Ten U.S. banks that have received assistance with rescue money taxpayers have spent over 16 million dollars for lobbying during the first six months of the year. Money is spent to influence the participants in the debate on financial sector reform in the U.S. The regulatory data show that the ten banks that have received the largest share of state aid in 2008 and 2009 spent a lot to influence the views of members of Congress, representatives of the White House, Treasury, Federal Reserve, and some of the federal agencies involved in designing the new regulatory framework. “I’m not surprised that these banks have spent so much money because I saw every day how it happens,” said Ed Mirtsvinski, director of the US Public Interest Research Group. He said reform of the financial sector have worked over 2000 lobbyists. The new regulatory framework, signed by President Barack Obama in July, with volumes in 2300 pages and outlines new rules for derivative trading, charging and regulation of transactions with debit and credit cards. Many of the new rules laid down by banks as too harsh and cause discontent. The sum of 16.32 million dollars set aside for lobbying during the first half, with 26 percent more than the money allocated to this activity for the same period last year.
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The end of the working week has brought the closure of three U.S. banks. Thus the number of bank failures in the country since the beginning of the year amounted to 86 and is on track to improve last year’s record of 140 closed financial institutions – the highest number since 1992. Federal deposit insurance corporation in (FDIC) has closed banks in the states of Florida and New Mexico, Georgia, as buyers are financial institutions by the states. The three failure will cost the FDIC 284,6 million dollars. “The growing problems in commercial property and the ongoing crisis in housing loans will cause many bankruptcies,” said Walter Mix, managing director at financial consulting firm LECG LLC. Over the next three and a half years the bank will claim the bankruptcy 60 billion dollar fund to FDIC, said by the corporation on 22nd June. Fund out of deficit in third quarter of last year. Florida-based Peninsula Bank was purchased by Premier American Bank, owned by Bond Street Holdings LLC. January Holding buy two troubled banks. First National Bank of Jordan was been sold by the FDIC of Savannah Bank, a High Desert State Bank in New Mexico – the First American Bank. In the first quarter of this year the list of troubled banks FDIC counts 775 institutions with assets of 431 billion.
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The former chairman of the Anglo Irish Bank has been arrested and questioned by local police for alleged financial irregularities. Sean Fitzpatrick has left his post in December 2008 after admitting it concealed personal loans for millions of euros from the bank. He had hidden data on loans from shareholders of the bank as a temporary transfer them to another bank before the period at the end of each year, not to declare them in balance. Last year, Anglo Irish Bank reported the largest loss in corporate history of Ireland – 4,1 billion for the six months to March. Expected results that are soon to announce the bank for the last reporting period, are worse. The Bank was one of the “stars” of business in Ireland during the prime real estate in the country, lends billions of euros for projects of entrepreneurs in Ireland and Britain. In 2009, however, it was nationalized because they were threatening to declare bankruptcy. Besides the hidden loans with the bank and other related scandals, including alleged scheme to support the artificial price of its shares and the entry of a huge loan from another bank as a deposit to a customer.
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The Swiss bank UBS came first profit since Oswald Gryubel assumed leadership of the company a year ago. Net profit for the financial institution for the fourth quarter of 2009 amounted to 1.205 billion Swiss francs (1.1 billion), Reuters reported. This is a significant improvement compared to the same period in 2008 when the bank had a loss of 9.58 billion francs. The improvement is partly due to a tax credit of 480 million Swiss francs, and the reduction of bonuses. However, under pressure from the continuing effects of the global financial crisis led to tax evasion cases in the United States and pressure from other countries for violation of banking secrecy to disclosure of tax crimes, UBS continues to lose the trust of its customers. “We are sure that the measures we took for withdrawal of capital from the bank’s clients are effective, but in the immediate future we expect to continue to draw,” says Oswald Gryubel CEO and Chairman of the Board of Directors Vilidzhar Kasper in a letter to investors.
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The Mayor of London Boris Johnson warned the bankers to stay in the City of London, warning that the temptation to move to Switzerland to them face unexpected risks, officials said. “I am told that there are some parts of the canton of Bern, where men are not allowed to urinate made after 10 o’clock at night so as not to disturb their neighbors,” Johnson told a reception organized by the Japanese investment bank Nomura in the ski resort of Davos, which is currently being held traditional World Economic Forum. His comments in the room full of bankers, were made on the news that some hedge funds and investment bankers leave London and move to Switzerland to avoid the EU regulations or imposed in the UK tax revenue over a specified amount and on bonuses. “Time is the master of the universe to show that they can be both servants of society,” said Johnson, a former journalist and a frequent guest on satirical TV shows.
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The Bankers in the City will hardly be affected by the tax bonus, introduced by the British government last month, according to a Financial Times survey among leading investment banks. The majority of banks surveyed in the anonymous survey said they will bear all expenses for single tax rate of 50% or more of them by increasing funds for bonuses, even at risk to irritate the government and its own shareholders. The results coincide with information gathered by companies for recruitment. “90% of the tax will be borne by the banks,” says consultant by one company with customers in the City. In many cases this will mean that banks will double the funds allocated for bonuses, and tax costs will be borne by shareholders. Likely to be affected dividends that will already be under pressure because of the requirements of regulators to keep the profits banks to strengthen capital, the bankers admitted. Some investors have become increasingly dissatisfied with the plans of banks. According to the survey more likely to take a full tax at state institutions. However, some, as U.S. and Europe say they will try to share the cost of taxes and bonuses between the bank employees. In cases in which costs are shared by bankers that will apply globally, not only for employees in London. This strategy will not like the British finance ministry. When British finance minister Alistair Darling said the tax he expected that banks refuse to distribute large bonuses, such as forecasting that it will attract additional revenue of only 550 million pounds.
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The International credit rating agency Standard and Poor’s announced that it confirms the long-term rating of A European banking group UniCredit Group. Short-term rates e A-1, a stable outlook, the bank said. The decision of Standard and Poor’s follows the disclosure of UniCredit’s intention to further strengthen its capital position by increasing its capital by 4 billion. The Board of Directors of the Bank adopted a proposal for a capital increase by issuing new ordinary shares. Thus, the group’s capital base will grow by an additional 80 basis points. At the end of June 2009 the index Core Tier 1 is 6.85%. With the capital increase UniCredit aims to continue its support for countries in which it works and to develop lending to small and medium-sized businesses, individual customers and households, says the message.
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