French President Nicolas Sarkozy said
it is “unacceptable” that there’s no tax on financial
transactions and said France “won’t wait for everyone to be
agreed” before imposing the tax.
“How can you explain that when you buy an apartment or go
to the supermarket you pay tax, but that financial transactions
are the only sort of purchase where you don’t pay,” he said.
Sarkozy, adding that the euro zone “must take its
responsibilities,” made the remarks to the closing session of
the “New Worlds” conference in Paris Jan. 6.
A European Union financial-transaction tax would drive away
investment and weaken employment unless a levy was accepted
worldwide, said Margrethe Vestager, Denmark’s economy minister.
Vestager made the remarks late in the day on Jan. 5 in a
telephone interview. “We only support a global tax.”
The European Commission in September proposed a regional
financial-transaction tax that would take effect in 2014 and
raise about 57 billion euros ($72 billion) a year. Denmark,
which holds the EU’s rotating six-month presidency, sees the
topic as a priority.
The European Parliament’s economic committee is set to
discuss the plan in Brussels today.
France and Germany have led the push for a transaction tax
to extract revenue from banks and other types of firms, which
supporters say could raise funds to tackle climate change and
reduce poverty. Skeptics, led by the U.K., have said that the
tax might hurt Europe’s economy without curbing the risk of
another financial crisis.
A transaction tax would need endorsement by the Group of 20
nations to succeed, Vestager said. She chided the U.S. for
showing “little willingness to address this issue.”
President Barack Obama’s administration has focused on
charging banks for their own regulation, favoring a levy on bank
balance sheets to fund government protection to the financial
system in lieu of a transaction-based fee.
Compliance Policy
Denmark Will Push to Complete EU Capital Rules, Minister Says
Denmark will push to complete European Union bank capital
rules over the next six months, Danish Economy Minister
Margrethe Vestager said.
Vestager made the remarks Jan. 6 in Copenhagen as the
Danish government presented its program for holding the rotating
EU presidency.
She said the ministry still needs to “work out some
compromises,” including the minimum level of required capital,
requirements to put on capital beyond the minimum level, and
types of assets should go into different types of capital.’’
The EU executive arm in September set a July 2012 deadline
for the bloc’s 27 member states to sign off on an overhaul of
capital rules for them to go into effect in 2013. The EU
proposed in July to apply rules set by the Basel Committee on
Banking Supervision to more than 8,300 lenders.
EU banks must also raise 114.7 billion euros ($152.8
billion) in fresh capital ahead of a June 30 deadline as part of
measures introduced to respond to the euro area’s sovereign-debt
crisis, the European Banking Authority said on Dec. 8.
Hungary’s Orban Embraces Central Bank Chief to Save IMF Deal
Hungary’s Premier Viktor Orban retreated in his
confrontation with central bank chief Andras Simor as he seeks
to revive talks for an international bailout after a market rout
last week. The currency and bonds gained even as the country
received its third downgrade to junk.
Orban told reporters after meeting Simor Jan. 6 in Budapest
that the president can count on the government’s support,
including backing him personally. The government wants an IMF
agreement “as soon as possible” and will do “everything” to
support the central bank to stabilize the economy, he said.
The International Monetary Fund and the European Union
broke off talks last month on Hungary’s bid for a bailout after
Orban refused to withdraw a new central bank regulation the
institutions said may undermine monetary-policy independence and
Simor’s authority. The forint fell to a record against the euro
Jan. 5 as investors speculated an IMF accord may be delayed.
The central bank law, which came into effect on Jan. 1, is
“fully compatible” with EU rules, Economy Minister Gyorgy
Matolcsy said in a letter sent to European Central Bank
President Mario Draghi Jan. 5.
Orban shunned the IMF since taking office in 2010 to
prevent interference in what he called his “unorthodox”
measures, which included effectively nationalizing $13 billion
of private pension-fund assets and imposing extraordinary
industry taxes to tame the budget deficit. The EU has criticized
all the policies.
For more, click here.
Compliance Action
MF Global Regulatory Probe Includes Review of CME Group’s Audit
The U.S. Commodity Futures Trading Commission is reviewing
actions by CME Group Inc., (CME) the world’s largest futures exchange,
as part of its investigation into the bankruptcy of MF Global
Holdings Ltd, according to a person briefed on the probe.
The CFTC is reviewing CME Group’s audit of MF Global prior
to the collapse of the New York-based broker, during which as
much as $1.2 billion in client funds went missing. The CFTC,
Securities and Exchange Commission, Justice Department and
bankruptcy trustee overseeing the MF Global-liquidation are
investigating the possible misuse of client funds.
The CFTC’s five commissioners haven’t voted to begin a
formal investigation into CME Group, according to the person
briefed on the matter, who requested anonymity because the
investigation is private.
“We haven’t been notified that we’re under
investigation,” Anita Liskey, a CME Group spokeswoman, said
Jan. 6 in an interview. CME Group was MF Global’s primary
auditor.
MF Global used about $700 million of customer funds to
“meet liquidity issues” at its broker-dealer in the days prior
to the bankruptcy, according to CME Group.
The New York Times reported earlier on the review of CME.
Capital Injection for Piraeus Bank (TPEIR) Wins Temporary EU Approval
The European Commission has temporarily approved, under
European Union state aid rules, a 380 million-euro capital
injection into Piraeus Bank provided under the Greek support
scheme for credit institutions.
The approval is temporary and will only be prolonged if the
Greek authorities submit an updated restructuring plan for
Piraeus Bank, the commission said Jan. 6.
Separately, the commission said it will seek views on
possible measures to get rid of obstacles to the European market
for card, Internet and mobile payments.
The consultation, starting Jan. 11, “assesses the current
landscape of card, Internet and mobile payments in Europe,
identifies the gaps between the current situation and the vision
of a fully integrated payments market and the barriers which
have created these gaps,” the commission said on its website
Jan. 6.
Nigeria Banks to Cut Services as Workers Plan General Strike
Nigeria’s lenders (NGSEB10), including Diamond Bank Plc (DIAMONDB) and Standard
Chartered Plc (STAN), will run limited branch services from Jan. 9
during a nationwide strike to protest the scrapping of fuel
subsidies that doubled gasoline prices.
“There will be skeletal services, people on essential
duties will come to work,” Abdulrahman Yinusa, chief financial
officer at Lagos-based Diamond Bank, which operates 220 branches
with 3,000 employees, said by phone Jan. 6 that there will be
“skeletal services” and only people on essential duties will
come to work.
Trade unions called an indefinite nationwide strike and
threatened to shut down ports, fuel stations, banks and oil
operations in Africa’s largest crude producer if the government
fails to restore the fuel subsidy. President Goodluck Jonathan
will hold an emergency meeting with governors of 36 states
tonight in Abuja, the capital, to discuss measures that can help
ease higher prices.
For more, click here.
Courts
ENRC Sues Former Executive in Dispute Over ‘Dishonest’ Raise
Eurasian Natural Resources Corp. (ENRC), the producer of metals in
Kazakhstan, sued its former head of human resources Andrew
Balgarnie, accusing the ex-Morgan Stanley banker of dishonestly
giving himself a 100,000 pound ($154,500) raise.
ENRC filed the counterclaim against Balgarnie last month,
according to court documents. The move follows Balgarnie’s
decision to sue ENRC for wrongful dismissal in November,
claiming he is owed 310,000 pounds in back pay and bonuses.
The company said it is seeking the return of 74,000 pounds
which resulted from a pay increase not properly approved by
Chief Executive Officer Felix Vulis.
ENRC, which held a three-month review of its corporate
governance last year amid conflicts between the board and
shareholders, agreed Jan. 5 to acquire First Quantum Minerals
Ltd.’s assets in the Democratic Republic of Congo for $1.25
billion, ending a legal dispute between the companies over the
Kolwezi copper project.
“The allegations of misconduct and dishonesty as set out
in ENRC’s counterclaim are vigorously resisted,” Balgarnie’s
lawyer James Cox said in an e-mailed statement.
For more, click here.
Comings and Goings
RBS Hires Kibble From PwC to Lead Strategy and Corporate Finance
Royal Bank of Scotland Group Plc (RBS), the U.K.’s largest
government-owned bank, hired Richard Kibble from
PricewaterhouseCoopers LLP as group director of strategy and
corporate finance.
Kibble, 43, will start work in March and will report to
Chief Executive Officer Stephen Hester and Finance Director
Bruce Van Saun, Edinburgh-based RBS said in a statement Jan. 6.
Kibble has been a partner at PwC from 2008 and before that was
managing partner at Marakon Associates.
RBS last week hired Lazard Ltd. (LAZ) to advise on the sale of
parts of its equities unit, including stockbroker Hoare Govett,
said a person with knowledge of the talks. Hester is shrinking
the lender’s securities unit after the bank received the biggest
banking bailout in the world in 2008. Hester said in November
plans by the government-backed Independent Commission on Banking
will force the lender to cut the division further.
To contact the reporter on this story:
Carla Main in New Jersey at
cmain2@bloomberg.net
To contact the editor responsible for this story:
Michael Hytha at
mhytha@bloomberg.net
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