Constitution Court OKs two executive decrees

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February 22, 2012 2:59 pm
The Court spent about 50 minutes reading the verdict.
Opposition Democrat party list MP and former finance minister Korn Chatikavanij and Senator Kamnoon Sitthisamarn submitted the petition to the Court for the interpretation of the two decrees.
The first of the two executive decrees involves permission for the government to seek a Bt350 billion loan to finance water management and flood rehabilitation projects while the second is in regard to the transfer of the FIDF’s debt from the Finance Ministry to the Bank of Thailand.
The government has reiterated that the decrees were needed to restore confidence in Thailand after the flood crisis last year.
The opposition questioned the urgency of the decrees, saying the government had enough budget and time to propose the loan decree through the legislative process to the House of Representatives.
The transfer of FIDF’s debt was criticised as government interference with the Bank of Thailand.
The ruling left the government with several bullets to finance its post-flood investment. Economic stability and unavoidable urgency were cited as the reasons for the ruling.
The borrowing executive decree will allow the government to finance 32 long-term flood-protection plans, which require a total investment of about Bt360 billion. The decree empowers the Finance Ministry to borrow Bt350 billion in Baht or other currencies by June 30, 2013.
The second decree will give even more room for investment as the government need not to set aside a budget for principal and interest payment for the Financial Institutions Development Fund (FIDF), starting from the 2013 fiscal year.
In the 2012 fiscal year, Bt68.43 billion was set aside for the purpose. The amount accounted for 2.9 per cent of public expenditures in the year and 16.2 per cent of total investment budget.

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Bank lending to shrink in 2012 – Ernst & Young

LONDON (Reuters) – Total bank lending in Britain is set to shrink for the first time since 2009 this year, and the lack of credit from mainstream banks will help payday loan firms grow further, a survey by the Ernst & Young ITEM club said on Monday.
The E&Y ITEM club forecast that total UK bank loans would shrink by 2.2 percent in 2012, having risen by an estimated 4.3 percent in 2011.
“We have been warning about the impact bank deleveraging could have on the economy for some time, but this is the first time there will be an annual contraction in total loans since 2009, when the UK economy was still suffering from the immediate effects of the global financial crisis,” said Neil Blake, senior economic adviser to the Ernst & Young ITEM Club.
Last year, Britain’s top banks, including the “Big Four” of Barclays, HSBC and part-nationalised lenders Lloyds and Royal Bank of Scotland, stuck a deal with the government in which they pledged to lend more to businesses in return for legislative restraint.
However, many small firms have said they are still not getting enough credit following the deal, known as “Project Merlin.”
As a result, both small businesses and consumers are turning increasingly to alternative lenders, such as firms that typically lend a few hundred pounds to clients for a week or two to tide them over until their next pay cheque.
Last month, payday loan companies Ferratum and Cash Converters both told Reuters they expected more growth this year, and the E&Y ITEM club said this sector was set to expand in 2012.
“Households that fall outside of the credit terms of traditional lenders are increasingly looking toward other credit providers, regardless of the cost. With banks expected to further tighten lending conditions, we expect the shift towards alternative lenders to continue unabated,” said Blake.
(Reporting by Sudip Kar-Gupta; Editing by Will Waterman)

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Fitch downgrades Hungary to junk status

BUDAPEST, Hungary (AP) — Fitch downgraded Hungary’s credit rating to junk status on Friday, citing a standoff between the government and international lenders like the IMF and the European Union over possible rescue loans.
Fitch kept a negative outlook on Hungary, indicating a more than a 50 percent chance for another downgrade on the Central European nation of 10 million people within the next two years. The move followed similar action from Moody’s and Standards & Poor’s.
Hungary’s shaky finances have been battered this entire week. Its currency, the forint, fell to all-time lows during two consecutive days and the government suffered through a rough bond auction Thursday in which the interest rates it had to paid to borrow jumped more than 2 percentage points in just a few weeks.
Investors are deeply unsure about the government’s economic policies and whether it can agree upon a rescue loan with the International Monetary Fund.
Fitch Ratings’ decision to cut Hungary’s credit rating one notch, to BB+ from BBB-, was triggered partly “by further unorthodox economic policies which are undermining investor confidence and complicating the agreement of a new IMF-EU deal,” said Matteo Napolitano, Director in Fitch’s Sovereign Group.
Hungary late last year requested financial aid from the EU and the IMF. But the two institutions broke off preliminary negotiations in December amid concerns over new laws that hurt the independence of Hungary’s central bank.
“Even if a (loan) agreement were to be reached, doubts would remain over whether the Hungarian government could submit to its strict conditionality, given its track record of policy unpredictability,” Fitch said.
Government spokesman Andras Giro-Szasz said the downgrade was “surprising” considering statements from Prime Minister Viktor Orban and Tamas Fellegi, Hungary’s chief financial negotiator, confirming the country’s intention to soon reach an agreement with international creditors and affirming its support for the independence of the central bank.
Earlier Friday, Orban met with National Bank of Hungary President Andras Simor and the government’s top economic officials. Orban dismissed market speculation that his conservative government was planning to raid central bank reserves to prop up the state budget and said it would do everything it can to support the central bank’s efforts to stabilize the economy.
On Friday, the forint strengthened to around 215 per euro after falling as low as 224 per euro on Thursday.
Despite government pledges, investors are wary of government policies that boost budget revenues without unpopular austerity measures — such as windfall taxes on banks, telecommunications firms and others. They are also unnerved by Hungary‘s new constitution and new laws that have centralized political power and eroded democratic checks and balances.
Hungary has also been deeply affected by the eurozone’s debt crisis — nearly 80 percent of its exports go to EU countries. Its domestic consumption has been weakened by high levels of household debt, including many mortgages held in soaring Swiss francs.
Many experts see the country falling back into a recession this year, though not as deeply as the 6.7 percent contraction in 2009.
Hungary was given a bailout of euro20 billion ($26 billion) in 2008 after the collapse of U.S. investment bank Lehman Brothers. Yet Orban, whose Fidesz party gained a two-thirds majority in parliament in April 2010 elections, chose to end the deal so IMF would not oversee Hungary’s economic policy

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Digital Reasoning Raises Venture Financing for Automated Understanding of Big Data

NASHVILLE, TN–(Marketwire -12/06/11)- Digital Reasoning, a leader in understanding unstructured data at scale, today announced it has raised a Series B round with participation from In-Q-Tel, individual partners of Silver Lake, and other private investors. With this round, Digital Reasoning will add John Brennan to its board of directors. Brennan is a partner at Silver Lake Sumeru.
The investment will be used to accelerate development and expand marketing and sales into new Financial Intelligence, Enterprise Risk Management, and related markets with Synthesys®, the company’s flagship product that identifies, summarizes and reveals hidden relationships between people, places and events in big data. Currently, Synthesys is being used in government agencies to uncover security threats and enable intelligence analysts to find and act on critical relationships in big data while containing the costs of and dependence on human reading.
“Organizations in every market are looking for ways to exploit the information and intelligence embedded in unstructured data; Synthesys could be a transformational solution in the enterprise as organizations develop their big data strategies,” said John Brennan. “Digital Reasoning’s platform can go beyond its success in the government intelligence market to help enterprises quickly analyze big data to detect fraud, uncover market trends, gain better insight into customer behavior, and mitigate risk.”
“We are thrilled to have an investment from this caliber of investor and we welcome John to our board. His software and operating experience will help us scale and expand into new markets,” said Tim Estes, CEO at Digital Reasoning. “Until now, the tools available on Big Data have been focused on mostly structured data that is well formed and easily countable. Now, we can bring rich understanding of human communication — unstructured data — into new markets through a next generation of analytics that scales and runs on technologies like Hadoop.”
Synthesys has solved three key impediments to the growth of the Big Data Analytics market:

• Eliminating the need for a data model to aid understanding of text
• Handling diverse data at scale without compromising the depth of understanding
• Inventing a way to automatically understand the meaning of words in context

Digital Reasoning has successfully deployed Synthesys as both enterprise software and cloud-based web service. With success on a number of large systems in the government market, Digital Reasoning will be expanding Synthesys into enterprise commercial markets.
About Digital ReasoningDigital Reasoning provides Automated Understanding for Big Data. Automated Understanding analyzes unstructured and structured big data to reveal the hidden and potentially valuable relationships between people, place and time. More than a dozen government agencies use Digital Reasoning’s flagship product, Synthesys, to uncover security threats and accelerate the time to actionable intelligence. The company is headquartered in Franklin, Tennessee, with an office in Arlington, Virginia. For more information, please visit www.digitalreasoning.com.
Digital Reasoning™ and Synthesys® are trademarks of Digital Reasoning Systems, Inc.

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