NEWS,18 AND 19.06.2013

Ranks of the rich swelling - report

The number of millionaires in the world jumped 9.2% to 12 million last year, in part because of simultaneous strength in the stock, bond and real estate markets, according to a study of the high-net-worth population.
The survey, released on Tuesday by RBC Wealth Management and Capgemini Financial Services, tracked high-net-worth people, whom it defined as those with more than $1m that they can invest.
North America was home to the highest number of millionaires - 3.7m. But the study projected that the Asia-Pacific region, which held the top spot in 2011, would reclaim it.
Part of the strength in North America came from rising equities markets - the Standard & Poor's 500 stock index gained 13% in 2012. North American investors put 37% of their money into stocks, a higher proportion than people in the Asia-Pacific region, where investors tend to be more conservative, the study said.
The amount of wealth held by the world's richest people also increased substantially, rising 10% to $46.2 trillion, well above the pre-economic crisis level of $40.7 trillion in 2007.
The study forecast high-net-worth wealth would increase 6.5% annually to $55.8 trillion by 2015, mainly because of growth in the Asia-Pacific region.
The survey found that 53% of wealthy US individuals would prefer to have a single firm handle their financial accounts.
However, a 2011 study from Boston-based research firm Aite Group showed more than half of high-net worth investors held their money in four or more financial institutions.
"Having one super-adviser would be preferred, but finding someone who can do that well is hard," said Aite analyst Sophie Schmitt.
The RBC-Capgemini survey polled more than 4 000 high-net-worth people globally in February and March, including 736 Americans.

Switzerland buries US tax law

Swiss lawmakers dealt a death blow on Wednesday to a draft law which aimed to protect the country's banks from criminal charges in the United States for helping wealthy Americans evade tax.
The Swiss government has warned that the bill's failure could prompt impatient US prosecutors to indict banks, though it could still use an executive order to allow them to hand over data to try to avoid criminal charges.
The bill, which lawmakers from both the centre-left and right opposed for widely differing reasons, was designed to let banks sidestep Swiss secrecy laws by disclosing their US dealings so they could avoid prosecution. With or without the law, they will still seek out of court settlements with US authorities that could cost the industry as much as $10bn.
Parliament's lower house voted 123 to 63 against debating the legislation, effectively killing the law, even though the upper house had confirmed its support earlier in the day.
Switzerland's banking lobby expressed regret about the vote and urged the government to do everything possible to help banks reach settlements under a US Department of Justice programme.
"Switzerland must not take the risk of a further indictment of a bank lightly," the Swiss Bankers Association said in a statement.
Finance Minister Eveline Widmer-Schlumpf said the government would do everything in its power but its options were limited without the bill.
The protection of client information has helped to make Switzerland the world's biggest offshore financial centre, with $2 trillion in assets. But the haven has come under fire as other countries have tried to plug budget deficits by clamping down on tax evasion, with authorities investigating Swiss banks in Germany and France as well as the United States.
Experts were divided over the threat posed to Swiss banks by parliament's decision to oppose the law.
"The Americans will get the data they want. They will not stop until they have it," said Martin Naville, head of the Swiss-American Chamber of Commerce. "It is taxing the patience of our American friends. When their patience is over, there will be indictments, perhaps just one or two, but it will be more than enough to create chaos."
No one was immediately available for comment at the US Department of Justice.
Wegelin precedent
Earlier this year a U.S. indictment felled Switzerland's oldest private bank, Wegelin. It paid a $58m fine and closed its doors for good after pleading guilty to helping wealthy Americans evade taxes through secret accounts.
Shares in Basler Kantonalbank, one of the banks under US investigation seen at immediate risk, closed down 2.5%, compared with broadly positive Swiss stocks.
But Peter V. Kunz, professor for business law at Berne University, was more sanguine.
"I think bankers will be indicted, but I don't really see banks getting indicted... as there may not be enough evidence to accuse them of systematically violating US law," he said.
"Wegelin was indicted and settled but in my view this was a singular case. I don't see it as a model case for Swiss banks."
The government's attempt to fast-track the legislation through parliament to meet a US ultimatum angered many lawmakers in the fiercely independent country.
Right-wing lawmakers opposed the bill on the grounds that it could set a precedent that might prompt other countries to seek concessions from Switzerland. The centre-left also rejected it for different reasons, believing Swiss banks should be forced to face the music for aiding tax evasion.
Lawmakers from both the lower and upper house endorsed a statement saying they supported a solution to the long-running tax dispute despite the defeat, and called on the government to allow banks to cooperate under existing laws.
Protracted negotiations
Switzerland's biggest bank, UBS, was forced to pay a $780m fine in 2009 and deliver the names of more than 4,000 clients to avoid indictment, giving the US authorities information that allowed them to pursue other banks.
Since then, the government has tried to reach a settlement for the whole financial industry, but has been hamstrung by Swiss secrecy laws and bickering among banks over who should pay the heavy fines.
US authorities have more than a dozen banks under formal investigation, including Credit Suisse, Julius Baer, the Swiss arm of Britain's HSBC, privately held Pictet in Geneva and local government-backed Zuercher Kantonalbank and Basler Kantonalbank.

UK backs jail time for reckless bankers

Bankers who are reckless with customers' or taxpayers' money could face criminal charges and have bonuses and pensions clawed back, according to proposals backed by Britain's prime minister on Wednesday.
Many Britons blame bankers' risk-taking for the 2008 financial crisis and subsequent economic slump and were furious when the former boss of RBS left the bank with a pension of almost £17m even after a state rescue.
He later agreed to a cut and was stripped of his knighthood but it was one in a series of banking scandals that increased pressure on Prime Minister David Cameron to get tougher on a sector contributing billions of pounds to the British economy.
The parliamentary commission on banking standards he set up last year after Barclays was fined for manipulating interest rate benchmarks said on Wednesday the law should be changed so that bankers found guilty of "reckless misconduct in the management of a bank" could face jail.
The UK Treasury said the new rules could be in place before the end of 2015 but lawyers said it would be hard to prove when a banker had taken too much risk or simply made a mistake.
Asked in parliament whether he supported the report's recommendations on criminal penalties and pay, Cameron said: "Penalising, including criminal penalties ... bankers who behave irresponsibly, I say yes."
Lawyers doubted that new laws would be effective.
"There is likely to be a considerable burden of proof - merely miscalculating or being negligent in an assessment of risk most likely won't be enough," said Michael Isaacs, head of banking litigation at law firm Pinsent Masons.
The commission also recommended a new pay code to better balance risk and reward, with bonuses deferred for up to ten years with the aim of preventing bankers taking risks for short term reward, one of the factors blamed for the crisis.
It also proposed that the UK financial regulator would be granted a new power enabling it to cancel all bonuses and pension rights not yet paid out to senior executives in the event of their banks needing taxpayer support.
Watered down
Banking industry sources said banks were likely to accept many of the proposals in principle, including the threat of criminal sanctions, but will lobby for some to be watered down, including the 10-year deferral on bonuses.
"The commission's conclusions contain many constructive proposals to help fix the issues which have afflicted the industry, most importantly in the emphasis on personal responsibility and accountability," said HSBC Chairman Douglas Flint.
The cross-party commission, which includes former British finance minister Nigel Lawson and Justin Welby, head of the Anglican church, recommended senior bankers are held personally responsible and regulators granted greater powers.
Commission member Pat McFadden said it would be "pressing the government very hard in the coming weeks" to make sure the proposals are implemented. The government has set itself a four week deadline to give a formal response.
"I think all of us who were engaged in this process over the last year very much hope this is not a report which is going to gather dust," he told Reuters.
The British Bankers Association, a lobby group, said it would work with government and regulators to take forward proposals from what it described as the "most significant report into banking for a generation".
Unpopular
Bankers are deeply unpopular in Britain where the economy has narrowly avoided a triple-dip recession and is expected to show tepid growth at best through next year.
"I think jail sentences would be suitable," Ben Stewart, a 34-year-old cabinet maker said in Whitechapel, not far from the City of London, the traditional financial heartland.
"It's fraud a lot of what they've done. Even if it's not legally fraud, I think by most people's moral compass, they'd find it quite distasteful."
The commission recommended the industry adopt two new registers for senior bankers and other employees to make sure the most important responsibilities within banks were assigned to specific individuals.
The 'Senior Persons Regime' would enable those responsible for failures to be identified more easily and provide a stronger basis for action to be taken against them, the report said.
The Financial Conduct Authority, the financial services industry watchdog which took over regulation of banks in April, said it was "learning from the regulatory mistakes of the past".
The commission also urged the government to immediately consider a range of strategies for RBS, which is 81% state-owned, including a possible break-up.
Some commission members, including Lawson, have advocated hiving off RBS's toxic loans into a 'bad bank' leaving the remaining 'good bank' better able to lend to British businesses and households. But Finance Minister George Osborne said such a move would be complicated, time consuming and costly.
The report said the government had interfered in the running of RBS and Lloyds Banking Group, in which it holds a 39% stake, and said RBS was being held back by having the government as its main shareholder.
The level of the government's influence over RBS has come under scrutiny since chief executive Stephen Hester was ousted last week with the Treasury's approval.
Osborne is set to lay out strategies for returning RBS and Lloyds Banking Group to full private ownership in his annual speech to financiers in the City of London on Wednesday.

Big expectations for Obama Berlin speech

Five years and 50 years. As President Barack Obama revisits Berlin, he can't escape those anniversaries and the inevitable comparisons to history and personal achievement.

His 26-hour whirlwind visit to the German capital caps three days of international summitry for the president and marks his return to a place where he once summoned a throng of 200 000 to share his ambitious vision for American leadership.

That was 2008, when Obama was running for president and those who supported him at home and abroad saw the young mixed-race American as a unifying and transformational figure who signified hope and change.

Five years later, Obama comes to deliver a highly anticipated speech to a country that's a bit more sober about his aspirations and the extent of his successes, yet still eager to receive his attention at a time that many here feel that Europe, and Germany in particular, are no longer US priorities. A Pew Research Centre poll of Germans found that while their views of the US have slipped since Obama's first year in office, he has managed to retain his popularity, with 88% of those surveyed approving of his foreign policies.

Obama also has an arc of history to fulfil.

Fifty years ago next week, President John F Kennedy addressed a crowd of 450 000 in that then-divided city to denounce the Soviet bloc and famously declare "Ich bin ein Berliner", German for "I am a Berliner". Since then, presidents from Ronald Reagan to Bill Clinton have used Berlin speeches to articulate broad themes about freedom and international alliances.

Need for activism

Obama, fresh from a two-day summit of the Group of Eight industrial economies, will speak at the Brandenburg Gate, a symbol of Germany's division and later reunification. It is a venue that German Chancellor Angela Merkel denied him in 2008, saying only sitting presidents were granted such an honour.

The past context and the weight of it are not lost on the White House.

"This is a place where US presidents have gone to talk about the role of the free world essentially," said Obama's deputy national security adviser, Ben Rhodes. "He is seeking to summon the energy and legacy of what's been done in the past and apply it to the issues that we face today."

Rhodes said Obama will make the case that even though the Berlin Wall came down 23 years ago and the threat of nuclear war has dissipated, the type of activism apparent during the Cold War needs to be applied to such current challenges as climate change, counterterrorism and the push for democratic values beyond the United States and Europe.

A senior administration official said Obama will also renew his call to reduce the world's nuclear stockpiles, including a proposed one-third reduction in US and Russian arsenals. He is not expected to outline a timeline for this renewed push. The official insisted on anonymity in order to preview the issue before the president's speech.

Obama will also hold a joint news conference with Merkel.

Merkel surprised by scope of spying

The visit was attracting widespread attention in Germany. People waved and snapped photos as Obama sped by after his arrival and a thick cluster awaited the motorcade as it passed the Brandenburg Gate. An evening news show in Berlin devoted itself to the president's visit, highlighting "Das Biest", or "The Beast", as the president's armoured limousine is called.

There have been a few small protests, including one directed against the National Security Agency's surveillance of foreign communications, where about 50 people waved placards taunting, "Yes, we scan."

Merkel has said she was surprised at the scope of the spying that was revealed and said the US must clarify what information is monitored. But she also said US intelligence was key to foiling a large-scale terror plot and acknowledged her country is "dependent" on co-operating with American spy services.

For Merkel, the visit presents an opportunity to bolster her domestic standing ahead of a general election in September.

The US and the Germans have clashed on economic issues, with Obama pressing for Europe to prime the economy with government stimulus measures, while Merkel has insisted on pressing debt-ridden countries to stabilise their fiscal situations first.

But the two sides have found common ground on a trans-Atlantic trade pact between the European Union and the US At the just-completed G8 summit, the leaders agreed to hold the first talks next month in the US.

Obama calls for nuclear reductions

Issuing an appeal for a new citizen activism in the free world, President Barack Obama renewed his call on Wednesday to reduce US and Russian nuclear stockpiles and to confront climate change, a danger he called "the global threat of our time."

In a wide-ranging speech that enumerates a litany of challenges facing the world, Obama said he wanted to reignite the spirit that Berlin displayed when it fought to reunite itself during the Cold War.
"Today's threats are not as stark as they were half a century ago, but the struggle for freedom and security and human dignity, that struggle goes on," Obama said at the city's historic Brandenburg Gate before a crowd of 6 000 invited guests under a bright, hot sun.
"And I come here for this city of hope because the test of our time demands the same fighting spirit that defined Berlin a half-century ago."
He called for a one-third reduction of US and Russian nuclear stockpiles, saying it is possible to ensure American security and a strong deterrent while also limiting nuclear weapons.
Obama's address, delivered from behind bullet-proof glass, comes nearly 50 years after John F Kennedy's famous Cold War speech in this once-divided city.
The president has previously called for reductions to nuclear stockpiles. But by addressing the issue in a major foreign policy speech, Obama signalled a desire to rekindle an issue that was a centrepiece of his early first-term national security agenda.
The president discussed non-proliferation with Russian President Vladimir Putin when they met on Monday on the sidelines of the Group of 8 summit in Northern Ireland. During Obama's first term, the US and Russia agreed to limit their stockpiles to 1 550 as part of the New START Treaty.
In Moscow, Russian foreign policy aide Yuri Ushakov said that plans for any further arms reduction would have to involve countries beyond Russia and the United States.
"The situation is now far from what it was in the '60s and '70s, when only the USA and the Soviet Union discussed arms reduction," Ushakov said.
Withdrawal
Obama's calls for co-operation with Moscow come at a time of tension between the US and Russia, which are supporting opposite sides in Syria's civil war. Russia also remains wary of US missile defence plans in Europe, despite US assurances that the shield is not aimed at Moscow.
Germany's foreign minister, Guido Westerwelle, is a strong advocate of nuclear disarmament and has long called for the removal of the last US nuclear weapons from German territory, a legacy of the Cold War.
The Buechel Air Base in western Germany is one of a few remaining sites in Europe where they are based.
Under an agreement drawn up when they formed a coalition government in 2009, Merkel's conservatives and Westerwelle's Free Democratic Party agreed to press Nato and Washington for the nuclear weapons to be withdrawn, but did not set any time frame.
Nuclear stockpile numbers are closely guarded secrets in most nations that possess them, but private nuclear policy experts say no countries other than the US and Russia are thought to have more than 300.
The Federation of American Scientists estimates that France has about 300, China about 240, Britain about 225, and Israel, India and Pakistan roughly 100 each.

Obama defends terrorism tactics in Berlin

President Barack Obama defended US intelligence methods on a visit to Berlin on Wednesday, telling Chancellor Angela Merkel and wary Germans that Washington was not monitoring the e-mails of ordinary citizens or damaging civil liberties.

Obama is popular in Germany but revelations before the trip that the United States has a covert internet surveillance programme, codenamed Prism, have caused outrage in a country where memories of the eavesdropping East German Stasi secret police are still fresh.

Merkel said at a joint news conference that also touched on Afghanistan, Syria and the global economy, that the two leaders had held "long and intensive" talks on the spying issue, and pointed out that some questions still need to be cleared up.

"This is not a situation in which we are rifling through the ordinary e-mails of German citizens or American citizens or French citizens or anybody else," said Obama, on his first visit to the German capital as president.

"This is not a situation where we simply go into the internet and start searching any way we want. This is a circumscribed system directed at us being able to protect our people and all of it is done under the oversight of the courts."

Obama was later due to speak to a crowd of roughly 4 000 invited guests at the Brandenburg Gate, which used to stand alongside the Berlin Wall dividing communist East Berlin from the capitalist West of the city.

Tension in Afghanistan

His visit comes on the 50th anniversary of John F Kennedy's famous Ich bin ein Berliner speech. Seizing on the Cold War theme, Obama is expected to announce plans to sharply reduce nuclear arms stockpiles, an initiative he kicked off with a speech in Prague in 2009 but which involves complex negotiations with Russia.

At the news conference, he touched on tensions with Afghan President Hamid Karzai over US plans to begin talks with the Taliban to try to seek a negotiated peace after 12 years of war, acknowledging "huge mistrust" between the Western-backed government in Kabul and its arch-foes.

"We do think that ultimately we're going to need to see Afghans talking to Afghans about how they can move forward and end the cycle of violence there so they can start actually building their country," Obama said.

As a sign of displeasure with the US move, Karzai has suspended talks with Washington on a troop agreement. But Obama said he welcomed Karzai's announcement that Afghan forces would soon take responsibility for security from the US-led Nato peacekeeping force.

On Syria, Obama said reports that the United States was ready to "go all in" to war in the country were exaggerated. He reiterated his view that President Bashar Assad's government had used chemical weapons, while acknowledging that Russia was sceptical on this point.

For her part, Merkel said Germany would not deliver weapons to the rebels, even though a European Union arms embargo on Syria has lapsed.

Pragmatic relationship

Obama arrived in Germany from a two-day summit with Group of Eight leaders in Northern Ireland where he and other leaders clashed with Russian President Vladimir Putin over Syria.

He last came to Berlin in 2008, during his first campaign for the presidency. Back then, Merkel refused to allow him to speak at the Brandenburg Gate. Instead he spoke down the road in Berlin's Tiergarten park, attracting a crowd of 200 000 - largely enthusiastic admirers.

The Democrat has forged a pragmatic - if not warm - relationship with the conservative Merkel, who is hoping to get a boost out of the visit months before a German election.

In a message which seemed designed for her domestic audience, she told Obama at the news conference that balance was essential in government monitoring of Internet communications.

"I made clear that although we do see the need for gathering information, the topic of proportionality is always an important one and the free democratic order is based on people feeling safe," said Merkel, who grew up in the communist East and experienced the Stasi first hand.

Obama said the US had thwarted at least 50 threats because of its monitoring programme, including planned attacks in Germany.

Reassurance on drones

"So lives have been saved and the encroachment on privacy has been strictly limited," he said.

A poll last week showed 82% of Germans approve of Obama, but the magic of 2008, when he was feted like a rock star, has faded amid concerns about his tactics in combating terrorism.

In a nod to the criticism, Obama defended his failure to close the Guantanamo Bay prison on Cuba that his predecessor George W Bush opened after the invasion of Afghanistan in 2001, shortly after the 11 September attacks in New York and Washington.

He also reassured Germans that the US military was not using German bases to launch unmanned drone attacks.

For Obama, who grew up in Hawaii and spent part of his childhood in Indonesia, Europe has sometimes seemed an after-thought. The signature foreign policy initiative of his first term was his "pivot" to Asia.

But analysts say plans to create a free-trade zone between the United States and European Union are a sign that he is repositioning policy to focus on Europe.

Enduring bonds

"The Obama administration has found it harder than expected to work with emerging powers and has fallen back to a more traditional reliance on European allies," said Charles Kupchan, professor of international affairs at Georgetown University.

"Washington doesn't have better options. And when it comes to who to engage in Europe, Germany grows stronger and stronger."

Obama spoke of "enduring bonds based on common values" that linked the United States to Europe.

Peacekeeping: Ban warns of new threats

UN Secretary General Ban Ki-moon said on Wednesday the world body's peacekeeping efforts face growing dangers from non-traditional threats such as suicide bombers and improvised explosive devices.

Ban told reporters on a visit to a peacekeeping training base near the Chinese capital that the UN must ensure that peacekeepers have the necessary training and specialised skills to face the threats.

These threats "are not new to the UN, but they are more intense," Ban said.

Ban's comments came at the start of a three-day visit to China to meet with newly appointed President Xi Jinping and Premier Li Keqiang. Their discussions are expected to include China's growing involvement in UN affairs, along with international topics including tensions on the Korean Peninsula.

He said peacekeepers need to react rapidly and gather and analyze information on remote areas. In order to ensure that capability, the UN is deploying drones for the first time to its mission in the Democratic Republic of the Congo, Ban said.

Ban also praised China's commitment to peacekeeping efforts. China has dispatched 22 000 troops to 23 missions, more than the other four permanent members of the UN Security Council combined.

"I applaud this solidarity," Ban said, noting 14 Chinese peacekeepers have died while serving.

Threatened

In all, nearly 3 000 peacekeepers have died in the line of duty since the first were deployed 65 years ago - 103 of them last year in Congo, Darfur, Sudan, Ivory Coast and other countries. Eight more civilian contractors, such as pilots, also died during deployment with peacekeeping missions in 2012.

The United Nations currently has more than 113 000 personnel serving in 16 UN peacekeeping and political missions.

In the latest crisis to hit peacekeeping efforts, Austria announced it would pull out its 377 peacekeepers from the 911-member UN force in the Golan Heights after fighting from the Syrian civil war threatened their positions earlier this month.

That will leave just 341 Philippine soldiers and 193 from India in the strategic area along the border with Israel.

Philippine Foreign Secretary Albert del Rosario told reporters on Wednesday that his country will keep its peacekeepers in place at least until 3 August. It will then consider a request from Ban to stay on, del Rosario said.

NEWS,10 AND 11.06.2013

New London finance jobs rise 20%

The number of job vacancies in London's financial services sector rose 20% between April and May as employers took comfort from more stable financial markets, a recruiter said on Monday.
Job vacancies in one of the world's top financial centres rose to 6 426 last month, up from 5 355 in April, according to Morgan McKinley's London Employment Monitor.
London's banks and financial services companies have slashed thousands of jobs in recent years following a wave of banking scandals and a protracted period of economic weakness. However, the sector still employs over 1 million people in Britain and contributes almost 10% of gross domestic product, according to TheCityUK, which promotes UK financial services.
The May employment monitor results showed confidence about the potential for business growth was steadily returning, Hakan Enver, operations director at Morgan McKinley Financial Services, said in a statement.
"As we approach the mid-year point, we have seen less volatility both in the financial markets and also in the wider global economy. Although the market remains highly sensitive to macroeconomic issues, sentiment has slowly been improving since the start of the year," Enver said.
However, the number of job opportunities appearing in May was almost 60 percent lower than in May 2012. Enver said this reflected the impact of the large scale redundancies made last year, which have outweighed the number of roles becoming available, and a trend for filling vacancies internally.
The survey, based on Morgan McKinley's weekly records of new permanent and temporary job vacancies and new candidates registering with the firm for employment, also found that the number of job seekers rose by 7% month-on-month in May as job security became less of a concern.
On average, workers moving to new roles last month pocketed an 8% pay rise versus a 12% gain in April.
The smaller pay rise was down to firms having spent some of their hiring budgets earlier in the year, feeling less pressure to snap up top candidates as markets calmed and people returning to work after a period of redundancy.

Saudi prince sues Forbes - report

Saudi billionaire Prince Alwaleed bin Talal has sued Forbes magazine for libel in a British court, alleging its valuation of his wealth at $20bn was short of the mark by $9.6bn, Britain's Guardian newspaper reported on Friday.
The prince, a grandson of Saudi Arabia's founder and nephew of King Abdullah, had attacked the US magazine's ranking of world billionaires as flawed and biased against Middle Eastern businesses after he was ranked number 26 in this year's list.
An official at the High Court in London confirmed that Prince Alwaleed had filed a defamation suit against Forbes, its editor Randall Lane, and two of its journalists on April 30. Details of the claim were not immediately available.
Through his Kingdom Holding Company, Prince Alwaleed owns large stakes in Citigroup, News Corp and Apple Inc, among other companies. He is also owner or part-owner of luxury hotels including the Plaza in New York, the Savoy in London and the George V in Paris.
This year's Forbes World Billionaires list was published on March 4, and the following day Kingdom Holding said the valuation process used "incorrect data" and "seemed designed to disadvantage Middle Eastern investors and institutions".
The public spat attracted a lot of comment, but Forbes stuck by its estimate of Prince Alwaleed's wealth and published an in-depth article in its March 25 issue entitled "Prince Alwaleed and the curious case of Kingdom Holding stock".
The article gave details about how Forbes had arrived at the figure of $20 billion and criticised what it described as a lack of transparency by Kingdom Holding in detailing its assets.
The article also described Prince Alwaleed's marble-filled, 420-room Riyadh palace, his private Boeing 747 equipped with a throne, and his 120-acre resort on the edge of the Saudi capital with five homes, five artificial lakes and a mini-Grand Canyon.
The High Court official in London said the two journalists named in the defamation claim were Kerry Dolan, the author of the article, and Francine McKenna, who was credited with additional reporting.
No date has been set for a court hearing in the case, which is in its very early stages, the official said.
The law firm Kobre & Kim, which the Guardian said was acting for Prince Alwaleed in the suit, declined to comment. New York-based Forbes could not immediately be reached for comment.
The Guardian article quoted the magazine as saying: "We're very surprised at claims that Prince Alwaleed has decided to sue Forbes, particularly if he has done so in the United Kingdom, a jurisdiction that has nothing whatsoever to do with our recent story which raised questions about his claims about his wealth."
Media lawyer Jonathan Coad, of the London firm Lewis Silkin, said London was seen as a more attractive place than New York to bring defamation suits because US libel law made higher requirements of claimants.
"In the US, a high-profile claimant has to prove firstly that the article was untrue and secondly that the publisher knew that the article was untrue, which is what we call malice. Those are two hurdles that a UK libel action does not present," said Coad, who is not involved in the Prince Alwaleed case.
Under British libel law, a claimant has only to prove that a publication was defamatory. Then the burden of proof passes to the defendant, who has several possible defences, including that the publication was true.

Obama to name Furman as chief economist

President Barack Obama on Monday will nominate longtime adviser Jason Furman to be his new chief White House economist, an administration official said.
Furman, who will replace economist Alan Krueger as chair of the White House's Council of Economic Advisers (CEA), has a Ph.D. in economics from Harvard University and has advised Obama since his 2008 election campaign.
"Furman has been a key adviser to the president and has contributed to most every major proposal on jobs and the economy," said the White House official who declined to be identified. Obama will announce the appointment at 14:10.
Krueger, who was confirmed as CEA chair in November 2011, is returning to his professor post at Princeton University, from which he has been on leave. He had to return to the school by this fall in order to maintain his tenure, according to one source.
Furman is currently assistant to the president for economic policy and principal deputy director of the White House National Economic Council (NEC), which is run by Gene Sperling, and was an economist in the Clinton administration.
The CEA advises the president on domestic and international economic policy based on data and economic research. The chairman is a cabinet member and requires Senate confirmation.
Former colleagues said Furman would be effective because of his good relationship with the president and White House staff.
The appointment is likely a sign that budget and tax fights with Congress will continue to play a high-profile role in White House economic policy. It could also raise the profile of the CEA within the White House itself.

 

Opec keeps oil demand forecast steady

Opec kept its world oil demand forecast for 2013 virtually unchanged in its latest update on Tuesday, but tipped downward revisions given the deteriorating economic climate.
The Organization of Petroleum Exporting Countries (Opec) said it expected world demand this year to reach 89.65 million barrels per day (mbpd), a slight drop from the forecast of 89.66 mbpd in its previous monthly report.
This would represent a rise of 780,000 bpd from 2012 oil demand, said the cartel which pumps about 35% of the world's crude.
Most of the increased demand is due to China and other countries not in the OECD club of advanced economies.
But Opec warned "the current forecast is subject to downward revisions not only in the OECD but also in emerging economies."
The latest Chinese manufacturing and export data raised concerns about a slowdown in Chinese growth, while growth in advanced economies is also expected to be lower than initially expected.
The Opec report noted that oil demand from debt crisis-wracked Europe declined for the 20th straight month in April.
"General expectations for the region's oil consumption during 2013 have once more weakened since last month's projections," said Opec.
Despite concerns about weakening global demand for oil, the cartel decided at its latest ministerial meeting at the end of last month to keep its output ceiling unchanged at 30 mbpd as the price per barrel of crude has hovered around $100.
However it warned it stood ready to act to support the price of oil.
The report, citing non-Opec sources, noted that international sanctions were having an impact on Iran's oil output, which fell to 2.64 mbpd in May, down from a level of 3.63 mbpd in 2011.
The International Energy Agency, the energy analysis arm of the 34-nation Organisation for Economic Cooperation and Development (OECD), releases its updated oil market forecasts on Wednesday.

US approves a nearly $1trn farm bill

The US Senate approved a sweeping, $955bn farm bill late Monday that sets out agriculture policy for the next five years, including expansion of crop insurance and reduction of food stamps.
The bill, which allocates some $955bn on nutrition and conservation programs, commodities and other agriculture spending, passed 66-27 with broad bipartisan support, and goes to the House of Representatives for consideration.
It slashes some $24bn from the federal deficit compared with the previous farm bill, a consideration Democrats hope will beef up the likelihood of passage in the Republican-led House where members have expressed intent to cut even more.
Agriculture is among the biggest US industries, accounting for at least 16 million jobs, and Senator Debbie Stabenow of Michigan, chair of the Agriculture Committee, has called passing the farm bill this year a top priority.
"It's been a long road," she said on the Senate floor, referring to how last year's farm bill passed by the Senate was not taken up by the Republican-controlled House, causing the Senate version to expire at the end of 2012.
"I'm very optimistic we will get this done" and on to President Barack Obama's desk for his signature.
Stabenow accused House Republicans of having "walked away from rural America last year," but "this year it looks like it's going to be different."
House Speaker John Boehner suggested as much Monday in a statement saying the House will begin "vigorous and open debate" on its version of the farm bill later this month.
But Boehner hinted at a potential showdown, particularly over dairy provisions from last year that Boehner opposes, but that were kept in the 2013 bill.
"I oppose those provisions and will support efforts on the House floor to change them appropriately," he said, but he urged House members to come forward with possible solutions.
"Let's have the debate, and let's vote," he said.
By far the largest part of the bill, some $760.5bn over 10 years - the chunk of time over which the costs are calculated - addresses nutritional programs including food stamps, which the legislation cuts by some $4bn.
House lawmakers have called for even deeper cuts in the food stamp program as part of their goal of slashing a further $15bn from the overall bill.
It also marks a major transition from direct payments to farmers, a decades-old policy that helps shield growers from risk, to a market-based crop insurance system.
The new crop insurance plan would cost $89bn over 10 years.

Snowden: Russia will consider asylum

Russia would consider granting asylum to the American who has exposed top-secret US surveillance programmes, if he were to ask for it, President Vladimir Putin's spokesperson said on Tuesday.
Spokesperson Dmitry Peskov stopped short of saying Moscow would accept Edward Snowden, but pro-Kremlin lawmakers spoke out in favour of the idea, tapping into a lingering Cold War rivalry with the United States and a vein of anti-American sentiment Putin has often encouraged.
"Promising Snowden asylum, Moscow takes upon itself the defence of people persecuted for political reasons," Alexei Pushkov, chairperson of the international affairs committee in the lower house of parliament, said on Twitter.
"There will be hysteria in the United States. They recognise this as their right alone," he said.
Putin and other Russian officials have often accused the United States of hypocrisy, saying it tries to impose standards of human rights, freedom and democracy on other nations while falling far short of them itself.
Snowden, who provided the information for reports that revealed broad monitoring of phone call and Internet data by the US government, fled to Hong Kong and has said he hopes that Iceland might grant him asylum.
He is not known to have mentioned the possibility of asylum in Russia, but Peskov was quoted in Russian daily Kommersant as saying Moscow was open to such an approach.
Asked whether Russia would be inclined to grant an asylum request, the spokesperson said: "It is impossible [to say] now. No one has applied yet. If he says: I request [political asylum], then we will consider it".

US assesses damage after NSA leak

The Obama administration has launched an internal review to assess damage to US national security from last week's leak of top-secret details of National Security Agency (NSA) surveillance programmes, a senior US intelligence official said.

The review is separate from an initial criminal investigation into the leak opened by the justice department, the official told.
The administration's review will examine the extent of damage to national security programs from the disclosures by Edward Snowden, of details of NSA's collection of phone call and e-mail data, the official said.
It will be co-ordinated by the National Counter-intelligence Executive (NCIX), a branch of the director of national intelligence's office, the official said.
Snowden, who had been working at the NSA as an employee of contractor Booz Allen Hamilton, went public in a video released on Sunday by Britain's Guardian newspaper.
In the interview, he described being disturbed by the NSA's broad monitoring of phone call and internet data from large companies such as Google and Facebook.
The company said on Tuesday that it had terminated Snowden's employment on Monday for violations of its code of ethics and policies.
It said he had been an employee for less than three months and had a salary of $122 000.
Snowden's revelations have prompted a broad national debate about the balance of American's privacy rights and national security measures, especially as they have developed since the 11 September 2001, attacks in the United States.
A team of national security, law enforcement and intelligence officials was scheduled to brief House of Representatives members later on Tuesday about the NSA's surveillance programmes. The Senate will be briefed on Thursday.
Snowden "a traitor"
House Speaker John Boehner defended the NSA programmes and their congressional oversight, saying he had been briefed on the programmes and that Americans were not "snooped on", unless they communicated with a terrorist in another country.
"He's a traitor," Boehner said of Snowden in an interview.
"The disclosure of this information puts Americans at risk, it shows our adversaries what our capabilities are, and it's a giant violation of the law."
Many other lawmakers, both Democrats and Republicans, have also called for swift punishment.
But Senator Rand Paul, a Republican popular with the Tea Party movement that campaigns against intrusive government, said he was reserving judgment on Snowden.
He said such civil disobedience happened when people felt like they had no other options.
"I think most Americans don't want this surveillance," Paul said

Cyber-snooping backlash builds in Berlin

German outrage over a secret US internet spying programme is building before a visit by Barack Obama next week, with senior members of Chancellor Angela Merkel's government demanding a full explanation from the president when he lands in Berlin.

Merkel's spokesperson has said she will raise the issue with Obama in talks next Wednesday. That could cast a cloud over the visit, designed to celebrate US-German ties on the 50th anniversary of a famous speech in which President John F Kennedy declared: "Ich bin ein Berliner".

Government surveillance is an extremely sensitive topic in Germany, where memories of East Germany's feared Stasi secret police and its extensive network of informants are still fresh in the minds of many citizens.

In a guest editorial for Spiegel Online on Tuesday, Justice Minister Sabine Leutheusser-Schnarrenberger said reports the United States could access and track virtually all forms of internet communication were "deeply disconcerting" and potentially "dangerous".

"The more a society monitors, controls and observes its citizens, the less free it is," she said.

"The suspicion of excessive surveillance of communication is so alarming that it cannot be ignored. For that reason, openness and clarification by the US administration itself is paramount at this point. All facts must be put on the table."

Germans still enamoured of Obama

Opposition parties have jumped on the issue, keen to put a dampener on the Merkel-Obama talks and prevent them from boosting the chancellor as she gears up for a September parliamentary election in which she is seeking a third term.

"This looks to me like it could become one of the biggest data privacy scandals ever," Greens leader Renate Kuenast told.

Obama is due to land in Berlin on Tuesday night, hold talks and a news conference with Merkel on Wednesday and then give a speech in front of thousands at the Brandenburg Gate.

It is his first trip to the German capital since he passed through in 2008 during his first campaign for the presidency, giving a speech at the Victory Column in the Tiergarten park that attracted 200 000 adoring fans.

Five years on, Germans are still enamoured of Obama: A poll last week showed 82% view him favourably.

But his failure to close the Guantanamo Bay military prison, extensive use of drones to kill suspected al-Qaeda militants and the latest revelations about the secret surveillance programme, codenamed Prism, have tempered enthusiasm.

Grounds for 'massive concern'

According to documents leaked to the Washington Post and Guardian newspapers, the programme gave US officials access to e-mails, web chats and other communications from companies like Google, Facebook, Twitter and Skype.

Obama has defended it as a "modest encroachment" on privacy and reassured Americans that no one is listening to their phone calls.

But US law puts virtually no eavesdropping restrictions on the communications of foreigners, meaning in theory that Washington could be delving into the private Internet communications of Germans and other Europeans.

Peter Schaar, the German official with responsibility for data privacy, said this was grounds for "massive concern" in Europe.

"The problem is that we Europeans are not protected from what appears to be a very comprehensive surveillance programme," he told the Handelsblatt newspaper. "Neither European nor German rules apply here, and American laws only protect Americans."

Swiss want answers on US spy claims

Switzerland on Tuesday revealed that it has asked the United States to explain an alleged CIA blackmail operation to spy on the Alpine country's banks, exposed by whistleblower Edward Snowden.
The Swiss foreign ministry told AFP that it was aware of media reports about the issue and that it had sent the US embassy in the capital Berne a diplomatic note seeking "clarification".
The ministry also confirmed that Snowden was accredited as a diplomatic attaché at the US permanent mission to the United Nations in Geneva from March 2007 to February 2009.
"The role of members of permanent missions in Geneva is to represent their country at international organisations based in Switzerland," the ministry said.
"In line with the Vienna Convention on diplomatic relations, Switzerland expects members of diplomatic missions in Berne and permanent missions in Geneva to respect the laws and rules of the country," it added.
Snowden, a 29-year-old technology expert and US government contractor, has turned whistleblower to reveal Washington's so-called PRISM programme.
The programme enables the National Security Agency to issue directives to internet firms such as Google or Facebook to gain access to emails, online chats, pictures, files and videos uploaded by foreign users.
Snowden has said that it was in Geneva - where his diplomatic role was a cover for his work for the US intelligence agency, the CIA - that he first considered going public.
Disillusioned
"Much of what I saw in Geneva really disillusioned me about how my government functions and what its impact is in the world," he told the British newspaper The Guardian.
"I realised that I was part of something that was doing far more harm than good," he added.
Snowden claimed there was an operation in which an agent made friends with a banker, got him drunk so he was stopped for driving while intoxicated, and then helped him escape legal action.
In exchange, the man allegedly spied on Swiss banks to garner data for US tax authorities on money stashed abroad by Americans.
Speculation is raging in Switzerland's media over the banker's identity, amid a debate over a take-it-or-leave-it deal proposed by Washington to fine Swiss banks that allegedly abetted such tax evasion.
Discharged from the army after an accident in 2003 just before he could deploy to Iraq, Snowden worked at the National Security Agency for various outside contractors, including Dell and Booz Allen Hamilton.