NEWS,07.05.2013

EU targets banks to help consumers

The European Commission will propose new rules to make it easier for consumers to open and switch bank accounts, as well as see what banking fees they are being charged.

The proposal, to be published on Wednesday and which could become law in the European Union in three years, also requires banks to shoulder the administrative burden when clients switch accounts, such as transferring direct debits.

Officials with knowledge of the draft law said it would also oblige banks to spell out their charges in a standardised way, making it easier for customers to compare.

The Commission wants at least one bank in each country to offer a basic account, allowing people currently outside the banking system to deposit cash and pay bills.

The EU executive will also suggest giving citizens the legal entitlement to open an account, acting out of a growing sense of frustration that efforts to cajole banks into better self-regulation is not working.

Studies by Commission officials showed that banks did not offer enough information on switching accounts and that consumers did not know what fees they paid for banking services.

The studies also found that 58 million citizens in Europe had no bank accounts - including half the populations of Bulgaria and Romania.

The Commission hopes introducing a standard guide to fees for people opening an account, as well as an annual summary of charges and establishing a national comparison website will change this.

Under the new rules, consumers wanting to switch banks would only have to inform the new bank, which would then be obliged to tell gas, electricity and other providers of the changes to account payments.

The proposal will go to EU member states for their approval or possible change before the changes can be introduced.

China braces for surge in gold imports

Chinese gold imports are likely to swell further after rising strongly for a second straight month in March, as investors seek safety from economic uncertainty and after prices plunged to a two-year low last month.

"Physical demand picked up significantly over the last couple of weeks. Consumers and industrial users tend to see price drops as buying opportunities," Zhang Bingnan, secretary-general of the China Gold Association, told Reuters.

"Investment demand should continue to stay strong through the rest of the year because of limited investment alternatives," said Zhang, adding that gold sales and processing volumes both spiked in April. 

He said China's gold consumption in the first quarter probably rose 10% to 15% from 255.2 tonnes in 2012. Net gold flows from Hong Kong to China, the world's number two gold consumer after India, rose to 223.519 tonnes in March from 97.106 tonnes in February, data from the Hong Kong Census and Statistics Department showed on Tuesday (www.censtatd.gov).

In March, Shanghai gold futures fetched premiums of more than $30 to global prices, making it cheaper to buy the metal overseas. April could see imports swell further after the drop in international prices spurred frenzied buying in Asia, leading to a shortage of gold bars and coins in Singapore as well as Hong Kong, which is China's main source for gold imports.   

Demand for gold from India and China is a major factor in global prices, with the World Gold Council saying the two countries account for more than a third of global appetite. China produced 403 tonnes of gold in 2012, but consumption was more than double at 832.2 tonnes.

Gold tumbled to around $1 321 an ounce on April 16, its lowest in more than two years, after a fall below $1 500 and fears of central bank sales led to a sell-off that stunned investors and prompted them to slash holdings of exchange-traded funds.

It stood at around $1 460 on Tuesday.

 "April imports will be stronger than March," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong. "The world was buying gold and China was no different at all."

Heavy traffic 

The drop in gold prices has prompted a gold rush in China, with Chinese shoppers flocking to retailers to buy jewellery and gold bars.  

A spokesman for Hong Kong jewellery chain Chow Tai Fook , the world's largest jewellery retailer by market value, told that traffic at its China stores jumped by 50% during the May Day holidays.

The surge in Chinese travellers during the three-day May Day holiday also drove gold sales in Hong Kong to rise by an estimated 50%, with total gold sales from April 29 to May 2 reaching some 40 tonnes, local media quoted Haywood Cheung, president of the Hong Kong Gold and Silver Exchange, as saying. 

The jump in Chinese physical demand also prompted some banks to ship in more supplies from London and Swiss vaults, traders said.

With China's economy still on shaky ground, investors could increasingly be turning to gold as a so-called safe-haven investment. 

China's annual export growth may have picked up slightly in April due to a low comparison from a year ago, while import growth probably eased, a Reuters poll showed, suggesting the underlying momentum for both the domestic and global economies remains tepid. Gold exports to China from Hong Kong hit an all time high  of 557.478 tonnes in 2012.

Companies 'cooking books' to meet targets

Hard-pressed company bosses across much of the world are under so much pressure to deliver on growth that many have resorted to cooking the books, Ernst & Young says in its latest Fraud Survey published on Tuesday.
One in five of almost 3 500 staff quizzed in 36 countries in Europe, the Middle East, Africa and India said they had seen financial manipulation in their companies in the last 12 months, the accounting and consultancy firm said.
In addition 42% of board directors and top managers surveyed said they were aware of "some type of irregular financial reporting".
And despite scandals and regulatory failures in the wake of the credit crunch, almost a quarter of top financial services staff surveyed said they were aware of manipulation and almost 10% of all staff said their companies had understated costs, overstated revenues or used unprincipled sales tactics.
Meanwhile, almost half of the sales staff surveyed across all sectors did not consider anti-corruption policies to be relevant and more than a quarter thought it acceptable to offer personal gifts or services to win or retain business.
In India, over a third felt justified in offering cash - triple the number in Western Europe.
"Our survey shows that to find growth and improved performance in this environment, an alarming number appear to be comfortable with or aware of unethical conduct," said David Stulb, head of E&Y's fraud investigation and dispute services practice.
In Spain, ranked alongside Russia and just below Nigeria and Slovenia, 61% of staff believed companies often exaggerated results, compared with only 7% in Finland.
And E&Y said the vast majority of managers from Norway to Nigeria and Russia to Greece were feeling the pressure to deliver a good financial performance over the next 12 months, despite little optimism that business conditions would improve.
They were now forced to balance the risks of expanding into rapid-growth markets, where winning contracts can go hand-in-hand with corruption, cutting costs further and piling pressure on staff or suppliers - or distorting results, the firm said.
E&Y warned multinationals based in mature markets they could be more vulnerable to the risks of unethical behaviour. One quarter of those asked thought watchdogs in rapid-growth markets focussed more on the behaviour of foreign businesses.
The consultancy called on managers to ask more robust questions focus on key risks, such as poor due diligence accounting checks of intermediaries and associates, and punish unethical behaviour.

Egypt replaces economy ministers

Egypt announced a cabinet reshuffle on Tuesday that removed two ministers closely involved in talks with the International Monetary Fund (IMF) and increased the representation of President Mohamed Mursi's Muslim Brotherhood in government.

The opposition had been demanding the installation of a politically neutral cabinet to oversee parliamentary elections later this year.

Prime Minister Hisham Kandil announced nine changes to his cabinet. These included the appointment of Amr Darrag, a senior official in the Brotherhood's Freedom and Justice Party, as planning minister.

The outgoing minister, Ashraf al-Arabi, had played a central role in talks with the IMF over a $4.8bn loan seen as crucial to easing a deep economic crisis. Egypt has yet to seal a deal with the IMF.

Fayyad Abdel Moneim, a specialist in Islamic economics, was appointed as finance minister, replacing Al-Mursi Al-Sayed Hegazy, another expert on Islamic finance who was appointed in January, the last time Kandil reshuffled the cabinet.

Abdel Moneim received a doctorate from Al-Azhar University in Islamic economics in 1999.

The government has been widely criticised for failing to revive an economy that is in deep crisis because of more than two years of political turmoil.

Another Brotherhood member, Yehya Hamed, was appointed investment minister. The new cabinet includes at least 10 politicians affiliated to the Muslim Brotherhood or the FJP, compared to eight in the old one.

Ahmed Suleiman was named as justice minister, replacing Ahmed Mekky, who resigned last month in protest at efforts by Mursi's Islamist allies to purge the judiciary.

The ministers of interior, defence and foreign affairs were left unchanged.

Crisis sees rise in German immigration

An influx of people from crisis-hit southern European countries like Spain, Italy and Greece has led to the biggest surge in German immigration in nearly 20 years.

The Federal Statistics Office said 1.081 million immigrants flocked to Germany last year, up 13% from 2011 and the highest number since 1995.
Leading the way were arrivals from countries in eastern Europe and from southern eurozone countries, struggling with recession and high unemployment as a result of the currency bloc's three-year old debt crisis.
The number of immigrants coming from Spain, Greece, Portugal and Italy rose by 40% or more compared to the prior year.
"The rise in immigration from EU countries hit by the financial and debt crisis is particularly strong," the Statistics Office said.
Safe haven
Germany has been a rare pillar of strength during the crisis, benefitting from deep structural reforms introduced a decade ago, competitive small-and-medium sized companies and record low interest rates resulting from its status as a safe haven.
Unemployment, at 6.9%, is hovering just above a post-reunification low.
By contrast, more than one in four workers in Spain and Greece are without a job, and youth unemployment in these countries is close to 60%.
This has made Germany, Europe's largest economy, an increasingly attractive destination, despite barriers like the language.
Still, the numbers from southern Europe remain fairly small in total terms compared to those from the east.
A total of 34 109 people came from Greece and 29 910 from Spain in 2012.
That compared to 176 367 from Poland and 116 154 from Romania.