Saturday, April 27, 2013

India's Chidambaram to woo investors in N. America to fund current account gap

By Rajesh Kumar Singh and Manoj Kumar

NEW DELHI, April 14 | Sat Apr 13, 2013 11:44pm EDT

NEW DELHI, April 14 (Reuters) - India's finance minister will seek to drum up foreign investment from the United States and Canada this week to fund a record high current account deficit, even as policymakers debate the risks of over-reliance on foreign investors to finance the gap.

As P. Chidambaram kicks off a week-long North America trip, his officials are working on a series of steps to attract at least $20 billion in new investment to fund the deficit without depleting India's $300 billion in foreign exchange reserves.

The proposals include raising the cap on foreign investment in rupee-denominated government debt by up to $5 billion, reducing tax rates on such investments, making it easier for Indian firms to borrow abroad, and easing curbs on foreign investment in sensitive sectors such as defence, telecoms and media, finance and trade officials told Reuters.

The measures are still being formulated and have not been approved, the officials stressed.

Chidambaram, aiming to take advantage of a wave of cheap global funds, will meet foreign investors in New York, Ottawa and Toronto, the latest stops in a global roadshow to talk up India as an investment destination.

The new push for foreign investment is seen as part of an important but potentially risky shift in how India approaches its widening current account deficit, which has emerged as the government's biggest economic worry.

"We will take all steps to ensure that inflows remain strong for the next two years," Prime Minister Manmohan Singh told a gathering of industrialists in New Delhi earlier this month.

The new push for foreign investment stems from India's struggle to boost its merchandise exports in a fragile global economy and rein in a high import bill. The government is now willing to tolerate a current account deficit of 5 percent, roughly double what it has typically aimed for, the finance ministry officials said.

India's current account deficit widened to an all-time high of 6.7 percent of GDP in October-December, driven by heavy oil and gold imports and muted exports.

India's failure to attract sufficient capital inflows precipitated a balance of payment crisis in 1991, when the central bank was forced to airlift 47 tonnes of gold to Europe as collateral for a loan to avert a sovereign default.

"The size of the deficit in itself is not a problem, if you can comfortably finance it," said an official familiar with the funding proposals being considered by the government.

RISKY STRATEGY

Officials concede the strategy will make India far more dependent on foreign investors, exposing it to sudden reversals in capital flows, which could trigger a financial crisis.

"But we do not have really too much of a choice other than relying on portfolio inflows," said Jyotinder Kaur, an economist at HDFC Bank.

Aninda Mitra, India economist at Capital Economics in Singapore, said much will depend on the global environment and the success of the government's economic reform drive.

"Capital inflows will depend on the risk-seeking behaviour of global investors as well as the policies of the major central banks," he said. "Sentiment about India and the future of reforms will also determine the direction of short-term flows."

India currently allows $76 billion of foreign investment in sovereign as well as corporate debt.

The finance ministry officials said one of the proposals under consideration would address a long-standing demand of foreign institutional investors to reduce the withholding tax on all rupee-denominated bonds to 5 percent from 20 percent. A decision was likely by the end of May.

Chidambaram is also considering raising the ceiling on Indian firms' borrowing from offshore money markets as soon as the existing cap of $40 billion is exhausted, they said.

He is pushing strongly for a re-think on caps on foreign direct investment in sectors like defence and print and broadcast media to 49 percent from 26 percent, but has faced opposition from more protectionist colleagues in cabinet.

Finance ministry officials told Reuters the tweaks could raise $3-$5 billion in additional investment. But the government has so far failed to win parliamentary approval for proposals to increase foreign investment in the insurance and pension sectors.


View the original article here

UPDATE 1-Germany puts brakes on EU bank union with treaty call

* Schaeuble says treaty change needed for bank closure rules

* Drawn-out changes to EU law would hamper banking union

* Says countries must pay into bad banks before ESM help

By Annika Breidthardt and John O'Donnell

DUBLIN, April 13 (Reuters) - Germany said European banking union will require changes to EU law, in a call that could slow completion of the plan designed to underpin the euro currency.

Speaking after a meeting of European Union finance ministers on Saturday, Germany Finance Minister Wolfgang Schaeuble said the EU's Lisbon treaty had to be changed to allow common rules on shutting troubled banks - a central element of the union.

"Banking union only makes sense ... if we also have rules for restructuring and resolving banks. But if we want European institutions for that, we will need a treaty change," he said.

Designed to ensure vulnerable countries do not have to tackle financial problems alone, the plan for banking union was one of the bloc's biggest political steps to stabilise the euro and prevent taxpayers from footing bills for bank rescues.

"We will not be able to take any steps on the basis of a doubtful legal basis," Schaeuble told reporters. "That's why it's also crucial that we strengthen the network of national restructuring funds and authorities."

As a first step towards the union, the European Central Bank is set to start supervising euro zone banks from July 2014.

This should be followed by a so-called bank resolution scheme to close or salvage struggling banks as well as pay for the costs involved. The third and final step would be a coherent framework across Europe for deposit protection.

Worried the supervisory role could compromise ECB monetary policy independence, Germany on Friday persuaded EU countries to sign a political declaration committing to future treaty change.

Schaeuble also made clear legal change would be necessary for the unified scheme for tackling failed banks.

Changing the Lisbon treaty, which underpins the bloc's law, would be a drawn-out process as it calls for the agreement of all member states - some of which require referenda.

It would raise particular problems for Britain, where eurosceptics have argued that the country should quit the bloc.

Schaeuble has long had reservations about banking union, which would be a step towards allowing the euro zone's rescue fund to directly assist banks, a move Germany fears might leave it facing the bill for reckless lending by foreign banks.

Schaeuble said the country of a bank in financial difficulty must first inject fresh capital before direct support from the European Stability Mechanism (ESM) is possible.

Spain's Finance Minister Luis de Guindos said member states would pay a minimum 4.5 percent of capital for troubled banks.

"From that point, there would be a burden sharing to converge towards 10 percent paid by the member state," de Guindos said. "This means the ESM will pay for around 90 percent and the member state for 10 percent."

Schaeuble also emphasised German opposition to the creation of a joint deposit guarantee scheme.


View the original article here

Ahead of the curve: but bendable screens still seek breakthrough

By Jeremy Wagstaff and Sinead Carew

SINGAPORE/NEW YORK, April 14 | Sat Apr 13, 2013 11:48pm EDT

SINGAPORE/NEW YORK, April 14 (Reuters) - The touted arrival this year of wearable gadgets such as computer displays strapped to wrists and in wrap-around glasses is just a step towards a bigger revolution in screens - those that can be bent, folded and rolled up.

Once freed from today's relatively heavy, breakable and fixed glass displays, tomorrow's devices may look very different, with screens that can be rolled out, attached to uneven surfaces, or even stretched.

But there's still some way to go.

"It becomes a product designer's paradise - once the technology is sorted out," says Jonathan Melnick, who analyses display technology for Lux Research.

There is no shortage of prototypes - South Korea's Samsung Electronics this year showed off a display screen that extends from the side of a device - but obstacles remain: overcoming technical issues, figuring out how to mass produce parts cheaply, and coming up with devices compelling enough for gadget buyers.

Screen technology - and the global small display market is seen more than doubling to around $72 billion by 2016, according to DisplaySearch - is still dominated by liquid crystal displays (LCDs), which require a backlight and sit between two sheets of glass, making the screen a major contributor to the weight of a device, from laptops to tablets.

"Most of the weight in a tablet is the glass structure in the display and the support structure around it to prevent it from cracking," said Kevin Morishige, a former engineer at Cisco Systems Inc, Hewlett-Packard Co and Palm.

LCD's dominance is already under threat from lighter Organic Light Emitting Diodes (OLEDs) that don't need backlighting, are brighter, offer a wider viewing angle and better colour contrast - and can be printed onto a few layers.

FROM GORILLA TO WILLOW

Glass, however, is getting lighter and more flexible.

Corning Inc, whose toughened Gorilla glass became the screen of choice for many smartphones, will provide phones with curved glass edges as soon as this year. It is also now promoting Willow Glass, which can be as thin as a sheet of paper and is flexible enough to be wrapped around a device or structure. Initially, Willow will be used as a coating for products like solar panels, but it is eventually expected to create curved products.

A key selling point for Willow is more efficient production which involves so-called roll-to-roll manufacturing, like a printing press, rather than today's more costly batch manufacturing. But the commercialization of Willow as a flexible product is some way off, James Clappin, who heads Corning's glass technology group, told Reuters.

And glass has its limits.

"You can bend it, but you can't keep flexing it," said Adrian Burden, a UK consultant who has worked on several start-ups related to display technology, and holds patents in the field. This means that while glass is likely to continue to play a leading role in devices with curved displays, screens that users can bend, fold and roll will likely be plastic.

But plastic is not as robust as glass. "As soon as you introduce plastic substrates you have all kinds of issues with sensitivity to the environment," says Burden.

BARRIER FILMS, NANOPARTICLES

So while OLED and plastic would seem to be companion technologies they create an extra problem when laid together: they need so-called barrier films to prevent the various layers from leaking oxygen and moisture.

"There are barrier films in all sorts of products, for example food packaging, but the challenge is that OLED is one of the most sensitive materials we follow, and so creates huge challenges," says Lux Research's Melnick.

Singapore-based Tera-Barrier Films, for example, has developed a way to plug leaks in the layers using nanoparticles. Director Senthil Ramadas says that after years of delays the company last month started production in Japan and aims for mass production by end-2014. "You have several challenges in the value chain," he said. "All these things need to be established, and only now is it coming out."

And there's another problem: all the materials in a bendable display need to be bendable, too - including the transparent conductors that drive current through the display. Several technologies are vying to replace the brittle and expensive Indium Tin Oxide (ITO) used in most fixed displays, including nanowires, carbon nanotubes, graphene and conductive mesh.

Some of these technologies are close to production. Another Singapore-based firm, Cima Nanotech, for example, rolls a coating of silver-based conductive ink on a sheet which then self-aligns into a web of strands a few microns across that forms the conductive layer.

It's unlikely such shifts in the underlying technologies will yield products immediately. For one thing, "prototypes can be made," says Melnick, "but that's a long way from mass production as many of the processes and material in these devices face big yield and scaling issues."

ON A ROLL

This is gradually changing, some in the industry say, as production shifts from making parts in batches of sheets to the more efficient roll-to-roll process. "Batch is more expensive and slower than roll-to-roll, which needs new equipment and design - and takes time," said Ramadas at Tera-Barrier.

All this requires money, and manufacturers have to be convinced to invest in the new equipment.

Even after the success of Gorilla Glass, popularized by the Apple Inc iPhone, Corning is having to work hard to prepare customers for Willow displays. Clappin said customers want thinner devices and easier to produce glass, but Willow requires a completely different manufacturing set-up.

"When we talk about commercialising Willow a big part of our development activity is enabling the ecosystem to handle what is essentially a brand new material," Clappin added. "Nobody's accustomed to working with glass that bends and moves. It's a new material. The ecosystem needs to be trained to handle it."

He sees demand, particularly from video gamers, for Willow-based curved screens, but remains less convinced about rollable or foldable screens. "Conformable is in the near future. As far as flexible, bendable, fold-upable goes, I see that further out and I'm not even sure that's a viable product," he said.

That in turn requires figuring out what end users might want. "For us and for our clients it's not so much about the flexible display technology," says Brandon Edwards, Shanghai-based executive creative director of frog, a design company owned by India's Aricent. "That's a huge part of it, but what are the practical ways we can bring products to market and how fast, and what's the right cadence? What are consumers going to be responsive to?"

WHAT DO PEOPLE WANT?

For companies with deep pockets, like Samsung, this can mean building prototypes such as those displayed at international technology shows. But that doesn't guarantee success in selling products. Sony Corp, for example, promoted flexible OLED displays back in 2007. "Six years later they've not come up with anything," says Zhang Jie, senior scientist at Singapore's Institute of Metals Research and Engineering. "If Samsung's going to really drive this the application really needs to drive people and make them want it."

This slows down the process. In late 2011, Samsung told analysts it planned to introduce flexible displays into handsets "some time in 2012, hopefully the earlier part than later", but a year later the company said the technology was still "under development." In an investment note last month Jefferies said that while Samsung may introduce "unbreakable" screens this year, it didn't expect to see flexible displays in Samsung devices until 2014-15.

Ultimately, teasing out the technical problems may be only half the battle.

"This is the eternal question of the speciality materials industry," says Lutz Grubel, Japan-based head of marketing for German glass maker Schott's Xensation Cover 3D glass. "You have something, a material, and you're looking for an application. That's the game."


View the original article here

Friday, April 26, 2013

Sands lawsuits shine harsh light on Macau's casino paradise

By Farah Master

MACAU, April 14 | Sun Apr 14, 2013 3:41am EDT

MACAU, April 14 (Reuters) - Casino magnate Sheldon Adelson's reference to triad organised crime gangs in testimony in a lawsuit has hit a raw nerve in Macau, the Chinese boomtown that his Las Vegas Sands Corp helped transform from a gangland haven into a $38 billion gambling capital.

The lawsuit against Sands was brought by Hong Kong businessman Richard Suen, who is seeking $328 million he says he is owed for helping the U.S. firm obtain one of three coveted casino licenses in Macau, now the world's biggest gambling market with annual revenues more than six times Las Vegas's.

Adelson's comments about triads reverberated across Macau this week and prompted a former Sands partner, casino operator Galaxy Entertainment Group Ltd, to post a regulatory filing with the Hong Kong stock exchange objecting to "certain inaccurate statements".

Sands and Galaxy jointly won a Macau casino license in 2002, but they failed to reach an operational agreement and split up. Adelson, 79, when asked in a Las Vegas court why the two firms could not work together, responded that Galaxy "had expressed their judgement they were going to do business with either reputed or triad people and we couldn't do that."

That comment, which drew little attention in Las Vegas, was front-page news in Macau because it suggested China had failed to clean up the violent gangs that dominated the gambling scene a decade ago. Triads involved in Macau's VIP gaming rooms were notorious for their heavy-handed methods of collecting on gambling debt. Macau's VIP segment, where wealthy Chinese wager millions, accounts for around 70 percent of total revenues.

A Galaxy spokesman said the company was seeking legal advice and could not comment further.

Interviews with seven Macau gaming executives, including four former Sands employees, revealed a sense of dismay that the trial, watched locally online and tracked closely in the daily papers, was drawing attention to a seedier side of Macau that China has sought to scrub. The city wants to position itself as a transparent and reputable tourist destination.

China cracked down on triads after it took formal control of the former Portuguese colony in 1999. Back then, mobsters like the infamous Wan "Broken Tooth" Kuok-koi gave Macau a name for violence as much as gambling.

Macau's casino revenue hit $38 billion last year, dwarfing Las Vegas's $6 billion. Unlike Vegas, where fun-seekers can dine, see showbiz legends and go nightclubbing without laying a dollar on the tables, Macau's visitors tend to focus intently on betting in its massive, packed gambling halls.

'EVERYONE IS WATCHING'

Macau, home to 500,000 people, is the only place in China where casino gambling is legal. Gaming accounts for 70 percent of its government revenues, which explains why the trial has received so much interest.

In China, court proceedings are normally closed, so the open access to the Sands hearing - and its allegations of Macau gang activity and backroom deals - makes for prime viewing.

"Everyone is watching this," said a casino executive in Macau who declined to be named because of the sensitivity of the matter. "Adelson's comments have so many underlying meanings that are embarrassing. Talking about triads, whether it is true or not, implies the government didn't do a good job at cleaning up Macau."

Some casino sources expressed surprise that Adelson would draw negative attention to a city that helped turn Sands into a $46 billion company. Sands owns four of Macau's 35 casinos - more than any other U.S. firm - and its Macau operations generated about 60 percent of the company's total 2012 casino revenues of $9 billion.

"Why is he killing the goose that gave him the gold?" a casino executive asked.

Several executives questioned why Sands did not settle the lawsuit to prevent unflattering details from reaching the public domain. Former Sands executive William Widner said he had lost confidence in Adelson because of the Suen trial.

"This trial was injurious to relations in China; it should have never been in a courtroom like this," Widner said in court on Wednesday.

REPUTATION RISK

This is the first of three legal battles that are casting an uncomfortable spotlight on how Macau awarded lucrative gambling licenses in 2002, a source of controversy because little was publically revealed about how the winners were selected.

The lawsuits show behind-the-scenes jockeying and close connections between business and government as 21 bidders were whittled down to three - the Sands-Galaxy partnership, Macau kingpin Stanley Ho, and Las Vegas mogul Steve Wynn's Wynn Resorts Ltd.

After Galaxy and Sands split, Macau awarded a sub-concession license to Sands for no charge, which was controversial because Wynn and Ho's SJM were able to sell their sub-concessions to Melco Crown and MGM Resorts for $900 million and $200 million respectively.

A Sands spokesman declined to discuss any specifics regarding the concession license process.

Some Macau residents welcomed the closer scrutiny that came with the lawsuits.

"The Macau people want to hear more about these cases, find out how the license process worked," said Jose Coutinho, a directly elected member of Macau's legislative assembly who is known for promoting democratic reforms. "The government should set up an independent panel to find out what happened when the licenses were awarded."

The Macau government did not respond to email and telephone requests for comment.

But the Macau Business Daily, the city's main English-language daily, said the city's reputation was at risk.

"Things can be said in U.S. courts - and then reported by the media using the rule of court privilege there - that if repeated outside the tribunal or in other jurisdictions might be considered inflammatory or even defamatory," it wrote in an editorial published on Thursday. (Editing by Emily Kaiser and Daniel Magnowski)


View the original article here

Cyprus central bank chief calls for its independence to be respected

NICOSIA, April 14 | Sun Apr 14, 2013 4:58am EDT

NICOSIA, April 14 (Reuters) - Cyprus's central bank governor said on Sunday he was willing to work with the government to pull the island out of its economic crisis, provided the bank's independence was respected.

A rift between Governor Panicos Demetriades, appointed last May by the communist former administration, and the ruling centre-right government has deepened in recent days and pressure has grown on him to resign over his handling of the crisis.

In the past week, the Cypriot parliament started an investigation against Demetriades, President Nicos Anastasiades's government withdrew the appointment of his deputy, and three central bank officials resigned.

The ongoing saga drew a scathing response from European Central Bank (ECB) President Mario Draghi, who wrote to the Cypriot president telling him any attempt to effectively sack the governor could land Cyprus in the European Court of Justice.

"My intention to work with the country's democratic institutions is a given," Demetriades was quoted as saying in an interview with the Phileleftheros newspaper.

"We are ready to respond to every call for cooperation and coordination for the benefit of this country always, however within the framework of total respect towards the central bank's independence, as stipulated by the ECB."

Under European Union law, a governor can only be dismissed if he no longer fulfils the conditions required for the performance of his duties, or if he is guilty of serious misconduct.

The investigation launched by Cypriot lawmakers this week is seeking to find out whether Demetriades supplied enough information during an investigation into the demise of Cyprus's two biggest lenders, which left the economy in disarray.

The collapse of the Mediterranean island's banking system imposed massive losses on depositors in order to qualify for a 10 billion euro ($13 billion) bailout by the European Union and International Monetary Fund.

The departures in the past week from the regulator's board have slimmed the six-member board to two, including Demetriades. However, executive power rests with the governor so while they add to the pressure on Demetriades to quit, they are not expected to affect policy-making.

The government, in power for under two months, has sought to play down accusations it was intervening with the central bank's duties.

Government spokesman Christos Stylianides said authorities demanded Demetriades take back comments he made on the sidelines of a Eurogroup meeting in Dublin this week that the central bank's independence was under attack.


View the original article here

Yemen c.bank FX reserves hit 6-mth low as bombings hit oil exports

* Gross reserves fall to $5.8 bln in February

* Oil exports drop 30 percent from January

* Yemen hit by oil pipeline bombings

* Inflation at 5-month high of 7.1 pct y/y in January

By Martin Dokoupil

DUBAI, April 14 (Reuters) - The foreign reserves of Yemen's central bank shrank by $457 million in February to their lowest level since last August as oil exports from the impoverished Arab country plunged by a third, data showed on Sunday.

The Arabian peninsula state, which relies on crude exports to replenish its reserves and finance up to 70 percent of budget spending, has suffered from frequent bombings of its main oil pipeline since political turmoil started in 2011.

Gross foreign assets held by the central bank fell to $5.8 billion in February, covering 5.9 months of imports, from $6.2 billion or 6.4 months of imports in January, central bank data showed. Net reserves, which factor in the central bank's foreign obligations, stood at $4.5 billion in February.

The central bank, which received a $1 billion loan from Saudi Arabia last year to support its reserves, did not explain the decrease in its monthly bulletin.

In March, its vice governor told Reuters that reserves of $6.2 billion were appropriate, but that the level would depend on whether Yemen continued to suffer pipeline bombings by Islamist militants and disgruntled tribesmen.

Attackers blew up parts of Yemen's main 110,000 barrel per day oil export pipeline in February and March, halting the flow of crude. Another explosion occurred earlier this month, only two weeks after the pipeline was repaired.

A long closure of the line last year forced Yemen's largest refinery at Aden to shut, leaving the country dependent on fuel donations from Saudi Arabia and imports.

Yemen exported $210 million worth of crude oil in February, a drop of more than 30 percent from January, the data also showed. The government's share of those exports was 1.8 million barrels in February, the lowest level since May 2012.

In January, the International Monetary Fund warned that the political transition following the overthrow of President Ali Abdullah Saleh in February 2012, and security concerns - particularly attacks on key oil and electricity facilities - threatened the economic outlook.

Yemen's economy improved last year but its recovery remains fragile in the second-poorest Arab state after Mauritania. A third of Yemen's 25 million people live on less than $2 a day, and unemployment is estimated at around 35 percent.

Last year wealthy Gulf Arab states, Western governments and other donors pledged $7.9 billion in aid over several years to Yemen, but only a small fraction has so far arrived.

The IMF said earlier this month that it was discussing fresh financial aid to Yemen, which a central bank official said could be as large as $500 million.

The country faces a fiscal deficit of 6.0 percent of gross domestic product this year, the IMF has forecast, more than the 5.7 percent estimated for 2012.

Inflation in Yemen picked up in January, climbing to 7.1 percent on an annual basis, the highest level since August 2012, from 5.8 percent in December, the central bank data showed.

The central bank has cut its key interest rate by 5 percentage points to a three-year low of 15 percent since October 2012 to spur the economic recovery, after the rial currency stabilised at about 214 to the U.S. dollar and inflation fell from a peak of 25 percent in October 2011.

The governor of the central bank said earlier this month that he was comfortable with the current level of interest rates and that he expected economic growth to accelerate to about 7 percent this year from 4.5 percent in 2012.


View the original article here

Bankers count on watered down EU trading tax

By Swaha Pattanaik and Simon Jessop

LONDON, April 14 | Sun Apr 14, 2013 3:00am EDT

LONDON, April 14 (Reuters) - Bankers are confident they can persuade the European Union that its proposed financial trading tax poses enough risks to struggling economies and banks to warrant being watered down.

Their campaign against the tax, which will be imposed by 11 of the EU's 27 countries, focuses on how much it would boost the cost of funding for governments and companies, erode returns earned even by long-term investors, and hurt funding markets which are crucial to the health of the financial system.

Advocates of the financial transaction tax say it is small enough and covers enough assets not to distort markets while ensuring banks, which received taxpayers' cash during the financial and euro zone crises, make a contribution to the public coffers as governments try to rein in budget deficits.

Their arguments have struck a chord with public opinion, particularly in those European countries where unemployment has been rising, social welfare has been cut and wages have stagnated or fallen due to government austerity measures.

But bankers say the impact of the levy will be felt far beyond the financial sector if the EU sticks to its plan to tax buyers and sellers at each stage of every trade that is either transacted by someone in one of the countries imposing the tax or involves an asset issued by an institution based there.

"I think that the impact is so dramatic, I would be astounded if it passes in its current form," Remco Lenterman, chairman of the FIA European Principal Traders Association said.

"I would almost theorise that if they pass and implement it in its current form, they would have to cancel it after a three- to six-month period as markets would become so dysfunctional that you would have to revert back."

The European Commission declined to comment. Financial regulation is often changed in the process of negotiations.

Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia, and Slovakia have said they will levy the tax. The Commission says revenues from the tax are expected to total up to 35 billion euros a year, or 1 percent of the total tax revenues of the participating countries.

It is still unclear how the tax would be collected in EU countries which won't levy it - a group that includes Britain, which has the region's biggest financial centre.

MULTIPLYING THE IMPACT

Bankers are stepping up lobbying of the European Commission and countries which will impose the levy to explain how a tax of 0.1 percent on stocks and bonds and 0.01 percent on derivatives could have such a seismic impact.

One of their oft-cited examples is how much the tax would add to the cost of a transaction which involves one investor selling a bond and another buying it.

Because such a trade typically involves dealers and brokers as intermediaries between investors, the tax could be levied 10 times, with the same dealer or broker sometimes being taxed twice -- once for buying the bond and again for selling it on -- as well as each time a position is hedged to mitigate risk.

Banks therefore expect the tax to depress trading volumes, which will hurt the profits they make from such business. And they expect to pass higher trading costs on to clients.

"They say this is a tax on the financial sector but we pass on the tax to clients," said a London-based banker responsible for derivatives trading who spoke on condition of anonymity.

"Investors end up paying the tax, either through a direct charge or because market-makers are not market making anymore so bid/offer spreads widen and transaction costs rise."

That is unlikely to sway the European Commission or those who signed up for the tax given one of their intentions was to deter financial trading which does not contribute to the efficiency of markets or to the economy.

The Commission has said the levy targets transactions which take place between financial institutions but that it would not be "disproportionate" if some of the costs were passed on to consumers.

But rising trading costs are expected to prompt investors to demand higher returns. The impact this could have on government and corporate borrowing costs, and therefore the economy, may end up being persuasive.

COSTS TO PUBLIC COFFERS

For example, a Bank of America Merrill Lynch study published in March said the tax could add as much as 8.5 billion euros to the combined cost of annual debt interest payments of Germany, France and Italy in the first year.

It would also affect corporate bonds.

Consulting firm London Economics said the per-transaction impact of the tax, as a percentage of bond returns, would average between 6.2 and 12.8 percent for corporate borrowers from the countries which impose the levy.

"Our view remains that the tax is highly unlikely to be implemented in anything like its current form," the Bank of America Merrill Lynch research note on the tax's impact said.

"(We) think such a tax would increase borrowing costs noticeably, increase financial risks and crimp the availability of finance to the 'real economy', as well as damaging monetary policy transmission mechanisms."

The Commission's own report on the potential impact of the trading tax estimates it could shave 0.28 percent off gross domestic product in the long run. But it said that imposing the tax "will not negatively impact growth or jobs".

Still, bankers say a potential drag on growth is the last thing highly indebted euro zone countries need as they try to revive economic activity and, either avoid international bailouts, or exit such bailouts.

"I will eat my hat if this tax comes in as proposed on January 2014," said David Lewis at Astec Analytics, which specialises in information on securities borrowing and lending.

"For politicians it's gold, but it's the wrong thing at the wrong time. In the current economic environment we should be freeing up the market, reducing costs and making things easier".

Politics is expected to determine when and by how much the financial trading tax is eventually amended.

Five bankers and six financial industry bodies contacted by Reuters pinpointed the German parliamentary elections, scheduled for September, as a key watershed.

"It is ... unlikely that the proposal - in its current form - will survive," said Judith Hardt, secretary general of the Federation of European Securities Exchanges.

"Some lobbyists in Brussels say that part of the initiative is driven by the upcoming German elections. Some assume that the urgency of getting results quickly will diminish after the elections."


View the original article here

India's Chidambaram to woo investors in N. America to fund current account gap

By Rajesh Kumar Singh and Manoj Kumar

NEW DELHI, April 14 | Sat Apr 13, 2013 11:44pm EDT

NEW DELHI, April 14 (Reuters) - India's finance minister will seek to drum up foreign investment from the United States and Canada this week to fund a record high current account deficit, even as policymakers debate the risks of over-reliance on foreign investors to finance the gap.

As P. Chidambaram kicks off a week-long North America trip, his officials are working on a series of steps to attract at least $20 billion in new investment to fund the deficit without depleting India's $300 billion in foreign exchange reserves.

The proposals include raising the cap on foreign investment in rupee-denominated government debt by up to $5 billion, reducing tax rates on such investments, making it easier for Indian firms to borrow abroad, and easing curbs on foreign investment in sensitive sectors such as defence, telecoms and media, finance and trade officials told Reuters.

The measures are still being formulated and have not been approved, the officials stressed.

Chidambaram, aiming to take advantage of a wave of cheap global funds, will meet foreign investors in New York, Ottawa and Toronto, the latest stops in a global roadshow to talk up India as an investment destination.

The new push for foreign investment is seen as part of an important but potentially risky shift in how India approaches its widening current account deficit, which has emerged as the government's biggest economic worry.

"We will take all steps to ensure that inflows remain strong for the next two years," Prime Minister Manmohan Singh told a gathering of industrialists in New Delhi earlier this month.

The new push for foreign investment stems from India's struggle to boost its merchandise exports in a fragile global economy and rein in a high import bill. The government is now willing to tolerate a current account deficit of 5 percent, roughly double what it has typically aimed for, the finance ministry officials said.

India's current account deficit widened to an all-time high of 6.7 percent of GDP in October-December, driven by heavy oil and gold imports and muted exports.

India's failure to attract sufficient capital inflows precipitated a balance of payment crisis in 1991, when the central bank was forced to airlift 47 tonnes of gold to Europe as collateral for a loan to avert a sovereign default.

"The size of the deficit in itself is not a problem, if you can comfortably finance it," said an official familiar with the funding proposals being considered by the government.

RISKY STRATEGY

Officials concede the strategy will make India far more dependent on foreign investors, exposing it to sudden reversals in capital flows, which could trigger a financial crisis.

"But we do not have really too much of a choice other than relying on portfolio inflows," said Jyotinder Kaur, an economist at HDFC Bank.

Aninda Mitra, India economist at Capital Economics in Singapore, said much will depend on the global environment and the success of the government's economic reform drive.

"Capital inflows will depend on the risk-seeking behaviour of global investors as well as the policies of the major central banks," he said. "Sentiment about India and the future of reforms will also determine the direction of short-term flows."

India currently allows $76 billion of foreign investment in sovereign as well as corporate debt.

The finance ministry officials said one of the proposals under consideration would address a long-standing demand of foreign institutional investors to reduce the withholding tax on all rupee-denominated bonds to 5 percent from 20 percent. A decision was likely by the end of May.

Chidambaram is also considering raising the ceiling on Indian firms' borrowing from offshore money markets as soon as the existing cap of $40 billion is exhausted, they said.

He is pushing strongly for a re-think on caps on foreign direct investment in sectors like defence and print and broadcast media to 49 percent from 26 percent, but has faced opposition from more protectionist colleagues in cabinet.

Finance ministry officials told Reuters the tweaks could raise $3-$5 billion in additional investment. But the government has so far failed to win parliamentary approval for proposals to increase foreign investment in the insurance and pension sectors.


View the original article here

Moody's Zandi is top pick for Fannie watchdog -report

By Douwe Miedema

WASHINGTON, April 13 | Sat Apr 13, 2013 1:49pm EDT

WASHINGTON, April 13 (Reuters) - Mark Zandi, a well-known economist, is a front-runner to lead the U.S. housing regulator and oust Edward DeMarco, who critics say hasn't done enough to aid homeowners, the Wall Street Journal reported.

President Barack Obama tried to replace DeMarco in 2011 as head of the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, but Senate Republicans blocked his nominee to succeed DeMarco.

The two agencies help finance two-thirds of new U.S. home loans, but were seized by the government in the 2008 economic crisis when mortgage losses mounted. They have since drawn nearly $190 billion from the U.S. Treasury to stay afloat.

Zandi is rating agency Moody's often-quoted chief economist, and has testified many times as a witness in congressional hearings. He has also published a well-received study about the 2008 mortgage market implosion.

The White House had not made up its mind about the nomination, but there were signs that Zandi might draw some Republican support, the Wall Street Journal said on Saturday, quoting people familiar with the matter.

The White House declined to comment. Zandi declined to say whether he had been approached for the job, or whether he was interested in the position.

The Journal said representative Mel Watt, a North Carolina Democrat, was also a candidate to replace DeMarco.

New York Attorney General Eric Schneiderman said this week that Obama has the power to send DeMarco home and can likely replace him without congressional approval, for instance with one of the agency's deputy directors.

An eight-page memorandum prepared by Schneiderman's team quoted Sandra Thompson, who was recently appointed as a deputy director, was a viable replacement.

Liberals take issue with DeMarco's decision to block Fannie Mae and Freddie Mac from reducing loan principals for borrowers who owe more than their homes are worth, a position at odds with that of the White House. (Reporting by Douwe Miedema and Roberta Rampton. Editing by Christopher Wilson)


View the original article here

UPDATE 1-Fed's Lockhart says inflation will be "easily recognizable"

By Alister Bull

April 13 (Reuters) - U.S. inflation is under control and is going to stay that way because the Federal Reserve will "easily" spot the conditions that could erode price stability, and has the tools to tighten policy when needed, a top U.S. central banker said on Saturday.

Atlanta Federal Reserve President Dennis Lockhart acknowledged that inflation expectations might be fanned by rapid credit growth as the economy picked up steam, as a result of the aggressive actions taken by the central bank.

"That chemistry is not at work today," he told a panel on fiscal policy at The University of Iowa School of Law, in Iowa City. "I'm confident those improving conditions will be easily recognizable and the committee has a variety of tools to counter inflationary pressures with tightening measures."

The Fed has held interest rates near zero since late 2008 and tripled the size of its balance sheet to around $3 trillion through massive bond purchases aimed at holding down longer-term borrowing costs to boost investment and hiring.

Lockhart, who is viewed as a policy centrist and therefore a good gauge of the consensus among Fed leaders, is not a voting member this year of the central bank's policy-setting Federal Open Market Committee (FOMC).

He shared the Iowa panel with Allan Meltzer, a respected economist and historian of the Federal Reserve, who has been an outspoken critic of its dramatic actions to put the U.S. economy on a sounder footing. Lockhart stood his ground.

"We are navigating in uncharted waters...but I am convinced we are weighing the benefits of the policy against the possible longer-term costs in a balanced way," he said.

Some critics say bond buying by the Fed has funded explosive deficit spending by President Barack Obama. But Lockhart rejected that accusation.

"A low cost of borrowing for the federal government is a by-product of a policy of nursing the economy back to full health and with success, the ultra-low interest rate conditions are likely to give way to higher rates, whether or not the government is borrowing," he said.

He also noted international investors continued to view U.S. financial markets as a "safe haven", in an indication that they did not regard the Fed's actions as undermining the long-term outlook for the nation's prospects.

"The dollar is in fact strengthening and investors do not seem to be overly concerned that the FOMC's policies will stoke inflation over the longer term," he said.


View the original article here

Thursday, April 25, 2013

Yemen c.bank FX reserves hit 6-mth low as bombings hit oil exports

* Gross reserves fall to $5.8 bln in February

* Oil exports drop 30 percent from January

* Yemen hit by oil pipeline bombings

* Inflation at 5-month high of 7.1 pct y/y in January

By Martin Dokoupil

DUBAI, April 14 (Reuters) - The foreign reserves of Yemen's central bank shrank by $457 million in February to their lowest level since last August as oil exports from the impoverished Arab country plunged by a third, data showed on Sunday.

The Arabian peninsula state, which relies on crude exports to replenish its reserves and finance up to 70 percent of budget spending, has suffered from frequent bombings of its main oil pipeline since political turmoil started in 2011.

Gross foreign assets held by the central bank fell to $5.8 billion in February, covering 5.9 months of imports, from $6.2 billion or 6.4 months of imports in January, central bank data showed. Net reserves, which factor in the central bank's foreign obligations, stood at $4.5 billion in February.

The central bank, which received a $1 billion loan from Saudi Arabia last year to support its reserves, did not explain the decrease in its monthly bulletin.

In March, its vice governor told Reuters that reserves of $6.2 billion were appropriate, but that the level would depend on whether Yemen continued to suffer pipeline bombings by Islamist militants and disgruntled tribesmen.

Attackers blew up parts of Yemen's main 110,000 barrel per day oil export pipeline in February and March, halting the flow of crude. Another explosion occurred earlier this month, only two weeks after the pipeline was repaired.

A long closure of the line last year forced Yemen's largest refinery at Aden to shut, leaving the country dependent on fuel donations from Saudi Arabia and imports.

Yemen exported $210 million worth of crude oil in February, a drop of more than 30 percent from January, the data also showed. The government's share of those exports was 1.8 million barrels in February, the lowest level since May 2012.

In January, the International Monetary Fund warned that the political transition following the overthrow of President Ali Abdullah Saleh in February 2012, and security concerns - particularly attacks on key oil and electricity facilities - threatened the economic outlook.

Yemen's economy improved last year but its recovery remains fragile in the second-poorest Arab state after Mauritania. A third of Yemen's 25 million people live on less than $2 a day, and unemployment is estimated at around 35 percent.

Last year wealthy Gulf Arab states, Western governments and other donors pledged $7.9 billion in aid over several years to Yemen, but only a small fraction has so far arrived.

The IMF said earlier this month that it was discussing fresh financial aid to Yemen, which a central bank official said could be as large as $500 million.

The country faces a fiscal deficit of 6.0 percent of gross domestic product this year, the IMF has forecast, more than the 5.7 percent estimated for 2012.

Inflation in Yemen picked up in January, climbing to 7.1 percent on an annual basis, the highest level since August 2012, from 5.8 percent in December, the central bank data showed.

The central bank has cut its key interest rate by 5 percentage points to a three-year low of 15 percent since October 2012 to spur the economic recovery, after the rial currency stabilised at about 214 to the U.S. dollar and inflation fell from a peak of 25 percent in October 2011.

The governor of the central bank said earlier this month that he was comfortable with the current level of interest rates and that he expected economic growth to accelerate to about 7 percent this year from 4.5 percent in 2012.


View the original article here

Adjusting long-term exit strategy has near-term effects: Fed's Kocherlakota

Minneapolis Federal Reserve Bank President Narayana Kocherlakota speaks at a macro-finance conference hosted by the Boston Federal Reserve Bank and Boston University in Boston, Massachusetts November 30, 2012.

Credit: Reuters/Brian Snyder


View the original article here

UPDATE 1-Libya deposits $2 bln in Egypt cbank from investments

TRIPOLI, April 13 (Reuters) - Libya has deposited $2 billion in Egypt's central bank deducted from investments Tripoli has inside its neighbour, the central bank governor said on Saturday.

Speaking to Reuters, Saddeq Omar Elkabber said the amount was a "central bank deposit not a loan", but did not give further details.

"Libya's investments in Egypt total around $10 billion. These are in banks, property and other sectors," he said.

"Egyptian stability is important for Libya," he said. "This is like when the European Union helped Greece."

Libyan Prime Minister Ali Zeidan told Reuters "there was no loan" made to Egypt but added the Libyan central bank "was free to make deposits where it chose".

On Wednesday, the Egyptian state news agency MENA reported Libya would give Egypt a $2 billion five-year, interest-free loan under an agreement signed that day.

It quoted a finance ministry official as saying the loan would have a three-year grace period and was intended "to support the Egyptian economy and the state budget and foreign currency reserves".

Also on Wednesday, Qatar agreed to give Egypt $3 billion more in aid by buying Egyptian government bonds, as the Arab world's most populous nation seeks to secure an IMF loan to ease its deepening economic crisis.

The new financial injections will buy Egypt time as it seeks to avert social unrest over fuel shortages and food price increases during a long, hot summer.


View the original article here

WRAPUP 1-Fed doves play down threat of US inflation

By Jonathan Spicer and Alister Bull

April 13 | Sat Apr 13, 2013 5:29pm EDT

April 13 (Reuters) - Federal Reserve policymakers went out of their way on Saturday to play down the risk that aggressive measures to bolster the U.S. economy would lead to inflation in the future, in a clear signal of support for its ongoing actions to spur growth.

The U.S. central bank last month maintained a controversial program of buying $85 billion of bonds a month, while pledging to keep interest rates near zero until unemployment hits at least 6.5 percent, so long as inflation stays under 2.5 percent.

Two of the central bank's most dovish officials - Chicago Federal Reserve boss Charles Evans and Minneapolis Fed President Narayana Kocherlakota - pushed back against recent signals from Fed hawks who want to taper those bond purchases.

"Without signs of actual inflation, many inflation-risk discussions ultimately raise this specter of ... unlocking the long-ago-vanquished inflation demons from the dungeon," said Evans, a voting member of the Fed's policy committee this year.

"We have to monitor it, we have to be mindful, but I don't think we should obsess over it," he told an event in Boston.

Minutes of the Fed's March 19-20 meeting, released on Wednesday, indicated that "many" of its 19 policymakers thought the pace of bond buying could be slowed in coming months, provided the nation's labor market continues to improve.

However, data released since that meeting showed disappointingly small U.S. job growth in March and an unemployment rate of 7.6 percent, which was actually down from 7.7 percent the month before but only because people gave up looking for work.

The Fed's preferred inflation measure is around 1.3 percent, well below its 2 percent target.

Kocherlakota, like-minded and speaking alongside Evans, argued that a balanced policy approach would allow inflation to deviate somewhat from its official 2 percent inflation goal, in order to lower U.S. unemployment.

"A balanced approach would allow for deviations of inflation from its longer run goal in order to facilitate a faster decline in unemployment back to its desired level," Kocherlakota said.

Kocherlakota is alone in advocating for even more accommodation from the Fed in the form of lowering to 5.5 percent, from 6.5 percent currently, the "threshold" at which the central bank will consider raising rates from near zero.

Meanwhile, a third official, Atlanta Fed President Dennis Lockhart, also defended the bond buying and said the "chemistry" necessary to spark inflation - stronger credit growth and a much more buoyant economy - was simply not in place.

"I'm confident those improving conditions will be easily recognizable and the committee has a variety of tools to counter inflationary pressures with tightening measures," he told an event at the University of Iowa on fiscal policy.

Lockhart, who is not a voter this year, is viewed as a policy centrist and therefore a good guide to the consensus among Fed leaders.

"We are navigating in uncharted waters...but I am convinced we are weighing the benefits of the policy against the possible longer term costs in a balanced way," he told the audience.


View the original article here

UPDATE 2-Focus on US unemployment as inflation in check, Fed doves say

By Jonathan Spicer

BOSTON, April 13 (Reuters) - Two dovish Federal Reserve policymakers on Saturday highlighted the U.S. central bank's good record keeping inflation close to target, arguing the Fed needs to stay focused on accommodative policies despite some outsized fears over future inflation.

Chicago Fed President Charles Evans and Narayana Kocherlakota of the Minneapolis Fed, speaking at a forum on how best to heal the troubled U.S. labor market, in effect sought to push back against more hawkish-minded officials who want to wind down the Fed's extraordinarily easy monetary policies.

Evans said inflation pressures look low now, and the Fed's easy policies have helped slowly move the unemployment rate down toward 5.5 percent, which he called a sustainable level.

U.S. joblessness stood at 7.6 percent last month, down from 10 percent in 2009. The Fed's preferred inflation measure is around 1.3 percent, below its 2 percent target.

"Without signs of actual inflation, many inflation-risk discussions ultimately raise this specter of ... unlocking the long-ago-vanquished inflation demons from the dungeon," said Evans, a voting member of the Fed's policy committee this year.

"We have to monitor it, we have to be mindful, but I don't think we should obsess over it," he said, adding the Fed's inflation performance has been "really good."

"Chairman Bernanke will go down as one of the best Fed chairs for many many reasons, but also because the inflation performance has been good."

NOT HIGHER BUT LOWER POLICY THRESHOLDS

The Fed is buying $85 billion in Treasury and mortgage securities per month and has promised to keep interest rates near zero for a long while more to support the stop-start U.S. economic recovery and get Americans back to work.

While policy doves currently hold sway over Chairman Ben Bernanke and the majority of Fed policymakers, minutes from last month's policy meeting suggest the quantitative easing program could draw to a close by year end, earlier than some economists had expected.

Like-minded and speaking alongside Evans, Kocherlakota argued that a balanced policy approach would allow inflation to deviate somewhat from its 2-percent inflation goal in order to lower U.S. unemployment.

"A balanced approach would allow for deviations of inflation from its longer run goal in order to facilitate a faster decline in unemployment back to its desired level," Kocherlakota said.

Kocherlakota is alone in advocating for even more accommodation from the Fed in the form of lowering to 5.5 percent, from 6.5 percent currently, the "threshold" at which the central bank will consider raising rates from near zero.

On Saturday, he told reporters that while it would be ok to lower the threshold, it would be "very confusing for the public" if the Fed were to raise that threshold.

"I would strongly advise against doing this," he said, because the Fed has said it will keep rates low until that point. But, he added, it hasn't said "anything about what could do after that, which allows for the possibility that we could always lower the threshold."


View the original article here

Austria defies mounting pressure to end bank secrecy

* EU's six biggest countries to jointly tackle tax havens

* Germany's Schaeuble says will capitalise on strong momentum

* Austria's Fekter fights to keep bank secrecy

By John O'Donnell and Jan Strupczewski

DUBLIN, April 13 (Reuters) - Austria defied growing pressure to follow Luxembourg in ending bank secrecy, after a group led by Europe's six biggest countries pledged to work together to tackle tax havens.

Late on Friday, the finance ministers of Germany, France, Britain, Italy, Spain and Poland announced their desire to jointly push for more bank transparency, a message they will take to the meeting of the Group of 20 top global economies in Washington next week.

"Nobody can deny that bank secrecy is outdated, that we need an efficient system to tackle evasion strategies," French Finance Minister Pierre Moscovici told reporters, flanked by his counterparts from the other countries.

"Our mission is to create momentum. When these six major capitals of Europe move together, it creates a strong signal which nobody can resist."

On Saturday, three other countries - Belgium, the Netherlands and Romania - joined the initiative, the European Commission's official in charge of tax policy, Algirdas Semeta said.

"It's about allowing member states to make the right tax choices for them without being affected by the malpractices of others," Semeta told journalists, on the sidelines of an EU ministers' meeting. "In a nutshell, it's about fairness."

Poland's finance minister told Reuters that he joined the group to ensure foreign multinationals do not abuse tax regimes for profit. Such companies are particularly important for central and eastern Europe.

"The scale of the problem is smaller in Poland than in western Europe but some of the techniques used in western Europe to evade taxes are being transferred to Poland too," Jacek Rostowski said.

"Citizens must have full confidence that the system is not being abused to evade taxes or for simply for tax fraud," he said. "The fight with tax fraud will be all the more effective if it is conducted on a European and even global level - that's why we joined."

Announcing the cooperation, George Osborne, Britain's finance minister, had said he was pushing for more transparency from the UK overseas territories of the Cayman Islands and British Virgin Islands.

"They are in no doubt about what we expect," he said. "The places that you can hide are getting smaller and smaller."

DATA GRAVEYARD

The announcement adds to pressure on Vienna to sign up to EU rules for the automatic exchange of information on bank depositors.

It follows Luxembourg's decision this week to share foreign bank account details with EU governments from 2015, bringing it into line with all other member states bar one - Austria.

But Austrian Finance Minister Maria Fekter stuck to her earlier position, dismissing such an exchange of information as an invasion of privacy.

"We will fight for bank secrecy. We are no tax haven," Fekter told reporters, placing her country in a minority of one during discussions on the issue among 27 EU ministers.

She defended Austria's practice of imposing tax on interest paid to foreign savers, money collected and returned to their home country's government - but with no names attached. The European Union wants information about accounts to be given.

"Our neighbours get their fair tax delivered," she said, claiming that any automatic exchange of information would lead to an overload of data that would not be used.

"It's much more sensible to deliver the money rather than a graveyard of data," she said. "That brings more money quicker into the tax coffers and is genuinely tackling tax evasion."

She had earlier attacked the Group of 20 top economies for not taking what she branded centres of money laundering such as the Cayman Islands, Virgin Islands or Delaware.

Confidentiality is so cherished in Austria that banking secrecy, which has deep traditional roots, is anchored in the constitution.

But Fekter faces a difficult fight. Tax evasion deprives EU governments of roughly 1 trillion euros ($1.3 trillion) annually. France, in particular, wants to underscore its determination to tackle tax fraud.

France's former budget minister Jerome Cahuzac is under investigation for fraud after admitting lying about having a Swiss bank account, an affair that has prompted criticism of French President Francois Hollande.

EU leaders will also discuss how to combat the tax haven issue when they meet next month.

"We have, for many different reasons, a strong momentum," Germany's Finance Minister Wolfgang Schaeuble told journalists. "We will use it."

Fekter may even struggle to have her way in Austria, with some voices pushing for a more moderate approach, including Chancellor Werner Faymann. He has said it would be possible for Austria to share information on foreigners' accounts without violating banking secrecy.

In later comments, Fekter told journalists she was open to "talks and negotiations" and drew a distinction between surrendering information about account holders and bank account activity. But it was unclear, following her repeated insistence that bank secrecy would remain, where any compromise was possible.


View the original article here

UPDATE 2-Troika concludes Greek bailout review, next aid tranche soon - source

* EU/IMF conclude Greek bailout review of reform progress

* Eurogroup, IMF likely to discuss deal in May

* Greece to wrap up talks with troika by Monday night

By Annika Breidthardt and Renee Maltezou

DUBLIN/ATHENS, April 13 (Reuters) - An inspection team of international lenders has finished its review of Greece's austerity programme, paving the way for another 10 billion euros aid payment, a source with knowledge of the talks said on Saturday.

The deal reached on Friday, concludes the first review by the so-called "troika" of the European Commission, the International Monetary Fund and the European Central Bank since they unlocked fresh aid in December, staving off a chaotic bankruptcy.

In exchange for the December deal in Greece's 240-billion euro bailout, Athens passed a fresh round of austerity measures.

"The third review mission of the programme was completed last night in Athens with a staff level agreement," one delegate with knowledge of the discussions told Reuters.

The official added the Eurogroup of euro zone finance ministers and the IMF's board would each likely discuss the agreement in May, a condition for the money to actually be paid.

Klaus Regling, the head of the euro zone's rescue funds, said on Friday the European Financial Stability Facility (EFSF), under which Greece's rescue is handled, stood ready to disburse 10 billion euros ($13 billion) to Athens once conditions were met.

"Greece would get 2.8 billion euros after the milestones have been met. In addition, 7.2 billion (euros are) available in bonds to recapitalise the banks. This is based on a tranche already approved last December," he told reporters.

Greece has received about 200 billion euros in rescue loans since its first bailout in May in 2010. But despite imposing a 75-percent debt cut on private-sector bondholders and receiving debt relief from its official lenders last year, it is still far from a returnto the bond markets.

After a meeting of European Union finance ministers, German Finance Minister Wolfgang Schaeuble said a 2.8 billion euro March tranche of funds had not been released yet because Greece had not fulfilled some of the bailout milestones.

"The Greek side explained it is fully committed and we hope that this will be the case by the next meeting," Schaeuble said.

The recapitalisation of Greece's banks and shrinking the country's spendthrift public sector have been key issues on the agenda of talks with the troika, which resumed its visit in Athens earlier this month.

Prime Minister Antonis Samaras met his coalition partners on Saturday to discuss the hot topics and the progress of the troika review. After the meeting, the deputy finance minister said talks with the troika would be wrapped up by Monday.

"I believe the ultimate details of a deal with the troika will be finalised by Monday night," Christos Staikouras said.

Greece has agreed to dismiss 15,000 public sector workers and hire as many younger employees, Staikouras said.

About 4,000 workers will leave by the end of the year and another 11,000 in 2014, party officials said. The state is expected to cut more than 180,000 by 2015.

Socialist leader Evangelos Venizelos said the troika was expected to approve the political leaders' proposals by Sunday.

Under Greece's current bailout plan agreed in November, Athens has to cut 150,000 public sector jobs overall from 2010 to 2015, about a fifth of the total, through hiring curbs, retirement and dismissals.

"We have designed a commonly accepted framework which I hope the troika will accept by Sunday night," Venizelos said. "We must close all the issues."

Lay-offs are a sensitive issue in Greece where unemployment has hit a record high of 27.2 percent and the economy is now in its sixth year of recession but recent polls show that most Greeks want the reform of the public sector and its services.

With the country's constitution protecting state workers from dismissal, Samaras said in an interview with a newspaper that the government could cut staff by scrapping job positions.

There is no doubt we need a smaller but also better public sector," Samaras said. "The constitution doesn't ban the dismissal of state workers whose position has been scrapped."


View the original article here

Wednesday, April 24, 2013

Jeff Dunham-Minding the Monsters

Sorry, I could not read the content fromt this page.Sorry, I could not read the content fromt this page.

View the original article here

GoHardXtreme Commences National TV Brand Awareness Campaign For Its New Line Of Urban Clothing With Stardust Global TV

Sorry, I could not read the content fromt this page.Sorry, I could not read the content fromt this page.

View the original article here

Atlas Shrugged Part 2 (Blu-ray)

Video Features Widescreen, English, French, Spanish, Subtitled Sorry, I could not read the content fromt this page.

View the original article here

Moody's Zandi is top pick for Fannie watchdog: report

Mark Zandi, chief economist of Moody's Analytics, speaks at the Reuters Real Estate and Infrastructure Summit in New York June 20, 2011. REUTERS/Brendan McDermid

Mark Zandi, chief economist of Moody's Analytics, speaks at the Reuters Real Estate and Infrastructure Summit in New York June 20, 2011.

Credit: Reuters/Brendan McDermid

By Douwe Miedema

WASHINGTON | Sat Apr 13, 2013 1:54pm EDT

WASHINGTON (Reuters) - Mark Zandi, a well-known economist, is a front-runner to lead the housing regulator and oust Edward DeMarco, who critics say hasn't done enough to aid homeowners, the Wall Street Journal reported.

President Barack Obama tried to replace DeMarco in 2011 as head of the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, but Senate Republicans blocked his nominee to succeed DeMarco.

The two agencies help finance two-thirds of new U.S. home loans, but were seized by the government in the 2008 economic crisis when mortgage losses mounted. They have since drawn nearly $190 billion from the U.S. Treasury to stay afloat.

Zandi is rating agency Moody's (MCO.N) often-quoted chief economist, and has testified many times as a witness in congressional hearings. He has also published a well-received study about the 2008 mortgage market implosion.

The White House had not made up its mind about the nomination, but there were signs that Zandi might draw some Republican support, the Wall Street Journal said on Saturday, quoting people familiar with the matter.

The White House declined to comment. Zandi declined to say whether he had been approached for the job, or whether he was interested in the position.

The Journal said representative Mel Watt, a North Carolina Democrat, was also a candidate to replace DeMarco.

New York Attorney General Eric Schneiderman said this week that Obama has the power to send DeMarco home and can likely replace him without congressional approval, for instance with one of the agency's deputy directors.

An eight-page memorandum prepared by Schneiderman's team quoted Sandra Thompson, who was recently appointed as a deputy director, was a viable replacement.

Liberals take issue with DeMarco's decision to block Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) from reducing loan principals for borrowers who owe more than their homes are worth, a position at odds with that of the White House.

(Reporting by Douwe Miedema and Roberta Rampton. Editing by Christopher Wilson)


View the original article here

Tales From the Crypt-Complete Seasons 5-6

Produced by George A. Romero after the success of CREEPSHOW, this 1980s anthology series boasted a shocking tale every week. Unnerving synth lines and bare-bones production values were hallmarks of the syndicated program, which tended toward supernatural plotlines but also included sci-fi and comedy in its uncanny netherworld. Frequently, its material came adapted from horror's most popular authors, including Stephen King, Clive Barker, and Harlan Ellison. And, in TWILIGHT ZONE fashion, it relished throwing a cruel twist at its characters by every episode's end. This collection presents all 13 episodes from the show's fifth season, including those starring guests Steve Buscemi, Roger Daltrey, Traci Lords, David Paymer, , Martin Sheen, and Billy Zane, plus 15 episodes from season six with guest stars Hank Azaria, Isaac Hayes, Richard Lewis, John Lithgow, Wayne Newton, Isabella Rossellini, and Rita Rudner.

View the original article here

Kerry, Lew to next meet top Chinese officials in July

By Douwe Miedema

WASHINGTON, April 13 | Sat Apr 13, 2013 11:49am EDT

WASHINGTON, April 13 (Reuters) - U.S. Treasury Secretary Jack Lew and Secretary of State John Kerry will meet senior Chinese officials in July as the world's two largest economies continue discussions on currency rates and the North Korean nuclear threat.

The so-called U.S.-China strategic and economic dialogue, an annual high-level forum, will be held in the week of July 8-12 in Washington, the Treasury Department said.

Kerry and Lew will meet Vice Premier Wang Yang and State Councilor Yang Jiechi, along with members of the Chinese delegation, and their U.S. colleagues.

Kerry has been meeting with China's leaders in Beijing this week, and the two countries agreed to make a joint effort to push for the peaceful denuclearization of the Korean peninsula.

Lew traveled to China for a two-day visit in March, where he pushed Beijing to take more action on the exchange rate of the yuan, which many in Washington say is undervalued and is harming U.S. exports.

The discussions in July will follow up on these two meetings, the Treasury said.

"The dialogue will focus on addressing the challenges and opportunities that both countries face on a wide range of bilateral, regional and global areas," it said.

The United States and its allies believe North Korea violated the 2005 aid-for-denuclearization deal by conducting a nuclear test in 2006 and pursuing a uranium enrichment program that would give it a second path to a nuclear weapon in addition to its plutonium-based program.


View the original article here

State Street electronic FX chief departs in leadership shake-up

BOSTON, April 13 | Sat Apr 13, 2013 1:59pm EDT

BOSTON, April 13 (Reuters) - State Street Corp said on Saturday the top executive of its electronic foreign exchange trading business has left the company in a leadership shake-up.

The departure of Clifford Lewis raises questions about the direction of Boston-based State Street's high-frequency trading platform for forex called Currenex. Lewis was chief executive and chairman of Currenex when State Street agreed in 2007 to buy the company for nearly $600 million in cash.

"Because we have combined teams and solutions that previously resided within other business units, we've had to make tough decisions about leadership, and Cliff Lewis left as a result of those decisions," said State Street spokeswoman Carolyn Cichon. "We are very grateful for the contributions he has made and strong management team that he leaves behind."

Lewis did not return messages seeking comment. He was an executive vice president at State Street and head of the e-Exchange business, which includes Currenex, FXConnect and a range of other trading platforms. The e-Exchange FX businesses averaged over $150 billion in daily volume in 2012, making them one of the largest FX trading platforms in the world. Lewis also managed State Street's derivatives and bond clearing businesses.


View the original article here

Tomb Raider

Also Available: Other Formats Choose Format Sorry, I could not read the content fromt this page.

View the original article here

Greece says talks with troika to be finalised by Monday-deputy finmin

ATHENS, April 13 | Sat Apr 13, 2013 11:22am EDT

"I believe that the ultimate details of a deal with the troika will be finalised by Monday night," Christos Staikouras said after a meeting with Prime Minister Antonis Samaras and the ruling coalition's party leaders.

An inspection team of international lenders has finished its review of Greece's reform progress, paving the way for the release of more bailout aid, a source with knowledge of the talks told Reuters on Saturday.


View the original article here

Infrared Control Inflatable Flying Giant Dolphin Swimmer

5 foot giant inflatable flying Dolphin Swimmer! Realistic features and an extended Infrared Radio Control range. Plus, your Super Fliers swim in 5 directional control movements and have a 360 degree turning circle. Made from durable nylon that provides hours and hours of fun for everyone. Stays inflated for weeks with helium, then simply re-inflate your Super Fliers again for hours and hours of more fun!

View the original article here

Focus on unemployment as inflation in check, Fed doves say

Chicago Federal Reserve Bank President Charles Evans speaks during the Sasin Bangkok Forum July 9, 2012. REUTERS/Sukree Sukplang

Chicago Federal Reserve Bank President Charles Evans speaks during the Sasin Bangkok Forum July 9, 2012.

Credit: Reuters/Sukree Sukplang

By Jonathan Spicer

BOSTON | Sat Apr 13, 2013 4:21pm EDT

BOSTON (Reuters) - Two dovish Federal Reserve policymakers on Saturday highlighted the U.S. central bank's good record keeping inflation close to target, arguing the Fed needs to stay focused on accommodative policies despite some outsized fears over future inflation.

Chicago Fed President Charles Evans and Narayana Kocherlakota of the Minneapolis Fed, speaking at a forum on how best to heal the troubled U.S. labor market, in effect sought to push back against more hawkish-minded officials who want to wind down the Fed's extraordinarily easy monetary policies.

Evans said inflation pressures look low now, and the Fed's easy policies have helped slowly move the unemployment rate down toward 5.5 percent, which he called a sustainable level.

U.S. joblessness stood at 7.6 percent last month, down from 10 percent in 2009. The Fed's preferred inflation measure is around 1.3 percent, below its 2 percent target.

"Without signs of actual inflation, many inflation-risk discussions ultimately raise this specter of ... unlocking the long-ago-vanquished inflation demons from the dungeon," said Evans, a voting member of the Fed's policy committee this year.

"We have to monitor it, we have to be mindful, but I don't think we should obsess over it," he said, adding the Fed's inflation performance has been "really good."

"Chairman Bernanke will go down as one of the best Fed chairs for many many reasons, but also because the inflation performance has been good."

NOT HIGHER BUT LOWER POLICY THRESHOLDS

The Fed is buying $85 billion in Treasury and mortgage securities per month and has promised to keep interest rates near zero for a long while more to support the stop-start U.S. economic recovery and get Americans back to work.

While policy doves currently hold sway over Chairman Ben Bernanke and the majority of Fed policymakers, minutes from last month's policy meeting suggest the quantitative easing program could draw to a close by year end, earlier than some economists had expected.

Like-minded and speaking alongside Evans, Kocherlakota argued that a balanced policy approach would allow inflation to deviate somewhat from its 2-percent inflation goal in order to lower U.S. unemployment.

"A balanced approach would allow for deviations of inflation from its longer run goal in order to facilitate a faster decline in unemployment back to its desired level," Kocherlakota said.

Kocherlakota is alone in advocating for even more accommodation from the Fed in the form of lowering to 5.5 percent, from 6.5 percent currently, the "threshold" at which the central bank will consider raising rates from near zero.

On Saturday, he told reporters that while it would be ok to lower the threshold, it would be "very confusing for the public" if the Fed were to raise that threshold.

"I would strongly advise against doing this," he said, because the Fed has said it will keep rates low until that point. But, he added, it hasn't said "anything about what could do after that, which allows for the possibility that we could always lower the threshold."

(Reporting by Jonathan Spicer; Editing by Chizu Nomiyama)


View the original article here

Human Planet 2010

Following in the footsteps of Planet Earth and Life, this epic eight-part blockbuster is a breathtaking celebration of the amazing, complex, profound and sometimes challenging relationship between humankind and nature. Humans are the ultimate animals - the most successful species on the planet. From the frozen Arctic to steamy rainforests, from tiny islands in vast oceans to parched deserts, people have found remarkable ways to adapt and survive. We've done this by harnessing our immense courage and ingenuity; learning to live with and utilize the other creatures with which we share these wild places. Human Planet weaves together eighty inspiring stories, many never told before, set to a globally-influenced soundtrack by award-winning composer Nitin Sawhney. Each episode focuses on a particular habitat and reveals how its people have created astonishing solutions in the face of extreme adversity. Finally we visit the urban jungle, where most of us now live, and discover why the connection between humanity and nature here is the most vital of all.

View the original article here

Tuesday, April 23, 2013

Bankers count on watered down EU trading tax

By Swaha Pattanaik and Simon Jessop

LONDON, April 14 | Sun Apr 14, 2013 3:00am EDT

LONDON, April 14 (Reuters) - Bankers are confident they can persuade the European Union that its proposed financial trading tax poses enough risks to struggling economies and banks to warrant being watered down.

Their campaign against the tax, which will be imposed by 11 of the EU's 27 countries, focuses on how much it would boost the cost of funding for governments and companies, erode returns earned even by long-term investors, and hurt funding markets which are crucial to the health of the financial system.

Advocates of the financial transaction tax say it is small enough and covers enough assets not to distort markets while ensuring banks, which received taxpayers' cash during the financial and euro zone crises, make a contribution to the public coffers as governments try to rein in budget deficits.

Their arguments have struck a chord with public opinion, particularly in those European countries where unemployment has been rising, social welfare has been cut and wages have stagnated or fallen due to government austerity measures.

But bankers say the impact of the levy will be felt far beyond the financial sector if the EU sticks to its plan to tax buyers and sellers at each stage of every trade that is either transacted by someone in one of the countries imposing the tax or involves an asset issued by an institution based there.

"I think that the impact is so dramatic, I would be astounded if it passes in its current form," Remco Lenterman, chairman of the FIA European Principal Traders Association said.

"I would almost theorise that if they pass and implement it in its current form, they would have to cancel it after a three- to six-month period as markets would become so dysfunctional that you would have to revert back."

The European Commission declined to comment. Financial regulation is often changed in the process of negotiations.

Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia, and Slovakia have said they will levy the tax. The Commission says revenues from the tax are expected to total up to 35 billion euros a year, or 1 percent of the total tax revenues of the participating countries.

It is still unclear how the tax would be collected in EU countries which won't levy it - a group that includes Britain, which has the region's biggest financial centre.

MULTIPLYING THE IMPACT

Bankers are stepping up lobbying of the European Commission and countries which will impose the levy to explain how a tax of 0.1 percent on stocks and bonds and 0.01 percent on derivatives could have such a seismic impact.

One of their oft-cited examples is how much the tax would add to the cost of a transaction which involves one investor selling a bond and another buying it.

Because such a trade typically involves dealers and brokers as intermediaries between investors, the tax could be levied 10 times, with the same dealer or broker sometimes being taxed twice -- once for buying the bond and again for selling it on -- as well as each time a position is hedged to mitigate risk.

Banks therefore expect the tax to depress trading volumes, which will hurt the profits they make from such business. And they expect to pass higher trading costs on to clients.

"They say this is a tax on the financial sector but we pass on the tax to clients," said a London-based banker responsible for derivatives trading who spoke on condition of anonymity.

"Investors end up paying the tax, either through a direct charge or because market-makers are not market making anymore so bid/offer spreads widen and transaction costs rise."

That is unlikely to sway the European Commission or those who signed up for the tax given one of their intentions was to deter financial trading which does not contribute to the efficiency of markets or to the economy.

The Commission has said the levy targets transactions which take place between financial institutions but that it would not be "disproportionate" if some of the costs were passed on to consumers.

But rising trading costs are expected to prompt investors to demand higher returns. The impact this could have on government and corporate borrowing costs, and therefore the economy, may end up being persuasive.

COSTS TO PUBLIC COFFERS

For example, a Bank of America Merrill Lynch study published in March said the tax could add as much as 8.5 billion euros to the combined cost of annual debt interest payments of Germany, France and Italy in the first year.

It would also affect corporate bonds.

Consulting firm London Economics said the per-transaction impact of the tax, as a percentage of bond returns, would average between 6.2 and 12.8 percent for corporate borrowers from the countries which impose the levy.

"Our view remains that the tax is highly unlikely to be implemented in anything like its current form," the Bank of America Merrill Lynch research note on the tax's impact said.

"(We) think such a tax would increase borrowing costs noticeably, increase financial risks and crimp the availability of finance to the 'real economy', as well as damaging monetary policy transmission mechanisms."

The Commission's own report on the potential impact of the trading tax estimates it could shave 0.28 percent off gross domestic product in the long run. But it said that imposing the tax "will not negatively impact growth or jobs".

Still, bankers say a potential drag on growth is the last thing highly indebted euro zone countries need as they try to revive economic activity and, either avoid international bailouts, or exit such bailouts.

"I will eat my hat if this tax comes in as proposed on January 2014," said David Lewis at Astec Analytics, which specialises in information on securities borrowing and lending.

"For politicians it's gold, but it's the wrong thing at the wrong time. In the current economic environment we should be freeing up the market, reducing costs and making things easier".

Politics is expected to determine when and by how much the financial trading tax is eventually amended.

Five bankers and six financial industry bodies contacted by Reuters pinpointed the German parliamentary elections, scheduled for September, as a key watershed.

"It is ... unlikely that the proposal - in its current form - will survive," said Judith Hardt, secretary general of the Federation of European Securities Exchanges.

"Some lobbyists in Brussels say that part of the initiative is driven by the upcoming German elections. Some assume that the urgency of getting results quickly will diminish after the elections."


View the original article here

Dancing Machine

Muze PNote For a brief time, it seemed as if the magic was back between Motown and the Jackson 5. The title track was their best up-tempo hit since "ABC," and put them back on top of the R&B charts for the first time in three years. It just missed topping the pop charts as well, peaking at number two. They even got a second chart hit from the album, and it restored their position within the pop and R&B communities. ~ Ron Wynn

View the original article here

UPDATE 1-No Egypt request for bigger IMF loan, central banker tells paper

* Egypt has not asked for increase on $4.8 billion loan

* Senior IMF official has said loan size could be changed

* Egypt needs financial help to overcome budget crisis

CAIRO, April 14 (Reuters) - Egypt has not asked the International Monetary Fund (IMF) to increase a $4.8 billion loan it has not yet drawn down, central bank governor Hisham Ramez told al-Shorouk newspaper on Sunday.

On April 2 the IMF's Middle East and Central Asia director said the size of the loan could be changed depending on the country's needs.

Ramez said that Egypt could still request an increase of $1 billion on the loan if the maturity period was extended to more than 30 months from the 22 months agreed last November.

He reiterated the government's position that Egypt would not seek an emergency loan from the global lender and said that talks with an IMF delegation that arrived in Cairo 10 days ago were going well.

The most populous Arab country needs the loan to ease economic strains after two years of political upheaval. Low reserves of foreign currency threaten Egypt's ability to buy in wheat, of which it is the world's biggest importer, and fuel.

President Mohamed Mursi's government postponed implementating the loan in December in the face of unrest triggered by a political row over the extent of his powers.

Any IMF deal is likely to require Cairo commit to tax increases and cuts in subsidies, a highly sensitive issue at a time when Mursi is facing protests over his management of the country before this year's parliamentary elections.

Shortages of subsidised diesel have paralysed transport in parts of Egypt and the Egyptian pound has lost 9 percent of its value against the dollar since late last year.


View the original article here

Alice in Wonderland Special Un-Anniversary Edition

Based on the 1865 book by Lewis Carroll, this is the classic Disney animated version of Alice's adventures as she follows a white rabbit into a "Wonderland" of her own imagination. On her journey, she encounters the Mad Hatter, the Cheshire Cat, and a host of other beloved characters brought to life with the usual Disney zest. Combining stellar animation with upbeat songs such as "I'm Late," ALICE IN WONDERLAND garnered an Academy Award nomination for "Best Scoring of a Musical Picture."

View the original article here

UPDATE 1-Austria defies mounting pressure to end bank secrecy

* EU's six biggest countries to jointly tackle tax havens

* Germany's Schaeuble says will capitalise on strong momentum

* Austrian Finance Minister Fekter fights to keep bank secrecy

* Austrian chancellor says open to exchange data on foreigners

By John O'Donnell and Jan Strupczewski

DUBLIN, April 13 (Reuters) - Austria defied growing pressure to follow Luxembourg in ending bank secrecy, after a group led by Europe's six biggest countries pledged to work together to tackle tax havens.

Late on Friday, the finance ministers of Germany, France, Britain, Italy, Spain and Poland announced their desire to jointly push for more bank transparency, a message they will take to the meeting of the Group of 20 top global economies in Washington next week.

"Nobody can deny that bank secrecy is outdated, that we need an efficient system to tackle evasion strategies," French Finance Minister Pierre Moscovici told reporters, flanked by his counterparts from the other countries.

"Our mission is to create momentum. When these six major capitals of Europe move together, it creates a strong signal which nobody can resist."

On Saturday, three other countries - Belgium, the Netherlands and Romania - joined the initiative, the European Commission's official in charge of tax policy, Algirdas Semeta said.

"It's about allowing member states to make the right tax choices for them without being affected by the malpractices of others," Semeta told journalists, on the sidelines of an EU ministers' meeting. "In a nutshell, it's about fairness."

Poland's finance minister told Reuters that he joined the group to ensure foreign multinationals do not abuse tax regimes for profit. Such companies are particularly important for central and eastern Europe.

"The scale of the problem is smaller in Poland than in western Europe but some of the techniques used in western Europe to evade taxes are being transferred to Poland too," Jacek Rostowski said.

"Citizens must have full confidence that the system is not being abused to evade taxes or for simply for tax fraud," he said. "The fight with tax fraud will be all the more effective if it is conducted on a European and even global level - that's why we joined."

Announcing the cooperation, George Osborne, Britain's finance minister, had said he was pushing for more transparency from the UK overseas territories of the Cayman Islands and British Virgin Islands.

"They are in no doubt about what we expect," he said. "The places that you can hide are getting smaller and smaller."

DATA GRAVEYARD

The announcement adds to pressure on Vienna to sign up to EU rules for the automatic exchange of information on bank depositors.

It follows Luxembourg's decision this week to share foreign bank account details with EU governments from 2015, bringing it into line with all other member states bar one - Austria.

But Austrian Finance Minister Maria Fekter stuck to her earlier position, dismissing such an exchange of information as an invasion of privacy.

"We will fight for bank secrecy. We are no tax haven," Fekter told reporters, placing her country in a minority of one during discussions on the issue among 27 EU ministers.

She defended Austria's practice of imposing tax on interest paid to foreign savers, money collected and returned to their home country's government - but with no names attached. The European Union wants information about accounts to be given.

"Our neighbours get their fair tax delivered," she said, claiming that any automatic exchange of information would lead to an overload of data that would not be used.

"It's much more sensible to deliver the money rather than a graveyard of data," she said. "That brings more money quicker into the tax coffers and is genuinely tackling tax evasion."

She had earlier attacked the Group of 20 top economies for not taking what she branded centres of money laundering such as the Cayman Islands, Virgin Islands or Delaware.

Confidentiality is so cherished in Austria that banking secrecy, which has deep traditional roots, is anchored in the constitution.

But Fekter faces a difficult fight. Tax evasion deprives EU governments of roughly 1 trillion euros ($1.3 trillion) annually. France, in particular, wants to underscore its determination to tackle tax fraud.

France's former budget minister Jerome Cahuzac is under investigation for fraud after admitting lying about having a Swiss bank account, an affair that has prompted criticism of French President Francois Hollande.

EU leaders will also discuss how to combat the tax haven issue when they meet next month.

"We have, for many different reasons, a strong momentum," Germany's Finance Minister Wolfgang Schaeuble told journalists. "We will use it."

Fekter may even struggle to have her way in Austria, with some pushing for a more moderate approach, including Chancellor Werner Faymann. He has said Austria could share information on foreigners' accounts without violating banking secrecy.

Faymann, a Social Democrat, reiterated that line in an interview the Oesterreich newspaper published on its website on Saturday, saying he and his deputy, conservative leader Michael Spindelegger, had defined a clear government line on the issue.

"Banking secrecy will stay for Austrians, and at the same time we want to participate in exchanging data for foreigners. How that will be implemented is the subject of negotiations," he said, adding that may be case by case or automatic.

Fekter had told journalists she was open to "talks and negotiations" and drew a distinction between surrendering information about account holders and bank account activity. But it was unclear, following her repeated insistence that bank secrecy would remain, where any compromise was possible.


View the original article here