NEWS,29.01.2013

RBS faces £500m fine over Libor scandal

Britain's Royal Bank of Scotland could face a £500m ($786m, €585m) fine from British and US authorities for its role in the Libor rate-rigging affair, media said Tuesday.The Wall Street Journal, citing people briefed on negotiations, added that US authorities were pushing for a settlement of allegations that would result also in an RBS division pleading guilty to criminal charges.The newspaper said that the deal could be completed within the next fortnight and added that RBS was resisting any guilty plea amid fears it would lose clients and spark costly litigation.A spokesperson for the state-rescued bank would not be drawn on the article, simply saying: "Discussions with various authorities in relation to Libor setting are ongoing."We continue to co-operate fully with their investigations," he added in a statement.Investors meanwhile took flight at Tuesday's development. RBS shares sank 5.98% to finish at 345.80 pence on London's FTSE 100 index of leading shares, which ended 0.71% higher at 6 339.19 points.The Edinburgh-based lender is 82% owned by the British government after a vast bailout during the global financial crisis.The Libor affair erupted in June 2012 when Barclays bank was fined 290m by British and US regulators for attempted manipulation of Libor and Euribor interbank rates between 2005 and 2009.In December, Swiss banking giant UBS was slapped with fines totalling $1.5bn after a major probe by Swiss, British and US regulators revealed evidence of massive misconduct."It cannot be said that this comes as a surprise given that it was well flagged that authorities will chase RBS following the successful takedowns of Barclays and UBS," said analyst Ishaq Siddiqi at trading group ETX Capital."However, it does serve to remind us just how careless and brazen traders at these banks were, taking excessive risk to manipulate rates."The response in markets may be somewhat muted in the sessions ahead as over the months we have learnt just how deep this corruption ran through the Libor market and instead, investors are likely to breathe a sigh of relief as these charges will remove an overhang in the stock price."The Libor rate is used as a benchmark for global financial contracts worth about $300 trillion. However, the system was found to be open to abuse, with some traders lying about borrowing costs to boost trading positions or make their bank seem more secure.The London Interbank Offered Rate, or Libor, is a flagship instrument used all over the world, affecting what banks, businesses and individuals pay to borrow money. Euribor is the eurozone equivalent.

Global tourism peaked in 2012 - UN

International tourist arrivals exceeded one billion for the first time last year, with the Asia-Pacific region posting the biggest increase in foreign visitors, and numbers will rise further in 2013, a UN body said on Tuesday. The number of international tourist arrivals grew by 4.0% to 1.035 billion in 2012, up from 996 million in 2011, the Madrid-based United Nations World Tourism Organisation said in an annual survey."2012 was a year of constant economic instability in the entire world, especially in the euro zone. Despite this international tourism managed to maintain its course," the body's Secretary General Taleb Rifai told a news conference.The organisation forecasts international tourist numbers will grow in 2013 although at a slightly lower rate of 3.0%  4.0%.Global tourism figures were hit hard by the 2008 global financial crisis, with the rise in international arrivals that year slowing to 2.1% after jumping 6.6% in the previous year.Arrivals plunged by 3.9% in 2009, its worst performance in 60 years, as the outbreak of the swine flu virus contributed to cash-strapped consumers' decision to stay home.But international tourism arrivals bounced back the following year, rising 6.6% in 2010 and by 5.0% in 2011 even though global economic crisis had not yet ended. The Asia-Pacific region posted the largest growth in visitor arrivals last year with the number of foreign tourists up by 14 million or 6.5% to 233 million.Growth in the number of foreign visitors was highest in Southeast Asia, with the number of arrivals up by 8.7% over 2011.Tourist numbers climbed 4.1% in emerging economies compared with a 3.6% rise in advanced economies.The only region to report a decline in tourist numbers compared with 2011 was the Middle East with 2.0% fewer arrivals because of political instability in popular tourist spots such as Egypt and Syria.But the drop in the number of visitors to the region was smaller than the decline of 7.0 posted in 2011, the UN body said.Asia and Africa are expected to post the greatest growth in tourist numbers this year.The agency predicts tourist arrivals will increase by 5.0%-6.0% in the Asia-Pacific region this year and by 4.0%-6.0% in Africa.The Middle East will see the number of foreign visitors to the region rise by 0 and 5.0% this year while Europe will post growth of 2.0%-3.0%.The forecast of continued growth in international tourist arrivals next year comes a week after the International Monetary Fund (IMF) predicted the global economy will grow slightly less in 2013 than expected.The IMF projects global gross domestic product annual growth of 3.5% this year, a dip of 0.1 point from its October forecast owing largely to weakness in the eurozone, and 4.1% in 2014.The UN World Tourism Organisation predicts international tourist arrivals will rise by an average of 3.8% each year between 2010 and 2020 and will reach 1.8 billion in 2030.

Japan to approve $1.02 trillion budget

Japan's cabinet was Tuesday set to approve a $1.02 trillion annual budget with boosts in defence and public works spending amid a festering territorial row with China and a renewed assault on deflation.The cabinet is expected to approve a ¥92.61 trillion budget for fiscal 2013, with revenue estimated at ¥43.10 trillion and new bond issuance at ¥42.85 trillion - the first time in four years revenue will have been greater than new bond issuance, local reports have said.The budget is down from the ¥92.9 trillion allocated in the fiscal 2012 initial budget, the first decrease in seven years, they said.But the defence budget is up by ¥40bn or about 0.8% from the previous year to ¥4.75 trillion, the first rise in 11 years, at a time Japan is embroiled in a row with China over a chain of islands in the East China Sea.Beijing has repeatedly sent vessels to the disputed waters, prompting calls in Japan for more measures to defend the Tokyo-controlled islands, called the Senkakus in Japan but known as the Diaoyus in China.Defence Minister Itsunori Onodera has said the military will add nearly 300 personnel to help defend the disputed islands.Meanwhile, public works spending rises for the first time in four years, growing by ¥710bn to ¥5.29 trillion, reports said.Prime Minister Shinzo Abe, who took office in December, has pledged to pull Japan out of years of deflation by active government spending coupled with aggressive monetary easing by the Bank of Japan.Abe's government announced a $226.5bn stimulus package earlier this month.In the fiscal 2013 budget, the issuance of new government bonds decreases by ¥1.4 trillion from the preceding year to ¥42.85 trillion, Jiji Press said.The government is planning an $86bn bond sale to pay for the stimulus, stoking fears about spending by Tokyo, which already owes creditors cash equal to twice the size of its economy.

 

Japan, China set to boost economic ties

Japanese Prime Minister Shinzo Abe said on Tuesday he was open to a meeting with Chinese leaders to rebuild ties damaged by a territorial dispute but said there was no room for negotiations on their row over a group of small islands.The remarks came after China's Communist Party chief, Xi Jinping, told a Japanese envoy sent to Beijing last week that he was committed to developing bilateral ties and would consider holding a summit meeting.Relations between the world's second- and third-largest economies plunged after the Japanese government bought three disputed islands from a private owner last September, sparking anti-Japan protests across China.Some Japanese businesses were looted and Japanese citizens attacked."It is precisely because we have a problem that we should hold the summit between leaders and have high-level talks," Abe said on a television programme, "I would like to consider a top-level summit if circumstances allow."The conservative prime minister has just increased the defence budget for the first time in 11 years and swept back to power in a December election calling for the protection of Japan's "beautiful seas".He reiterated Japan's stance on the islands, which it controls. Japan calls them the Senkaku while China calls them the Diaoyu."The Senkaku Islands are our land and China has taken provocative steps against them ... we have been clear that there is no room for negotiation on this matter," he said."But on top of that, there's an economic relationship. Japan invests in China and reaps benefits from exporting its goods there while China creates job places thanks to Japanese investment," said Abe, adding that maintaining strong economic ties were vital for both countries."If top-level meeting was necessary to achieve that, we should do it and from that point on rebuild our relationship."