Finance Matters

Posts Tagged ‘finance ministry’

Fred Goodwin, the former chief executive of the Royal Bank of Scotland (RBS), has been stripped of his knighthood for his role in the bank’s collapse during the 2008 credit crunch.

The Queen formally approved the annulment of the honour yesterday, after it was decided Mr Goodwin’s award brought the honours system into disrepute.

The decision is unprecedented as honours have formerly only been withdrawn from people convicted of a crime.

Mr Goodwin was knighted in 2004 for services to banking but his actions during the banking crisis are believed to have contributed to the collapse of RBS.

The bank received £45bn of rescue-funding and is now more than 80% owned by the Government.

The Financial Services Authority and Treasury Select Committee believe the banks’ failure was a key factor in financial crisis and the subsequent recession in the UK.

Mr Goodwin oversaw the takeover of Dutch bank ABN Amro in a £49bn deal which took place at the onset of the credit crunch, exposing RBS’s weak balance sheet and precipitating its collapse.

When Mr Goodwin left the bank in November 2008 his £703,000-a-year pension deal, which included a £2.7m lump sum, led to public outrage.

In the event of a future banking crisis, Britain’s finance ministry will be able to take charge after new law reforming the regulation of the country’s financial system takes effect next year.

The legislation will disband the Financial Services Authority from 2013 and give the central bank the power to supervise banks and insurers.

In a speech following the publication of the draft law, Chancellor of the Exchequer George Osborne said: “When taxpayers’ money is at risk in a crisis this legislation gives the Chancellor (of the Exchequer) the power to direct the Bank of England to act.”

TOKYO (AP) — Japan marked its first trade deficit since 1980, a 2.49 trillion yen ($32 billion) shortfall for 2011 caused in part by last year’s tsunami and the rising value of the yen, the Finance Ministry said Wednesday.

Government data released Wednesday said the value of Japan’s exports fell 2.7 percent to 65.55 trillion yen ($843 billion) for 2011. The drop was attributed to the economic impact of the March 11, 2011 earthquake and tsunami and the rise in the value of the yen against the U.S. dollar, along with a gloomier outlook in the global economy.

In December, the trade balance was a deficit of 205.1 billion yen, according to the Finance Ministry figures.

The data underscore the growing pressures facing the world’s third-largest economy, which relies heavily on exports to drive growth. A persistently strong yen, Europe’s debt problems and the recent flooding in Thailand are eroding gains made since the March earthquake in Japan disrupted manufacturing.

The turmoil in Europe and the U.S. has driven up the yen as global investors flock to the currency as a relatively safe haven. The yen hit multiple historic highs against the dollar this year.

A rising yen shrinks the value of overseas earnings when repatriated and makes Japanese products less competitive in overseas markets. The yen has weakened to around 77 to the dollar recently, but exporters say it is still too high.

The currency levels have forced manufacturers including Nissan Motor Co. and Panasonic Corp. to shift some production overseas, a trend that could further undermine Japan’s exports.

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ATHENS, Greece (AP) — Officials in debt-crippled Greece have named and shamed some 4,000 alleged tax dodgers, including a former media magnate and a prominent entertainer, with the worst offender owing nearly euro1 billion ($1.3 billion).

The list, published by the Finance Ministry, is part of a campaign to crack down on rampant tax evasion that is hurting the eurozone member’s effort to avoid bankruptcy.

At the top of the list was a 58-year-old accountant, currently serving terms of more than 100 years in prison for tax fraud, who allegedly owes some euro950 million. At least another three people convicted for the same scam are also high on the list.

But ministry officials Monday acknowledged that it would be extremely hard to reclaim much of the outstanding debts — which total nearly euro15 billion ($19.5 billion).

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Good morning. Here’s what you need to know.

• Asian markets started the new year up sharply, with Hong Kong’s Hang Seng Index gaining 2.4%. Europe is mostly positive while U.S. futures point to a surge higher — Dow futures are showing a 200 point gain at open. 
• German unemployment fell greater than expected to 6.8%. The number of jobless citizens dropped 22,000 to 2.89 million as the construction and auto industries held up surprisingly well. Economists were looking for the headline figure to decline by 10,000. 
• U.K. manufacturing slowed less then economists predicted, as factory output measured by Markit Economics and the Chartered Institute of Purchasing and Supply increased to 49.6. A reading below 50 indicates contraction. Markit noted that producers recorded their worst performance since 2009. These 10 dates are crucial for the future of Europe >
• India’s finance ministry will allow direct foreign investment in the nation’s publicly traded companies. The announcement, which also gives funds and pensions greater movement in India’s capital markets, goes into effect on January 15.
• The Iranian Riyal fell to a new record low against the U.S. dollar on Monday, following President Obama’s push for greater sanctions on the country. The currency declined to about 16,800 riyals to the dollar, a 10% slump from last Thursday. Click here to see 10 huge geopolitical risks that could make or break markets in 2012 >
• Oil giant Total signed a $2.3 billion deal with Chesapeake Energy to gain access to the company’s Utica Shale rights in Ohio. The announcement will give Total 25% ownership of a joint venture to drill for shale. Here is everything you need to know about the shale gas revolution >
• BP has filed suit against Halliburton in U.S. court for $42 billion to cover all expenses of the Deepwater Horizon accident and ensuing oil spill.  BP has already paid more than $14 billion to clean up the waters and compensate impacted Americans.
• U.S. manufacturing data will be announced today at 10 a.m. Economists polled by Bloomberg are calling for the ISM index to increase to 53.4 for December, up from 52.7. A reading above 50 indicates expansion. Follow the announcement live on Money Game >
• Caterpillar and Rio Tinto have started the new year by locking out unionized employees in Canada. Caterpillar shuttered 450 workers at its locomotive plant in Ontario, while Rio locked out an 800 employee smelter in Quebec.
• Today marks the last day of the primary race in Iowa, as the state caucuses tonight. Recent polls put Ron Paul and Mitt Romney in a neck-and-neck contest. Follow live coverage on Business Insider here >

Bonus: Mitt Romney threw Kim Kardashian into the mix as he finishes up in Iowa, comparing her failed marriage to promises made by President Obama.

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Good morning. Here’s what you need to know.

• Asian markets were up in overnight trading, with the Hang Seng gaining 1.97%. After a weekend of rumors on a possible Euro-wide stability pact / fiscal union / Eurobond deal, Europe is surging, and U.S. futures are higher ahead of the market open.

• The IMF has denied rumors that up to €600 billion could be made available to Italy at a rate of between 4% – 5%, to give the country about 18 months to get back on track. Meanwhile, President Obama is hosting EU officials at the White House today, and is expected to push them for a solution to the region’s sovereign debt crisis. Don’t Miss: The real state of government deficits in the Eurozone >

• Over the weekend, all the buzz was about France and Germany reportedly discussing a new “stability pact” to fight the sovereign debt crisis. While few details on the pact were released, talks centered on changes to the EU treaty, and efforts at enforcing fiscal conservatism. The pact could also force the ECB to take a bigger role in fighting the crisis. It was also rumored that the pact could just be series of bilateral accords between just 9 eurozone countries. Now here are 5 people you’ve never heard of who really control the fate of Europe >

• Germany’s finance ministry has denied reports of an elite eurobond system which would begin the process of creating a two-tier monetary union. EU Commission said the purpose of any eurobonds would be to preserve the euro zone, not to split it up. Meanwhile, a new poll shows that Germans largely oppose eurobonds and that support for chancellor Angela Merkel is increasing. Now here are 7 big debates happening in Europe right now >

• The OECD has slashed its growth forecast, saying the 34 OECD countries will grow 1.9% this year, down from previous projections of 2.3% growth; and 1.6% in 2012, down from 2.8%. The report said that mounting concerns over the survival of Europe’s monetary union were the biggest risk to the global economy.  Click here to see 11 depressing charts from the OECD’s report >

• Latin American steel company Ternium S.A. is paying $2.2 billion to buy a stake in Brazilian competitor Usiminas, from two of its minority shareholders. The deal is part of Ternium’s move to strengthen its position in Latin America.

• New home sales data for October will be released at 10 AM ET. Consensus is for a drop to a seasonally adjusted annual rate of 310,000 units. Follow the release at Money Game >

• Moody’s has warned that an escalation of the euro zone sovereign and banking crisis is threatening the credit ranking of all European sovereigns.

• Pakistan has stopped supplies for American-led NATO troops in Afghanistan, after a NATO air strike killed 24 Pakistani soldiers. U.S. military officials have said their forces can only sustain operations for a week in the event of such a shutdown.

• Belgium sold €2 billion of bonds maturing between 2018 and 2041 and the yield on 10-year government bonds fell to 5.69%. The auction saw demand for debt at 2.59 times the amount of notes sold, up from 1.65 times a month ago. This comes after Moody’s downgraded Belgium’s credit rating to AA with a negative outlook on Friday. Check out the 19 countries most likely to default >

• BONUS – Reese Witherspoon was spotted with her family at Disneyland, in Anaheim, California. 

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