Cebu City and Davao City.

“We have been monitoring closely the situation through our officers and employees from Cebu and Davao, who I am pleased to report are all safe together with their families,” Sianturi said.

With aftershocks felt the day after the earthquake, Citi suspended branch operations in Cebu City and encouraged clients to transact through its online, phone and mobile banking channels. “For the safety of our clients and employees, we sought the approval of the Bangko Sentral ng Pilipinas and they were very supportive of our plans,” he added.

The 7.2-magnitude earthquake that shook Bohol was also felt in nearby areas with various earthquake intensities recorded in Cebu City, Negros Occidental, Guimaras Island, Bacolod City, and Leyte, stretching to Davao City, Zamboanga Peninsula, Antique and Surigao del Sur.

The National Disaster Risk Reduction and Management Council estimated that 3.2 million people were affected by the earthquake.

source: business.inquirer.net

Australia central bank subsidiary in Saddam link

SYDNEY—The Reserve Bank of Australia (RBA) on Monday admitted staff from a subsidiary visited Iraq at the height of UN sanctions after it was accused of attempting to strike an illegal deal with Saddam Hussein.

A joint investigation by the Australian Broadcasting Corporation and Fairfax Media said secret files showed officials from the central bank’s scandal-hit Note Printing Australia (NPA) went to Iraq to discuss a contract to turn the country’s paper currency into polymer notes.

During the 1998 trip, codenamed Delta Project, they met a middleman—former dictator Hussein’s brother-in-law and bodyguard Arshad Yassin, the reports said.

“Indications from Arshad Yassin’s office are that Saddam Hussein’s office has already allocated $US65 million for the total project,” RBA officials said in one document, the media groups reported.

“He has confirmed that Saddam Hussein has seen the polymer notes samples and is keen to adopt our product.”

Reserve officials working for NPA said the funds could potentially be accessed by funnelling them through a Jordanian bank “with the green light of SH (Saddam Hussein),” it was alleged.

The operation was called off six months later after Australian diplomats uncovered the secret dealings with the brutal regime, according to the ABC.

The RBA admitted officials made the trip, as calls mounted for a full inquiry.

“The visit in 1998 was, in the opinion of the bank, ill-advised,” it said in a statement.

“No banknotes were ultimately supplied to Iraq. On the records available to the bank, the project went into abeyance after concerns were raised by DFAT (Department of Foreign Affairs and Trade) with the then-CEO of NPA.”

David Chaikin, a legal expert at the University of Sydney who reviewed the confidential bank documents, said the negotiations were a violation of international law and alarm bells should have been sounded “to the highest levels of the bank”.

“What was happening is not only in violation of law, but could potentially destroy and undermine the reputation of Note Printing Australia and its owner, the Reserve Bank,” he told the broadcaster.

He added to Fairfax that the files contained a “very strong prima facie” case that officials involved in the trip had breached a UN sanction that banned Australians from promoting the sale or supply of goods to Iraq.

NPA has been plagued by allegations of corruption in recent years, with claims it and another RBA subsidiary Securency paid bribes to win plastic bank note contracts in Asia.

Executives from both companies have been charged over the alleged racket, which involved contracts in Indonesia, Malaysia, Vietnam and Nepal, following an investigation by Fairfax in 2009.

The RBA has previously denied it attempted to hide information related to the Asian contracts, with bank chief Glenn Stevens telling an inquiry last year that he knew nothing about the scandal before it was exposed.

Whistle-blower Brian Hood, a former NPA executive, told the ABC and Fairfax that Stevens’ testimony “wasn’t the truth” and the RBA knew of the allegations in 2007, claims the bank rejected Monday.

“The governor has always answered questions in parliamentary proceedings fully and truthfully,” it said.

Australian Greens Party deputy leader Adam Bandt said the latest revelations were disturbing.

“Most Australians would be shocked to know their central bank was using their money to line up dirty deals with Saddam Hussein,” he said.

“The stench surrounding the Reserve Bank gets worse and a full inquiry is needed to clear the air.”

source: business.inquirer.net

Ex-JPMorgan execs pressed about trading loss

WASHINGTON— Two former high-ranking executives at JPMorgan Chase faced tough questions from U.S. senators Friday about why the bank played down risks and hid losses from regulators when it was losing billions of dollars.

The hearing was held a day after the Senate Permanent Subcommittee on Investigations issued a scathing report that ascribed widespread blame for $6.2 billion in trading losses to key executives at the nation’s biggest bank.

The losses came less than four years after the 2008 financial crisis and hurt the reputation of a bank that had come through the crisis known for taking fewer risks than its competitors. Three employees in the London office were fired — two senior managers and a trader. It also led to the resignation of Ina Drew, the former chief investment officer overseeing trading strategy.

Douglas Braunstein, the former chief financial officer, and Drew were pressed to explain why bank executives gave federal examiners in April information that significantly understated losses for the first quarter of 2012.

“The number I reported (to the regulators) was the number that was given to me,” said Drew, who resigned last spring after the losses became public.

Drew blamed the losses on executives under her watch who failed to control risks out of the London office. She said that undermined her oversight and kept her from preventing the losses.

The report also suggested that CEO Jamie Dimon was aware of the losses in April, even while he played them down publicly. And Sen. Carl Levin, the chairman of the panel, implied that Dimon set a precedent at the bank for withholding information.

Dimon acknowledged in May 2012 that the firm had lost $2 billion on risky trades out of its London office. The losses have since been revised to more than $6 billion.

After reading the report and hearing executives testify that they didn’t know who was responsible for informing regulators, members of the panel questioned whether the nation’s biggest bank had become too large to manage.

The “trading culture at JPMorgan … piled on risk, hid losses, disregarded risk limits, manipulated risk models, dodged oversight and misinformed the public,” Levin said Friday at the hearing.

New York-based JPMorgan acknowledges that it made mistakes but rejects any assertions that it concealed losses or risks.

The bank said in a statement Friday, “We have made regrettable errors and overhauled our risk policies to correct these mistakes, but senior executives always provided information to regulators and the public that they believed to be accurate.”

Dimon was not a witness at Friday’s hearing.

In April, news reports said a trader in JPMorgan’s London office known as “the whale” had taken huge risks that were roiling the markets. Dimon immediately dismissed the reports as a “tempest in a teapot” during a conference call with analysts.

But Dimon acknowledged the losses a month later. And he told a separate Senate committee in June that the bank showed “bad judgment,” was “stupid” and “took far too much risk.” He also had his compensation last year reduced by 50 percent, as did Braunstein.

After the trading loss came to light, Drew resigned after 30 years with the firm and voluntarily paid back two years of salary.

Drew said Friday that while she doesn’t believe she bore personal responsibility for the losses, she decided to step down to make it easier for JPMorgan “to move beyond these issues.” Her comments were her first public remarks since leaving the firm.

Braunstein acknowledged that risk models for the trading operation were changed in a way that was improper early last year. The changes made the bank’s trading losses appear smaller than they were.

The subcommittee report was also critical of the Office of the Comptroller of the Currency, JPMorgan’s primary regulator. It said the Treasury agency failed to investigate the trading even when the London operation repeatedly blew through pre-set risk limits and it failed to notice when the unit didn’t submit required reports for several months.

The agency acknowledged that there were shortcomings in its oversight of JPMorgan.

“There were red flags that we failed to notice and act upon,” Comptroller Thomas Curry testified at Friday’s hearing.

source: business.inquirer.net

Nevada refuses to settle $30 million lawsuit brought by bank

CARSON CITY — The state Board of Finance refused Tuesday to settle a $30 million lawsuit filed by Lehman Brothers Commercial Bank, which lost the state’s business when the company’s financial status was downgraded.

Lehman contends the state of Nevada broke its contract when it stopped its business and investments with the bank.

The board met for 25 minutes behind closed doors to discuss a suggestion by a settlement judge with the Nevada Supreme Court.

“We didn’t settle,” said Gov. Brian Sandoval, the chairman of the board. “There was no vote.”

Details of the proposed settlement were kept confidential, and the meeting was closed to the public on grounds that it was a discussion between an attorney and client.

State Treasurer Kate Marshall said settlement discussions will continue, and the board will consider the issue again in 60 days.

District Court Judge James Wilson granted a summary judgement in favor of the state in the case, but his ruling is on appeal by Lehman. Wilson said Moody’s Investors Service downgraded Lehman to B3 in 2008.

Marshall said Lehman filed bankruptcy, and the state collected 33 cents on each dollar of $50 million invested with the bank.

Marshall said Lehman’s rating was a junk bond status, and the state stopped giving the bank access to its business. Lehman maintains the state broke a contract and wants $30 million in damages.

Wilson said the Board of Finance and the State Treasurer’s Office “lawfully terminated the agreement” with Lehman and were “entitled to cease all future deliveries of debt services monies” to the banking company.

Sandoval said the suit with the Supreme Court is still moving forward.

source: lasvegassun.com

Court of Appeals freezes accounts of Brit's wife in £750-million scam

MANILA, Philippines - The Court of Appeals (CA) has frozen the bank accounts of the Filipino wife of a British national who is facing charges involving a 750-million-pound (around P50 billion) fraud scam in the United Kingdom.

In a resolution released last Monday, the fourth division of the appellate court ordered Philippine Savings Bank and Standard Chartered Bank to immediately freeze the accounts under the name of Ruth Ramos Ochavez for 20 days.

Associate Justices Juan Enriquez Jr. and Manuel Barrios concurred with the ruling penned by Associate Justice Apolinario Bruselas Jr.

The CA issued the freeze order to avoid the possibility of funds being withdrawn, removed, transferred, concealed, and placed beyond the reach of Philippine law enforcers.

The order was sought in an ex-parte petition filed by the Philippines’ anti-money laundering agency.

On Aug. 11, 2011, the Department of Justice coordinated with the Anti-Money Laundering Council after it received a request of assistance from the Serious Fraud Office (SFO) of the government of the UK, coursed through the UK Judicial Cooperation Unit.

The request was made on the basis of the good international relations between the Philippines and the UK, and their common interest against criminality.

The British government had conducted an investigation on Achilleas Kallakis, a.k.a. Stefanos Kollakis, Alexander Lewis, a.k.a. Martin Lewis and Michael Karl Helmut and Mauritius Becker for violations of British criminal laws, “by conspiring amongst themselves to submit false and/or forged documents and/or statements to defraud Allied Irish Bank (AIB), an Irish company with branch registration in England and a UK subsidiary, AIB Group (UK) PLC, of money in the amount of around 700 million pounds, as well as alleged violations of British anti-money laundering laws.”

Records show that the crimes were allegedly committed between 2003 and 2007.

The SFO believes that Williams, alias Martin Lewis, violated UK money laundering laws by transferring illegally obtained funds of AIB to a network of accounts overseas and concealed the proceeds he obtained from the fraud by passing them to his wife, Ochavez, through her bank accounts in the Philippines.

The SFO added that Ochavez received cash deposits in a UK bank account during the period of the fraud even if she had not declared any income from employment in the UK since April 2005.

The SFO identified the subject bank accounts in the Philippines, both in the name of Ochavez, where proceeds of the alleged unlawful activities were transferred.

source: philstar.com

Donita Rose's mom sees bankruptcy in positive light

MANILA, Philippines – Evelyn Cavett, the mother of actress-TV host Donita Rose who is now based in Nevada, has finally moved on three years after filing for bankruptcy and losing the five houses her family has worked so hard to acquire.

“We have always lived in a house. Now we’re living in a rented house. It’s okay, it’s okay. We can make it. It’s just a matter of your attitude. It happened to be that recession hit, it’s global, and so we have to accept it,” Evelyn told The Filipino Channel’s “Balitang America,” with the video clip posted on its official website on March 19.

According to Evelyn, most of the money used to invest for the houses had been from Donita’s showbiz earnings. Donita was not only a popular actress-model in the Philippines, but was also well-known across Asia as one of the video jocks for MTV Asia.

“Large portion of it [investment] was initiated by Donita. She really spared her income, huge, just a lot of money that we put into the down payment. That’s how we started to have all these homes.

“We collected five homes [using] of course my savings, and then my sister worked for the bank, and my hard-earned income being a teacher. We put it together with Donita’s [money],” Evelyn related.

Bankruptcy is usually a cause for humiliation for many, but Evelyn believes otherwise.

“Why the embarrassment? No! You should not be. I’m not. You know, it happened to me and so be it. Make sure that we keep our job… We know how to cook, we know how to budget, shopping-wise, food-wise. We are the survivors,” she said.

Accepting their condition might have been difficult, but Evelyn can now say, “It’s gone! What can you do? You have to move on. There’s nothing that you can do [but] face it.”

Evelyn, now 64, still works as a teacher during weekdays and a tutor for kids during weekends.

source: mb.com.ph

RBA to ban excessive card fees

The RBA is finalising a new surcharging standards which it hopes will stop businesses imposing excessive credit card charges on customers

Under the proposal, credit card providers such as Mastercard or Visa will be able to restrict the amount businesses charge customers for transactions on their cards.

RBA assistant governor (financial system) Malcolm Edey said on Tuesday that a draft revision of surcharging standards was in the final stage of consultation.

He said the new standard would limit the surcharge imposed on customers, though it may not necessarily be capped at the cost of the transaction.

Dr Edey said he hoped the changes would lead to lower transaction costs for businesses and consumers.

He said credit card providers would be able to take action against businesses that imposed excessive surcharges on customers while still allowing businesses to recoup the costs of transaction.

'In that way I think it strikes a reasonable balance and it should strengthen the incentive for schemes to compete in lowering their fees to merchants,' he said.

'The less a scheme costs to merchants, the lower will be the permissible surcharge.'

Dr Edey said there was anecdotal evidence that some businesses were imposing a surcharge above the cost of the transaction.

Some businesses were levying the same fee on consumers for low-cost cards as those with high-cost cards and that others had imposed a surcharge that was simply well above the cost of the transaction, he said.

'Although these practices do not appear to be widespread, they are of concern from a payments-efficiency point of view because they can distort consumer choices about the payment methods that they use,' Dr Edey said in a speech in Sydney.

'They go against the principle I stated earlier of allowing the efficient flow of price signals to the economic decision-maker.

'It is for these reasons that the (Reserve) Bank reopened consideration of the surcharging standard last year.'

source: http://www.skynews.com.au/national/article.aspx?id=731053&vId=

Bank Transfer Day urging consumers to run away from rising bank fee

This Saturday- NOV. 5 has been declared Bank Transfer Day urging consumers to run away from rising bank fee and move their money to credit unions.


The suggestion during the behind of "Bank Transfer Day" held glow with the Occupy Wall Street protests around the nation and this action which started on Facebook on the name Bank Transfer day now has 48,324 likes.