Monday, October 12, 2015

HSBC loses senior anti-money laundering compliance executive

HSBC loses senior anti-money laundering compliance executive  

[ST LOUIS] A senior player in HSBC's push to improve the way it polices transactions for criminal activity left the British bank late last month, creating a possible gap in leadership as it seeks to satisfy compliance demands from US regulators and the US Department of Justice.
Daniel Wager, a former Homeland Security official with prior experience helping another multinational bank improve compliance controls, left his post as regional head of anti-money laundering investigations last month to join a consulting venture. Thus far, a replacement has not been named, a source familiar with the matter said.
Mr Wager was HSBC's top US anti-money laundering executive until early this year when he was replaced by Mary Squire, formerly head of sanctions and anti-money laundering at the Royal Bank of Scotland Group.
Mr Wager and Polly Greenberg, who last month also left her job as chief of the major economic crime bureau at the Manhattan District Attorney's office, started a New York regulatory compliance practice for Kinetic Partners, a division of financial advisory and investment banking firm Duff & Phelps Corp.
HSBC spokesman Rob Sherman declined to comment on Mr Wager's departure.
HSBC paid nearly US$2 billion in penalties in December 2012 to resolve charges that it failed to stop hundreds of millions of dollars in drug money from flowing through the bank from Mexico, and it promised to fix the problems.
The Office of the Comptroller of the Currency (OCC) and the Justice Department are closely tracking the bank's steps. Spokesmen for both declined comment on Wager's departure.
The government chose former New York prosecutor Michael Cherkasky to monitor HSBC's compliance remediation efforts. His reports have cited issues with the bank's progress to date.
In April 2014, after reviewing a report by Mr Cherkasky, the Justice Department said in a mandatory court filing in federal court in Brooklyn that there remains "much work to be done."
In a court filing earlier this month, the Justice Department said Mr Cherkasky "continues to identify specific areas of HSBC Group's AML and sanctions compliance programme where further remediation is required." It added that the bank "continues to work to address and remediate these areas."
REUTERS

Banks face client fee restrictions in Scandinavia to end abuses

Banks face client fee restrictions in Scandinavia to end abuses  

[COPENHAGEN] Banks in Scandinavia face a possible ban on some commissions just as the industry relies more on fee-based revenue streams.
Sweden and Denmark may order banks to stop charging customers for the distribution of investment products, including those created by banks' own subsidiaries, according to the two countries' regulators. The deliberations are based on concerns that the current fee structure creates conflicts of interest which European Union rules don't adequately address.
"We can't accept commissions that abuse customers' trust and that aren't transparent," Per Bolund, Sweden's minister for financial markets, told Bloomberg.
The proposals follow investigations in Sweden and Denmark revealing that some asset managers were alleging that index- linked products were actively managed, enabling them to collect higher fees while doing less work.
Norway is taking similar steps. The financial regulator there has ordered DNB, Norway's biggest bank, to either correct pricing or improve management of its DNB Norge fund after concluding it was a so-called "closet tracker." The push to crack down on fee collection comes as banks rely more on commissions from trading securities and less on traditional lending amid record-low interest rates. Both Sweden and Denmark have negative central bank rates. But regulators are sounding the alarm amid concern that the business model leaves banks exposed to riskier revenue streams that can suddenly dry up when markets turn.
Finland's Financial Supervisory Authority - the Nordic region's only regulator that oversees banks in a euro-zone member - has warned that income structures are becoming more volatile following a 20 per cent decline in net interest income since 2009. The development may have implications for the amount of capital banks should hold, said Jyri Helenius, head of the FSA's prudential supervision department.
"There are higher risks now, with the volatility of income in the future higher than it has been," Helenius said. "Because of that, we as a supervisor will be looking more closely into business models of banks and seeing if there are risks there." Part of the blame for the development lies with investors demanding ever higher returns, according to Jesper Rangvid, a finance professor at Copenhagen Business School and lead author of the Danish government's report on the financial crisis.
"When banks have lower earnings because interest rates are lower, it is important to remember that ROE should, a priori, be lower," Mr Rangvid said. "You can't, and shouldn't, expect to have an ROE of 10 to 12 per cent unless you are willing to take on additional risks." The biggest Nordic banks all target returns on equity of at least 12 per cent. Nordea, the region's largest lender, has said it aims for an ROE of about 15 per cent.
A ban on fees in the region would exceed rules laid out in the EU, which are due to be implemented by 2017 and only target independent financial advisers.
The Swedish government is currently reviewing comments to the proposal as it considers whether to move ahead, Bolund said. Denmark's Business Minister Troels Lund Poulsen has said he's waiting for the outcome of a government report before deciding whether to introduce legislation.
Banks ranked fee generation among their top two strategies for raising profitability in coming months, along with cutting operations expenses, in a June European Banking Authority industry survey.
"There are benefits from having a more diversified mix of income," Helenius said. "But most important is that banks measure and assess the risks correctly and if their income structure is such that the risks are higher, they should have higher buffers."
BLOOMBERG
 
FROM AROUND THE WEB

Trump won't be next president: Obama

Trump won't be next president: Obama   

[WASHINGTON] President Barack Obama is fairly certain of one thing when it comes to next year's election: Donald Trump won't succeed him in the White House.
The billionaire businessman, the frontrunner in the race to become the Republican party's White House nominee, has raised hackles with his controversial comments on immigration, gun control and women, among other issues.
"He knows how to get attention. He is, you know, the classic reality TV character, and at this early stage, it's not surprising that he's gotten a lot of attention," Mr Obama said of Mr Trump in an interview on CBS television's 60 Minutes news programme.
"I don't think he'll end up being president of the United States," Mr Obama said in the interview, which aired on Sunday.
Advertisement
Mr Trump's incendiary comments on immigration and other issues have dominated the campaign and offended many Americans, but he nevertheless has seen his poll numbers climb steadily higher.
During a speech to Latino political leaders last week, Mr Obama condemned the logic of "saying clearly inflammatory things and then saying, 'Well that's not what I meant' - until you do it again and again." "Leadership is not fanning the flames of intolerance, and then acting all surprised when a fire breaks out," he added.
Mr Obama did not name Mr Trump directly during that speech, instead denouncing the overall tone of the Republican presidential field.
In his 60 Minutes interview, the Democratic president pointed to "genuine anti-immigrant sentiment in a large portion of at least Republican primary voters," although he stressed it was not "uniform."
Mr Obama, who is currently completing his second term after winning elections in 2008 and 2012, said he had no regrets about term limits that prevent him from running again.
"I think having a fresh set of legs in this seat, I think having a fresh perspective, new personnel and new ideas - and a new conversation with the American people about issues that may be different a year from now than they were when I started eight years ago - I think that's all good for our democracy," Mr Obama said.
"I think it's healthy." But the president said he believes he would win if he had a chance to run for a third term.
Mr Obama said he had a "bittersweet" feeling about the 15 months he has left in the White House.
"On the one hand, I am very proud of what we've accomplished and it makes me think, I'd love to do some more," Mr Obama said.
"But by the time I'm finished, I think it will be time for me to go."
AFP

Thousands rally against Erdogan as Turkey mourns deadliest attack

Thousands rally against Erdogan as Turkey mourns deadliest attack 

[ANKARA] Thousands of mourners filled the streets of Ankara on Sunday and vented their anger at President Recep Tayyip Erdogan after 97 people were killed in the country's worst-ever terror attack, while the government raced to identify the two male suicide bombers it blamed for the bloodshed.
Flags flew at half-mast across Turkey on the first of three days of national mourning declared by Prime Minister Ahmet Davutoglu, as questions grew over who could have ordered Saturday's bombings on a peace rally in Ankara.
Turkey's pro-Kurdish Peoples' Democratic Party (HDP), one of the groups that had organised the rally, said it believes the death toll now stands at 128.
The attacks have raised tensions in Turkey just three weeks before snap elections are due on November 1 and as the military wages an offensive against Islamic State (IS) jihadists and Kurdish militants.
Advertisement
With the country on edge, Mr Erdogan issued a statement condemning the "heinous" bombings and cancelled a planned visit to Turkmenistan but he has yet to speak in public since the attack that shocked the nation.
On Sunday, thousands of demonstrators thronged central Ankara's Sihhiye Square, close to the blast site by the city's main train station, to pay tribute to the victims.
Many of those gathered accused the government of failing to provide security at the ill-fated rally and several anti-government demonstrators shouted "Erdogan murderer" and "government resign!" "I am a mother, I'm worried about my grandchildren, I am marching for our children, for our future. Each time there are people dead, I also die a little," said Ms Zahide, who like many others carried a pink carnation flower to commemorate the victims.
The premier's office said 97 people were killed when the bombs exploded just after 10.00am (0700 GMT) as leftist and pro-Kurdish activists assembled for the rally.
It added that 507 people were wounded, with 160 still in hospital and 65 in intensive care in 19 hospitals.
An AFP correspondent said the scene of the blast was littered with ball bearings, indicating the explosions were intended to cause maximum damage.
'TOPPLE THE DICTATOR'
In an emotional address to the mourners in Ankara, the HDP's leader Selahattin Demirtas said that rather than seeking revenge people should aim to end Mr Erdogan's rule, starting with the upcoming legislative elections.
"We are not going to act out of revenge and hatred. But we are going to ask for (people to be held to) account," he added, saying the elections would be part of a process to "topple the dictator." Even before the attacks, the president was under immense political pressure after his Justice and Development Party (AKP) lost its overall majority in June 7 polls for the first time since it came to power in 2002.
Coalition talks failed and Mr Erdogan called new elections for November 1. But to the disappointment of the AKP, opinion polls show the outcome may be little different to the previous ballot.
The Ankara death toll surpasses that of the May 2013 twin bombings in Reyhanli on the Syrian border that killed over 50 people, making the attack the deadliest in the history of the Turkish Republic.
The attacks drove a knife through the heart of normally placid Ankara, which became the capital following the founding of the modern Turkish Republic by Mustafa Kemal Ataturk.
"This could well be Turkey's 9/11," said Soner Cagaptay, director of the Turkish Research Programme at The Washington Institute.
LINK TO IS?
There has been no claim of responsibility yet for the twin bombings but Davutoglu said groups including IS jihadists, the outlawed Kurdistan Workers' Party (PKK) and the far-left Revolutionary People's Liberation Party-Front (DHKP-C) were capable of carrying out such an attack.
"Work is continuing to identify the corpses of the two male terrorists who carried out the suicide bombings", the office of Prime Minister Ahmet Davutoglu said in a statement late Sunday.
The attack came just under three months after a suicide bombing blamed on IS, also against peace activists, in the border town of Suruc on the Syrian border killed 33 people.
NTV television said the Suruc and Ankara attacks were similar both in style and the type of bombs used. The same forensic experts sent to Suruc are now working in Ankara.
The Hurriyet and Haberturk dailies reported that the elder brother of Abdurrahman Alagoz, who carried out the Suruc suicide bombing, could be implicated in the Ankara blasts.
The Suruc bombing caused one of the most serious flare-ups in Turkey in recent times as the PKK accused the government of collaborating with IS and resumed attacks on the security forces after an over two-year truce.
The military hit back, launching a "war on terror" against the Kurdish militants.
The PKK on Saturday unexpectedly announced it would suspend all attacks - except in self defence - ahead of the polls.
But the Turkish army kept up its campaign with more air raids on southeast Turkey and northern Iraq, killing 49 suspected militants over the last two days, the official Anatolia news agency reported.
Two Turkish soldiers were also killed in clashes with the PKK in the eastern Erzurum region, reports said.
AFP

IMF urges Japan to proceed with second sales tax hike

IMF urges Japan to proceed with second sales tax hike

[PERU] A senior International Monetary Fund official has urged Japan to go ahead with a sales tax hike scheduled for April 2017 to maintain its long-term fiscal credibility.
Mitsuhiro Furusawa, the IMF's deputy managing director, warned on Sunday that flexible fiscal policy and structural reforms must accompany ultra-loose monetary policy for Japan to achieve a sustained economic recovery. "If you keep missing your medium- to long-term fiscal target, people will start having doubts" on whether Japan is serious about reining its burgeoning public debt, Mr Furusawa said. "Delaying the tax hike just because you don't like it won't be too convincing," he told Reuters at the World Bank and International Monetary Fund meetings.
Prime Minister Shinzo Abe delayed a second sales tax hike by 18 months to April 2017, after the first one pushed Japan into a recession last year. He has pledged not to delay it again, but some lawmakers fret that the economy may not have revived enough to weather the pain from the higher levy.
Mr Furusawa said Japan should proceed with the second hike, which will bring the tax rate to 10 per cent, unless the economy is hit by an external shock of the scale of the collapse of Lehman Brothers in 2008.
On the yen, the former top Japanese currency diplomat said that while its declines had both advantages and disadvantages for the economy, it was important to avoid extreme fluctuation. "Some companies may benefit from a weak yen, while others may not. But for companies to have enough time to adjust their business plans, it's important that the yen doesn't move too rapidly," he said. "Policymakers would need to respond to excessive volatility or disorderly currency moves. Otherwise, currency rates should basically be determined by markets," he said.
Mr Furusawa declined to comment on whether the Bank of Japan should ease policy further at its next meeting on Oct 30, when it is set to cut its long-term economic and price forecasts.
But he said that inflation has gradually accelerated when excluding the effect of slumping energy costs. "There's not much the BOJ can do about external factors, so it will probably guide policy looking at many other things." Japan's economy shrank in April-June and may suffer another contraction in July-September on weak exports and consumption.
Consumer prices slid in the year to August on slumping energy costs, keeping the BOJ under pressure to expand its massive stimulus to meet its 2 percent inflation target.
REUTERS

728 X 90

336 x 280

300 X 250

320 X 100

300 X600