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Swiss court rules handing over bank employee info to US illegal

"A Swiss court has ruled that Credit Suisse's decision to provide US tax authorities with information on an employee was illegal, according to the ruling made public Monday. In April 2012, the Swiss government gave 11 Swiss banks the go-ahead to accommodate a US tax evasion probe and hand over the names of thousands of their employees and consultants working with American clients. Fearful of harsh US penalties and prosecution, the banks then met Washington's demands, handing over personal information about numerous staff members, and reportedly also making personal documents, emails and details of telephone calls available." Continue reading →

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IRS Seeks To Require Reporting Of All U.S. Bank Accounts

"Currently, information reports are not required on non-interest accounts, while there is a $10 threshold for reporting on interest bearing accounts. This change would be effective for the current tax year of 2015, giving banks and credit unions little time to adapt their systems for compliance. Should this provision be enacted, taxpayers will be awash in new 1099s reporting de minimis amounts of interest. In many cases, they will report less than a one dollar in earned interest per year. Additionally, this new reporting requirement will impose substantial costs on the financial services industry that far exceed the revenue that will be gained by the proposal." Continue reading →

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Visa CEO Charlie Scharf: Moving at the speed of money

"West Coast venture capitalists see Visa as an oligopolistic dinosaur and are pouring hundreds of millions of dollars into rivals that use bitcoin. Meanwhile, banks, which collect the bulk of the fees from merchants, are warily eyeing Visa’s efforts to bypass them and forge direct relationships with retailers by offering one-click internet transactions and providing data on consumer behaviour that only Visa possesses. None of which seems to faze Visa’s chief executive, Charlie Scharf. In time, he says, would-be Visa disruptors all discover—just as internet upstarts PayPal, Square and Uber did—that it is simply easier and more economical to work with his leviathan than fight it." Continue reading →

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Risky Loans Shunned by Banks Are Booming in Wall Street’s Shadow

"Regulators’ efforts to rein in Wall Street’s biggest banks are in danger of backfiring. Guidelines aimed at strengthening lending standards are shifting the market for high-yield credit to less-supervised loan funds, raising alarm this week from the Financial Stability Oversight Council. Because the funds don’t have depositors, some of their money comes from Wall Street banks, leaving systemically important institutions exposed to risks regulators hoped to avoid. BDCs and private credit funds [are called] 'Dodd-Frank banks' because they’ve grown in the wake of the 2010 Dodd-Frank Act’s heightened supervisory scrutiny of regulated lenders." Continue reading →

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Ecuador launches new digital currency after banning competitors

"The new system, which is officially set to launch on Thursday, will work much like mobile phone bank payments in other countries: users will be able to exchange hard cash for digital money which is stored in an electronic wallet on their phones. As with other mobile payment programmes, text messages will allow users to make payments to other accounts, but what makes this plan different is that this is the first time a national government will have full control; everything from the creation of new units to securing the system against attack will be managed by the Central Bank of Ecuador. The bill that authorized the digital dollar also banned Bitcoin and other digital currencies." Continue reading →

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Bitcoin: Greece’s new euro workaround?

"Joaquin Fenoy was wandering the streets of Athens Friday, doing his bit to ease Greece’s currency restrictions. He wasn’t handing out cash, but rather installing an ATM with a withdrawal limit of €1,000 (about $1,100). That’s €940 above the €60 daily ATM withdrawal limit the Greek government put in place to stop a bank run as its creditors decide the country’s financial fate. There is one catch, though: You need to have the virtual currency bitcoin to use it. In Greece’s case, worried relatives in London could buy bitcoins and transfer them to the digital wallet of a family member in Athens, who could then withdraw the bitcoins as euros from Bitchain’s ATM." Continue reading →

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Read more about the article China Lets Banks Roll Over Loans Backed by Pledges of Shares

China Lets Banks Roll Over Loans Backed by Pledges of Shares

"China will let banks roll over loans backed by shares and adjust their collateral requirements as the government tries to limit pressure for investors to sell stock and contain risks to the financial system from a market rout. The China Banking Regulatory Commission also wants lenders to support firms’ share buybacks by offering collateralized loans, the agency said in a statement on Thursday. One of the side-effects of the share market’s collapse from a June 12 peak was to diminish the value of shares pledged as collateral for loans from banks and brokerages. In China, a borrower pledging blue-chip shares can usually get a loan of as much as 50 percent of their value." Continue reading →

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China bans major shareholders from selling for next six months

"China’s securities regulator took the drastic step of banning shareholders with stakes of more than 5% from selling shares for the next six months in a bid to halt a plunge in stock prices that is starting to roil global financial markets. The China Securities Regulatory Commission (CSRC) said on its website late on Wednesday that it would deal severely with any shareholders who violated the rule. The prohibition is also seen applying to foreign investors who hold stakes in Shanghai- or Shenzhen-listed companies, although most of their holdings are below 5%. More than 500 China-listed companies announced trading halts on the Shanghai and Shenzhen exchanges on Wednesday." Continue reading →

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Living with Venezuela’s high inflation

"As the world watches the Greek debt crisis unfold, the economy of a country in another corner of the planet is also struggling, and some experts are even trying to draw similarities. Venezuela has the world's highest inflation, leaving many facing shortages and soaring prices. While the government of president Nicolas Maduro says this is the result of an 'economic war by capitalists and the United States against the country's socialist revolution', critics say the high inflation rate is simply showing the government's economic incompetence. The BBC's Daniel Pardo explains how inflation affects what Venezuelans buy every day, like the popular snack called Arepa." Continue reading →

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Loads of Debt: A Global Ailment With Few Cures

"As central banks like the Federal Reserve and the European Central Bank have printed trillions of dollars and euros, markets in stocks and bonds, as well as other types of assets, have responded optimistically, sometimes reaching highs that were unthinkable seven years ago in the depths of the financial crisis. Central banks can make debt less expensive by pushing down interest rates. Crucially, though, they cannot slash debt levels to bring much quicker relief to borrowers. In fact, lower interest rates can persuade some borrowers to take on more debt. Many countries are now in a position where their governments and companies live in fear of an increase in interest rates." Continue reading →

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