Professor: Breaking up big bank monopoly highlight of China’s financial reform

(People’s Daily Online) 20:31, March 22, 2014

Chinese Bank of China

Beijing, March 22 (People’s Daily Online) — To break up big bank monopoly will be the highlight of China’s financial reform in 2014, professor Li Daokui told People’s Daily Online in Beijing, March 22, 2014.

Li Daokui, a professor with School of Economics and Management of Tsinghua University, has attended the “China Development Forum 2014” at the Diaoyutai State Guesthouse in Beijing. Continue reading “Professor: Breaking up big bank monopoly highlight of China’s financial reform”

2.5m people will have to take out a loan just to afford central heating this Christmas (U.K.)

Shocking figures revealed as winter fuel costs are hiked by up to £120

Simon Read

Monday, 9 December 2013

Some 2.5 million people will have to borrow money to heat their homes this Christmas. The shock statistics are published as energy users are hit this month with winter fuel hikes of up to £120.

Research published today by affordable property group Circle Housing suggests that around seven million people will be forced to take out a loan to cover extra costs this Christmas.

While four million people say the loans will be to pay for festive food and drink, more than a third of borrowers will use the cash to pay their winter energy bills. Continue reading “2.5m people will have to take out a loan just to afford central heating this Christmas (U.K.)”

[Up to $20 Trillion U.S.] Offshore financial industry leak exposes identities of thousands of holders of anonymous wealth from around the world

Identities of the rich who hide cash offshore

David Leigh

The Guardian,  Wednesday 3 April 2013 18.59 EDT

British Virgin Islands
The British Virgin Islands, the world’s leading offshore haven used by an array of government officials and rich families to hide their wealth. Photograph: Duncan Mcnicol/Getty Images

Millions of internal records have leaked from Britain’s offshore financial industry, exposing for the first time the identities of thousands of holders of anonymous wealth from around the world, from presidents to plutocrats, the daughter of a notorious dictator and a British millionaire accused of concealing assets from his ex-wife.

The leak of 2m emails and other documents, mainly from the offshore haven  of the British Virgin Islands (BVI), has the potential to cause a seismic shock worldwide to the booming offshore trade, with a former chief economist at McKinsey estimating that wealthy individuals may have as much as $32tn (£21tn) stashed in overseas havens.

In France, Jean-Jacques Augier, President François Hollande’s campaign co-treasurer and close friend, has been forced to publicly identify his Chinese business partner. It emerges as Hollande is mired in financial scandal because his former budget minister concealed a Swiss bank account for 20 years and repeatedly lied about it.

In Mongolia, the country’s former finance minister and deputy speaker of its parliament says he may have to resign from politics as a result of this investigation.

But the two can now be named for the first time because of their use of companies in offshore havens, particularly in the British Virgin Islands, where owners’ identities normally remain secret.

The names have been unearthed in a novel project by the Washington-based International Consortium of Investigative Journalists [ICIJ], in collaboration with the Guardian and other international media, who are jointly publishing their research results this week.

The naming project may be extremely damaging for confidence among the world’s wealthiest people, no longer certain that the size of their fortunes remains hidden from governments and from their neighbours.

BVI’s clients include Scot Young, a millionaire associate of deceased oligarch Boris Berezovsky. Dundee-born Young is in jail for contempt of court for concealing assets from his ex-wife.

Young’s lawyer, to whom he signed over power of attorney, appears to control interests in a BVI company that owns a potentially lucrative Moscow development with a value estimated at $100m.

Another is jailed fraudster Achilleas Kallakis. He used fake BVI companies to obtain a record-breaking £750m in property loans from reckless British and Irish banks.

As well as Britons hiding wealth offshore, an extraordinary array of government officials and rich families across the world are identified, from Canada, the US, India, Pakistan, Indonesia, Iran, China, Thailand and former communist states.

The data seen by the Guardian shows that their secret companies are based mainly in the British Virgin Islands.

Sample offshore owners named in the leaked files include:

• Jean-Jacques Augier, François Hollande’s 2012 election campaign co-treasurer, launched a Caymans-based distributor in China with a 25% partner in a BVI company. Augier says his partner was Xi Shu, a Chinese businessman.

• Mongolia’s former finance minister. Bayartsogt Sangajav set up “Legend Plus Capital Ltd” with a Swiss bank account, while he served as finance minister of the impoverished state from 2008 to 2012. He says it was “a mistake” not to declare it, and says “I probably should consider resigning from my position”.

• The president of Azerbaijan and his family. A local construction magnate, Hassan Gozal, controls entities set up in the names of President Ilham Aliyev’s two daughters.

• The wife of Russia’s deputy prime minister. Olga Shuvalova’s husband, businessman and politician Igor Shuvalov, has denied allegations of wrongdoing about her offshore interests.

•A senator’s husband in Canada. Lawyer Tony Merchant deposited more than US$800,000 into an offshore trust.

He paid fees in cash and ordered written communication to be “kept to a minimum”.

• A dictator’s child in the Philippines: Maria Imelda Marcos Manotoc, a provincial governor, is the eldest daughter of former President Ferdinand Marcos, notorious for corruption.

• Spain’s wealthiest art collector, Baroness Carmen Thyssen-Bornemisza, a former beauty queen and widow of a Thyssen steel billionaire, who uses offshore entities to buy pictures.

• US: Offshore clients include Denise Rich, ex-wife of notorious oil trader Marc Rich, who was controversially pardoned by President Clinton on tax evasion charges. She put $144m into the Dry Trust, set up in the Cook Islands.

It is estimated that more than $20tn acquired by wealthy individuals could lie in offshore accounts. The UK-controlled BVI has been the most successful among the mushrooming secrecy havens that cater for them.

The Caribbean micro-state has incorporated more than a million such offshore entities since it began marketing itself worldwide in the 1980s. Owners’ true identities are never revealed.

Even the island’s official financial regulators normally have no idea who is behind them.

The British Foreign Office depends on the BVI’s company licensing revenue to subsidise this residual outpost of empire, while lawyers and accountants in the City of London benefit from a lucrative trade as intermediaries.

They claim the tax-free offshore companies provide legitimate privacy. Neil Smith, the financial secretary of the autonomous local administration in the BVI’s capital Tortola, told the Guardian it was very inaccurate to claim the island “harbours the ethically challenged”.

He said: “Our legislation provides a more hostile environment for illegality than most jurisdictions”.

Smith added that in “rare instances …where the BVI was implicated in illegal activity by association or otherwise, we responded swiftly and decisively”.

The Guardian and ICIJ’s Offshore Secrets series last year exposed how UK property empires have been built up by, among others, Russian oligarchs, fraudsters and tax avoiders, using BVI companies behind a screen of sham directors.

Such so-called “nominees”, Britons giving far-flung addresses on Nevis in the Caribbean, Dubai or the Seychelles, are simply renting out their names for the real owners to hide behind.

The whistleblowing group WikiLeaks caused a storm of controversy in 2010 when it was able to download almost two gigabytes of leaked US military and diplomatic files.

The new BVI data, by contrast, contains more than 200 gigabytes, covering more than a decade of financial information about the global transactions of BVI private incorporation agencies. It also includes data on their offshoots in Singapore, Hong Kong and the Cook Islands in the Pacific.

IMF/EU will steal €100m from the Church

Church says it will lose €100m

Published on March 26, 2013


The Church stands to lose more than 100 million euros in the bailout deal reached with international creditors early Monday, its leader Archbishop Chrysostomos said.

“The capital owned by the Church, which was over 100 million euros, has been lost,” the archbishop told reporters.

“There will be many difficulties, some will lose their jobs, the hungry will be multiplied and the Church has to take care of people,”

he added.

The church has substantial shareholdings on the island, including in the banks at the centre of the drastic financial sector cuts imposed by the European Union and the International Monetary Fund as a condition for releasing 10 billion euros in emergency loans.

The church’s interests range from hotels to brewers, and it is also the island’s biggest landowner.

Last September, as the financial crisis bit, the church cut salaries of bishops and most priests by 15 to 25 percent but spared those who received 1,500 euros or less in monthly salaries.


Standard & Poor’s Sued by U.S. for Fake Ratings




(CN) – Standard & Poor’s inflated its ratings of mortgage-backed securities, ignoring the inherent credit risks that brought the financial sector to its knees in 2008, the U.S. government says in Federal Court.

Filed late Monday in the Central District of California, the complaint alleges that the McGraw Hill-owned credit-rating agency defrauded investors in structured financial products known as residential mortgage-backed securities (RMBS) and collateralized debt obligations (CDOs).

Federally insured financial institutions and other investors lost billions of dollars on the misrepresented CDOs, the government said.

Standard & Poor’s Financial Services also lied that its ratings were the product of “objectivity, independence, and freedom from influence by any conflicts of interest posed by its relationships with issuers,” according to the complaint.

“As S&P knew, contrary to its representations to the public, S&P’s desire for increased revenue and market share in the RMBS and CDO ratings markets, and its resulting desire to maintain and enhance its relationships with issuers that drove its ratings business, improperly influenced S&P to downplay and disregard the true extent of the credit risks posed by the RMBS and CDO tranches in order to favor issuers in its ratings of those tranches,” the government added.

S&P allegedly inflated its ratings by weakening the criteria and models from what its own analysts believed would make the ratings more accurate.

Attorney General Eric Holder said S&P’s “egregious” conduct “goes to the very heart of the recent financial crisis.”

Attorneys general from California, Connecticut, Delaware, the District of Columbia, Illinois, Iowa and Mississippi filed or will file civil fraud lawsuits against S&P alleging similar misconduct in the rating of structured financial products, the Justice Department said.

It added that more state attorneys general will make similar filings today.

The government noted that the Central District of California is home to the now defunct Western Federal Corporate Credit Union, which was the largest corporate credit union in the country.

“Following the 2008 financial crisis, WesCorp collapsed after suffering massive losses on RMBS and CDOs rated by S&P,” the Justice Department said in a statement.

U.S. Attorney for the Central District of California Andre Birotte Jr. described the “significant harm” that S&P’s conduct caused in greater Los Angeles.

“Across the seven counties in my district, we had huge numbers of homeowners who took out subprime mortgage loans, many of which were made by some of the country’s most aggressive lenders only because they later could be securitized into debt instruments that were given flawed ‘AAA’ ratings by S&P,” Birotte said in a statement. “This led to an untold number of foreclosures in my district. In addition, institutional investors located in my district, such as WesCorp, suffered massive losses after putting billions of dollars into RMBS and CDOs that received flawed and inflated ratings from S&P.”

The complaint seeks civil penalties from McGraw-Hill and Standard & Poor’s under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

It alleges mail fraud, wire fraud and financial institution fraud.

“To date, the government has identified more than $5 billion in losses suffered by federally insured financial institutions in connection with the failure of CDOs rated by S&P from March to October 2007,” according to the Justice Department’s statement.

It added that the underlying federal investigation, code-named “Alchemy,” that led to this week’s complaint was initiated in November 2009 in connection with the President’s Financial Fraud Enforcement Task Force.

“With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud,” the Justice Department said.

In the past three years, the Justice Department has purportedly filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants

U.S. finance industry warned of cyber attacks

By Agence France-Presse Wednesday, September 19, 2012 20:22 EDT

Bank of America customers at a Bank of America machine.

NEW YORK — A US financial industry group warned banks and other institutions to beware of cyber attacks Wednesday, after some firms reported sporadic problems with their websites.

The Financial Services Information Sharing and Analysis Center said it raised its cyber threat level from “elevated” to “high.”

The group, which monitors cyber threats to the sector, cited “recent credible intelligence regarding the potential for DDoS and other cyber attacks against financial institutions.”

DDoS stands for “distributed denial of service”, attacks in which vast numbers of computers simultaneously attempt to contact the target networks, swamping their servers.

It also said a vulnerability reported in Microsoft’s Internet Explorer browser was a factor.

“Members should maintain a heightened level of awareness, apply all appropriate updates… and ensure constant diligence in monitoring and quick response to any malicious events,” the group said on its website.

On Tuesday, the Site Intelligence Group said a group of hackers calling themselves the “Cyber fighters of Izz ad-din Al Qassam” announced an attack on Bank of America and the New York Stock Exchange websites.

The group claimed they were in retaliation for the release of the controversial movie “Innocence of Muslims,” which has led to massive protests across the Muslim world.

The NYSE declined to comment, but a source familiar with the exchange said the site was not affected.

Bank of America spokesman Mark Pipitone said the financial giant’s website “is, and has been available throughout the day, although some customers may have experienced occasional slowness.”

Asked about the reported attack, the spokesman said: “I can assure you we continuously take proactive measures to secure our systems.”

JPMorgan Chase’s consumer bank unit also reported some slowness.

“Some customers are having trouble getting on We’re working on it and apologize for the frustration,” a spokesman said