Brazil targets 15 banks including Citi, HSBC in forex fixing probe

      

Brazil's antitrust body announced an unprecedented probe for the country into alleged foreign exchange market rigging by 15 banks including Citigroup and HSBC, which are accused of colluding to form a secret cartel.

PHOTO: AFP

JUL 4, 20156:35 AM

[BRASÍLIA] Brazil's antitrust body announced an unprecedented probe for the country into alleged foreign exchange market rigging by 15 banks including Citigroup and HSBC, which are accused of colluding to form a secret cartel.

"There are strong indications of anticompetitive practises of price fixing" and other manipulations between the banks, the watchdog known as Cade said late Thursday. The alleged cheating lasted from 2007 until at least 2013, authorities said.

"The evidence shows that (the banks) formed a cartel" fixing prices, coordinating trades, and impeding other operators involved in the Brazilian market, the watchdog said.

There is also evidence that the banks shared sensitive information on contracts, futures prices, clients, negotiating strategies and other confidential material, Cade said.

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Brazilian investigators say the banks under scrutiny communicated online via the Bloomberg chat platform to organize what they themselves referred to as "The cartel" and "The mafia." The other 13 banks named are: Banco Standard de Investimentos, Tokyo-Mitsubishi UFJ, Barclays, Credit Suisse, Deutsche Bank, JPMorgan Chase, Merrill Lynch, Morgan Stanley, Nomura, Royal Bank of Canada, Royal Bank of Scotland, Standard Chartered and UBS.

In addition to the institutions, the probe is targeting 30 individuals who were not identified.

Similar probes around the world, including in South Africa, South Korea, Europe and the United States have targeted much of the same group of banks.

In May, US and British regulators fined Barclays, JPMorgan Chase and several others a total of nearly US$6 billion between them for rigging foreign exchange market and Libor interest rates.

No Brazilian banks were named in the investigation, which was the first of its kind by Brazil, a Latin American giant counted along with Russia, India, China, and South Africa as one of the BRICS developing economic powerhouses.

AFP

      

Greek deposits may be seized to save banks: FT

Greek savers could lose at least 30 per cent of their bank deposits which could be seized to help shore up the country's banking system as fears grow of financial collapse, the FT reported Saturday. 

PHOTO: EPA

JUL 4, 20156:37 AM

[LONDON] Greek savers could lose at least 30 per cent of their bank deposits which could be seized to help shore up the country's banking system as fears grow of financial collapse, the FT reported Saturday.

Depositors with over 8,000 euros (S$11,980) in the bank may be made to take a "haircut" similar to those taken by Cypriot account holders in 2013, when uninsured funds were seized to stabilise the financial sector, the FT said, quoting bankers and businessmen close to negotiations.

"It would take place in the context of an overall restructuring of the bank sector once Greece is back in a bailout programme," said one of the sources.

Greek Prime Minister Alexis Tsipras has called a referendum to asks Greeks whether they are willing to swallow tougher austerity measures in return for bail-out funds from its creditors, the International Monetary Fund, the European Commission and the European Central Bank (ECB).

Greek banks have been shut since Monday, and the system faces collapse if the ECB declares the banks insolvent should Greece refuse to pay back its debts.

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Canadian economy not heading for recession: minister

Canada's finance minister denied Friday that the country is heading for recession, a day after two major banks predicted economic doomsday.

PHOTO: REUTERS

JUL 4, 20157:42 AM

[MONTREAL] Canada's finance minister denied Friday that the country is heading for recession, a day after two major banks predicted economic doomsday.

Canada, the world's fifth-biggest oil producer, has been hard hit by tumbling global oil prices and its economy shrank 0.6 per cent at an annualized rate in the first quarter.

On Thursday, Nomura bank said it expected Gross Domestic Product to contract 0.5 per cent in the second quarter, while Bank of America Merrill Lynch said a 0.6 per cent decline in that period was likely.

A recession is defined as two consecutive quarters of contraction.

But Finance Minister Joe Oliver said: "We're not in a recession... We don't believe we will be in a recession." Despite the bleak outlook of the banks, Mr Oliver said he expects growth in the second quarter and beyond to be robust.

"We expect solid growth for the year, following a weak first quarter," he said.

A recession could put the Conservative government, in power since 2006, in bad standing ahead of general elections in October.

Second quarter GDP estimates are expected after the central bank's next meeting, which takes place on July 15. Final figures are expected to be confirmed in September.

AFP

    
 

Crying Greek pensioner: The human story behind the Greek crisis

Retiree Giorgos Chatzifotiadis had queued up at three banks in Greece's second city of Thessaloniki on Friday in the hope of withdrawing a pension on behalf of his wife, but all in vain. 

PHOTO: AFP

JUL 4, 20151:45 PM

[THESSALONIKI] Retiree Giorgos Chatzifotiadis had queued up at three banks in Greece's second city of Thessaloniki on Friday in the hope of withdrawing a pension on behalf of his wife, but all in vain.

When he was told at the fourth that he could not withdraw his 120 euros (S$180), it was all too much and he collapsed in tears.

The 77-year-old told AFP that he had broken down because he "cannot stand to see my country in this distress"."That's why I feel so beaten, more than for my own personnel problems," Mr Chatzifotiadis said.

The image of him sitting outside the bank, openly crying in despair with his savings book and identity card on the floor, was captured by an AFP photographer illustrating how ordinary Greeks are suffering during the country's debt crisis.

Athens had imposed capital controls and shut all banks since Monday to stem a haemorrhage of cash, but on Wednesday allowed some branches to reopen for three days so that retirees who have no bank cards could withdraw their pensions - capped at 120 euros.

Recounting how he had gone from bank to bank in a futile attempt to collect his wife's pension, Mr Chatzifotiadis said when he was told at the fourth "that I could not get the money, I just collapsed".

Both he and his wife, like many Greeks in the north of the country, had spent several years in Germany where he "worked very hard" in a coal mine and later a foundry.

And it is to Berlin, which is being blamed by many in Greece for its hardline stance in demanding the government impose more austerity measures for fresh international aid, that Mr Chatzifotiadis is sending his wife's pension."I see my fellow citizens begging for a few cents to buy bread. I see more and more suicides. I am a sensitive person. I can not stand to see my country in this situation," he said."Europe and Greece have made mistakes. We must find a solution," he added.

But Mr Chatzifotiadis feels he can do little to change the situation, and he is not even sure if he would be able to vote at Sunday's referendum on whether to accept international creditors' bailout conditions.

European leaders have warned that a 'No' vote would also mean no to the euro zone.

Pointing out that the polling station is 80 km away, Mr Chatzifotiadis said: "I have no money to go there, unless perhaps if my children would take me in their car."

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Report Greek deposits may be seized is 'malicious rumour': minister  

A Financial Times report that Greek savers could lose 30 per cent of their bank deposits to shore up their country's banking system is a "malicious rumour," Greek Finance Minister Yanis Varoufakis said Friday. 

PHOTO: AFP

JUL 4, 20157:55 AM

[ATHENS] A Financial Times report that Greek savers could lose 30 per cent of their bank deposits to shore up their country's banking system is a "malicious rumour," Greek Finance Minister Yanis Varoufakis said Friday.

"FT report of a Gk (Greek) Bank Bail In is a malicious rumour that the Head of the Greek Banks Association denied this morning," he tweeted.

The British business daily, quoting unidentified bankers and businessmen close to negotiations, had reported that Greek depositors with over 8,000 euros (S$11,980) in an account may be made to take a "haircut" similar to those taken by Cypriot account holders in 2013, when uninsured funds were seized to stabilise the financial sector.

"It would take place in the context of an overall restructuring of the bank sector once Greece is back in a bailout programme," said one of the sources.

Greek banks have been shut since Monday, and the system faces collapse if the European Central Bank (ECB) declares them insolvent should Greece refuse to pay back its debts.

Greek Prime Minister Alexis Tsipras has called a referendum for Sunday to asks Greeks whether they are willing to swallow tougher austerity measures in return for bail-out funds from its creditors, the International Monetary Fund, the European Commission and the ECB.

AFP