ECB has raised a discount rate up to 4,25 %
Written on 19 July 2008 by adminThe European central bank (ECB) has raised a discount rate on 0,25 percentage items. Thus, the parameter has made 4,25 % annual. Such decision was accepted today, on July, 3rd, at session of advice of managing directors of bank.
Decision of ECB has coincided with expectations of analysts, who predicted, that the bank will raise the rate of refinancing on 0,25 percentage items - up to 4,25 % annual.
More than for a year the rate was kept at the level of 4 %. However, the president of Bank has for many times declared that the bank had to solve the problem of struggle against inflation, even in detriment of economic growth.
Let’s remind that ECB’s previous session took place on June, 5th, 2008, and the discount rate has been left at the level of 4 % annual.
According to published on June, 30th, preliminary data of Eurostat, inflation in Euro zone of euro is expected at the level of 4 % in annual calculation. Thus ECB’s reference point on inflation in Euro zone makes not above 2 %.
In experts’ opinion, increase of the European discount rate will inevitably lead to the further falling of dollar and rise in prices on raw actives. Now the difference between rates in the Europe and the USA will make 2,25 %, that, most likely, will serve as a principal cause for weakness of US currency.
Bank of America has finished purchase of hypothec broker Countrywide
Written on 12 July 2008 by adminBank of America (BoA) has finished purchase of hypothec broker Countrywide Financial for 2,5 billion dollars. The sum of the transaction was on 37 % below initial 4 billion dollars because of decrease in BoA’s quotations. Opponents of merge prove, that together with Countrywide BoA has got billions dollars of write-offs and a legal cost in the future, and opponents object, that in long-term prospect the bank only will win from the transaction and after end of crisis it will receive a quarter of the hypothec market of the USA.
This transaction as a matter of fact has been begun in August, 2007 when BoA in exchange for 16 % of shares has invested 2 billion dollars into Countrywide and has helped bank to cope with the deficiency of liquidity, caused by credit crisis. In January of this year the company has agreed upon purchase of Countrywide, entirely through exchange of shares in the ratio 1 to 0, 1822. For that moment the transaction was estimated in 4 billion dollars, however, since then shares of bank have fallen in price almost on 40 % because of what the size of the transaction was reduced up to 2,5 billion dollars. The Bank has paid for the company about 4,3 dollars per share, besides, one year ago papers of the company cost over 35 dollars piece.
Bank of America will fire 7,5 thousand of “hypothec” employees
Written on 30 June 2008 by adminWithin two years after purchase of largest in the USA hypothec company Countrywide Bank of America is going to reduce nearby7,5 thousand workplaces.
To reduction will cover about 3 % of all labor of the united companies. In the end of March nearby 209,1 thousand person worked in Bank of America and nearby 50,4 thousand employees worked in the Countrywide.
Reduction of the personnel will pass all over the country, basically, in those areas, where functions of the serving two companies are duplicated.
Countrywide has already reduced 11 thousand workplaces in connection with growth of losses under credits from the middle of 2007 and has limited delivery of brave loans, including low-rate subprime credits and loans with the floating interest rate.
Mortgage will ruin thousand British
Written on 29 June 2008 by adminMore than 23 000 Englishmen, who have taken the mortgage from the beginning of year, continue to lose money. Falling of the prices for the real estate means unprofitableness of investments in hypothec habitation as cost of the house, got in such way, becomes below the sum, which the borrower should give to the bank.
Data of Hypothec creditors’ council show that rates of growth continue to decrease in the housing market. The quantity of transactions has fallen to one agent up to the lowest mark for last 30 years. For last 5 months real estate has lost in the price about 6 %.
These data have forced banks to toughen requirements to borrowers - now they reluctantly give out loans and refuse clients without initial payment as the risk of outstanding credit is very high. For the borrower loss in cost of habitation doesn’t seem such a serious problem while the owner will not face necessity of leaving the house, when he will not be able to pay the percent under the mortgage.
Data show decrease in a segment of sale and purchase, where very small quantity of people have replaced habitation - for last 3 months on each agency hardly has more than 17 transactions. However, it is not the end - up to the end of 2009 experts predict even greater falling in prices.
Royal Bank of Scotland predicts world financial crash
Written on 21 June 2008 by adminRoyal Bank of Scotland (RBS) analysts believe that within the nearest three months the world share market can suffer crash, which will become one of the most scale for last 100 years, predicting, that by September of this year S&P 500 index will lose 22 %. At the same time HBOS bank’s experts consider, that the quantity of the given out loans on purchase of the real estate will decrease on 45 %, and the number of non-returns of credits will grow on 17 %. The bank of Russia also prepares for the next demand for liquidity from banks.
RBS analysts predict longer period of economic growth delay, which will be kept not only within this, but also within the following year. Thus in such conditions Central Banks will appear actually paralyzed and will not be able to undertake anything for inflation restraint. Most of all RBS analysts are disturbed with prospect of increase of rates in the Europe for struggle against inflation that can turn back with sharp toughening of monetary policy. The further decrease in economic forecasts will lead to reduction and according to analysts’ estimations it will lead to decrease of companies’ profits and increase in forecasts of corporate defaults.
International conference Private Banking and Wealth Management in Russia
Written on 18 June 2008 by adminCompany Infor-media Russia invites you to take part in 2nd International conferences «Private Banking and Wealth Management in Russia: prospects, strategy, practice», which will pass on June, 23rd and 24, 2008 in hotel «Marriott Royal Aurora», Moscow, Russia.
Conference «Private Banking and Wealth Management in Russia: prospects, strategy, practice» will touch upon such questions as:
- Foreign historical experience on rich clients’ service
- Features of foreign banks for Russian clients
- Specificity of work of the Russian banks on Russian VIP-clients service and attraction
- Tools for maintenance of growth of means of the involved investors
The program of conference is made in view of participants’ wishes and offers!
The basic topics of conference are:
Potential and prospects of development Private Banking and Wealth Management in Russia
Practical experience of introduction and construction of programs Private Banking in the Russian banks and in large financial groups
Expansion of a ruler of products and programs in sphere of private bank service
Diversification of Russian VIP-clients’ investments portfolio
Tools of actives profitableness increase
Prospects of development of the share market as tool for servicing of Private Banking and Wealth Management in Russia
UBS, Citigroup and Merrill Lynch can lose 10 billion dollars more
Written on 15 June 2008 by adminAmerican banks Merrill Lynch and Citigroup, and also European UBS can suffer losses at the rate of 10 billion dollars because bonds insurers have lost the maximum ratings in the USA. Earlier because of securities insurers problems three banks have already lost the similar sum, however, analysts consider, that in a context of the general losses of banks because of credit crisis the sum of new write-offs does not look such high.
According to analysts’ estimation three banks already have written off as 10 billion dollars because of problems of bonds’ insurers. Now they expect for with doubling the sum of write-offs. In the end of the last week rating agency Standard and Poor’s has reduced ratings of two largest American bonds’ insurers MBIA and Ambac from the highest up to AA, having predicted decrease in rates of new business and financial flexibility growth. As a result ratings of insured securities for the sum from above 1 billion dollars will go under revision. Even earlier MBIA and Ambac have lost the highest ratings of agency Fitch. Agency Moody’s also thinks about the same step.
The limited potential of insurers’ profits creates risk of cost of insurances and guarantees under the hypothec securities, given to banks and the broker companies. The general losses of banks can reach 40 billion dollars. The greatest risk of new write-offs has hung above bank UBS - the largest European victim of credit crisis. On the end of March the size of potential losses of bank has been estimated in 6,3 billion dollars. While in Citigroup the volume of the positions, guaranteed by insurers, made 4,8 billion dollars. In Merrill Lynch this parameter has made 3 billion dollars.
Savings Bank of Russia will cancel mortgages at delivery of credits
Written on 9 June 2008 by adminThe Savings Bank of Russia is going to cancel gradually mortgages and guarantees at credits delivery.
The member of board of bank (Denis Bugrov) has informed on it in lobby of the International economic forum in St.-Petersburg.
As he said credit programs, in which requirements on guarantors will be facilitated, will be already soon started. As specialists from Savings Bank consider, all this will simplify process of drawing upon credits.
Credit card or the consumer credit
Written on 5 June 2008 by adminDistinction of the credit scheme gives a difference of debts’ repayment mode - in case of credit card revolving the client is obliged to repay a part of the sum monthly, and overdraft card obliges the borrower to repay at once all debts within one month.
Banks try to use various ways to attract clients in using credit cards. The most widespread ways of attraction cover grace period of crediting, decrease in the commission for service of the account. Recently some banks have started to introduce such service as cash back - when the holder of a card, having made purchase due to a credit limit, receives compensation from bank (in the form of percent from the sum of purchase) back on the account.
The sum of the consumer credit can be above, than a credit limit on card, therefore for essential purchase on credit is more preferable take advantage of consumer credit. Repayments on consumer credit are usually offer monthly payments while on a card the holder can adjust a level of credit burden. It means that the client can liquidate a debt with the minimal payments (usually 10 % from the sum of debts) and to stretch process of payment for a long term and can extinguish a significant part of the credit or the credit entirely. Having extinguished debts entirely during the certain term and used the term of grace period (grace period), it is possible to be released from payment of interests on credit at all.
World’s largest country-creditor
Written on 26 May 2008 by adminJapan - is the world’s largest country-creditor, and positive balance between its made abroad and received from abroad investments into all forms has exceeded 250,2 bln. yens (more than $2,4 bln.).
Within the year this balance has increased on 16,3 %. It is spoken in the report of the Ministry of Finance, widespread in Tokyo.
Japan wins first place in the world on this parameter 17th year on end. This statistics considers all kinds of loans and capital investments of the country both on state, and at a private level.
Germany is on the second place in the world on positive balance of the made and received investments. China, Hong Kong and Switzerland follow it.
USA, according to statistics, acts as the largest the world the debtor: the foreign investments, made in their territory, exceed the American capital investments abroad almost on $3 bln.
