The Association of Christian Financial Advisers has welcomed the Government’s decision to investigate payday loans.
The Office of Fair Trading is to investigate payday lenders amid claims that they are taking advantage of people in financial difficulty and providing loans without checking that borrowers can afford to repay them.
The ACFA is calling for legislation to cap interest rates.
The group outlined its concerns in a letter to Chancellor George Osborne last December in which it expressed “increasing dismay” over the manner in which payday loan companies were allowed to trade.
The letter criticised the “unfair and unreasonable” interest rates charged by lenders.
According to the Independent, the typical APR charged by a payday lender is 4,000%.
“These rates of interest are not dissimilar to those of a back street loan shark, but dressed up with a fancy website and slick paced advertising,” the ACFA stated in its letter.
“Many consumers are now using this easy access to credit as a form of roll-over credit, month by month, thereby racking up unaffordable debt at extortionate rates of interest.”
The ACFA is calling upon the Chancellor to introduce legislation to cap interest rates for all personal lending, including unauthorised bank overdrafts.
It wants to see APR capped at a maximum percentage above base rate and interest limited to a rate similar to that imposed on credit unions – currently 12 per cent.
The ACFA has asked the Government to urgently introduce a measure to limit interest rates in the forthcoming budget.
“We’re delighted the government has announced this review of so-called Payday loans,” said Chairman Aidan Vaughan.
“There should be no place for the extortion of the desperate and vulnerable.”
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2012年2月26日星期日
Remedies to help underwater homeowners not enough, PUSH panel says
BY MAUDLYNE IHEJIRIKA Staff Reporter mihejirika@suntimes.com February 25, 2012 8:36PM
Updated: February 25, 2012 9:42PMOnly strident remedies — such as a national moratorium on foreclosures and offering financial aid to “underwater” homeowners — can help stem a crisis sending severe reverberations through poor and minority communities, members of an Operation PUSH panel said Saturday.
Those communities will have to demand action through voting power and protest, seeking redress through legislative and legal means, because the recent settlement between the nation’s largest lenders and 49 state attorneys general shows they can’t count on government solutions, said the Rev. Jesse Jackson and other members of the panel.
“In the 1960s, we fought against restrictive covenants, then redlining, then for the Community Reinvestment Act. We finally get a rise in black and brown home ownership. Now this,” said Jackson, pointing to research showing the largest segment of “underwater” homes — where the amount owed exceeds the value of the home — are found in poor and minority communities.
“Much of this is race-based driven exploitation,” Jackson said. “We must now fight to recover our lost assets stolen from us and not protected by the government. We must connect our votes with our remedy.”
About 11 million households nationally are underwater.
The government bailout of banks that was supposed to help many of those households stave off foreclosure “have not helped nearly as much as it needs to,” asserted Woodstock Institute Vice President Spencer Cowan.
Nor, Cowan said, will the landmark $25 billion settlement reached last month with five top mortgage lenders, which helps only 1 million households.
“The $25 billion settlement is only a small aspect and doesn’t address the myriad other problems that led us to this point,” he said. “Nor does it address the two largest holders of mortgages, Fannie Mae and Freddie Mac.”
Others noted the crisis has pushed more of the middle-class into poverty.
“The only investment most middle-class people have is their home. Now these same people have no credit. If they can’t get a loan, their kids can’t go to college. You have a whole generation of people moving from middle-class to poverty,” said the Rev. Janette Wilson, PUSH Education Director.
The panel advocated criminal action against lenders who participated in the predatory and deceptive lending practices, issuing loans destined to fail.
“Find the people who robo-signed these loans, and start going after them. The $25 billion settlement doesn’t rule out criminal investigation of the banks for some of these other problems,” said Cowan.
Research by his group found in the six-county Chicago metropolitan region, the average underwater homeowner owes $50,000 more than their home’s value.
The number of homes hit with foreclosures in the region rose 13.9 percent in January from December — to 13,750 homes, or one in every 276 homes.http://tourism9.com/ http://vkins.com/
2012年2月25日星期六
China issues green-credit guideline for banks
The Chinese government introduced a “green credit” guideline for commercial lenders on Friday to facilitate economic restructuring in a manner that’s environmentally friendly and saves energy.
The China Banking Regulatory Commission, the top banking regulator, ordered lenders to cut loans to industries with high-energy consumption and high levels of pollution or excessive capacity, and to strengthen financial support for green industries and projects.
The CBRC encouraged banks to evaluate, classify and rate the environmental and social risks inherent in their clients’ businesses and take the results as a key reference in their ratings and access to credit.
“Through credit controls, banks can have an influence on businesses’ awareness of energy savings, emissions-reductions and the benefits to the public,” said Yan Yanfei, deputy director-general of the statistics department at the CBRC.
He said that in the next step, the CBRC will set up some key indexes to make the guideline more specific and try to include adherence to the plan in the rating system.
Lenders also need to improve management of any overseas projects that they support, to ensure that the initiators of those projects comply with local environmental, land, healthcare and security legislation, according to the guideline.
Zhang Rong, the programme manager of environment and social standards at the International Finance Corporation of the World Bank Group, said the guideline is welcome, especially given the increased involvement of Chinese enterprises in the global market, and the increasing number of calls urging the overseas projects to take more care of the local environment and to reduce energy use.
“Actually Chinese banks have already made very good attempts at green credit, and they can learn from the mature technology and management systems that their international counterparts have already been using for some time,” Zhang said.
China Development Bank Corp, which makes nearly half of the total loans supporting overseas projects of Chinese enterprises, has just provided credit to a Chinese company that operates an iron ore mine in Africa. The funds will help the company move surface soil to a place of safety to protect the seeds of local plants, according to Lu Hanwen, deputy director-general of CDB’s Project Appraisal Department II.
By the end of 2011, CDB had lent 658 billion yuan ($104 billion) to support environmental protection, energy-saving and emissions-reduction projects, accounting for 12.7 per cent of the bank’s total outstanding loans.
Yang Bin, deputy general manager of Corporate & Investment Banking at Shanghai Pudong Development Bank Co Ltd, said banks have enough motivation to lend green credits because the demand from clients that they undertake green initiatives has been rising constantly.
Such loans have a lower non-performance ratio than other lending because enterprises can usually obtain strong incentives for green projects from the government to repay the loans, he said.
“And the rate of return against cost for green credits is much higher than other lending,” said Yang, adding that evaluating the environmental impact and energy-consumption of their clients will cost the banks little.
“But State-owned enterprises should also be ordered to implement green policies if the government wishes to achieve its energy-saving and emissions-reduction goals,” Yang said.
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The China Banking Regulatory Commission, the top banking regulator, ordered lenders to cut loans to industries with high-energy consumption and high levels of pollution or excessive capacity, and to strengthen financial support for green industries and projects.
The CBRC encouraged banks to evaluate, classify and rate the environmental and social risks inherent in their clients’ businesses and take the results as a key reference in their ratings and access to credit.
“Through credit controls, banks can have an influence on businesses’ awareness of energy savings, emissions-reductions and the benefits to the public,” said Yan Yanfei, deputy director-general of the statistics department at the CBRC.
He said that in the next step, the CBRC will set up some key indexes to make the guideline more specific and try to include adherence to the plan in the rating system.
Lenders also need to improve management of any overseas projects that they support, to ensure that the initiators of those projects comply with local environmental, land, healthcare and security legislation, according to the guideline.
Zhang Rong, the programme manager of environment and social standards at the International Finance Corporation of the World Bank Group, said the guideline is welcome, especially given the increased involvement of Chinese enterprises in the global market, and the increasing number of calls urging the overseas projects to take more care of the local environment and to reduce energy use.
“Actually Chinese banks have already made very good attempts at green credit, and they can learn from the mature technology and management systems that their international counterparts have already been using for some time,” Zhang said.
China Development Bank Corp, which makes nearly half of the total loans supporting overseas projects of Chinese enterprises, has just provided credit to a Chinese company that operates an iron ore mine in Africa. The funds will help the company move surface soil to a place of safety to protect the seeds of local plants, according to Lu Hanwen, deputy director-general of CDB’s Project Appraisal Department II.
By the end of 2011, CDB had lent 658 billion yuan ($104 billion) to support environmental protection, energy-saving and emissions-reduction projects, accounting for 12.7 per cent of the bank’s total outstanding loans.
Yang Bin, deputy general manager of Corporate & Investment Banking at Shanghai Pudong Development Bank Co Ltd, said banks have enough motivation to lend green credits because the demand from clients that they undertake green initiatives has been rising constantly.
Such loans have a lower non-performance ratio than other lending because enterprises can usually obtain strong incentives for green projects from the government to repay the loans, he said.
“And the rate of return against cost for green credits is much higher than other lending,” said Yang, adding that evaluating the environmental impact and energy-consumption of their clients will cost the banks little.
“But State-owned enterprises should also be ordered to implement green policies if the government wishes to achieve its energy-saving and emissions-reduction goals,” Yang said.
http://tourism9.com/ http://vkins.com/
Tightening the EPF Act
Proper investment policy, disclosure, governance and accountability should be mandated under the law for EPF’s near half a trillion ringgit funds
THE recent brouhaha over the Employees Provident Fund (EPF) financing a government-sponsored RM1.5bil housing scheme highlights several issues facing the nation’s premier retirement fund.
Considering that it is a major heavyweight, which manages almost RM470bil belonging to some 12 million members, it is important to ensure that the EPF does its job, and does it as well as it should.
Questions swirl around three main issues: The kind of projects that the EPF should finance and the risk they bear; the amount of government influence over what the EPF should do; and the level of transparency and accountability that the fund shows to its members.
Sadly, on all three counts, it shows serious deficiencies. Although it has improved in recent years, in terms of the quality of investments, it has in the past made some dubious investments which have never been fully explained.
In part this is due to substantial government influence over its operations, specifically, the Finance Minister, who not only appoints board members but also has substantial influence over them, the law requiring directors in most cases to be subservient to the Finance Minister.
Meantime, the way the EPF reports its results, and its investments and losses and gains, leaves much to be desired. It is impossible for a fund member or anyone else to independently verify the soundness of its investment decisions. There is no or little statutory requirement for appropriate standards of disclosure, governance and accountability.
Because of its huge size, approaching half a trillion ringgit (it should exceed that mark easily this year), a multitude of sins can be easily hidden in its massive books. That’s all the more reason for an eagle eye to be kept on it at all times.
The way to ensure that the EPF keeps on the straight and narrow is to mandate that unambiguously through an amendment to the EPF Act. That should start with clear definitions of directors’ qualifications, requiring them to be those who have impeccable integrity and have an unblemished and distinguished record of service in the finance, accounting and investment fields.
The current Act gives the power to the Government, through the Finance Minister, to nominate the board members, but this should be preferably done through a committee rather than a single individual.
The Act should then specify clearly the role of the directors, which would be to oversee the implementation of measures which will follow a highly specified investment policy and return objectives.
The investment policy should specify a low risk approach that would preserve members’ contributions, while at the same time providing a moderate rate of return.
It should also specify very broad allocation strategy between various classes of assets, for example Malaysian Government Securities, other investment-grade bonds, equities, property and real estate and other investments.
Changes to the EPF Act should clearly specify that directors and the fund should at all times act solely in the interest of members who own the funds in the first place. While the Government can borrow money from the EPF, it has no business inducing it to invest in businesses that have high risk.
That will stop the board from making a decision to invest in a project just because the Finance Minister or someone else told it so. Those with long memories will remember that the EPF has made strange investments before, like Time dotCom.
The changes to the Act should also specify in fairly specific terms the kind of disclosure that it makes. It should itemise all the investments it makes, and state when they were made and at what price, and how much it is losing or making on each one.
Averages have a way of disguising major outliers. On average, gains may be respectable but that does not mean major losses may not have been made on some investments. The only way to ensure that does not get buried under the mountain of funds is to disclose it.
These are not unrealistic changes. Many retirement funds act this way. Take CalPERS or California Public Employees’ Retirement System, the United States’ largest public pension fund with assets totalling some US$220bil (about RM660bil).
It publicly discloses its investment policy and asset allocation decisions. Those interested can view its investment track record. Journalists can ask for and receive its investment details for specific companies, areas and regions.
Here’s what it says in its own words: “Our goal is to efficiently and effectively manage investments to achieve the highest possible return at an acceptable level of risk. In doing so, CalPERS has generated strong long-term returns.”
We want EPF, whose size is not very far away from CalPERS, to do the same for all its members. The EPF does not belong to the Government and therefore the Government must not have full powers over the way it acts.
Until these changes to the Act are made and the EPF board acts professionally and above board in every decision it makes, taking all the required professional advice, we can’t ever be sure that EPF is always acting purely in the interests of its constituents – the Malaysian working public.
Independent consultant P Gunasegaram (t.p.guna@gmail.com) is happy that the EPF declared 6% dividends. He hopes it can continue to do so.
http://tourism9.com/ http://vkins.com/
THE recent brouhaha over the Employees Provident Fund (EPF) financing a government-sponsored RM1.5bil housing scheme highlights several issues facing the nation’s premier retirement fund.
Considering that it is a major heavyweight, which manages almost RM470bil belonging to some 12 million members, it is important to ensure that the EPF does its job, and does it as well as it should.
Questions swirl around three main issues: The kind of projects that the EPF should finance and the risk they bear; the amount of government influence over what the EPF should do; and the level of transparency and accountability that the fund shows to its members.
Sadly, on all three counts, it shows serious deficiencies. Although it has improved in recent years, in terms of the quality of investments, it has in the past made some dubious investments which have never been fully explained.
In part this is due to substantial government influence over its operations, specifically, the Finance Minister, who not only appoints board members but also has substantial influence over them, the law requiring directors in most cases to be subservient to the Finance Minister.
Meantime, the way the EPF reports its results, and its investments and losses and gains, leaves much to be desired. It is impossible for a fund member or anyone else to independently verify the soundness of its investment decisions. There is no or little statutory requirement for appropriate standards of disclosure, governance and accountability.
Because of its huge size, approaching half a trillion ringgit (it should exceed that mark easily this year), a multitude of sins can be easily hidden in its massive books. That’s all the more reason for an eagle eye to be kept on it at all times.
The way to ensure that the EPF keeps on the straight and narrow is to mandate that unambiguously through an amendment to the EPF Act. That should start with clear definitions of directors’ qualifications, requiring them to be those who have impeccable integrity and have an unblemished and distinguished record of service in the finance, accounting and investment fields.
The current Act gives the power to the Government, through the Finance Minister, to nominate the board members, but this should be preferably done through a committee rather than a single individual.
The Act should then specify clearly the role of the directors, which would be to oversee the implementation of measures which will follow a highly specified investment policy and return objectives.
The investment policy should specify a low risk approach that would preserve members’ contributions, while at the same time providing a moderate rate of return.
It should also specify very broad allocation strategy between various classes of assets, for example Malaysian Government Securities, other investment-grade bonds, equities, property and real estate and other investments.
Changes to the EPF Act should clearly specify that directors and the fund should at all times act solely in the interest of members who own the funds in the first place. While the Government can borrow money from the EPF, it has no business inducing it to invest in businesses that have high risk.
That will stop the board from making a decision to invest in a project just because the Finance Minister or someone else told it so. Those with long memories will remember that the EPF has made strange investments before, like Time dotCom.
The changes to the Act should also specify in fairly specific terms the kind of disclosure that it makes. It should itemise all the investments it makes, and state when they were made and at what price, and how much it is losing or making on each one.
Averages have a way of disguising major outliers. On average, gains may be respectable but that does not mean major losses may not have been made on some investments. The only way to ensure that does not get buried under the mountain of funds is to disclose it.
These are not unrealistic changes. Many retirement funds act this way. Take CalPERS or California Public Employees’ Retirement System, the United States’ largest public pension fund with assets totalling some US$220bil (about RM660bil).
It publicly discloses its investment policy and asset allocation decisions. Those interested can view its investment track record. Journalists can ask for and receive its investment details for specific companies, areas and regions.
Here’s what it says in its own words: “Our goal is to efficiently and effectively manage investments to achieve the highest possible return at an acceptable level of risk. In doing so, CalPERS has generated strong long-term returns.”
We want EPF, whose size is not very far away from CalPERS, to do the same for all its members. The EPF does not belong to the Government and therefore the Government must not have full powers over the way it acts.
Until these changes to the Act are made and the EPF board acts professionally and above board in every decision it makes, taking all the required professional advice, we can’t ever be sure that EPF is always acting purely in the interests of its constituents – the Malaysian working public.
Independent consultant P Gunasegaram (t.p.guna@gmail.com) is happy that the EPF declared 6% dividends. He hopes it can continue to do so.
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2012年2月24日星期五
A lesson on student loans
A lesson on student loans
Student Financial Education Services presents students with advice for dealing with loans.
Student Financial Education Services presents students with advice for dealing with loans.
by STUDENT FINANCIAL EDUCATION SERVICES
This article originally appeared in The Tiger on February 24, 2012 | PRINT
Understanding Your Student Loans
The majority of college students have them: student loans. Student loans have increased in popularity in recent years, mostly due to the increasing tuition rates seen across the country. As you near the end of your tenure here at Clemson, there are a few things to keep in mind that will better prepare you to deal with your student loans.
Where do I find my loans?
If you are like many students, you remember receiving the many pieces of mail over the past four years detailing your loans, but now you cannot seem to find the information. You most likely know your loans by the types of loans they are, like Stafford Loan, Perkins Loan and others. These loans are not all made by one company, but are sold off and serviced by a wide variety.
There is an easy-to-use resource to help locate all of your student loans and who they are owned or serviced by. The website to help you locate your student loans is http://www.nslds.ed.gov/nslds_SA/.
If you have private loans, such as those often made by banks or financial companies such as Discover, Citi, Bank of America or others, you may need to contact that financial institution directly, as their information is sometimes not located in the online database.
How do I pay my loans?
Once you graduate, you should be proactive about finding out when you need to start paying your student loans back.
Graduating from college can be a hectic time, and with all the address changes that you may be going through, it’s easy for mail to get misplaced or sent to the wrong address. It is the responsibility of the borrower, which would be you, to make contact with the owner or servicer of your loan(s) in order to find out when payments begin.
The owner or servicer of your loan will most likely offer you several options for repaying your loans, although not all companies offer these options, and some companies may offer more options. Here are a few basic options:
Standard Repayment: Think of this payment option as a standard loan, you make fixed payments that do not change from month to month for the standard repayment period (which is typically 10 years).
Extended Repayment: This payment option is similar to the standard payment option, except the payment period (which is the time it takes to pay back the loan) will be longer than the standard period. This type of repayment plan may be beneficial to those who have extremely large amounts of student loans and cannot afford the monthly payment under the standard repayment plan.
Graduated Repayment: A graduated repayment plan offers the advantage of allowing you to make lower monthly payments right when you get out of school with the monthly payment increasing every set period of time (such as every two or three years). This type of repayment plan is based on the ideal that your income will increase over time.
Income Dependent Repayment: This payment plan is available in certain government loan situations and allows the borrower to pay a certain percentage of their income toward the loan until the loan is paid off or until a time limit of 25 years is reached. If the time limit of 25 years is reached, the government will forgive the remaining balance on the debt, although tax implications may apply.
Although these are just a few of the standard payment options, it is important to keep your current situation in mind when determining which payment plan is right for you. It is also important to think of the payment plan in terms of which will cost you the most in interest, as opposed to those repayment plans that will accrue the least amount of interest. Students are responsible for verifying the information in this article prior to making financial decisions.
If you would like additional information on student loan payment plans or help understanding your student loan situation, please visit the Student Financial Education Office located in The Union, Office 805. You can set up an appointment by emailing us at sfes1@clemson.edu or calling us at (864) 656-7337.
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View the discussion thread.
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The majority of college students have them: student loans. Student loans have increased in popularity in recent years, mostly due to the increasing tuition rates seen across the country. As you near the end of your tenure here at Clemson, there are a few things to keep in mind that will better prepare you to deal with your student loans.
Where do I find my loans?
If you are like many students, you remember receiving the many pieces of mail over the past four years detailing your loans, but now you cannot seem to find the information. You most likely know your loans by the types of loans they are, like Stafford Loan, Perkins Loan and others. These loans are not all made by one company, but are sold off and serviced by a wide variety.
There is an easy-to-use resource to help locate all of your student loans and who they are owned or serviced by. The website to help you locate your student loans is http://www.nslds.ed.gov/nslds_SA/.
If you have private loans, such as those often made by banks or financial companies such as Discover, Citi, Bank of America or others, you may need to contact that financial institution directly, as their information is sometimes not located in the online database.
How do I pay my loans?
Once you graduate, you should be proactive about finding out when you need to start paying your student loans back.
Graduating from college can be a hectic time, and with all the address changes that you may be going through, it’s easy for mail to get misplaced or sent to the wrong address. It is the responsibility of the borrower, which would be you, to make contact with the owner or servicer of your loan(s) in order to find out when payments begin.
The owner or servicer of your loan will most likely offer you several options for repaying your loans, although not all companies offer these options, and some companies may offer more options. Here are a few basic options:
Standard Repayment: Think of this payment option as a standard loan, you make fixed payments that do not change from month to month for the standard repayment period (which is typically 10 years).
Extended Repayment: This payment option is similar to the standard payment option, except the payment period (which is the time it takes to pay back the loan) will be longer than the standard period. This type of repayment plan may be beneficial to those who have extremely large amounts of student loans and cannot afford the monthly payment under the standard repayment plan.
Graduated Repayment: A graduated repayment plan offers the advantage of allowing you to make lower monthly payments right when you get out of school with the monthly payment increasing every set period of time (such as every two or three years). This type of repayment plan is based on the ideal that your income will increase over time.
Income Dependent Repayment: This payment plan is available in certain government loan situations and allows the borrower to pay a certain percentage of their income toward the loan until the loan is paid off or until a time limit of 25 years is reached. If the time limit of 25 years is reached, the government will forgive the remaining balance on the debt, although tax implications may apply.
Although these are just a few of the standard payment options, it is important to keep your current situation in mind when determining which payment plan is right for you. It is also important to think of the payment plan in terms of which will cost you the most in interest, as opposed to those repayment plans that will accrue the least amount of interest. Students are responsible for verifying the information in this article prior to making financial decisions.
If you would like additional information on student loan payment plans or help understanding your student loan situation, please visit the Student Financial Education Office located in The Union, Office 805. You can set up an appointment by emailing us at sfes1@clemson.edu or calling us at (864) 656-7337.
Views: 32
View the discussion thread.
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Aircraft unit misses take-off nod
Patna. Feb. 23: The State Investment Promotion Board (SIPB), which held its meeting today after a gap of almost five months, cleared all 116 proposals, except about half-a-dozen that have been put on hold.
Among the proposals that were set aside for the time being included one that talked about setting up of an aircraft manufacturing unit in the state.
Beltronics Techno Pvt Ltd, Patna, had come up with an investment proposal to set up a manufacturing unit of aeroplane and air taxi, besides carrying out maintenance work of aircraft in the vicinity of the state capital.
The company, which claimed that it has already entered into a tie-up with a UK-based firm for financing the project, said it would pump in Rs 92,000 crore for the purpose.
“We have asked them (the company) to give a presentation before the board. We want to see their project details. We would like to know what it wants to do and how it plans to go about? We also want to know what are the land and other requirements of the entrepreneur?” principal secretary (industries) C.K. Mishra told The Telegraph.
SIPB was set up by the Nitish Kumar-led NDA government after assuming power in November 2005 with an aim to promote private investment in the state.
The board has, so far, approved 603 project proposals, which entail an investment of Rs 2.48 lakh crore with a capacity to generate 1.85 lakh jobs.
Sources said if the aircraft manufacturing unit gets the board’s approval, the chances of which are very bleak, it would bring Rs 92,000 crore in investment alone to the state.
In the wake of entrepreneurs, especially Aditya Birla Group chairman Kumar Mangalam Birla who made a fervent appeal to the government at the just concluded “Global Bihar Summit” for speedy approval of the project, the SIPB decided to hold regular meetings in order to avoid delay in giving approvals to proposals.
Bihar Industries Association (BIA) president KPS Keshri, who is also a member of the SIPB, told The Telegraph: “SIPB meeting would now be held twice a month. The aim is to ensure that the proposed projects do not get delayed in getting the board’s approval.”
He added, “It was also decided that those entrepreneurs, who could not apply to the SIPB, would be given a chance to apply to the board.”
According to the industrial incentive policy of 2011, projects having SIPB’s approval would get incentives.
Since there was no fixed time-frame for holding the meeting of the board for approving the investment projects, it led to accumulation of a long list (116) of investment proposals requiring the board’s approval.
The last time a meeting of the board was held was in the last week of September last year
Any fresh investment proposal, once cleared by the SIPB, of up to Rs 100 crore investment would be put up before chief minister Nitsih Kumar for his approval, whereas proposals of over Rs 100 crore would be sent to the cabinet for the necessary approval.
The proposals, which got the board’s approval included investments from sectors like food processing, power, cold storage, flour mills, rice mills, beer factories and others.
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Among the proposals that were set aside for the time being included one that talked about setting up of an aircraft manufacturing unit in the state.
Beltronics Techno Pvt Ltd, Patna, had come up with an investment proposal to set up a manufacturing unit of aeroplane and air taxi, besides carrying out maintenance work of aircraft in the vicinity of the state capital.
The company, which claimed that it has already entered into a tie-up with a UK-based firm for financing the project, said it would pump in Rs 92,000 crore for the purpose.
“We have asked them (the company) to give a presentation before the board. We want to see their project details. We would like to know what it wants to do and how it plans to go about? We also want to know what are the land and other requirements of the entrepreneur?” principal secretary (industries) C.K. Mishra told The Telegraph.
SIPB was set up by the Nitish Kumar-led NDA government after assuming power in November 2005 with an aim to promote private investment in the state.
The board has, so far, approved 603 project proposals, which entail an investment of Rs 2.48 lakh crore with a capacity to generate 1.85 lakh jobs.
Sources said if the aircraft manufacturing unit gets the board’s approval, the chances of which are very bleak, it would bring Rs 92,000 crore in investment alone to the state.
In the wake of entrepreneurs, especially Aditya Birla Group chairman Kumar Mangalam Birla who made a fervent appeal to the government at the just concluded “Global Bihar Summit” for speedy approval of the project, the SIPB decided to hold regular meetings in order to avoid delay in giving approvals to proposals.
Bihar Industries Association (BIA) president KPS Keshri, who is also a member of the SIPB, told The Telegraph: “SIPB meeting would now be held twice a month. The aim is to ensure that the proposed projects do not get delayed in getting the board’s approval.”
He added, “It was also decided that those entrepreneurs, who could not apply to the SIPB, would be given a chance to apply to the board.”
According to the industrial incentive policy of 2011, projects having SIPB’s approval would get incentives.
Since there was no fixed time-frame for holding the meeting of the board for approving the investment projects, it led to accumulation of a long list (116) of investment proposals requiring the board’s approval.
The last time a meeting of the board was held was in the last week of September last year
Any fresh investment proposal, once cleared by the SIPB, of up to Rs 100 crore investment would be put up before chief minister Nitsih Kumar for his approval, whereas proposals of over Rs 100 crore would be sent to the cabinet for the necessary approval.
The proposals, which got the board’s approval included investments from sectors like food processing, power, cold storage, flour mills, rice mills, beer factories and others.
http://tourism9.com/ http://vkins.com/
2012年2月22日星期三
Constitution Court OKs two executive decrees
Home » politics » Constitution Court OKs two executive decrees
February 22, 2012 2:59 pmThe 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.
2012年2月19日星期日
World body blacklists Thailand for money laundering, terrorism financing
Thailand was yesterday identified by an intergovernmental organisation as uncooperative in the global efforts to combat money-laundering and terrorism financing.
The move came only days after bomb blasts in Bangkok and discovery of explosive devices linked to terrorism.
The Paris-based Financial Action Task Force (FATF), in its statement on Thursday (yesterday Bangkok time), said Thailand was one of 15 countries that have begun taking steps to combat terrorist financing and money-laundering but have yet to make sufficient progress in addressing the deficiencies in their regulations.
Deputy Premier and Finance Minister Kittiratt Na-Ranong yesterday expressed concern that the move could adversely affect Thailand’s image and its economy.
He said the government would ask the Anti-Money Laundering Office to explain the situation.
“As far as I know, Thailand has been requested by the FATF to issue an anti-money-laundering law that complies with international standards but we have failed to do so, which led to the country being blacklisted,” Kittiratt said.
Songtham Pinto, director of the Bank of Thailand’s macro-economy division, said he expected short-term negative impact on tourism as a result of the FATF move and the earlier bomb scare in Bangkok, which was linked to international terrorism.
Siam Commercial Bank president Kannika Chalit-aphon urged the government to expedite the legislation.
She expected the impact on investor confidence to be short-term.
“There could be some worries and impacts on investments in certain industries. It is not a big problem,” she said.
Tevin Vongvanich, chief financial officer of PTT, said the company was evaluating the expected impact on the company’s financial transactions after Thailand was listed among watch-list countries that are not active in enforcing legislation to combat money-laundering and terrorism financing.
In general, the transactions may take a longer time for financial scrutiny.
However, PTT is confident that the downgrade will not affect its financial-transaction costs.
“At PTT, we believe that our existing customers understand this matter, and this will not affect the financial transactions between us and existing clients. But we may have to explain more to new clients,” he said.
Paiboon Nalintharangkul, chairman of the Federation of Thai Capital Market Organisations (FeTCO), said the government would have to pay attention to this and proceed with an amendment to its money-laundering law.
Being on such a blacklist could affect the competitiveness of the private sector, he said, while investing overseas may require more complicated procedures.
Foreign investors may not be concerned about this and foreign capital will continue to flow in, seeking higher returns as the country’s economic fundamentals are sound, he explained.
On the contrary, there may be a problem for capital outflow, he said.
For example, wealth management and private funds or funds with overseas investment policies may find difficulties investing overseas due to likely more complicated procedures for checking sources of investment.
Opposition Democrat politician Korbsak Sabhavasu, formerly a deputy prime minister, said this latest development was not good for Thailand’s reputation, as most of the countries identified by the FATF as uncooperative had a negative image regarding money-laundering and terrorism financing.
The Ministry of Foreign Affairs yesterday cancelled its news conference on the matter.
In its statement, the FATF said: “Despite Thailand’s high-level political commitment to address its strategic deficiencies, Thailand has not made sufficient progress in implementing its action plan, and certain strategic deficiencies remain.”
It recommended that Thailand should adequately criminalise terrorist financing, establish and implement adequate procedures to identify and freeze terrorist assets, and further strengthen supervision of money-laundering and terrorism financing.
In addition to Thailand, the other countries on the latest FATF list of non-cooperative countries are Bolivia, Burma, Cuba, Ethiopia, Ghana, Indonesia, Kenya, Nigeria, Pakistan, Sao Tome and Principe, Sri Lanka, Syria, Tanzania, and Turkey.
-The Nation/Asia News Network
http://tourism9.cm/ http://vkins.com/
The move came only days after bomb blasts in Bangkok and discovery of explosive devices linked to terrorism.
The Paris-based Financial Action Task Force (FATF), in its statement on Thursday (yesterday Bangkok time), said Thailand was one of 15 countries that have begun taking steps to combat terrorist financing and money-laundering but have yet to make sufficient progress in addressing the deficiencies in their regulations.
Deputy Premier and Finance Minister Kittiratt Na-Ranong yesterday expressed concern that the move could adversely affect Thailand’s image and its economy.
He said the government would ask the Anti-Money Laundering Office to explain the situation.
“As far as I know, Thailand has been requested by the FATF to issue an anti-money-laundering law that complies with international standards but we have failed to do so, which led to the country being blacklisted,” Kittiratt said.
Songtham Pinto, director of the Bank of Thailand’s macro-economy division, said he expected short-term negative impact on tourism as a result of the FATF move and the earlier bomb scare in Bangkok, which was linked to international terrorism.
Siam Commercial Bank president Kannika Chalit-aphon urged the government to expedite the legislation.
She expected the impact on investor confidence to be short-term.
“There could be some worries and impacts on investments in certain industries. It is not a big problem,” she said.
Tevin Vongvanich, chief financial officer of PTT, said the company was evaluating the expected impact on the company’s financial transactions after Thailand was listed among watch-list countries that are not active in enforcing legislation to combat money-laundering and terrorism financing.
In general, the transactions may take a longer time for financial scrutiny.
However, PTT is confident that the downgrade will not affect its financial-transaction costs.
“At PTT, we believe that our existing customers understand this matter, and this will not affect the financial transactions between us and existing clients. But we may have to explain more to new clients,” he said.
Paiboon Nalintharangkul, chairman of the Federation of Thai Capital Market Organisations (FeTCO), said the government would have to pay attention to this and proceed with an amendment to its money-laundering law.
Being on such a blacklist could affect the competitiveness of the private sector, he said, while investing overseas may require more complicated procedures.
Foreign investors may not be concerned about this and foreign capital will continue to flow in, seeking higher returns as the country’s economic fundamentals are sound, he explained.
On the contrary, there may be a problem for capital outflow, he said.
For example, wealth management and private funds or funds with overseas investment policies may find difficulties investing overseas due to likely more complicated procedures for checking sources of investment.
Opposition Democrat politician Korbsak Sabhavasu, formerly a deputy prime minister, said this latest development was not good for Thailand’s reputation, as most of the countries identified by the FATF as uncooperative had a negative image regarding money-laundering and terrorism financing.
The Ministry of Foreign Affairs yesterday cancelled its news conference on the matter.
In its statement, the FATF said: “Despite Thailand’s high-level political commitment to address its strategic deficiencies, Thailand has not made sufficient progress in implementing its action plan, and certain strategic deficiencies remain.”
It recommended that Thailand should adequately criminalise terrorist financing, establish and implement adequate procedures to identify and freeze terrorist assets, and further strengthen supervision of money-laundering and terrorism financing.
In addition to Thailand, the other countries on the latest FATF list of non-cooperative countries are Bolivia, Burma, Cuba, Ethiopia, Ghana, Indonesia, Kenya, Nigeria, Pakistan, Sao Tome and Principe, Sri Lanka, Syria, Tanzania, and Turkey.
-The Nation/Asia News Network
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2012年2月13日星期一
Student loans always are due, no matter how long overdue
By Kathy Lynn Gray
The Columbus Dispatch Monday February 13, 2012 5:24 AM
If you think the student loan you took out years ago but never repaid won’t come back to haunt you, think again.The Columbus Dispatch Monday February 13, 2012 5:24 AM
The debt could land you in federal court, pleading your case before a U.S. district judge.
“There’s no statute of limitations on student loans,” warned Assistant U.S. Attorney Deborah F. Sanders. “That debt is growing, and you still owe it.”
Sanders handles the student-loan default cases that come through the U.S. attorney’s office for the southern half of Ohio. Her office is pursuing about 400 cases.
“We get them because the (federal) Education Department has not been able to collect after many, many attempts,” Sanders said. “If it comes to our office, borrowers have had a lot of chances to pay.”
Defendants fall into two camps: those who don’t pay, and those who can’t, she said.
Usually the loans are years overdue, sometimes as long as 20 years. By that time, a large chunk of the money owed is interest that has accrued and compounded over the years.
In one case filed last year, the defendant owed $160,000, including nearly $25,000 in accrued interest on the 10-year-old loan. On another 10-year-old loan, nearly $40,000 of the $101,000 owed was interest.
If federal lawyers obtain a judgment against a debtor, the government can collect the money in a variety of ways. Wages and savings and checking accounts can be garnisheed, and tax refunds can be diverted, Sanders said. “We have a pretty good rate of collection.”
The court also can set up payment plans once a judgment has been made.
Unlike many other types of debt, student loans cannot be dismissed through bankruptcy except in rare situations, said Stephanie Dailey, a Columbus lawyer who specializes in bankruptcies.
“It’s almost impossible to get out of student-loan debt,” Dailey said. A debtor has to have a dire hardship, such as being completely disabled, she said.
About half the people who come to her with financial difficulties have student-loan debt, Dailey said. She advises them to approach the lender and try to get on a payment plan so that interest doesn’t continue to pile up.
“A lot of people will just stick their head in the sand and hope it’ll go away,” she said. “ Instead, they should let the creditor know they’re having trouble paying and ask for help.”
Dailey herself has nearly $100,000 in student-loan debt from law school. She has deferred her loans — postponed paying them with the blessing of the lender — when paychecks were lean. Interest continues to accrue during a deferral, but the lender won’t turn the loan over to collectors.
The number of student-loan defaults that went to federal court rose significantly in the late 1990s as the Justice Department pushed for collection. Nationwide, 1,142 default cases were filed in 1995; that number surged to 24,404 by 2000. But the number has fallen back since then as the Education Department has set up other ways to collect the debts, Sanders said.
At the same time, students are taking on more debt to attend college. In 2010, the average was $25,250, up 5 percent from the previous year, according to a study by the Project on Student Debt. The average in Ohio was $27,713. An estimated $1 trillion in total student loans is outstanding nationwide.
The default rate in 2009, the most-recent data available, was 8.8 percent. That includes borrowers with loan repayments due between Oct. 1, 2008, and Sept. 30, 2009. An estimate of the total amount of loan money in default is not available.
A survey released last week by the National Association of Consumer Bankruptcy Attorneys found that 81 percent of bankruptcy lawyers said the number of potential clients with student-loan debt has increased “significantly” or “somewhat” in the past three or four years.
The association thinks that student-loan debt could create an economic threat to the country as serious as the home-mortgage crisis did in the late 2000s.
kgray@dispatch.com
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Council backs stalled housing with cash
A council is pumping £770,000 into a series of stalled developments which can now deliver more than 200 new homes and 380 jobs.
Walsall Council is using cash from the New Homes Bonus to issue loans and grants to four construction companies on five sites with a combined value of £20 million.Developers had to satisfy a range of criteria and also have part-built developments or schemes with planning permission which had not yet begun, before they could get the cash.
The loans will be repaid by the developers and reinvested in other schemes to help create new jobs and homes.
Adrian Andrew, Walsall Council member for regeneration, said: ‘I am proud and delighted to be able to announce a financial package of almost £800,000 that will help more than 200 homes get built.
‘This doesn’t just mean new homes taking shape. This is also much-needed jobs being created and fresh investment being unlocked.
‘Around 300 people could be working on the construction schemes. A further 80 jobs will be created in the care and support sector through the development of these sites.
‘All this means we’ll help safeguard jobs and create new ones. It’s a key priority for us to help create and safeguard private sector jobs and this does just that.
‘Walsall is yet again bucking the national trend and shows that we are open for business as a borough.
‘I am delighted that the government is following in our footsteps with a similar scheme called Getting Britain Building.’
Schemes getting cash
- Midland Properties will receive £245,000 loans to help resume building work at the former Field Road industrial estate in Bloxwich to create 18 homes for sale and rent as well as to help build 11 rental properties at the former Chamberlain & Hill site in Reeves Street, Bloxwich
- Stanley Developments are set to receive a £175,000 grant to help work start on 85 private and affordable older person extra care homes for rent or sale at Bentley Road North in Bentley.
- Jessup Brothers Ltd are to receive a £175,000 grant to resume work on the part built Walsall Waterfront development to create 82 private and affordable flats.
- BT Felton and Sons are set to receive a £175,000 loan to build 12 homes for private sale in Romney Way, Pheasey, Great Barr.
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China tells banks to roll over local govt loans – FT
SYDNEY (Reuters) – China has told its banks to start a huge roll-over of loans to local governments, the Financial Times reported, aiming to give itself more time to deal with a $1.7 trillion debt hangover from the global financial crisis.
The move underscores China’s determination to contain its 10.7 trillion yuan debt mess and forestall a potential loan crisis in the world’s No. 2 economy, analysts say.
As early as June 2011, the Chinese government had vowed to clean up its local debt either by shifting 2-3 trillion yuan of debt off local governments, forcing state banks to take some bad debt losses and selling select projects to private investors, sources told Reuters earlier.
Investors worry that China’s banks would suffer billions of bad loan losses and hobble the world’s growth engine at a time of anaemic global economic growth.
China’s mountain of local debt piled up after the 2008-09 financial crisis when Beijing ordered local governments to spend massively on infrastructure projects to buoy economic growth, which they did by borrowing heavily.
Analysts say Chinese banks are already rolling over or restructuring troubled loans to cash-strapped local governments unable to repay their debt. But the amount of loans being rolled over is not known as banks — and Beijing — are tight-lipped.
Worse, analysts say Chinese banks are hiding troubled loans by adamantly refusing to mark them as non-performing loans in financial statements before restructuring them, as per global best practice.
“This is bad regulation but I don’t think we are going to get a bank crisis,” said a bank analyst in Hong Kong.
In some cases, loans are being restructured by extending their maturities by as much as four years, the Financial Times said, citing bankers and analysts familiar with the matter.
Not all local government loans would be rolled over, the paper said, citing a person with knowledge of the plan.
Banks would determine if there was real demand for the investment. Continued funding for the construction of highways would be approved but less important projects, like massive city squares, might be cut off.
Banks would also consider whether investments were consistent with the government’s five-year plan for industrial upgrading and cleaner growth.
China has said that about half of the 10.7 trillion yuan of loans will mature over the next three years.
(Reporting by Richard Pullin in MELBOURNE and Koh Gui Qing in SINGAPORE, Editing by Dean Yates & Kim Coghill)
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The move underscores China’s determination to contain its 10.7 trillion yuan debt mess and forestall a potential loan crisis in the world’s No. 2 economy, analysts say.
As early as June 2011, the Chinese government had vowed to clean up its local debt either by shifting 2-3 trillion yuan of debt off local governments, forcing state banks to take some bad debt losses and selling select projects to private investors, sources told Reuters earlier.
Investors worry that China’s banks would suffer billions of bad loan losses and hobble the world’s growth engine at a time of anaemic global economic growth.
China’s mountain of local debt piled up after the 2008-09 financial crisis when Beijing ordered local governments to spend massively on infrastructure projects to buoy economic growth, which they did by borrowing heavily.
Analysts say Chinese banks are already rolling over or restructuring troubled loans to cash-strapped local governments unable to repay their debt. But the amount of loans being rolled over is not known as banks — and Beijing — are tight-lipped.
Worse, analysts say Chinese banks are hiding troubled loans by adamantly refusing to mark them as non-performing loans in financial statements before restructuring them, as per global best practice.
“This is bad regulation but I don’t think we are going to get a bank crisis,” said a bank analyst in Hong Kong.
In some cases, loans are being restructured by extending their maturities by as much as four years, the Financial Times said, citing bankers and analysts familiar with the matter.
Not all local government loans would be rolled over, the paper said, citing a person with knowledge of the plan.
Banks would determine if there was real demand for the investment. Continued funding for the construction of highways would be approved but less important projects, like massive city squares, might be cut off.
Banks would also consider whether investments were consistent with the government’s five-year plan for industrial upgrading and cleaner growth.
China has said that about half of the 10.7 trillion yuan of loans will mature over the next three years.
(Reporting by Richard Pullin in MELBOURNE and Koh Gui Qing in SINGAPORE, Editing by Dean Yates & Kim Coghill)
http://tourism9.cm/ http://vkins.com/
China tells banks to roll over local govt loans: report
SYDNEY (Reuters) – China has told its banks to start a huge roll-over of loans to local governments, the Financial Times reported, aiming to give itself more time to deal with a $1.7 trillion debt hangover from the global financial crisis.
The move underscores China’s determination to contain its 10.7 trillion yuan debt mess and forestall a potential loan crisis in the world’s No. 2 economy, analysts say.
As early as June 2011, the Chinese government had vowed to clean up its local debt either by shifting 2-3 trillion yuan of debt off local governments, forcing state banks to take some bad debt losses and selling select projects to private investors, sources told Reuters earlier.
Investors worry that China’s banks would suffer billions of bad loan losses and hobble the world’s growth engine at a time of anaemic global economic growth.
China’s mountain of local debt piled up after the 2008-09 financial crisis when Beijing ordered local governments to spend massively on infrastructure projects to buoy economic growth, which they did by borrowing heavily.
Analysts say Chinese banks are already rolling over or restructuring troubled loans to cash-strapped local governments unable to repay their debt. But the amount of loans being rolled over is not known as banks — and Beijing — are tight-lipped.
Worse, analysts say Chinese banks are hiding troubled loans by adamantly refusing to mark them as non-performing loans in financial statements before restructuring them, as per global best practice.
“This is bad regulation but I don’t think we are going to get a bank crisis,” said a bank analyst in Hong Kong.
In some cases, loans are being restructured by extending their maturities by as much as four years, the Financial Times said, citing bankers and analysts familiar with the matter.
Not all local government loans would be rolled over, the paper said, citing a person with knowledge of the plan.
Banks would determine if there was real demand for the investment. Continued funding for the construction of highways would be approved but less important projects, like massive city squares, might be cut off.
Banks would also consider whether investments were consistent with the government’s five-year plan for industrial upgrading and cleaner growth.
China has said that about half of the 10.7 trillion yuan of loans will mature over the next three years.
(Reporting by Richard Pullin in MELBOURNE and Koh Gui Qing in SINGAPORE, Editing by Dean Yates & Kim Coghill)
http://tourism9.cm/ http://vkins.com/
The move underscores China’s determination to contain its 10.7 trillion yuan debt mess and forestall a potential loan crisis in the world’s No. 2 economy, analysts say.
As early as June 2011, the Chinese government had vowed to clean up its local debt either by shifting 2-3 trillion yuan of debt off local governments, forcing state banks to take some bad debt losses and selling select projects to private investors, sources told Reuters earlier.
Investors worry that China’s banks would suffer billions of bad loan losses and hobble the world’s growth engine at a time of anaemic global economic growth.
China’s mountain of local debt piled up after the 2008-09 financial crisis when Beijing ordered local governments to spend massively on infrastructure projects to buoy economic growth, which they did by borrowing heavily.
Analysts say Chinese banks are already rolling over or restructuring troubled loans to cash-strapped local governments unable to repay their debt. But the amount of loans being rolled over is not known as banks — and Beijing — are tight-lipped.
Worse, analysts say Chinese banks are hiding troubled loans by adamantly refusing to mark them as non-performing loans in financial statements before restructuring them, as per global best practice.
“This is bad regulation but I don’t think we are going to get a bank crisis,” said a bank analyst in Hong Kong.
In some cases, loans are being restructured by extending their maturities by as much as four years, the Financial Times said, citing bankers and analysts familiar with the matter.
Not all local government loans would be rolled over, the paper said, citing a person with knowledge of the plan.
Banks would determine if there was real demand for the investment. Continued funding for the construction of highways would be approved but less important projects, like massive city squares, might be cut off.
Banks would also consider whether investments were consistent with the government’s five-year plan for industrial upgrading and cleaner growth.
China has said that about half of the 10.7 trillion yuan of loans will mature over the next three years.
(Reporting by Richard Pullin in MELBOURNE and Koh Gui Qing in SINGAPORE, Editing by Dean Yates & Kim Coghill)
http://tourism9.cm/ http://vkins.com/
2012年2月11日星期六
Public Safety
The mad dash to cobble together college funding will soon be under way.
In the weeks ahead, colleges will begin mailing out their much-anticipated acceptance letters and financial aid packages. The notices will alleviate pent up anxiety and finally give high school seniors a clearer idea of what their futures will hold.
But amid all the emotions, students and families will also need to start sorting out how they’ll pay for tuition. The average bill now comes in at more than $17,000 to attend an in-state public college.
The problem is that navigating the universe of financial aid can be confusing. That’s because there’s a vast patchwork of grants, scholarships and loans available. But a failure to compare the options and explore the alternatives could mean the difference in thousands of dollars in debt upon graduation.
Adding to that confusion is a spate of headlines in recent weeks regarding changes in financial aid. To help navigate this process, here’s a look at what’s behind the recent changes.
—
Comparing costs » As part of his broad plans to make higher education more affordable, President Barack Obama recently said he wants to make it easier for families to estimate the cost of college.
As it stands, there isn’t a uniform template for financial aid award letters, and officials say the forms can be difficult to decipher, even misleading. For example, schools usually provide a total “out of pocket” cost after subtracting aid such as grants and scholarships. But some schools also subtract loans from that figure, even though loans have to be repaid and actually push up costs because of interest charges.
In other cases, interest rates and other loan terms are not spelled out. Officials say this could lead to students taking on more debt than they realize.
To address the issue, the Department of Education and the newly created Consumer Financial Protection Bureau announced in October that they are developing a model financial aid form. There aren’t any plans yet to make the form mandatory. But once a template is finalized, Congress could vote to require colleges to use it to maintain access to federal aid. The adoption of such a form has also been widely supported by student advocates.
Separately, Obama is pushing for a “college scorecard” that would require schools to disclose their graduation rates, rate of employment and debt repayment among graduates.
—
Interest rates » Taking out a student loan to attend college has become the norm, with two-thirds of graduates leaving campus in debt. But not all loans are alike. So it might have caught your attention last month when Obama said in his State of the Union address that the fixed interest rates on student loans are set to double in July if Congress fails to act.
Before you panic, keep in mind that there are primarily two types of federal student loans: subsidized and unsubsidized. The difference is that the government doesn’t start charging interest on subsidized loans until the student graduates. With unsubsidized loans, interest starts accruing right away.
The loans also come with different interest rates. Unsubsidized loans currently charge a fixed rate of 6.8 percent. The interest rate on subsidized loans was gradually lowered to its current fixed rate of 3.4 percent over the past few years. But the law that temporarily reduced the rate sunsets in July.
So unless Congress extends the reduction, the rate on subsidized loans will snap back to 6.8 percent.
Next Page »
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In the weeks ahead, colleges will begin mailing out their much-anticipated acceptance letters and financial aid packages. The notices will alleviate pent up anxiety and finally give high school seniors a clearer idea of what their futures will hold.
But amid all the emotions, students and families will also need to start sorting out how they’ll pay for tuition. The average bill now comes in at more than $17,000 to attend an in-state public college.
The problem is that navigating the universe of financial aid can be confusing. That’s because there’s a vast patchwork of grants, scholarships and loans available. But a failure to compare the options and explore the alternatives could mean the difference in thousands of dollars in debt upon graduation.
Adding to that confusion is a spate of headlines in recent weeks regarding changes in financial aid. To help navigate this process, here’s a look at what’s behind the recent changes.
—
Comparing costs » As part of his broad plans to make higher education more affordable, President Barack Obama recently said he wants to make it easier for families to estimate the cost of college.
As it stands, there isn’t a uniform template for financial aid award letters, and officials say the forms can be difficult to decipher, even misleading. For example, schools usually provide a total “out of pocket” cost after subtracting aid such as grants and scholarships. But some schools also subtract loans from that figure, even though loans have to be repaid and actually push up costs because of interest charges.
In other cases, interest rates and other loan terms are not spelled out. Officials say this could lead to students taking on more debt than they realize.
To address the issue, the Department of Education and the newly created Consumer Financial Protection Bureau announced in October that they are developing a model financial aid form. There aren’t any plans yet to make the form mandatory. But once a template is finalized, Congress could vote to require colleges to use it to maintain access to federal aid. The adoption of such a form has also been widely supported by student advocates.
Separately, Obama is pushing for a “college scorecard” that would require schools to disclose their graduation rates, rate of employment and debt repayment among graduates.
—
Interest rates » Taking out a student loan to attend college has become the norm, with two-thirds of graduates leaving campus in debt. But not all loans are alike. So it might have caught your attention last month when Obama said in his State of the Union address that the fixed interest rates on student loans are set to double in July if Congress fails to act.
Before you panic, keep in mind that there are primarily two types of federal student loans: subsidized and unsubsidized. The difference is that the government doesn’t start charging interest on subsidized loans until the student graduates. With unsubsidized loans, interest starts accruing right away.
The loans also come with different interest rates. Unsubsidized loans currently charge a fixed rate of 6.8 percent. The interest rate on subsidized loans was gradually lowered to its current fixed rate of 3.4 percent over the past few years. But the law that temporarily reduced the rate sunsets in July.
So unless Congress extends the reduction, the rate on subsidized loans will snap back to 6.8 percent.
Next Page »
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2012年2月8日星期三
S Korea Banks' Household Loans Fall By Record Amount In January
SEOUL -(Dow Jones)- South Korean banks’ lending to households fell the most on record in January because of lower mortgage loans amid sluggish housing transactions, the Bank of Korea said Wednesday.
Banks’ overall household lending stood at KRW452.2 trillion in January, down KRW2.8 trillion from December 2011 and the biggest month-on-month decline on record. Such loans rose KRW1.8 trillion in December from the previous month.
The BOK attributed January’s drop in lending to lower mortgage loans, caused by seasonally weak housing transactions, as well as hefty loans in the previous month, as homebuyers hurried to settle their purchases before the year-end expiry of property acquisition tax benefits.
Mortgage lending to households fell KRW800 billion on month to KRW305.3 trillion in January, the largest monthly fall since a KRW1.2 trillion decline in May 2007. Such loans rose KRW2.5 trillion in December.
“January’s sharp fall in household loans is a one-off, which occurred amid the government’s efforts to reduce such loans,” an official at the BOK’s financial market department said.
Growth in household mortgage loans has slowed in recent months as commercial banks refrained from lending after the government in June tightened rules to curb household debt and prevent potential defaults from destabilizing the economy.
Bank lending to domestic businesses rose sharply last month, as companies resumed borrowing after repaying debt in December to improve their year-end debt ratios. The rise was also due to big firms’ efforts to secure funds amid worsening global funding conditions, the BOK said.
Bank loans to companies rose KRW6.8 trillion to KRW563 trillion in January, compared with a month-on-month decline of KRW9.1 trillion in December.
The lending data for households and businesses don’t include loans by non-bank financial companies.
In a separate statement, the BOK said the country’s broadest measure of money supply, known as L, rose 9.4% in December from a year earlier to KRW2,974.4 trillion, accelerating from a 8.9% gain in November.
The L money supply includes cash, deposits at financial institutions and money-market instruments.
South Korea’s M2 money supply rose 4.4% from a year earlier to KRW1,756.6 trillion, the same pace as in November.
M1, the narrowest gauge of money supply, rose 1.6% from a year earlier to KRW432.6 trillion versus a 2.0% rise in the previous month.
M1 comprises cash in circulation, demand deposits and savings at financial institutions. M2 consists of M1 plus time deposits with maturities of less than two years.
-By In-Soo Nam, Dow Jones Newswires; 822-3700-1902; In-Soo.Nam@dowjones.com
Banks’ overall household lending stood at KRW452.2 trillion in January, down KRW2.8 trillion from December 2011 and the biggest month-on-month decline on record. Such loans rose KRW1.8 trillion in December from the previous month.
The BOK attributed January’s drop in lending to lower mortgage loans, caused by seasonally weak housing transactions, as well as hefty loans in the previous month, as homebuyers hurried to settle their purchases before the year-end expiry of property acquisition tax benefits.
Mortgage lending to households fell KRW800 billion on month to KRW305.3 trillion in January, the largest monthly fall since a KRW1.2 trillion decline in May 2007. Such loans rose KRW2.5 trillion in December.
“January’s sharp fall in household loans is a one-off, which occurred amid the government’s efforts to reduce such loans,” an official at the BOK’s financial market department said.
Growth in household mortgage loans has slowed in recent months as commercial banks refrained from lending after the government in June tightened rules to curb household debt and prevent potential defaults from destabilizing the economy.
Bank lending to domestic businesses rose sharply last month, as companies resumed borrowing after repaying debt in December to improve their year-end debt ratios. The rise was also due to big firms’ efforts to secure funds amid worsening global funding conditions, the BOK said.
Bank loans to companies rose KRW6.8 trillion to KRW563 trillion in January, compared with a month-on-month decline of KRW9.1 trillion in December.
The lending data for households and businesses don’t include loans by non-bank financial companies.
In a separate statement, the BOK said the country’s broadest measure of money supply, known as L, rose 9.4% in December from a year earlier to KRW2,974.4 trillion, accelerating from a 8.9% gain in November.
The L money supply includes cash, deposits at financial institutions and money-market instruments.
South Korea’s M2 money supply rose 4.4% from a year earlier to KRW1,756.6 trillion, the same pace as in November.
M1, the narrowest gauge of money supply, rose 1.6% from a year earlier to KRW432.6 trillion versus a 2.0% rise in the previous month.
M1 comprises cash in circulation, demand deposits and savings at financial institutions. M2 consists of M1 plus time deposits with maturities of less than two years.
-By In-Soo Nam, Dow Jones Newswires; 822-3700-1902; In-Soo.Nam@dowjones.com
(END) Dow Jones Newswires 02-07-122214ET Copyright (c) 2012 Dow Jones & Company, Inc.http://tourism9.com/ http://vkins.com/
2012年2月6日星期一
UK families £7,900 in debt
UK households owe an average of £7,900 on personal loans, overdrafts and credit cards.
UK families are typically £7,900 in debt from personal loans, overdrafts and credit cards, despite three years of paying them down, a report has found.
Meanwhile, credit card use could fall into permanent decline, with the rise of digital technology and payday lenders changing how people access credit, the Precious Plastic report from PricewaterhouseCoopers (PwC) said.
Each household paid off an average of around £355 of their unsecured debt in 2011, but UK households remain “among the most indebted in the world” despite three successive years of net repayments, the report said.
The report predicted UK consumers will continue their determination to pay down their debts, owing around £7,500 by 2013.
But it highlighted “worrying” signs in spending habits, particularly among the 25 to 34 age group, where a quarter have used credit to fund essential purchases in the last year.
Average incomes have fallen by nearly 3.5pc in real terms over the past year, squeezing budgets even further as consumers have faced soaring bills.
Simon Westcott, director in PwC’s financial services practice, said: “UK consumers are among the most indebted in the world, with the average UK household still saddled with nearly £8,000 of unsecured debt.
“Although the UK Government’s austerity drive appears to be hitting home, with households paying off an average of £355 worth of their debt in 2011, three years of austerity by UK consumers has only made a small dent in the total levels of borrowing.
“In addition to this, our credit confidence survey has shown that there is a growing reluctance to borrow in the future and a marked deterioration in confidence about meeting repayments, particularly among 18 to 24-year-olds.”
The report said that historically, the United States has been a strong indicator of what happens in the UK, but consumer credit in the US saw the largest increase in a decade in 2011.
It put the contrast in behaviour down to UK austerity policies, which have had “a strong influence on consumer confidence and attitudes towards debt in the UK”.
Bank of England figures showed last week that consumers cut their debts at the fastest rate in two decades during December, amid signs they dipped into savings to pay for Christmas.
Credit card borrowing was also flat for the third month in a row, despite the festive season.
The PwC report said that credit card borrowing fell by 5pc last year, leaving the average balance at around £1,000, with tightening credit conditions compounding the issue.
Meanwhile, debit cards grew by 10pc in 2011, to become used more frequently than cash in payments for the first time.
Mr Westcott continued: “Forty-five years since it was first introduced, the credit card is suffering a mid-life crisis.
“Consumers discarded nearly one million cards in 2011, taking the number of credit cards in circulation down to levels not seen for almost a decade.
“The longer term trend suggests that numbers will continue to decline, with the younger generation showing a preference for debit cards and emerging digital alternatives such as mobile payments.
“This generation seems unlikely to switch to increased credit card usage in later life, as perhaps they would have done in the past, suggesting that debit cards, mobile payments and other innovations will force the credit card into an ever decreasing market.”
He suggested there could be a general move towards charging annual fees as regulators push for more transparent ways of charging.
Mr Westcott said: “Other banking products are likely to go the same way as consumers and regulators look for simpler products and the free bank account may become a thing of the past.”
The report argued that the innovation and convenience offered by “alternative lenders” such as high interest payday loan companies was encouraging a broader selection of consumers to choose their services over banks.
Mr Westcott said: “Mainstream lenders need to be aware that what may have begun as a last resort could be an enduring relationship as consumers are pleasantly surprised at the convenient and innovative service they receive from these smaller, more agile providers.
“As these providers become more conventional, we are likely to see them venture further into the mainstream market with their own credit card, longer term loan products or even current accounts.”
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UK families are typically £7,900 in debt from personal loans, overdrafts and credit cards, despite three years of paying them down, a report has found.
Meanwhile, credit card use could fall into permanent decline, with the rise of digital technology and payday lenders changing how people access credit, the Precious Plastic report from PricewaterhouseCoopers (PwC) said.
Each household paid off an average of around £355 of their unsecured debt in 2011, but UK households remain “among the most indebted in the world” despite three successive years of net repayments, the report said.
The report predicted UK consumers will continue their determination to pay down their debts, owing around £7,500 by 2013.
But it highlighted “worrying” signs in spending habits, particularly among the 25 to 34 age group, where a quarter have used credit to fund essential purchases in the last year.
Average incomes have fallen by nearly 3.5pc in real terms over the past year, squeezing budgets even further as consumers have faced soaring bills.
Simon Westcott, director in PwC’s financial services practice, said: “UK consumers are among the most indebted in the world, with the average UK household still saddled with nearly £8,000 of unsecured debt.
“Although the UK Government’s austerity drive appears to be hitting home, with households paying off an average of £355 worth of their debt in 2011, three years of austerity by UK consumers has only made a small dent in the total levels of borrowing.
“In addition to this, our credit confidence survey has shown that there is a growing reluctance to borrow in the future and a marked deterioration in confidence about meeting repayments, particularly among 18 to 24-year-olds.”
The report said that historically, the United States has been a strong indicator of what happens in the UK, but consumer credit in the US saw the largest increase in a decade in 2011.
It put the contrast in behaviour down to UK austerity policies, which have had “a strong influence on consumer confidence and attitudes towards debt in the UK”.
Bank of England figures showed last week that consumers cut their debts at the fastest rate in two decades during December, amid signs they dipped into savings to pay for Christmas.
Credit card borrowing was also flat for the third month in a row, despite the festive season.
The PwC report said that credit card borrowing fell by 5pc last year, leaving the average balance at around £1,000, with tightening credit conditions compounding the issue.
Meanwhile, debit cards grew by 10pc in 2011, to become used more frequently than cash in payments for the first time.
Mr Westcott continued: “Forty-five years since it was first introduced, the credit card is suffering a mid-life crisis.
“Consumers discarded nearly one million cards in 2011, taking the number of credit cards in circulation down to levels not seen for almost a decade.
“The longer term trend suggests that numbers will continue to decline, with the younger generation showing a preference for debit cards and emerging digital alternatives such as mobile payments.
“This generation seems unlikely to switch to increased credit card usage in later life, as perhaps they would have done in the past, suggesting that debit cards, mobile payments and other innovations will force the credit card into an ever decreasing market.”
He suggested there could be a general move towards charging annual fees as regulators push for more transparent ways of charging.
Mr Westcott said: “Other banking products are likely to go the same way as consumers and regulators look for simpler products and the free bank account may become a thing of the past.”
The report argued that the innovation and convenience offered by “alternative lenders” such as high interest payday loan companies was encouraging a broader selection of consumers to choose their services over banks.
Mr Westcott said: “Mainstream lenders need to be aware that what may have begun as a last resort could be an enduring relationship as consumers are pleasantly surprised at the convenient and innovative service they receive from these smaller, more agile providers.
“As these providers become more conventional, we are likely to see them venture further into the mainstream market with their own credit card, longer term loan products or even current accounts.”
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Pakatan: EPF loan scheme masked to hide federal debt
Written by Super Admin
Monday, 06 February 2012 13:45
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Monday, 06 February 2012 13:45
(The Malaysian Insider) – akatan Rakyat (PR) lawmakers accused Putrajaya today abusing monies from the Employees Provident Fund (EPF) to hide its current debt levels under the guise of offering a purportedly “noble” housing scheme for lower-income earners.
Slamming the move, DAP publicity secretary Tony Pua and PKR vice-president Nurul Izzah Anwar warned in a joint statement here that the scheme could throw Malaysia into a “debt-induced financial crisis” should borrowers default on their loans.
“The Ministry of Finance (MoF) and the Federal Territories Ministry must hence come clean on why it has chosen to risk workers’ retirement savings and the real reason why the government can’t fund the housing for the poor directly.
“MoF must solve its own financial problems and not for the Malaysian workers to bear the burden of the BN (Barisan Nasional) government’s follies,” they said.
Pua and Nurul Izzah, who are the MPs for Petaling Jaya Utara and Lembah Pantai respectively, explained that under normal circumstances, any welfare programme to assist the poor would be funded by the federal government through its tax revenue.
Should the monies prove insufficient, they added, the government may issue bonds to raise money to finance its deficit expenditure.
As such, the duo pointed out that Putrajaya could have issued such bonds to the EPF and still achieve its objective of helping lower-income earners secure home loans.
“It is hence extremely odd that the Federal Territories and Urban Well-Being Minister Datuk Raja Nong Chik Nong Raja Zainal Abidin announced that the EPF would be extending RM1.5 billion in loans directly to those who failed to secure commercial loans to purchase their houses.
“The fact that the government could have easily circumvented the entire controversy… arouses suspicion that something is amiss,” Pua and Nurul Izzah said.
READ MORE HERE
Slamming the move, DAP publicity secretary Tony Pua and PKR vice-president Nurul Izzah Anwar warned in a joint statement here that the scheme could throw Malaysia into a “debt-induced financial crisis” should borrowers default on their loans.
“The Ministry of Finance (MoF) and the Federal Territories Ministry must hence come clean on why it has chosen to risk workers’ retirement savings and the real reason why the government can’t fund the housing for the poor directly.
“MoF must solve its own financial problems and not for the Malaysian workers to bear the burden of the BN (Barisan Nasional) government’s follies,” they said.
Pua and Nurul Izzah, who are the MPs for Petaling Jaya Utara and Lembah Pantai respectively, explained that under normal circumstances, any welfare programme to assist the poor would be funded by the federal government through its tax revenue.
Should the monies prove insufficient, they added, the government may issue bonds to raise money to finance its deficit expenditure.
As such, the duo pointed out that Putrajaya could have issued such bonds to the EPF and still achieve its objective of helping lower-income earners secure home loans.
“It is hence extremely odd that the Federal Territories and Urban Well-Being Minister Datuk Raja Nong Chik Nong Raja Zainal Abidin announced that the EPF would be extending RM1.5 billion in loans directly to those who failed to secure commercial loans to purchase their houses.
“The fact that the government could have easily circumvented the entire controversy… arouses suspicion that something is amiss,” Pua and Nurul Izzah said.
READ MORE HERE
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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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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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2012年2月4日星期六
Spain reforms banks to revive economy
Click photo to enlarge
Spain’s Economy Minister Luis de Guindos pauses during a news conference at the Moncloa Palace in Madrid Friday after a government cabinet meeting.
Spain’s Economy Minister Luis de Guindos pauses during a news conference at the Moncloa Palace in Madrid Friday after a government cabinet meeting.
The regulations approved by the Cabinet require banks to set aside an estimated (euro) 50 billion $65 billion (50 billion euro) more in provisions to cover toxic real estate assets by the end of the year.
Those unable to do so can present merger plans by the end of May and get government assistance from an existing bailout fund that will be strengthened with an addition 6 billion euro.
To avoid being forced to raise so much money for the real estate provisions, banks will face enormous pressure to sell assets like land and foreclosed or unsold homes at lower market prices.
The aim is to keep them from hoarding the loans and property on their balance sheets, a practice which has already sapped strength from the banking system and the country’s finances overall for years.
“With this set of measures, the fundamental idea is to boost confidence in our economy, strengthen the banking sector and its credibility in the national and international realm,” Deputy Prime Minister Soraya Saenz de Santamaria told reporters after the Cabinet meeting.
Spain rode an unprecedented building boom from the 1990s until the financial crisis hit in 2008, but the real estate bubble that burst left it with an
unemployment rate of 22.8 percent — the highest among the 17 nations using the euro — and increasingly tight credit for business and individuals.
Bailed-out Portugal is suffering from an even deeper credit crisis, and its leader appealed Friday for Portuguese banks to be given more leeway to meet capital requirements because the credit crunch is driving viable companies out of business
The country’s bailout terms require Portugal’s banks to improve their reserve cushion of high-quality capital to help them weather Europe’s prolonged sovereign debt crisis.
That debt-reduction process, called deleveraging, has compelled them to reduce the number of loans they grant.
If the deleveraging process is too intense, it can be counterproductive in the medium term. That’s the fine-tuning we’re looking for,” Prime Minister Pedro Passos Coelho told weekly newspaper Sol in comments published Friday.
Spain’s development ministry now estimates there are 687,000 unsold new homes on the national market, but other studies put the number as high as 1.6 million in the nation of 47 million. There is no government figure for used homes for sale, but estimates range into the millions.
The move to clean up the banking sector and force property sales “is a good plan but it should have been done before because credit has been frozen here for such a long time,” said Carles Vergara, a Financial Management professor at Madrid’s IESE business school.
While home prices have declined more than 20 percent over the last several years to levels not seen since 2005, Spanish banks still hold about (euro) 175 billion in real estate holdings that the Bank of Spain classifies as “problematic.”
The government plan should spur banks to reduce prices by double digits and send down prices of homes not held by banks as well, said Fernando Encinar, head of research at the popular Idealisto.com real estate web site.
“Prices will go down more, and at a faster rate,” he said.
The book value of property on Spanish banks’ balance sheets is widely seen as inflated, and that has spooked foreign investors, making it hard for the banks to tap capital markets for money to lend.
Some economists warned that the bank reforms won’t work overnight miracles in restructuring the banking sector or getting credit flowing again to the eurozone’s fourth largest economy, which is expected to slip into recession this quarter.
The government, elected in November, is working desperately to chip away at a bloated deficit and keep Spain from having to request a bailout like those taken by Greece, Ireland and Portugal.
Its first big step was a (euro) 15 billion ($20 billion) deficit reduction package of spending cuts and tax hikes in January.
Coming up next week is a controversial package of reforms to shake up a labor market seen as one of Europe’s most rigid and encourage business to hire. Prime Minister Mariano Rajoy was heard saying at an EU summit on Monday that the reform will “cost me a general strike.”
Under the current system, people who are laid off or fired must be paid between 20 to 33 days of salary per year worked, and companies can’t negotiate directly with their unionized workers because they must adopt wage deals set for entire sectors.
Unions are expected to rally against the changes, and investors are wary about the possibility of social unrest if union members are joined in protests by droves of discontented Spaniards — including young adults under 25 hit by a jobless rate of nearly 50 percent.
But Antonio Barroso, an London-based analysts at the Eurasia Group consulting firm, said Rajoy’s government will almost certainly follow through with the labor reform.
“Unless the protests get out of control and get really nasty I don’t think the government will backtrack,” he said.
The bank reforms require institutions to increase provisions for troubled assets from 30 percent to 80 percent of book value, creating the incentive for them to sell them off.
Larger Spain banks should be able to set aside money to meet the new provisions, but experts say the rules will set off another round of mergers among ‘cajas,’ or savings bank chains more heavily exposed to real estate. The number of cajas dropped from 45 to 15 in a previous bout of mergers.
Spain could end up with as few as three to five cajas, said Oscar Moreno of Madrid brokerage Renta 4. Bank layoffs and branch closings are inevitable, added Rafael Pampillon, an economist at Madrid’s IE Business School.
“Clearly, we are going to downsize,” Pampillon said.
————
Ciaran Giles in Madrid contributed to this report.
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2012年2月3日星期五
Geithner says 2010 law made financial system 'stronger and safer'
Reporting from Washington—
Treasury Secretary Timothy F. Geithner has a message for voters as they listen to Republican presidential candidates call for repeal of the 2010 Dodd-Frank financial overhaul law: Remember the pain.
“I would say remember 2008 and 2009,” Geithner told reporters Thursday during a news conference touting the benefits of the overhaul. “Remember the fact that the reason why we’re living with very high unemployment with millions of Americans that have lost their homes, terrible damage to the basic economics of America is because of the failures that caused this crisis in the financial system.”
“And if you want to go back to that,” he said, “if you want to choose that future, then you should be in favor of the repeal of the law.”
Republican presidential candidates have hammered away at the sweeping rewrite of financial regulations.
At a debate in Florida last month, GOP frontrunner Mitt Romney said the law was “just killing the residential home market and it’s got to be replaced.”
Newt Gingrich was more blunt. Asked what could be done to help struggling homeowners, he said, “I think, first of all, if you could repeal Dodd-Frank tomorrow morning, you would see the economy start to improve overnight.”
In the face of such criticism on the campaign trail and from Republicans in Congress, Geithner defended the law.
He said it already had helped the financial system become “stronger and safer” even as some key provisions, such as the Volcker Rule restriction on banks trading with their own money, are still being implemented by regulators.
Speaking as the head of the Financial Stability Oversight Council, a panel of regulators created by the law to monitor the financial system for signs of problems, Geithner said the law had helped the economy recover.
Regulators this year would designate the large financial firms outside the banking system that will receive tougher oversight because their failure would pose a risk to the financial system, he said.
And the Obama administration would release more details about its plans to overhaul the housing finance system and replace Fannie Mae and Freddie Mac, which the government seized in 2008.
Republicans and business groups have criticized the hundreds of regulations required by the new law and tough new oversight, including the creation of the Consumer Financial Protection Bureau.
They have said that the uncertainty about pending regulations has made businesses hesitant to hire, and that tough new rules on banks, such as requiring them to hold more reserves, was limiting the banks’ ability to make loans to boost the recovery.
But Geithner said the new rules were badly needed to prevent a repeat of the crisis, and he criticized opponents who were trying to drag out implementation of the Volcker rule and other provisions. Slowing those changes would only increase uncertainty, he said.
“No financial system is invulnerable to crisis. We have a lot of challenges ahead. We still have a lot of unfinished business on the path of reform,” Geithner said. “But the American financial system now is much less vulnerable than it was and is now able to help finance a growing economy, rather than being a drag on overall economic growth.”
RELATED:
Timothy Geithner says a second stint at Treasury is unlikely
Financial regulatory overhaul faces new criticism on first birthday
Consumer agency chief’s appointment is invalid, GOP senators say
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Treasury Secretary Timothy F. Geithner has a message for voters as they listen to Republican presidential candidates call for repeal of the 2010 Dodd-Frank financial overhaul law: Remember the pain.
“I would say remember 2008 and 2009,” Geithner told reporters Thursday during a news conference touting the benefits of the overhaul. “Remember the fact that the reason why we’re living with very high unemployment with millions of Americans that have lost their homes, terrible damage to the basic economics of America is because of the failures that caused this crisis in the financial system.”
“And if you want to go back to that,” he said, “if you want to choose that future, then you should be in favor of the repeal of the law.”
Republican presidential candidates have hammered away at the sweeping rewrite of financial regulations.
At a debate in Florida last month, GOP frontrunner Mitt Romney said the law was “just killing the residential home market and it’s got to be replaced.”
Newt Gingrich was more blunt. Asked what could be done to help struggling homeowners, he said, “I think, first of all, if you could repeal Dodd-Frank tomorrow morning, you would see the economy start to improve overnight.”
In the face of such criticism on the campaign trail and from Republicans in Congress, Geithner defended the law.
He said it already had helped the financial system become “stronger and safer” even as some key provisions, such as the Volcker Rule restriction on banks trading with their own money, are still being implemented by regulators.
Speaking as the head of the Financial Stability Oversight Council, a panel of regulators created by the law to monitor the financial system for signs of problems, Geithner said the law had helped the economy recover.
Regulators this year would designate the large financial firms outside the banking system that will receive tougher oversight because their failure would pose a risk to the financial system, he said.
And the Obama administration would release more details about its plans to overhaul the housing finance system and replace Fannie Mae and Freddie Mac, which the government seized in 2008.
Republicans and business groups have criticized the hundreds of regulations required by the new law and tough new oversight, including the creation of the Consumer Financial Protection Bureau.
They have said that the uncertainty about pending regulations has made businesses hesitant to hire, and that tough new rules on banks, such as requiring them to hold more reserves, was limiting the banks’ ability to make loans to boost the recovery.
But Geithner said the new rules were badly needed to prevent a repeat of the crisis, and he criticized opponents who were trying to drag out implementation of the Volcker rule and other provisions. Slowing those changes would only increase uncertainty, he said.
“No financial system is invulnerable to crisis. We have a lot of challenges ahead. We still have a lot of unfinished business on the path of reform,” Geithner said. “But the American financial system now is much less vulnerable than it was and is now able to help finance a growing economy, rather than being a drag on overall economic growth.”
RELATED:
Timothy Geithner says a second stint at Treasury is unlikely
Financial regulatory overhaul faces new criticism on first birthday
Consumer agency chief’s appointment is invalid, GOP senators say
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2012年2月1日星期三
Spain tries again to clean up troubled banks
MADRID (Reuters) – Spain’s government will force its banks to recognize some 50 billion euros (41.3 billion pounds) in losses on bad loans to builders in a fresh financial sector reform on Friday, but doubts will still linger over the worthless property on the banks’ books.
The aim is to trigger a fresh wave of mergers to create stronger new banks four years after a property boom went bust and restore confidence to Spain, which has yet to shake off the euro zone debt crisis.
The new centre-right government has pledged to straighten out the banks once and for all, but officials are worried the reform will put great strain on Bankia, Spain’s fourth-biggest bank by market value, which is particularly exposed to real estate.
The reform will give newly merged banks up to two years to write down toxic assets by setting aside provisions on their books, other banks will get one year, said several sources close to the negotiations on the new rules.
The government will also lend funds to banks that struggle to meet the steep new provisions, through 5-year preferential shares bearing an 8 percent coupon in exchange for curbs on bank executives’ pay and bonuses, the sources said.
Spanish banks underwent a round of mergers and recapitalization under the former Socialist government. At that time banks boosted provisions against problem loans and property losses to about 30 percent. That will rise to 50 percent or higher with another 50 billion euros in coverage.
With the deeper reform the new government hopes to revive international interbank lending, mostly closed to Spain’s banks since the first Greek bailout in 2010, so that they can restart lending at home.
Bank lending continues to be stagnant as Spain heads into a second recession in four years and unemployment soars to 23 percent. The bank reform, as well as labour market reform and austerity measures are all part of Prime Minister Mariano Rajoy’s efforts to prove to investors that Spain is solvent.
But the banks’ potential losses are so deep — total exposure is some 176 billion euros or 18 percent of Spain’s economic output — markets may still be wary.
“We’ve got to be aware that investors could still ask for more provisioning after this. You can’t say categorically that doubling provisions means the uncertainty is over,” said a source in the financial sector.
BOOKING LOSSES
The new measures to be decreed by the cabinet on Friday will break down what losses banks must recognize on assets linked to real estate — foreclosed property, unrecoverable loans and substandard loans.
“What is key is what assets are priced and how they are priced,” said Carmen Munoz, senior director at Fitch Ratings.
The system will need an additional 64 billion euros if foreclosed property assets are marked down by 65 percent, bad loans with housebuilders at 80 percent and substandard loans at 50 percent, says Bank of America Merrill Lynch.
Total potential additional capital needed is equivalent to 79 percent of the system’s two-year pre-provision profit, the bank says. However, this rises to 248 percent if profits from Spain’s two biggest banks Santander and BBVA are removed.
INDISCRIMINATE LENDING
Spanish lenders lent indiscriminately to developers over a decade-long property bubble. When developers went bust, many creditor banks took on their land and unfinished housing blocks, booking them on their balance sheets at unrealistic prices.
Land classified for building has practically no resale value in Spain since there are between 700,000 and a million unsold homes and no appetite to build more.
The government hopes the most highly exposed banks get folded into stronger ones.
Particularly in focus is Bankia, the result of a merger between seven regional banks. Bankia has more customers than any other bank in Spain and is defined as a systemic bank that could drag down other lenders if it had trouble.
“The real problem they have is Bankia. The rest is minor,” said one Madrid-based banker.
Nomura estimates Bankia will need 5 billion euros in extra provisions — 12 times its estimated 2011 pre-tax profit. This compares with 4 billion for Santander at 0.3 times 2011 pre-tax profit and 3.3 billion euros for BBVA at 0.5 times profit.
Bankia, which has already received 4.5 billion euros in public money, has 41 billion euros in developer loans and 11 billion euros in foreclosed property on its books.
Finding a partner to take it on could be difficult, seeing as a stronger bank would only take it on if given generous guarantees by the government.
“At the end of the day, it will cost the government more to pay a private bank to take over Bankia than bail it out themselves, because buyers are only going to step in if it comes with a whopping big cheque from the state,” said one banking analyst.
WHERE WILL THE MONEY COME FROM?
Spain’s government, unwilling to swell state debt as the euro zone crisis has forced up borrowing costs, will probably have to raise some 10 billion to 12 billion euros to loan to the most troubled banks.
One source close to the deal said that since the loans will be at a market rate they will not count towards the public deficit, which Spain must reduce this year under European Union rules.
European help looks unlikely, as it will come attached with conditions and will be politically negative for the government.
“I don’t think appealing to the European rescue fund will be an option for bank restructuring in Spain,” said Santander Chief Executive Alfredo Saenz on Tuesday.
(Additional reporting by Andres Gonzalez, Carlos Ruano and Jesus Aguado; Editing by Mike Nesbit)
The aim is to trigger a fresh wave of mergers to create stronger new banks four years after a property boom went bust and restore confidence to Spain, which has yet to shake off the euro zone debt crisis.
The new centre-right government has pledged to straighten out the banks once and for all, but officials are worried the reform will put great strain on Bankia, Spain’s fourth-biggest bank by market value, which is particularly exposed to real estate.
The reform will give newly merged banks up to two years to write down toxic assets by setting aside provisions on their books, other banks will get one year, said several sources close to the negotiations on the new rules.
The government will also lend funds to banks that struggle to meet the steep new provisions, through 5-year preferential shares bearing an 8 percent coupon in exchange for curbs on bank executives’ pay and bonuses, the sources said.
Spanish banks underwent a round of mergers and recapitalization under the former Socialist government. At that time banks boosted provisions against problem loans and property losses to about 30 percent. That will rise to 50 percent or higher with another 50 billion euros in coverage.
With the deeper reform the new government hopes to revive international interbank lending, mostly closed to Spain’s banks since the first Greek bailout in 2010, so that they can restart lending at home.
Bank lending continues to be stagnant as Spain heads into a second recession in four years and unemployment soars to 23 percent. The bank reform, as well as labour market reform and austerity measures are all part of Prime Minister Mariano Rajoy’s efforts to prove to investors that Spain is solvent.
But the banks’ potential losses are so deep — total exposure is some 176 billion euros or 18 percent of Spain’s economic output — markets may still be wary.
“We’ve got to be aware that investors could still ask for more provisioning after this. You can’t say categorically that doubling provisions means the uncertainty is over,” said a source in the financial sector.
BOOKING LOSSES
The new measures to be decreed by the cabinet on Friday will break down what losses banks must recognize on assets linked to real estate — foreclosed property, unrecoverable loans and substandard loans.
“What is key is what assets are priced and how they are priced,” said Carmen Munoz, senior director at Fitch Ratings.
The system will need an additional 64 billion euros if foreclosed property assets are marked down by 65 percent, bad loans with housebuilders at 80 percent and substandard loans at 50 percent, says Bank of America Merrill Lynch.
Total potential additional capital needed is equivalent to 79 percent of the system’s two-year pre-provision profit, the bank says. However, this rises to 248 percent if profits from Spain’s two biggest banks Santander and BBVA are removed.
INDISCRIMINATE LENDING
Spanish lenders lent indiscriminately to developers over a decade-long property bubble. When developers went bust, many creditor banks took on their land and unfinished housing blocks, booking them on their balance sheets at unrealistic prices.
Land classified for building has practically no resale value in Spain since there are between 700,000 and a million unsold homes and no appetite to build more.
The government hopes the most highly exposed banks get folded into stronger ones.
Particularly in focus is Bankia, the result of a merger between seven regional banks. Bankia has more customers than any other bank in Spain and is defined as a systemic bank that could drag down other lenders if it had trouble.
“The real problem they have is Bankia. The rest is minor,” said one Madrid-based banker.
Nomura estimates Bankia will need 5 billion euros in extra provisions — 12 times its estimated 2011 pre-tax profit. This compares with 4 billion for Santander at 0.3 times 2011 pre-tax profit and 3.3 billion euros for BBVA at 0.5 times profit.
Bankia, which has already received 4.5 billion euros in public money, has 41 billion euros in developer loans and 11 billion euros in foreclosed property on its books.
Finding a partner to take it on could be difficult, seeing as a stronger bank would only take it on if given generous guarantees by the government.
“At the end of the day, it will cost the government more to pay a private bank to take over Bankia than bail it out themselves, because buyers are only going to step in if it comes with a whopping big cheque from the state,” said one banking analyst.
WHERE WILL THE MONEY COME FROM?
Spain’s government, unwilling to swell state debt as the euro zone crisis has forced up borrowing costs, will probably have to raise some 10 billion to 12 billion euros to loan to the most troubled banks.
One source close to the deal said that since the loans will be at a market rate they will not count towards the public deficit, which Spain must reduce this year under European Union rules.
European help looks unlikely, as it will come attached with conditions and will be politically negative for the government.
“I don’t think appealing to the European rescue fund will be an option for bank restructuring in Spain,” said Santander Chief Executive Alfredo Saenz on Tuesday.
(Additional reporting by Andres Gonzalez, Carlos Ruano and Jesus Aguado; Editing by Mike Nesbit)
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