The NYT reports that the low unemployment rate in Germany might allow workers to get higher wages, which could put upward pressure on the inflation rate. The only sources cited in this story are Jean-Calude Trichet, the head of the European Central Bank,

View full post on All Stories

View full post on All Stories

View full post on All Stories

View full post on All Stories

Reykjavik, Iceland (AHN) – Iceland will start repaying a $3.45 billion (EUR 2.6 billion) from Britain in 2016. Reykjavik owed the amount to London after the online Icesave Bank failed two years ago.

The agreement to repay ends two years of dispute over interest rates between the two countries after Iceland’s financial system collapsed in October 2008. Following the failure of Icesave’s parent company Landsbanki, the U.K. treasury had to bail out 300,000 British depositors, including 108 English, Scottish and Welsh councils that have high-interest accounts in Icesave.

The International Monetary Fund also extended a $2 billion loan, while Sweden, Finland, Norway and Denmark provided another $2.5 billion loan to Iceland.

According to the European Economic Area regulations, Iceland was supposed to pay each account holder $29,158 (EUR 22,000), but because of the financial straits in Iceland, Britain and the Netherlands offered the country a loan. Landsbanki also had a number of Dutch depositors.

Icelandic and British officials initially agreed a year ago to set the interest rate at 5 percent. However, 93 percent of Iceland residents rejected the agreement because they considered the interest rate too high.

The new agreement sets interest rate between 3 percent for the Netherlands and 3.3 percent for Britain on repayments from 2009 to 2016. The debt should be fully paid back by 2046.

The deal, however, needs the seal of approval from Iceland’s Parliament, president and government. If the agreement is approved, ratings agency Moody’s said Reykjavik’s credit rating could be raised and it may pave the way for Iceland joining the European Union.

View full post on Economy, Business And Finance Stories

View full post on All Stories

London, England, United Kingdom (AHN) – Anger is growing throughout Britain over the refusal by the Financial Services Authority to publish the result of its investigation of the Royal Bank of Scotland failure. The FSA commissioned PricewaterhouseCoopers to probe the RBS, which needed a $67.5 billion (GBP 45 billion) government bailout after the bank purchased ABN Amro for $73.5 billion (GBP 49 billion) and an $18 billion (GBP 12 billion) rights issue.

FSA cited the Financial Services and Markets Act of 2000 as the reason behind the non-publication of the investigation result. The FSA instead released Thursday a short press release that acknowledged mistakes were made by the bank administration, but said there was no law broken nor was there dishonesty among bank officials that led to the crisis.

Britons are clamoring for more transparency on the result of the probe because 83 percent of RBS is owned by taxpayers. Even Chancellor George Osborne and the current management and board of RBS have seen the report.

Because of this development, the FSA ordered a review of the Financial Services Authority’s rules. The Liberal Democrat Party joined the call that a copy of the PricewaterhouseCoopers report be furnished the parliamentary library.

What also angered the public was that Sir Fred Goodwin, the former chief executive of RBS, whose leadership of the bank was heavily criticized, got a multi-million pound pension when he left the bank.

Aside from the RBS probe, the FSA also had the two other major financial crisis players HBOs and Bradford & Bingley investigated, but the details of the two inquiries have also not been released by the agency.

View full post on Politics Stories

View full post on All Stories

View full post on All Stories

Manhattan, New York, United States (AHN) – A lawyer appointed as a trustee by a New York bankruptcy court filed a $6.4 billion lawsuit Thursday against JPMorgan Chase.

Irving Picard said he filed the case because JPMorgan is the primary banker of Bernard Madoff and must carry some responsibility for the losses of the imprisoned con man’s victims.

Picard maintains JPMorgan continued to be Madoff’s main bank even if there was growing evidence that Madoff was running a large fraud. Picard’s attorney, David Sheehan, said Madoff would not have pulled off with the massive Ponzi scheme without the bank’s complicity.

Picard filed the lawsuit with the U.S. District Court in Manhattan. The $6.4 billion is broken down into $1 billion legal fees and $5.4 billion in damages.

Sheehan said the bank disregarded “clear, documented suspicions” about Madoff, particularly large amounts of cash movement which are indicators of a Ponzi scheme.

JPMorgan denied Sheehan’s accusation. The bank maintained it had no advance knowledge that there was something wrong going on at Madoff’s company. The bank stressed it did not help in any way in the fraud committed by Madoff.

The trustee based his lawsuit on subpoena powers to secure internal bank documents and make depositions with JPMorgan employees.

According to reports that came out in French media, some bank executives have expressed concern about Madoff a few years before his fraudulent operations was exposed in December 2008.

Picard has so far recovered $1.5 billion on behalf of Madoff creditors. Any other money recovered from JPMorgan would be divided among Madoff victims on a pro-rated basis. Picard filed in May 2009 a $7.2 billion claim against Madoff investor Jeffry Picower, who however died in October that year.

Madoff, 72, after he admitted directing the largest Ponzi scheme in history, is serving a 150-yesr sentence in a North Carolina federal prison.

View full post on Economy, Business And Finance Stories