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How rumor sparked panic and three-day bank run in Chinese city

"The rumor spread quickly. A small rural lender in eastern China had turned down a customer's request to withdraw 200,000 yuan ($32,200). Bankers and local officials say it never happened, but true or not the rumor was all it took to spark a run on a bank as the story passed quickly from person to person, among depositors, bystanders and even bank employees. Savers feared the bank in Yancheng, a city in Sheyang county, had run out of money and soon hundreds of customers had rushed to its doors demanding the withdrawal of their money despite assurances from regulators and the central bank that their money was safe." Continue reading →

Continue ReadingHow rumor sparked panic and three-day bank run in Chinese city

UK tax office to get power to raid bank accounts without court order

"At the moment, if HMRC want to seize your property or cash, they have to take you to court, win and then get a court order. Now, after a couple of warning letters and a phone call, they apparently can do it at the flick of a switch. Crucially, there’s no safeguard built into this system – where's the appeal process? To repeat, if HMRC decide you owe them cash, they just take it. If you haven't managed to reach agreement with them, then you'll just wake up one morning, check your bank account, and find the money's gone. We're told that 'a minimum of £5,000 will be left across debtors’ accounts.' That’s a very low threshold – especially for a business or a pensioner." Continue reading →

Continue ReadingUK tax office to get power to raid bank accounts without court order

Europol: Police need powers to tackle virtual money laundering

"The head of the European Union's policing agency warned on Monday that virtual currencies such as Bitcoin were being used for money laundering and called for police to be given more powers to identify criminal suspects operating on the Internet. 'We're seeing that virtual currencies are being used as an instrument to facilitate crime, particularly in regard to the laundering of illicit profits,' said Europol head Rob Wainwright, speaking on the margins of a nuclear security conference in The Hague. Wainwright said police should be given new powers to allow them to identify anonymous participants online and bring them to justice." Continue reading →

Continue ReadingEuropol: Police need powers to tackle virtual money laundering

UK financial official: Monetize state debt when deflation risks persist

"There is no need for central banks’ balance sheets to shrink. They could stay permanently larger; and, for some countries, permanently bigger central-bank balance sheets will help reduce public-debt burdens. Even when permanent monetization occurs — as it almost certainly will in Japan and possibly elsewhere — it may remain forever the policy that dare not speak its name. Such reticence may serve a useful purpose. But it must not blind central banks and governments to the full range of policy tools available to address today’s severe debt overhangs." Continue reading →

Continue ReadingUK financial official: Monetize state debt when deflation risks persist

Incredible confusions: Why ‘austerity’ if we can just print the money?

"Debt can either be repaid or be defaulted on. Destroying the purchasing power of money through inflation is one way to default on the debt. Simply not paying the debt is the other option. In both cases, savers, ‘thrifty pensioners’, and the customers of banks, insurance companies, and pension funds will suffer, and in the inflationary scenario everybody will suffer greatly. Sadly, the massive printing of money and accumulation of debt that has occurred since the termination of the gold standard and the adoption of limitless state fiat money and pro-growth central banking has now brought us to a point where defaults appear to be unavoidable. This is not some great reset. It is a man-made catastrophe." Continue reading →

Continue ReadingIncredible confusions: Why ‘austerity’ if we can just print the money?

Bitcoins are like ‘glass beads’, warns Danish national bank

"The Danish national bank has released a briefing note firmly declaring bitcoin to not be money, noting that the currency is more like 'glass beads'. Denmark’s national bank is just the latest central bank to inveigh against bitcoin. In January, Malaysia’s central bank warned citizens that 'the Bitcoin is not recognised as legal tender in Malaysia… the public is therefore advised to be cautious of the risks.' In December 2013, the People’s Bank of China banned the country’s financial institutions from trading in the currency, shortly after the former president of the Dutch Central Bank said the currency’s boom was 'worse than the tulip mania'." Continue reading →

Continue ReadingBitcoins are like ‘glass beads’, warns Danish national bank

Ukraine Goes Cyprus 2.0, To Tax Deposits Over 100,000 Hryvnia

"Ukraine's parliament is to consider draft laws which would ban foreign-currency bank deposits and introduce a 25% tax on interest on deposits in banks and other financial institutions in circumstances where the interest received is more than 5% above the rate set by the National Bank of Ukraine. The proposed amendments to banking and tax legislation were put forward by Yevhen Sihal, who is a member of the country's ruling Party of Regions. In an explanatory note submitted with the drafts, he argued that the higher tax rate will encourage consumer spending, reduce the cost of business loans, and provide extra funding for the country's Pension Fund." Continue reading →

Continue ReadingUkraine Goes Cyprus 2.0, To Tax Deposits Over 100,000 Hryvnia

Visa, Mastercard block US-sanctioned Russian banks

"International payment system Mastercard has stopped serving clients of seven Russian lenders, after the US issued sanctions against it regarding Russia’s position over the Ukrainian turmoil. Rossiya Bank was blocked by both Mastercard and Visa, with the latter also cutting ties with Sobinbank, SMP Bank and Investcapitalbank. Washington’s move is meant to put pressure on people they see as members of President Vladimir Putin’s 'inner circle'. The bank’s owner, Yury Kovalchuk, is on the list as well, as an individual. Visa and Mastercard have a record of bowing to political decisions from Washington, most notably in blocking donations to the WikiLeaks whistleblower website." Continue reading →

Continue ReadingVisa, Mastercard block US-sanctioned Russian banks

Startup of the Week: CurrencyTransfer

"CurrencyTransfer is a business foreign exchange price comparison marketplace. International business payments can be expensive and opaque, with hidden markups of up to five percent of the value of transfers. CurrencyTransfer aims to bring transparency and impartiality to the market, by getting currency specialists to lifestream their tradable rates -- which are usually decided 'manually' over the phone depending on the client -- in a transparent market. It was set up by computer scientist Stevan Litobac, who was born in Sarajevo but fled to the UK when the Bosnian war started, and Israeli-Brit Daniel Abrahams." Continue reading →

Continue ReadingStartup of the Week: CurrencyTransfer

Appeals court upholds Fed’s 21-cent cap on retailer ‘swipe fees’

"A Federal Reserve rule allowing banks to charge retailers 21 cents to process debit-card transactions has been upheld by a federal appeals panel, a blow to big merchants such as Wal-Mart Stores Inc. and Target Corp. The dispute stems from a Dodd-Frank provision that required the Fed to set the so-called interchange fees, known colloquially as swipe fees, at a level reflecting the actual processing costs. The Fed's staff recommended cutting the fee from 44 cents per transaction on average to just 12 cents. But after heated protests from the financial industry, the Fed in June 2011 set a cap of 21 cents per transaction." Continue reading →

Continue ReadingAppeals court upholds Fed’s 21-cent cap on retailer ‘swipe fees’