NEWS,25.02.2013

Obama: Time to start governing

US President Barack Obama warned warring politicians on Monday it was time to start governing as Washington headed into another manufactured crisis threatening the fragile economy. Obama told an annual meeting of state governors at the White House that huge budget cuts due to hit on 1 March would "slow our economy, eliminate good jobs" and leave Americans with "thinly stretched" budgets wondering what to do.The president is demanding that congressional Republicans stave off a set of arbitrary, automatic spending cuts known as the sequester by closing tax loopholes that benefit the rich and corporations."We can't just cut our way to prosperity. Cutting alone is not an economic policy," Obama told Democratic and Republican governors in the State Dining Room of the White House.Many Republicans agree that the sequester, which imposes across the board cuts of $85bn this year from government programme, is a bad way to cut spending and reduce the deficit.But they argue that Obama is not serious about reining in spending and warn the president that his success in getting higher income tax rates on the rich late last year is the last time they will permit him to raise more revenue.Obama, who no longer has to worry about answering to voters, warned Washington had to "get past its obsession with focusing on the next election instead of the next generation”."All of us are concerned about our politics, both in our own party as well as the other party. But at some point we've got to do some governing."What we can't do is keep careening from manufactured crisis to manufactured crisis. "The American people have worked hard and long to dig themselves out of one crisis. They don't need us creating another one."

World powers have 'good offer' for Iran

World powers will present Iran with an updated and "good" offer at talks this week on its nuclear programme, an EU official said on Monday, although hopes for a breakthrough were slim. Talks aimed at curbing Tehran’s nuclear drive start in Kazakhstan on Tuesday, with the so-called 5+1 world powers represented by the EU sitting down with an Iranian team led by its top nuclear negotiator Saeed Jalili."We have prepared a good and updated offer for the talks, which we believe is balanced and a fair basis for constructive talks," said the spokesperson for EU foreign policy chief Catherine Ashton."The offer addresses international concerns... on the nature of the Iranian nuclear programme, but is also responsive to Iranian ideas," said the spokesperson, Michael Mann."We hope that Iran will seize this opportunity and come to the talks with flexibility and commitment to make concrete progress towards a confidence-building step."A source close to the negotiations said the offer would still insist that Iran halts enriching uranium to 20%, shuts down its controversial Fordo uranium enrichment plant and sends abroad all uranium already enriched to 20%."This still forms the basis of the demands of the 5+1 group," said the source who asked not to be identified.Reports have said that Iran could in return be offered a softening of sanctions imposed against it, possibly starting with a lifting of measures against its gold industry.However, Jalili said at the weekend that Tehran would not go beyond its obligations or accept anything outside its rights under the non-proliferation treaty (NPT)."We don't expect any breakthrough. The Iranians have made different declarations in the last days. It depends if you take the positive or the negative ones," said one Western official who asked not to be identified.The 5+1 world powers are Britain, China, France, Germany, Russia and the US.

China manufacturing growth falls

China's manufacturing growth hit a four-month low in February but remained positive, British banking giant HSBC said Monday, noting that the world's second-biggest economy was still recovering slowly.The bank's seasonally adjusted preliminary purchasing managers' index (PMI) stood at 50.4 for the month, down from a final 52.3 in January, it said in a statement.A reading above 50 indicates expansion and it was the fourth consecutive month of growth, after 12 months of contraction."The Chinese economy is still on track for a gradual recovery," Qu Hongbin, a Hong Kong-based economist with HSBC, said in the statement, downplaying the fall in PMI."The underlying strength of Chinese growth recovery remains intact, as indicated by the still expanding employment and the recent pick-up of credit growth," he added.Chinese banks more than doubled their lending in January from December, granting 1.07 trillion yuan ($171.7bn) worth of new loans, official data showed earlier this month, as Beijing seeks to boost economic growth.The domestic economy expanded at 7.8% last year, its slowest pace in 13 years, in the face of weakness at home and in key overseas markets.Policymakers cut interest rates twice in 2012 and have trimmed the amount of cash banks must place in reserve three times since December 2011 to encourage lending and pump up growth.The PMI figure, compiled by information services provider Markit and released by HSBC, tracks manufacturing activity and is a closely watched barometer of the health of China's economy.Liao Qun, a Hong Kong-based economist with Citic Bank International, said weaker manufacturing activity in February may have suggested the domestic rebound was unstable, but the overall recovery trend remained intact."The figure, after being seasonally adjusted, might indicate a weaker economic rebound in February due to the uncertainty in overseas economies and a lack of clarity in China's fiscal and monetary policies ahead of the two sessions," Liao said.The "two sessions" is a Chinese reference to the annual meetings of the country's top legislative and political advisory bodies in March, which will set the tone for the country's economic policies."Given the HSBC PMI index is just preliminary, we'll have to wait for the official PMI to gauge the momentum of China's growth recovery," Liao added. The official PMI, released by the China Federation of Logistics and Purchasing and the National Bureau of Statistics on a monthly basis, focuses more on large and medium companies, while the HSBC PMI covers mostly small firms.

China communists lament spoiled generation

The mouthpiece of China's ruling Communist Party on Monday lamented a generation who had never tasted "hard work" after the son of a general was detained on suspicion of involvement in a gang rape.Li Guanfeng, the teenage son of general Li Shuangjiang - a popular military singer and household name in the country - was held last Thursday in the latest allegation against privileged children of officials to spark public outrage.The news has dominated internet message boards, online news portals and state-run newspapers in China, where crimes by the offspring of the country's elite cause particular anger among ordinary people."Family education" among successful, well-known figures in China needs to be "cautious", said the People's Daily, the ruling party's official organ, in an editorial on the case."Many of these children have not experienced the hard work needed in the struggle to achieve success, but are shown the results of this success."Used to getting everything they want and having all their problems handled, they will use their father's name as an excuse, take flaunting wealth for granted and regard defying the law as brave behaviour."AssaultLi is among five suspects detained over allegations of a sexual assault on 17 February, the state-run China Daily said.The newspaper quoted an unnamed Beijing police source saying the group were accused of gang-raping a woman in a hotel room after a night of drinking.It is not the first time the 17-year-old has come to public attention.He was sent to a government correctional facility for one year in 2011 for beating a couple while their young child looked on. Domestic media reports said his parents changed his name from Li Tianyi to Li Guanfeng on his release.Hundreds of thousands of people went online to express their outrage at the time, and the general apologised for his son's actions.

Horsemeat found in Swedish meatballs

Czech authorities said on Monday they have detected horsemeat in meatballs labelled as beef and pork for Swedish furniture retailer giant Ikea, while EU officials met to discuss tougher food labelling rules to counter the developing scandal.The horsemeat was found in 1kg packs of frozen meatballs made in Sweden and shipped to the Czech Republic for sale in Ikea stores there, the State Veterinary Administration said. A total of 760kg of the meatballs were stopped from reaching the shelves.Ikea's furniture stores feature restaurants and also sell typical Swedish food, including the so-called Kottbullar meatballs.It was not immediately clear whether Ikea exported the same product to other countries. Calls seeking comment from Ikea in Sweden were not immediately returned on Monday.The Czech authority also found horsemeat in beef burgers imported from Poland during random tests of food products.Authorities across Europe have started doing random DNA checks after traces of horsemeat turned up in frozen supermarket meals such as burgers and lasagne beginning last month.The EU's agriculture ministers gathered in Brussels on Monday to discuss the widening scandal's fallout, with some member states pressing for tougher rules to regain consumer confidence.The 27-nation bloc must agree on binding origin disclosures for food product ingredients, starting with a better labelling of meat products, German Agriculture Minister Ilse Aigner said."Consumers have every right to the greatest-possible transparency," she insisted.Austria backs the German initiative; but others like Ireland say existing rules are sufficient although Europe-wide controls must be strengthened to address the problem of fraudulent labelling.The scandal has created a split between nations like Britain who see further rules as a protectionist hindrance of free trade under the bloc's single market, and those calling for tougher regulation.Processed food products - a business segment with traditionally low margins that often leads producers to hunt for the cheapest suppliers - often contain ingredients from multiple suppliers in different countries, who themselves at time subcontract production to others, making it hard to monitor every link in the production chain.Standardised DNA checks with meat suppliers and more stringent labelling rules will add costs that producers will most likely hand down to consumers, making food more expensive.The startThe scandal began in Ireland in mid-January when the country's announced the results of its first-ever DNA tests on beef products. It tested frozen beef burgers taken from store shelves and found that more than a third of brands at five supermarkets contained at least a trace of horse. The sample of one brand sold by British supermarket kingpin Tesco was more than a quarter horse.Such discoveries have spread like wildfire across Europe as governments, supermarkets, meat traders and processors began their own DNA testing of products labelled beef and have been forced to withdraw tens of millions of products from store shelves.More than a dozen nations have detected horse flesh in processed products such as factory-made burger patties, lasagnes, meat pies and meat-filled pastas. The investigations have been complicated by elaborate supply chains involving multiple cross-border middlemen.

Ikea pulls meatballs from 14 countries

Swedish furniture giant Ikea has withdrawn some of its company-branded meatballs in 14 European countries after horsemeat was found in the product by Czech authorities, the company said on Monday."We take this very seriously and have withdrawn one-kilo bags of frozen meatballs from Slovakia, the Czech Republic, Hungary, France, Britain, Portugal, Italy, the Netherlands, Belgium, Spain, Cyprus, Greece and Ireland," in addition to Sweden, said company spokesperson Ylva Magnusson.

NEWS,04.02.2013

Media lampoons Berlusconi's tax promise

Silvio Berlusconi's rivals lampooned him as a snake charmer and a TV huckster selling pots and pans on Monday after he promised sweeping tax cuts if his centre right wins Italy's election this month.The former prime minister launched his "last great electoral and political battle" on Sunday with a plan to reduce government spending, enact fiscal reform and what he called a "shock proposal" - reimbursing Italians for a much-hated tax on primary residences imposed last year.Forced from power in 2011 after financial market turmoil that threatened to push Italy into a Greek-style debt crisis, Berlusconi has focused his comeback hopes on attacking the austerity policies of Mario Monti's technocrat government."Even an imbecile is able to invent new taxes and impose them on citizens but only an intelligent person can cut costs," Berlusconi said at a rally in Milan, the northern city where he made his media and real estate fortune. But the day after, it was Berlusconi who was mercilessly derided by most newspapers and political opponents. Corriere della Sera, Italy's leading paper, ran a cartoon depicting him dressed as a smiling joker in a carnival outfit throwing coins and banknotes to everyone in his wake.Monti called Berlusconi "a snake charmer" and accused him of trying to sell "a dream even more fantastic than that in Alice in Wonderland".Just about the only comfort Berlusconi found in the media was in a headline in Il Giornale, a newspaper owned by his family: "Finally, More Money".The real estate tax, known as IMU, was imposed on primary residences last year by Monti to help with Italy's financial crisis, after it had been abolished in 2008 by Berlusconi.It is estimated to have raised some €4bn last year, a sum Berlusconi dismissed as no more than 0.5% of the €800bn annual budget.He said he would scrap the tax at his first cabinet meeting and refund payments already made. He promised to phase out a regional tax on businesses, reduce personal income tax rates, not hike value added tax (VAT) or impose a "wealth tax" on higher earners."This can work if alternative revenues are found," said Professor Fabio Marchetti, a tax expert at Rome Luiss university. "But I think it is rather utopian and demagoguery because it would make us the only country with no tax on primary residences." Berlusconi was criticised even by former allies.Giulio Tremonti, economy minister in the last Berlusconi government, said reimbursing the real estate tax "would objectively create a problem for public accounts."Vittorio Feltri, a journalist who was for years the editor of Il Giornale, said: "If the state can't find the money to pay its suppliers or make tax refunds, where is it going to find the money to reimburse the real estate tax?"Berlusconi said the money would come in part from striking a deal with Switzerland to tax financial activities there by Italian citizens."But a possible accord with Switzerland is still in stormy waters," said Professor Marchetti, adding that it could never be worked out before the new government takes office in April.Berlusconi promised to save money by cutting government waste, halving the number of parliamentarians, and eliminating public financing of political parties. Income would come from new taxes on things he called "not of primary necessity" - tobacco, gambling and lottery tickets."Some people will buy into it and it certainly will have an effect on some people's voting intentions but the unknown is how much of an effect it can have," said Marchetti.Most opinion polls indicate that the centre-left coalition, headed by Democratic Party secretary Pier Luigi Bersani, will win the Feb. 24-25 election. But the gap between the centre left and the centre right has narrowed steadily since Berlusconi returned to active politics. ($1 = 0.7301 euros)

German car sales down

New car registrations in Germany, a key measure of demand in one of the most crucial sectors of Europe's top economy, fell sharply in January, official data showed on Monday.Some 192 100 new cars were registered in January, a slump of 9% compared with the same month a year earlier, the VDA auto industry calculated.Export sales of German-made cars were down as well, falling by 8% to 310 700 units in January.In terms of output, the number of cars rolling off the production line fell by 11% to 394 300, VDA added.

 

Obama: more tax revenue needed

President Barack Obama said on Sunday more tax revenue would be needed in the coming years to reduce the US deficit but raising tax rates was not a key issue."I don't think the issue right now is raising rates," Obama said in an interview on CBS."There is no doubt we need additional revenue, coupled with smart spending reductions in order to bring down our deficit. And we can do it in a gradual way so that it doesn't have a huge impact," he said.At the beginning of the year Obama pushed through legislation to address the US fiscal cliff that raised income tax rates on households making more than $450 000 a year.

UK banks face break-up under new law

Britain's biggest banks will face being broken up if they fail to ring-fence their retail and investment arms, under draft legislation set to be announced by finance minister George Osborne on Monday.The new law will empower the government and a new banking watchdog to "electrify the ring-fence" if banks refuse to separate high-risk operations from savers' deposits.Launching the Banking Reform Bill, Chancellor of the Exchequer Osborne was due to say that banks will no longer be able to become "too big to fail", forcing the taxpayer to bail them out.The government had already announced plans to force banks to ring-fence operations by 2019, in a bid to avoid taxpayers having to bail out troubled banks as was the case during the financial crisis.But the draft law has been toughened up to include "electrification" of the ring-fence after the Parliamentary Commission on Banking Standards complained last month that the proposals fell "well short of what is required".Osborne had previously warned the commission against "unpicking the consensus" on structural reform of the banking sector but appears to have accepted its warning that the draft law left room for loopholes.The announcement puts the finance minister on a collision course with Britain's banks, which claim the legislation would make London less attractive as a global financial centre."This will create uncertainty for investors, making it more difficult for banks to raise capital, which will ultimately mean that banks will have less money to lend to businesses," said Anthony Browne, chief executive of the British Bankers' Association."Above all, what banks and business need is regulatory certainty so that banks can get on with what they want to do, which is help the economy grow."But Osborne was set to tell bankers: "When the RBS (Royal Bank of Scotland) failed, my predecessor Alastair Darling felt he had no option but to bail the entire thing out."Not just RBS on the high street, but the trading positions in Asia, the mortgage books in sub-prime America, the property punts in Dubai."I want to make sure that the next time a Chancellor faces that decision they have a choice. To keep the bank branches going, the cash machines operating, while letting the investment arm fail."If passed, the Banking Reform Bill would also establish a new watchdog for the industry and force investment and retail banks to have separate bosses.

No sign US eavesdropped on Cole suspect

A judge at Guantanamo Bay refused on Monday to suspend a pre-trial hearing for the prisoner accused of orchestrating the attack on the USS Cole, ruling that defence lawyers had offered no evidence supporting their suspicion that the CIA can eavesdrop on their private conversations with their client.Army Colonel James Pohl said that unless the defence can offer evidence of eavesdropping, the hearing for Abd al-Rahim al-Nashiri would continue."I can't stop a trial simply because something might happen," Pohl told defence attorney Navy Lieutenant Commander Stephen Reyes during a heated exchange at the start of the scheduled four-day hearing.Pohl granted ali-Nashiri's lawyers a three-hour recess to consider whether they can ethically continue representing him if they suspect that their privileged conversations are being monitored.The hearing was held at the US naval base in Cuba. AP watched a video feed of the hearing at Fort Meade.Al-Nashiri, a Saudi national, is charged with orchestrating the 2000 attack on the USS Cole, which killed 17 sailors and wounded 37. He has been imprisoned at the Guantanamo since 2006, after being held by the CIA in a series of secret prisons. He is considered to be one of the most senior leaders in al-Qaeda.The eavesdropping issue sprang from an episode last week in another Guantanamo case in which an undisclosed government agency unilaterally silenced courtroom loudspeakers to prevent spectators from hearing classified information. Pohl, who was surprised by the action, ordered the agency on Thursday to disconnect the equipment.Reyes said the defence wants to know whether any third party can secretly monitor privileged conversations at the courtroom defence table, in a nearby holding cell or elsewhere on the base.Prosecutor Anthony W Mattivi assured the judge that no such capability exists. Reyes wasn't satisfied."Now that we know there's a man behind the curtain, we can't say, 'Ignore the man behind the curtain’," Reyes said.Reyes said he especially wants to know if the CIA can eavesdrop on those conversations."If it is the CIA that is conducting the listening, this is the same organisation that detained and tortured Mr al-Nashiri," Reyes said.A CIA inspector general's report said al-Nashiri was waterboarded and threatened with a gun and a power drill because interrogators believed he was withholding information about possible attacks against the US. Such practices were allowed under rules approved by the George W Bush administration but many them have since been repudiated as torture.

NEWS,23.1.2013

Emerging world challenges multinationals

The battle in emerging markets is heating up as competition between multinational companies and firms from the developing world increases, a report said.According to a report published by the Boston Consulting Group found that a new generation of global challengers consisting of 100 fast-growing and fast-globalising companies from the developing world, is on track to becoming global leaders in their respective industries. To keep up, Western conglomerates will have to know when to compete and when to work together with the new kids on the block. The report said the global challengers were not "mere curiosities operating in distant regions" but rather were "full-fledge competitors that would shape the global economy in the next decade".  These global challengers includ South African media giant Alibaba, China's largest e-commerce company; Trina Solar, the fourth-largest solar panel manufacturer in the world; Indian carmaker Tata Motors and software group Infosys; Russian firms Lukoil and Gazprom as well as Chile's Latam Airlines.  "If ever there was a wake-up call for business leaders in the West, this is it," David C Michael, coauthor of the report, was quoted as saying. "We have been monitoring the rise of global challenger companies for nearly a decade, and the ambition of these companies - what we call the accelerator mindset - has never been stronger," said Michael.  The report goes on to say that global challengers already outpace their competitors from the developed world in growth, job creation and productivity.  Their average revenue was $26.5bn in 2011, compared with $21bn for the S&P 500 nonfinancial companies.  In addition, in the last five years global challengers added 1.4 million jobs, while employment at nonfinancial S&P 500 companies remained flat, the report said.  Chinese and Indian companies dominate the list of global challengers but companies from Egypt, South Africa, Saudi Arabia and Qatar are fast catching up, with the span of industries also widening.  The rise of emerging market companies presents opportunities that could be mutually beneficial to both sides, the report said.

Davos heads seek trillions in new revenue

Business leaders in Davos have plenty to worry about, from the eurozone to global geopolitical upheavals, but at heart their problem is simple: how to find new revenue in a low-growth world.Half a decade on from the financial crisis, investors want to see earnings driven by more than just cost cutting. Their focus now is on a return to sales growth, which presents the world's largest corporations with a $5 trillion challenge.That is the amount of extra revenue the 1 200 top global companies need to find each year simply to meet analysts' expectations, according to consulting firm Accenture. "The trouble is that stock markets' expectations of the ability of companies to grow far exceeds the underlying macroeconomic growth rates," said Mark Spelman, Accenture's global head of strategy. "So companies need to get beyond just thinking about emerging markets and rising middle classes and start to look at those segments where you are seeing significant consumer change, because there is a lot of latent growth in those segments." Increasingly, companies are seeking specific pockets of opportunity for sales growth. They remain cautious about major new investments, however, with confidence among managers in the near-term outlook for their businesses still weak. The annual PricewaterhouseCoopers survey of more than 1 300 chief executives worldwide found only 36% were "very confident" of their firm's prospects for revenue growth in the next 12 months, down from 40% a year ago.    The mismatch between the sputtering global market for goods and services predicted by macroeconomists and the lofty numbers forecast by analysts following individual companies is striking. In all regions, analysts' forecasts for company revenue growth are well above prevailing views on underlying economies. While the World Bank last week cut its 2013 global growth forecast to 2.4% - and just 1.3% in advanced economies - analysts see company revenues expanding by 7.8% in Asia outside Japan, 3.8% in the United States and 2.4 in the eurozone, according Thomson Reuters data. And consensus forecasts call for 2014 sales to pick up even further, especially in the US, where a recovery, it is hoped, could be spurred by rapid growth in shale oil and gas supplies. Companies in the middle of the current hoped-for recovery are wary, as reflected in results from two of Europe's biggest manufacturers on Wednesday. Siemens warned that industrial demand was weakening, while Unilever said economic conditions were "tough", though it had countered this by faster innovation in its products.  Longer term, CEOs are more optimistic, but there are bound to be questions over delivery, given that only around a tenth of companies in the S&P Global 1200 index have seen revenue growth outstrip economic growth in each of the past three years. In the fight to buck the slow-growth trend, nimbleness is key as companies move away from broad-based bets to more targeted strategies that they hope will win market share. "Uncertainty is itself becoming more of a certainty," said Jonas Prising, who heads Manpower's operations in the Americas and southern Europe. "In this new environment, strategic flexibility becomes all important."    Mergers and acquisitions would be one way for corporations to buy growth but CEOs remain reluctant to undertake large-scale deals, despite cheap credit and relatively low valuations. In fact, the focus of CEOs on M&A is at the lowest level in six years, according to the executives surveyed by PwC. "M&A activity is going to be very focused, very targeted and certainly nowhere near the levels that we saw over the past several years," said PwC International chairperson Dennis Nally. The calamitous nature of some bold deals from the recent past, such as those of miner Rio Tinto, whose CEO was sacked last week, will do nothing to encourage boldness by other business leaders. An important focus for companies now is on smarter ways to serve sections of their existing markets, while placing selective bets on new openings. For many, this involves embracing digital technology to keep pace with changes in how consumers buy goods and services - from shifting more resources to online sales to greater use of new tools to analyse behaviour. But new opportunities come in many guises. Luxury goods companies, for example, are aggressively growing their retail networks, especially flagship stores, particularly in growth markets, while companies in many sectors are chasing new service contracts that can lock in profits for years. Geography, too, remains a vital lever for managers to pull as they chase new sales. For Spanish companies struggling with a dire home market, Latin America has become a prime target because of their language advantage, helping the likes of telecoms giant Telefonica. Others are betting that the US market will indeed surge back this year, including German carmaker BMW and fashion house Hugo Boss. With $5 trillion to find, the world's business leaders can afford to leave no stone unturned.  

Swiss aims to ban 'mercenary' firms

The Swiss government said on Wednesday it aims to ban any companies offering mercenary services in conflict areas, in a bid to preserve Switzerland's cherished neutrality and ensure it respects international law. "The Federal Council wants to ban from Switzerland companies offering mercenary services," it said in a statement."The new law would make it illegal for security companies based in Switzerland to directly participate in hostilities within the context of an armed conflict abroad," it added.In the proposed law, which will need parliamentary approval before it can take effect, all companies headquartered in Switzerland would be required to declare all their security-linked activities abroad, the government said.This would allow Swiss authorities to determine whether the activities fell within the law or whether they should be banned, it said.The new rule would apply not only to companies that offer security services in Switzerland and abroad but also holding structures of firms that only do their business overseas."Security companies will not be permitted to carry out activities susceptible to enabling serious human rights violations," the government said, adding that firms would for instance be blocked from running prisons in countries known to use torture.The Swiss government had said it was necessary to regulate private security firms after Britain's Aegis Group Holdings, one of the world's biggest security companies operating in crisis or conflict zones, moved its headquarters to Basel in 2010.Around 20 security companies in Switzerland offer similar services.It will likely take another two to three years before the new law passes through both houses of the Swiss parliament, and it could take another year or so after that before it goes into effect, government spokesperson Luzius Mader told AFP.

NEWS,26.07.2012

G20 Tax Evasion Crackdown Yields Results But Challenges Remain

 A global campaign to tax trillions of dollars hidden in offshore tax havens has made revolutionary progress, an official leading the drive said, rejecting suggestions that the super rich are running rings around Western authorities.Pascal Saint-Amans, director of a unit at the Organisation for Economic Cooperation and Development, also cast doubt on estimates that the havens are illicitly sheltering wealth equivalent to several hundred times the fortune of Bill Gates.Leaders of the G20 group of leading Western and developing nations launched the campaign three years ago, aiming to claw back billions in lost tax revenue at a time when many governments are trying to cut huge budget deficits.Saint-Amans said his gut feeling was that before the G20's initiative at its 2009 London summit, people could hide their wealth in offshore havens without any risk of legal reprisals."Now you are at risk and that's a major change. That's a revolution," Paris-based Saint-Amans told in a telephone interview. Even if money is transferred abroad, rules improving transparency have made it easier for the taxman to find it, said Saint-Amans, whose unit is tasked with leading the Western efforts to fight tax evasion.The Tax Justice Network, a campaign group, estimated last weekend that as much as $21 to $32 trillion of financial assets are sheltered in offshore tax havens, representing up to $280 billion in lost income tax.That total wealth would dwarf the fortune of Microsoft Corp cofounder and philanthropist Bill Gates. In March Forbes magazine ranked Gates second on its global rich list with total wealth of a mere $61 billion.Saint-Amans suggested the TJN estimates might be overstated. "I was wondering where the equivalent of 450 Bill Gates are hiding from everyone. It looks like the equivalent 20,000 unknown billionaires in the world or 200,000 people with net worth of 100 million," he said.The Scorpio Partnership, a consultancy that analyses the global private wealth management industry, estimates the amount of money held offshore by people worth at least $1 million at a more modest $8-$9 trillion.Saint-Amans, who heads the OECD's Centre for Tax Policy and Administration, acknowledged his organisation makes no equivalent estimate. "I would rather spend the resource improving the legal framework and putting an end to loopholes than trying to find the magic number," he said.In a statement accompanying its research, TJN criticised the OECD and other international bodies for not doing enough to track offshore wealth, saying it was scandalous that institutions devoted so little research to the issue.G20 leaders agreed at their London summit to crack down on tax evasion and banking secrecy, and asked the OECD to publish lists of tax havens according to how cooperative authorities there are on releasing information about offshore wealth holdings.There are now 89 countries on the OECD's "white list" of jurisdictions that have implemented internationally agreed tax standards. These jurisdictions have between them signed more than 800 agreements on exchanging information with authorities other countries, Saint-Amans said."Until 2009, countries said being secretive is justified and fair. The change in the world is nobody says that any more, so that is a big change," he said.Western tax authorities have individually stepped up efforts to net more money hidden abroad by their own citizens through a series of amnesties targeting people with accounts in jurisdictions such as Switzerland and Liechtenstein.At the same time they have turned up the heat on citizens suspected of tax evasion. This has included using details of Swiss accounts originally stolen from HSBC by a former IT employee that found their way into the hands of tax authorities around Europe.Britain's HMRC tax office expects an amnesty offering leniency to people with accounts in Liechtenstein if they come clean to raise about 3 billion pounds, while a similar deal on Swiss accounts will bring in up to 7 billion pounds.Campaigners argue that such initiatives will achieve only limited success because a financial industry designed to ensure confidentiality across multiple jurisdictions makes it impossible to shut down tax fraud or money laundering."Anybody who's serious about holding money offshore ... will hold it through a trust," said Richard Murphy, a chartered accountant and director of Tax Research, a think-tank."You'd have the trust in one territory, the company in another territory, its directors in another territory and its bank account in a fourth territory. So making an application for information is not very simple."Murphy dismissed the OECD's progress in cracking down on tax havens, arguing that implementation of information exchange between territories is limited in practice and the process too complex to be workable."They've set up a system where it's virtually impossible to apply for information ... The OECD claiming they are making progress is like checking the stable door has been shut way after the horse bolted. Not just the horse, the entire stable has bolted," he said.The TJN research on offshore wealth - authored by James Henry, a former chief economist at consultant McKinsey & Co - highlights the "often unsavoury role" played by banks in catering to rich individuals who want to hide money offshore.Large private banks with offshore businesses reject the idea they aid tax evasion."Our Code of Conduct explicitly says not to assist clients in activities intended to breach their tax obligations," said a spokesman for Swiss bank Credit Suisse who declined to comment specifically on the contents of the TJN report But recent crackdowns by tax authorities in countries such as Britain, the United States and Germany have proved embarrassing for Swiss banks.German tax authorities are investigating roughly 5,000 German clients of Credit Suisse while French officials have searched the homes of UBS employees.At least 11 Swiss banks suspected of helping wealthy American clients dodge taxes are currently subject to a U.S. investigation.Saint-Amans said the OECD's efforts have focused on engaging with governments rather than imposing more supervision on financial institutions. The complexity of the industry, he said, meant that greater information exchange was the best way to tackle people using banking secrecy to break the law."I'm not sure that nationalising the banking industry throughout the world is the solution. The fact you have private practitioners being involved in a sophisticated environment is why you need to favour transparency and exchange of information," he said.Efforts to increase disclosure and combat both tax evasion and money laundering by international bodies such as the OECD and the Financial Action Task Force (FATF), a Paris-based inter-governmental body, have focused on self regulation."We've tried to ensure that what we're talking about is not to create some draconian system where we put a policeman in every financial institution which would be impossible to do," said a senior source at the FATF, which was set up to combat money laundering and terrorist financing.Nick Matthews, anti-money laundering and offshore financial industry specialist at Kinetic Partners, said purging the world's financial system is "incredibly difficult"."Clearly tax evasion leads to money laundering and is a crime but you would have money laundering even if there was no tax, because you still have proceeds from crime or corruption polluting the financial system," he said."That is why I say that no bank would ever stand up and claim that they are not being used to launder money. They appreciate that they are only as strong as their weakest link."

Wells Fargo In Analyst Note, 'Does Service Mean Anything?'

A banking analyst suggested that good customer service hurts a bank's profits. Wells Fargo pissed off the wrong customer.Earlier this week, Richard X. 'Dick' Bove, a well-known banking analyst, blasted the bank in a research note entitled "Does Service Mean Anything?" According to Bove, 71, Wells Fargo royally botched his personal account, charging him mystery fees, bungling his mortgage refinance application and basically blowing him off on the customer service front. Bove, who had been a Wachovia customer for around 10 years before Wells Fargo took over, said the changes at the Tampa, Fla., branch where he had been banking were considerable. Gone was the greeter at the door, for example. In place of a friendly 'Hello' were sales desks. He recounts one occasion when he visited his branch to speak with a personal banker but was left waiting in limbo. "The bank officer made me wait a bit; came out of his office and entered a public bathroom; and then left the bank," Bove recounted in his note. "Nothing was solved for me on that visit."Wells Fargo acquired Wachovia in 2008, and former Wachovia locations in Florida were fully rebranded by July 2011, according to Wells Fargo. Bove said all his experiences took place at the same location on North Florida Avenue in Tampa.In his note, he assaults Wells Fargo for paying far more attention to profits than people. He concludes that customer service  the kind of customer service that involves developing a relationship over time  might actually hurt the bank's business strategy. "What my Wells Fargo experience suggests is that a succesful bank is one that keeps seeking new customers and selling them more products and not getting bogged down by offering service," he wrote in his note on July 23. Bove said he has since moved his personal bank account to JPMorgan Chase, although he told his mortgage and several other business accounts are still active with the bank.Wells Fargo did not comment directly on Bove's note when contacted by HuffPost. "We...recognize that we're only as good as our last interaction and we remain committed to putting our customers at the center of everything we do," Mary Eshet, a senior spokeswoman for the bank, said in an emailed statement. Bove's comments come as the disconnect between banks' business strategy and customer experience continues to be an issue for Americans. The banking analyst is not alone in feeling abandoned by bank customer service. A survey released Tuesday from Consumers Union, the advocacy arm of Consumer Reports, reported that nearly one-fifth of all consumers said they considered switching banks in the last year. The survey participants, like Bove, cited high fees and bad customer service.However, actually moving from one bank to another is a complicated process. More than half of the people who said they wanted to switch banks in the survey, said the reason they didn't complete the process was because of difficulty in transferring automatic payments. The survey included 1,157 adults and took place in May 2012.Consumers Union is calling on Congress and the year-old Consumer Financial Protection Bureau to consider reforms that would make it easier for consumers to switch banks. Suzanne Martindale, staff attorney for Consumers Union, said more consumers want to move their money but feel frustrated at the process. “Moving your money takes a lot of time and money and some bank policies make it harder than it should be," she said in a statement released with the poll results. "We need to make it easier for consumers to switch banks so they have a real choice when it comes to where to keep their money.”Bove is known for his independent voice, which has occasionally gotten him into trouble, as The New York Times pointed out in a 2010 story detailing a lawsuit he faced over some of his analysis.