NEWS,01 AND 02.04.2013

World Bank urges end to extreme poverty

World Bank chief Jim Yong Kim on Tuesday called for a global drive to wipe out extreme poverty by 2030, acknowledging that reaching the goal will require extraordinary efforts."A world free of poverty is within our grasp. It is time to help everyone across the globe secure a one-way ticket out of poverty and stay on the path toward prosperity," Kim said in a speech in Washington, according to the prepared text.The World Bank president said that in practical terms, the goal would be to lower the number of people living on less than $1.25 a day from 21% of the world's population in 2010 to just 3% by 2030."Below 3%, the nature of the poverty challenge will change fundamentally in most parts of the world. The focus will shift from broad structural measures to tackling sporadic poverty among specific vulnerable groups," Kim said in a speech at Georgetown University."Though we will continue to reach out to those who suffer from sporadic and occasional poverty, the fight against mass poverty that countries have waged for centuries will be won."In 2000, the international community set eight UN Millennium Development Goals to be reached by 2015. One of them, to halve extreme poverty, was accomplished in 2010, five years ahead of time, Kim noted, after developing countries invested in social safety nets and created buffers to protect against crises."To reach the 2030 goal, we must halve global poverty once, then halve it again, and then nearly halve it a third time all in less than one generation," he said.To do that will require three main factors, he said.Higher economic growth rates will be needed, in particular sustained high growth in South Asia and Sub-Saharan Africa. Efforts must be made to curb inequality and ensure that growth reduces poverty, especially through job creation.And potential shocks, such as new food, fuel, or financial crises and climatic disasters, must be averted or cushioned.The World Bank president also set another poverty-reduction target that is less measurable: to increase the incomes of the poorest 40% of the population in each country.Kim, speaking ahead of the World Bank and International Monetary Fund meetings in Washington later in the month, said the goals of ending poverty and boosting shared prosperity require coordinated efforts."They are goals which we hope our partners our 188 member countries will achieve, with the support of the World Bank Group and the global development community," he said.

Cyprus finance minister quits

Cypriot Finance Minister Michael Sarris quit on Tuesday after concluding talks with foreign lenders on a bailout that forced the island to slap unprecedented losses on bank depositors in return for aid.The news came after Cyprus announced a partial relaxation of currency controls, raising the ceiling for financial transactions that do not require central bank approval, but keeping most other restrictions in place.Sarris, who was dispatched to Moscow last month but returned empty-handed as Cyprus sought Russian aid after rejecting a European bank levy proposal, said his main goal of agreeing a deal with lenders had been accomplished.He said it was also appropriate to resign since he was among several people under scrutiny by a team of investigators looking into the collapse of the country's banking system. His resignation was accepted by the government."I believe that in order to facilitate the work of (investigators) the right thing would be to place my resignation at the disposal of the president of the republic, which I did," Sarris said.Before quitting, he said it was not clear when the remaining capital controls would be lifted.The island introduced curbs on money movements when banks reopened on March 28 after a two-week shutdown while the government negotiated a €10bn bailout from the International Monetary Fund and the European Union.Cyprus's status as a financial hub has crumbled in the space of a fortnight after authorities were forced to wind down one bank and slap heavy losses on wealthier depositors in a second in return for the financial aid.Its capital controls are a first for the eurozone, introduced by Cyprus as it strives to prevent a cash drain.Bailout terms disclosed A finance ministry decree on Tuesday, the third since controls were first introduced, raised the ceiling on transactions which do not require central bank approval to €25 000 from €5 000. It also permits the use of cheques worth up to €9 000 per month.Other restrictions introduced last week, including a €300 per day cash withdrawal limit and a €1 000 limit on the amount travellers can take overseas, remain in place.The decree signed by Sarris and dated April 2 is valid for two days. Cypriot officials have said it could take up to a month for restrictions to be fully removed.Cypriot President Nicos Anastasiades, who has been in power for just over a month, says he was forced to accept onerous terms imposed by lenders to avert a default and an exit by the island from the eurozone.Under the terms of the deal, Cyprus will have until 2018 to carry out measures to shore up its finances and begin to receive aid starting in May.The island will pay an interest rate of 2.5% on its rescue loans, with repayment starting in 10 years. The loans will repaid over 12 years.On Tuesday, Anastasiades appointed three retired Supreme Court judges to investigate political, civil and criminal responsibilities over the demise of the economy, one of the bloc's smallest.Cyprus last week agreed to break up its No. 2 lender Popular Bank, kept on an ECB liquidity lifeline for months, into a "good" and a "bad" bank. The bank's "good" assets will be transferred to Bank of Cyprus, where depositors have been forced into accepting massive losses on uninsured deposits of more than €100 000.The process, known as a "bail-in" sees 37.5% of deposits exceeding €100 000 converted into equity in the bank, and an additional 22.5% used as a buffer which could also be converted into equity if circumstances warrant it.In a deal brokered early on Tuesday morning, it was also agreed that a small portion of the remaining 40% in uninsured deposits effectively frozen under the arrangement, 10%, be unblocked.The Cypriot government had unsuccessfully argued that the entire 40% be unblocked, a source familiar with the consultations said.

Casinos to kickstart Cypriot economy

Cyprus plans to lift a ban on casinos and offer firms tax exemptions on profits reinvested on the island under a package of reforms to kickstart its ailing economy, its president said on Monday.The country's eurozone partners agreed on a €10bn rescue package last Monday after weeks of tense negotiations that showed the debt crisis racking the 1-nation currency union is far from over.The tough terms of the deal look set to deepen the island's recession, shrink its banking sector and lead to thousands of job losses, while the capital controls imposed to prevent a run on Cypriot banks may test the ties that bind the single-currency bloc as a whole.President Nicos Anastasiades, who briefed ministers on the economy at an informal meeting on Monday, said the 12-point growth plan would be put to the cabinet for approval within the next 15 days.The programme includes measures to attract foreign investment to the island a hub for offshore finance as well as tax exemptions on business profits reinvested there, and the easing of payment terms and interest rates on loans.With about €68bn in its banks, Cyprus has a vastly outsized financial system that attracted deposits from abroad, especially Russia.In a bid to attract more tourists to the south of the island, it also hopes to lift a ban on casinos, which so far only operate legally in Turkish-controlled northern Cyprus.Speaking to reporters after a memorial service to commemorate the 1955 armed campaign against British rule, Anastasiades said the government would focus on "growth and incentives for growth".Cyprus's bailout is the first to impose steep losses on depositors with more than €100 000 in their accounts, and is expected to hit business activity especially hard.Asked to make a forecast on the likely depth of recession Cyprus faces, government spokesperson Christos Stylianides said: "It's not possible at this time to put numbers on the recession.""The government, having inherited an atomic bomb, tried to deactivate it and in doing so spared this country from total bankruptcy. It is now dealing with a post-earthquake period with the aim to kickstart the economy," he said.Stylianides said the cabinet discussed pending issues in the country's negotiations with its international lenders relating to the financial sector, fiscal adjustment measures, structural measures in the public sector and energy issues. He said Anastasiades would also chair a meeting of party leaders at 18:00 GMT on Monday to brief them on the matter.Under the bailout deal, major depositors in Cyprus's biggest lender, Bank of Cyprus, will lose around 60% of savings above €100 000.The country's banks reopened on Thursday after a nearly two-week hiatus aimed at averting a bank run, but the ripple effect of their closure is likely to strangle business on the island for a long time to come.There are also concerns that depositors in other struggling eurozone nations could take fright at the conditions imposed on Cyprus, although there have been no signs of bank runs.The capital controls imposed on the country raise questions about the long-term viability of the euro. There is also the risk that euros on the island may be valued differently to those in the rest of the bloc due to them being less liquid as a result of the controls. Anastasiades has defended the rescue deal as painful but essential, saying that without it, Cyprus had faced certain banking collapse and risked becoming the first country to be pushed out of the European single currency.

Cyprus probes causes of bankruptcy

Cyprus authorities on Tuesday launched a judicial probe into how the island was pushed to the verge of bankruptcy before having to agree a crippling eurozone bailout.Cypriot President Nicos Anastasiades called on the three-judge commission George Pikkis, Panayiotis Kallis and Yiannakis Constantinides to investigate himself and his family members as a "matter of priority" and with "extra vigour".This is seen as a move to counter unsubstantiated allegations that his family members used privileged information to get money out of the country before deposits were locked down.Accusations have also been made against other leading politicians and business figures that they took advantage of their position to protect their assets from a hit on bank deposits imposed by European Union-led creditors last month.Anastasiades said nobody was immune from the inquiry not even his extended family or the law firm in which he was a partner until recently."The current plight of the economy and our people is without a doubt the result of a synergy of factors both external and internal," Anastasiades said at the swearing-in ceremony."A series of acts or omissions from those authorised to manage the economy or the banking system led the country to the brink of bankruptcy, the dissolution of one its largest banks and the loss of billions from an impairment of deposits," he added.The massive losses suffered by savers in the island's two largest banks in the first eurozone rescue package to punish larger depositors has sparked huge resentment against anybody seen as having taken unfair advantage to shirk their share of the burden.Big depositors in largest lender Bank of Cyprus face losses of up to 60%, while those in second lender Laiki will have to wait years to see any of their money as the bank is wound up with the loss of thousands of jobs.The government is looking to free up the remaining 40% of BoC deposits of more than €100 000 that are not frozen as part of the bailout agreed with the "troika" of the EU, European Central Bank and International Monetary Fund.Allegations have swirled of big movements of cash out of both banks in the run-up to the bailout agreement as those in the know scrambled to protect their money.The panel, which has three months to report its findings, will also probe a list published by Greek media of Cypriot politicians who allegedly had loans forgiven during the meltdown.Cypriot banks have been operating under stringent capital controls since they reopened on Thursday, after a near two-week lockdown prompted by fears of a run on deposits.Central Bank of Cyprus governor Panicos Demetriades said in an interview with the Financial Times published on Tuesday that the controls would be eased in stages."I can't really tell you if it will be seven or 14 days before capital controls end," Demetriades said. "We have to lift them gradually."He played down fears there would be a run on accounts once the controls were eventually relaxed."Once people realise how well capitalised the banks are there is little reason why there will be deposit flight," he said.The draconian controls limit daily withdrawals to €300 and ban the taking of more than €1 000 in cash out of the country.At the island's main international airport in Larnaca, signs in Greek, English and Russia warn departing travellers of the restrictions.

Eurozone manufacturing slump deepens

The downturn in the 17-nation eurozone's manufacturing sector deepened sharply in March, with even powerhouse economy Germany dragged down, a key survey showed Tuesday.The Markit Eurozone Manufacturing Purchasing Managers Index fell to 46.8 points in March, up from an initial estimate of 46.6 but well short of the already weak 47.9 posted in February.The outcome left the closely followed indicator at a three-month low and below the 50-points boom-bust line since August 2011.The average PMI for the three months to March was 47.5 points, which Markit said was the best performance since the first quarter of 2012, but the latest figures showed a clear deterioration across the eurozone.Germany at 49 points slipped to a two-month low while "rates of decline gathered pace in all the other nations ... with the exception of France," Markit said in a statement.France stood at 44 points, a three-month high, while Italy was on 44.5, its lowest for seven months and Spain on 44.2, a five-month low.Markit warned that the data suggested worse could be to come, after recent figures had allowed analysts to hope that the economy might have finally touched bottom.Manufacturing "looks likely to have acted as a drag on the economy in the first quarter, with an acceleration in the rate of decline in March raising the risk that the downturn may also intensify in the second quarter," Markit chief economist Chris Williamson said in a statement."The surveys paint a very disappointing picture across the region, with all countries either seeing sharper rates of decline or in the cases of Germany and Ireland sliding back into contraction," Williamson said.He said the Cyprus bailout appeared not to have had any impact so far but "the concern is that the latest chapter in the (eurozone debt) crisis will have hit demand further in April."

Eurozone unemployment hits record high

Eurozone unemployment ran at a record 12% in February, with more than 19 million people on the dole as the debt crisis continued to sap the economy, official data showed Tuesday.The Eurostat data agency said unemployment in the 17-nation eurozone at 12% was unchanged from January when the figure was initially given as 11.9%.In the full 27-member EU, unemployment in February rose to 10.9% from 10.8%, with 26.34 million out of work, it said.Some 33 000 joined the jobless queues in the eurozone and 76 000 in the EU over the month of February, Eurostat said.Compared with a year earlier, the increase in registered unemployment was 1.78 million in the eurozone and 1.81 million in the EU.The highest unemployment rates in February were found in Spain with 26.3% and neighbour Portugal, on 17.5%. Greece was put at it 26.4% but this figure is for December, the latest available.The lowest rates were 4.8% in Austria and 5.4% in Germany, Europe's biggest economy.With youth unemployment a huge cause of concern, Eurostat said that the jobless rate for under-25s ran at 23.9% in the eurozone and 23.5% in the EU.Among the countries with the highest youth jobless levels, Spain was on 55.7%, followed by Portugal on 38.2% and Italy with 37.8%.Greece was the highest with 58.4% but this figure was for December, the last available.

UK manufacturing contracts in March

Britain's manufacturing sector shrank for a second consecutive month in March, a survey showed on Tuesday, leaving the country's more resilient services sector as the best hope of avoiding a new recession.The Markit/CIPS manufacturing purchasing managers' index came in at 48.3, only slightly above February's shock reading of 47.9, and a touch weaker than the consensus forecast.The output component of the survey fell in March at its fastest pace since October.The survey suggests manufacturing exerted an even bigger drag on growth between January and March than it did in the fourth quarter of 2012, when it accounted for a third of the economy's 0.3% contraction."The onus is now on the far larger service sector to prevent the UK from slipping into a triple-dip recession," said Rob Dobson, senior economist at Markit.Official GDP data for the first quarter won't be released until April 25 but the evidence so far suggests a strong risk that Britain will record a second consecutive quarter of contraction the technical definition of recession.A third recession in less than five years would be an embarrassment for the government which is sticking to tough austerity measures despite faltering growth at home and abroad.Despite the weakness in the economy, the Bank of England is not expected to take new stimulus measures when it meets on Wednesday and Thursday, although more action is widely expected before the end of the year.The Markit report blamed the poor performance of manufacturing in March on tough market conditions, subdued client confidence and ongoing bad weather.New orders from abroad contracted for the 15th month running in March. The survey blamed the fall on weak demand from Europe and strong competition in US and South Asian markets.In further bad news for UK policymakers, there were also signs that inflation pressures were picking up. Output prices rose at the fastest pace in three months while input prices picked up sharply, driven by the weakness of sterling and higher energy and food costs.Manufacturing accounts for around a fifth of British economic output. Surveys of the construction and service sectors for March are due to be released on Wednesday and Thursday respectively. There have been signs that the services sector is faring better than manufacturing. It grew at its fastest pace in five months in February, according to Markit and official data showed it notched up its best performance in January for five months.

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,07.01.2013

BoE unlikely to resume printing money

The Bank of England is unlikely to revive its money-printing campaign, a Reuters poll showed on Monday, even though the British economy is teetering on the brink of another recession.Economists in the survey attached a median 45% chance of the central bank resuming the quantitative easing programme which it suspended in November. However, policymakers are likely to pin their hopes on a new scheme to encourage bank lending for reviving the economy as the government makes deep spending cuts."We are going to see a continuation of difficult circumstances of growth remaining weak and inflation staying above target," said Simon Hayes at Barclays Capital.With rates near zero, the BoE has already purchased £375bn of British government bonds meaning approaching half of all conventional gilts belong to the central bank. On top of this exercise to push money into the economy, it has also launched a Funding for Lending Scheme (FLS), providing cheap credit to banks to encourage them to offer loans to customers.While the benefits of the FLS are not expected to filter through to the economy until later this year, data released on Friday showed November mortgage approvals were at their highest monthly total since last January. Banks polled for the BoE's quarterly Credit Conditions Survey said they would increase the availability of mortgages significantly in the first three months of 2013 after a record rise in the three months to December 11. "Signs that the Funding for Lending Scheme is gaining traction hint at some economic recovery over 2013 which we judge makes a further increase in the asset purchase target less likely," said Philip Shaw at Investec.The Bank's hands have been somewhat tied as inflation has held persistently above its 2% target and is not expected to fall below that for a long time. But the poll of 64 economists did not foresee any interest rate rise from the record low 0.5% until July 2014 at the earliest. Only a handful of policy-watchers in the poll, taken over the past week, saw a rate rise before then. One particularly hawkish forecaster is looking for an increase in August but there is no other prediction of higher rates in the poll before the second quarter of 2014.Work in progressGlobal regulators gave banks four more years and greater flexibility on Sunday to build up cash buffers so they can use some of their reserves to help struggling economies grow. Bank of England Governor Mervyn King, who steps down later this year, said the new rules will give the banking system more room to finance a recovery.King will be replaced by Canadian central bank chief Mark Carney in July, who is leaving behind an economy which weathered the global financial crisis quite well to take on one struggling to regain its footing. UK manufacturing activity hit a 15-month high in December, a survey showed last week. However, later figures indicated Britain's dominant service sector shrank for the first time in two years, suggesting the economy as a whole slipped back into contraction in the last three months of 2012. Britain bounced out of its second recession in four years in the third quarter of 2012, supported by London's hosting of the Olympic Games and extra working days, but it is forecast to achieve only tepid growth if any for some time. This is thanks partly to the government spending cuts and tax rises to tackle the budget deficit. The economy has grown little since 2010 when a coalition of Conservatives and Liberal Democrats came to power.Britain has struggled as the chances of recovery in the eurozone, its main trading partner, have faded further into this year. Economists are divided over whether the European Central Bank will cut its policy rate in the next few months.

Sarb appoints Bradlow to head new dept

The South African Reserve Bank (Sarb) said on Monday that it had appointed Daniel Bradlow as the head of the newly-established international economic relations and policy department‚ with effect from February 1.Bradlow’s key responsibilities would include providing strategic direction to the department‚ monitoring and analysing developments in international and regional institutions and forums.Bradlow is currently the South African Research Chairs Initiative professor of international development law and African economic relations at the University of Pretoria and professor of law at American University Washington College of Law.He has worked as a consultant for a number of international and regional development banks‚ international organisations‚ government agencies and foundations and has conducted training programmes for officials from central banks‚ ministries of finance‚ and other government departments from a number of countries in Africa and Asia.His experience includes research and writing about the International Monetary Fund‚ the World Bank‚ G20‚ international financial standard setting bodies‚ the legal aspects of debt and financial management‚ and aspects of negotiating and structuring of international financial and business transactions. He has also served on expert working groups that have been involved in policy-relevant research and advocacy activities related to the governance of various international institutions.He was educated at the University of the Witwatersrand; Northeastern University; Georgetown University; and holds an LLD (international development law) from the University of Pretoria.

French labour deal remains elusive

 

French employers will reject moves to overhaul rigid labour rules unless unions drop demands to tax short-term contracts more heavily than long-term ones, their leader said on Monday, suggesting talks this week could fail.Socialist President Francois Hollande called on employers and unions to strike a deal by the end of 2012 that would grant companies more flexibility in hiring and firing while giving more job security to workers on short-term contracts.Talks between the Medef employers' union and main labour groups spilled into January after talks broke up in December without a deal, with each side accusing the other of making unacceptable demands. The government says it will impose its own deal if the two sides fail to reach an agreement.As talks resume this week, Medef chief Laurence Parisot said employers would be unable to sign a deal imposing higher costs for hiring on seasonal or short-term contracts.French per unit labour costs are currently among the highest in the European Union, above Germany but below Denmark, and are often cited by economists as a brake on growth and a factor in maintaining chronically high unemployment."At this point in our discussions, including talks we had all day yesterday, on Sunday... the Medef will not sign the deal," Parisot said on Radio Classique. "The issue of taxation for short contracts is a vital question."Parisot accused Hollande's Socialist government of indirectly interfering in the talks to the employers' disadvantage.The government is pushing for a deal to address concerns that France has a two-speed labour system, with those on long-term job contracts enjoying too much job security and those on short-term contracts too little.FlexibiltyEmployers want an agreement that will allow companies to adjust their wage burden more nimbly in a downturn, as well as simplifying the rules about firing workers to make the process more predictable and keep costs in check.Two hardline unions reject measures to add flexibility. All five unions represented at the talks want greater job security for workers on flimsy contracts, calling for employers who use them to be penalised by paying higher taxes or more unemployment contributions.Unions reject greater flexibility in work contracts and demand more job security for short-term workers. They want employers using short-term contracts to pay more tax or higher contributions to the national fund that pays out unemployment benefits.Labour Minister Michel Sapin said the government would present a draft law regardless of the talks' outcome. However, he expressed faith in a deal being reached by January 11, when talks are due to conclude."They're negotiating, it's their responsibility, and I'm letting them negotiate," he told Canal+ television.Hollande's government has enough Socialist and allied lawmakers in parliament to pass a labour reform.But without a deal between unions and employers, it will be more exposed to criticism from both sides and unions may influence left-wing lawmakers into watering down any reform.The head of the CGT union, Bernard Thibault, said last week he would oppose more labour flexibility with "all his force".

2012 London jobs nosedive

The number of new jobs created in the City of London fell by more than a third last year as financial firms focused on cost-cutting, research by recruitment agency Astbury Marsden shows.The agency estimates that 35 115 new City jobs were created in 2012, down 35% on the year before. Only about 800 new jobs were created in December, it said, compared with 1 490 in December 2011.Banks worldwide are shedding jobs as stricter regulations and eurozone worries take their toll on trading income and investment banking operations."2012 was a busy year for HR departments across the City as cost-cutting remained a key focus for senior management and board members throughout the year," Mark Cameron, chief operating officer at Astbury Marsden, said."Tighter regulation including higher capital requirements forced up costs at a time when revenues dipped due to a number of factors, including a continued weak economy and less trading activity," he added.Cameron said that cuts had been particularly significant in 2012 because banks had implemented major restructuring, including the winding down of entire business units. Swiss bank UBS axed 10 000 staff and wound down its fixed-income business. On a more optimistic note, Cameron said that most of the obvious and immediate cuts have already been made and the worst may be over.The recruitment company also said that hiring prospects could be improved by signs that lawmakers are getting to grips with the euro zone crisis and by the deal struck by US politicians to delay budget spending cuts and avoid hefty tax increases.

China starts building nuclear power plant

A Chinese state news agency says the country has begun building a new nuclear power plant after lifting a construction moratorium imposed following Japan's Fukushima disaster.The Xinhua News Agency says the 3 billion yuan ($475m) power plant in Rongcheng, an eastern coastal city in Shandong province, will incorporate advanced safety features developed by Chinese researchers. China is the world's biggest energy consumer and nuclear power is a key element in official efforts to curb surging demand for fossil fuels.Beijing suspended approval of new nuclear power plants to carry out safety reviews following the Japan's 2011 earthquake and tsunami that wrecked the Fukushima plant. That moratorium was lifted in October.

 

Liquidity rules for banks eased

The world's top banking regulatory body on Sunday eased the first global liquidity rules scheduled to start applying to banks in 2015 and aimed at improving their ability to survive financial crises.The Basel Committee on Banking Supervision said at a press conference here that it had widened the definition of the easy-to-sell assets that banks will have to hold to survive periods of stress.The Basel III standards had been initially proposed in 2010 but banks and financial institutions have since lobbied intensely to make the rules more flexible and result in lower costs for the sector. The details of the Liquidity Coverage Ratio (LCR), which was drafted to avoid a repeat of the 2008 banking crisis and unanimously endorsed on Sunday by the Basel group's top oversight body, give the banks a reprieve. Its provisions include a much broader definition of the minimum assets every bank needs to hold, making it less costly for them to maintain the required buffer. "The changes to the definition of the LCR, developed and agreed by the Basel Committee over the past two years, include an expansion in the range of assets eligible as HQLA (high quality liquid assets)," the committee said. The new LCR's full details will also be fully implemented only in 2019, instead of 2015 as initially proposed."Specifically, the LCR will be introduced as planned on 1 January 2015, but the minimum requirement will begin at 60%, rising in equal annual steps of 10 percentage points to reach 100% on 1 January 2019," the Basel group announced. Mervyn King, Chairman of the Basel group's top oversight body and Governor of the Bank of England, described the agreement announced Sunday as "a very significant achievement.""For the first time in regulatory history, we have a truly global minimum standard for bank liquidity," said King.The Basel Committee brings together representatives regulators from 27 nations."Importantly, introducing a phased timetable for the introduction of the LCR, and reaffirming that a bank's stock of liquid assets are usable in times of stress, will ensure that the new liquidity standard will in no way hinder the ability of the global banking system to finance a recovery," King said.Stefan Ingves, chairperson of the Basel Committee and of Sweden's Sveriges Riksbank, said the global regulator could now focus on the Net Stable Funding Ration, another pillar of the Basel III reforms."The completion of this work will allow the Basel Committee to turn its attention to refining the other component of the new global liquidity standards, the Net Stable Funding Ratio, which remains subject to an observation period ahead of its implementation in 2018," he said.

Big banks pay billions over foreclosures

Ten mortgage servicers agreed on Monday to pay $8.5bn to end a case-by-case review of foreclosures required by US regulators. Banks including Bank of America, Citigroup, JPMorgan, Wells Fargo and six others will pay $3.3bn directly to eligible homeowners, and will also pay $5.2bn in loan modifications and forgiveness, regulators said. The Office of the Comptroller of the Currency and the Federal Reserve Board said they accepted the agreement to get relief to consumers more quickly than through the reviews. In April 2011 the agencies required the servicers to review foreclosure actions from 2009 and 2010 to evaluate whether borrowers had been unlawfully foreclosed on or otherwise suffered financial harm due to errors in the foreclosure process.