European Central Bank Governing Council Member Nout Wellink said the central bank’s April 7 interest rate increase sent to investors an “extremely important” signal aimed at preventing expectations of higher inflation.
View full post on Finance Stories
March 28 (Bloomberg) — Mickey Levy, chief economist at Bank of America Corp., discusses Federal Reserve policy, the U.S. economy and the federal budget. (Source: Bloomberg)
View full post on Finance Stories
Deutsche Bank AG, Germany’s biggest bank, may face $118 million in U.S. penalties to cover taxpayer losses on a federally insured apartment loan owned and serviced by one of the company’s subsidiaries.
View full post on Finance Stories
Manila, Metro Manila, Philippines (AHN) – The Philippine Central Bank said Monday it may reduce remittance forecasts for 2011 because of the political developments in the Middle East and the natural calamity in Japan that would impact the ability of overseas Filipino workers to send money home.
Prior to these developments, the Central Bank estimated remittances by overseas worksers would grow by 8 percent this year to reach $20 billion.
The bank also predicted a record $68 to $70 billion level in gross international reserves and $6 to $8 billion balance of payments surplus.
For several years, the OFW remittances had been growing annually as more Filipinos opt to work overseas where the pay is several times over local wages. Despite the global financial crisis in 2008, the remittances were not affected.
Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said the central bank will review in April the GIR and BOP projections, factoring in the developments in the Middle East and Japan.
There are millions of Filipino workers in the Middle East, but the bulk of them (or more than 2 million) are in Saudi Arabia, where the civil unrest contagion has not yet reached crisis level. There are more than 350,000 Filipinos in Japan, including children of Japanese-Filipino unions.
OFW remittances have propped up the Philippine economy since the country started to send workers to the Middle East in the mid-1970s. The workers’ remittances account for at least 10 percent of the Philippine gross domestic product.
Middle East-based OFWs contributed 16 percent of $18.76-billion total remittances in 2010, which was up from $17.35 billion in 2009. Remittances from Japan topped the money sent by Filipino workers from Asian nations, which comprised 12 percent of the 2010 total. Money from Japan reached $883 million last year.
Tetangco said the central bank will consider current and future trends, including impact of the higher oil prices.
View full post on Labor Stories
COLOMBO, Sri Lanka (IRIN) – As the Sri Lankan government launches a cash-for-work program in areas hit by recent flooding, following similar schemes in the former conflict areas in the north, experts warn of potential pitfalls of such schemes.
The new program will be operating in 12 northern and eastern districts devastated by flooding in January and February, which affected more than two million and displaced close to 700,000, according to the government.
Regional government officials have been instructed to employ those affected by flooding to rebuild rural roads, minor irrigation tanks and channels. Participants are to be paid about US$4 daily for up to four days a week.
More than $3 million has been allocated by the Ministry of Economic Development for the scheme, launched in early March.
Model
As residents started returning in late 2009 to areas formerly controlled by the Liberation Tigers of Tamil Eelam (LTTE) rebels in the north, the World Bank implemented a $7.5 million cash-for-work programme. Some 28,652 families benefited between December 2009 and July 2010, according to the bank.
The programme is the largest of about a dozen, which typically run for at most a year, that have operated in the north since the 2004 tsunami.
To limit the number of participants, the Bank set wages 15 percent below market rates and allowed one member per returning family to apply.
The work involves hand-dug construction and small-scale irrigation, and repairs to roads, health clinics, community drinking water facilities or schools.
“The cash-for-work program have been quite successful, given the lack of economic activity as the war-displaced began to move back… So far the work has been completed satisfactorily,” said G.A. Chandrasiri, the Northern Province governor.
No official unemployment figures are available for the province, but some analysts estimate half the population remains unemployed or is not working enough to support their needs; when cash-for-work programmes end, permanent jobs rarely replace them.
The program was never intended to be a long-term employment solution, stressed the World Bank office in Sri Lanka. “The priority and challenge at the end of the conflict was to create essential community infrastructure, ensure returning IDPs [internally displaced persons] have short-term income-earning opportunities… so that IDPs will resume their normal livelihood activities in agriculture, informal sector activities, etc.”
But short-term cash may actually have long-term negative consequences, said local economist and principal researcher with Point Pedro Development Institute in Jaffna province (heart of the former conflict zone), Muttukrishna Sarvananthan.
“It [cash-for-work] may distort labour market wages (i.e. after the CfW [cash-for-work] ends, the beneficiaries could expect similar or higher wages than what they received under CfW), discourage labour mobility [and] self-employment initiatives. Many CfW programmes in Jaffna and Vanni run for a long time with no meaningful work done.”
Major repairs are still handled by government agencies with heavy equipment or foreign workers rather than local manual labour, he added.
“I have seen Chinese workers employed in building of cantonment for army personnel stationed in [the northern district of] Kilinochchi. Local unskilled or semi-skilled labour could have been employed for this purpose.”
Sarvananthan estimates unemployment to be above 20 percent in the areas controlled by the LTTE until 2009, under-employment to be at least another 30 percent, and that almost half the work force in these areas survived on occasional employment, earning less than $1 per day.
“There are very limited job opportunities available in this area right now,” said Manoharan Seenathamby, the World Bank’s senior rural research specialist in Sri Lanka.
This could change if the government switched from capital-intensive to labour-intensive construction, suggested Sarvananthan.
“One way to generate meaningful employment in former conflict-affected regions is to employ labour-intensive – or what the ILO [International Labour Organization] calls labour-based – technologies in rehabilitation/reconstruction of infrastructure including roads, houses, public buildings.”
Insecurity
Kathiravel Krishna, a 31-year-old father of five from the northern village of Tharmapuram, said temporary work brought cash, but little stability. “Cash for work is available only for a limited time and in certain parts. Not all the people get it and it cannot replace the security of a job.”
He survives on the odd day job on farms and doing construction work. Some of the returnees, especially those who live alongside the main highway, have used parts of their UN-funded government cash grants of $220, given to each returnee family, to set up tea shops.
As of end 2010, 76,000 families had registered with the UN Refugee Agency (UNHCR) to receive these grants, intended to help in building temporary living quarters, for a total of about $7 million.
Krishna said tea-shop owners and other small business vendors near the highway were the most secure financially. “But, for those living [in the] interior, there is no such option and the cash grant is now long gone.”
ap/pt/mw
View full post on Labor Stories
Washington, D.C., United States (AHN) – American Bank Wells Fargo announced Monday that it plans to hire 500 employees in the Washington D.C. area over the next few months. The new hires would include tellers, managers and personal bankers.
The hiring is driven by Wells Fargo’s acquisition of Wachovia in December 2008 for $15 billion.
Wells Fargo also absorbed $74 billion of Wachovia’s losses. Before the Wells Fargo buy-in, Wachovia shares plummeted 80 percent following lawsuits filed against the bank for providing bank services to fraudulent telemarketers who cheated elderly investors of millions of dollars.
Wells Fargo plans to rebrand all of the Wachovia branches by fall. The concentration of new hires in the Washington area seeks to take advantage of the former Wachovia branches as having the highest deposits in the region where Wells Fargo has 130 branches.
According to the Federal Deposit Insurance Corporation, Wachovia overtook Bank of America last fall with a $3 billion hike in deposits in the Washington metropolitan area. Wachovia secured 16.1 percent of the local market share, versus BofA’s 14.6 percent.
Another 1,000 workers would also be hired by Wells Fargo for its 404 offices in the Mid-Atlantic region, but the new employees would be used to beef up existing branches, not to open new ones.
The planned 1,500 new hires would be on top of 600 employees that Wells Fargo took in for the Mid-Atlantic region since the merger.
Industry observers said Wells Fargo’s hiring spree is an indicator of the recovery of the financial services sector from the global financial crisis and recession. In the last 12 months from December 2009 to December 2010, the sector reported a net loss of only 1,700 jobs compared to 6,500 jobs lost the previous year.
Aside from Wells Fargo, Cardinal Bank and Sandy Spring Bank are also boosting their manpower.
View full post on Labor Stories
Bank of Montreal, Canada’s fourth- biggest bank by assets, said profit rose to a record on gains from investment banking and consumer lending.
View full post on Finance Stories
Bank of England policy maker Andrew Sentance said it’s time for the bank to start raising borrowing costs from a record low as the global economy recovers and emerging-market demand intensifies inflation pressures.
View full post on Finance Stories
London, England, United Kingdom (AHN) – British banks are apparently regaining their profitability, based on the performance of the four largest banks in the country.
The four – Barclays, Lloyds, HSBC and Standard Chartered – will announce combined profits of $36.3 billion (GBP 24.2 billion). The higher profits represent a 10 percent rise from last year reported by the four banks at $32.24 billion (GBP 21.5 billion).
HSBC enjoyed the largest profit at $20.25 billion (GBP 13.5 billion), followed by Barclays at $7.65 billion (GBP 5.1 billion), Standard Chartered at $6.75 billion (GBP 4.5 billion) and Lloyds at $1.5 billion (GBP 1 billion).
HSBC’s profit more than doubled compared to 2009′s, while Barclays was reduced by almost half.
Taxpayers have a 42 percent share in Lloyds and 84 percent stake in another bank, the Royal Bank of Scotland.
RBS, however, is expected to report a $919.50 million (GBO 613 million) loss. Despite the loss and being funded mainly by taxpayers who are tightening their belts, RBS Chief Executive Stephen Hester will reportedly receive a $3.66 million (GBP 2.44 million) bonus to be paid in shares cashable in three years.
Another British banker in the same situation is Michael Sherwood, head of Goldman Sach’s British operations, who reportedly will get $14.4 million (GBP 9 million) free shares or a 60 percent hike in value of stock award compared to what Sherwood got in 2009.
It is not only Sherwood who will enjoy a fatter paycheck at Goldman’s despite a 38 percent decline in the bank’s profits. Goldman Chief Executive Lloyd Blankfein will receive a 233 percent rise in basic pay this year to $2 million (GBP 3 million) from $600,000 (GBP 900,000).
Despite the turnaround enjoyed by the banks, Financial Services Authority Chairman Lord Turner said at the World Economic Forum that the public still require a reassurance that the financial crisis would not be repeated. Turner admitted the regulatory overhaul of British banks, which was designed to ensure the crisis would not happen again, is not yet complete.
Among the components of the overhaul is more transparency and control in bankers’ bonuses and compensation.
View full post on Labor Stories
Bank of America Corp., the largest U.S. bank by assets, earned $6.3 billion from its global banking and markets division last year, giving that business almost double the annual profit of any other segment.
View full post on Finance Stories
