Friday, December 26, 2008

HEALTH REFORM: Our Year In Review


Health Policy -
December 24, 2008 - 10:07am

Before we give this blog (and our bloggers) a holiday break and wish our readers all the best for the New Year, we wanted to take a moment to look back at 2008 and look ahead, with some optimism, to 2009. Amid our challenges are opportunities, and amid those opportunities are the best chance in many years to fix our health care system so that it is both more equitable and more sustainable.

A year ago at this time, we weren't even sure whether health care would emerge as a leading issue in the 2008 primaries, whether it would resonate with voters. To the extent that candidates were talking about health reform, it was to a large extent a squabble among Democrats about mandates that most Americans probably didn't understand. But as the primary season wore on, we heard more and more about health care -- and, as former Arkansas Gov. Mike Huckabee reminded us, about wellness and prevention. Health care, after all, isn't just about payments and insurance and financing (and politics). It's about our health.

To their everlasting credit, candidates in both parties took our nation's health care crisis seriously and voters in both parties spoke up. Headlines may have focused on the disagreements about taxes, money and insurance markets; finding consensus on how best to expand coverage remains challenging. But what also emerged is that policymakers and politicians have an increasingly sophisticated understanding of the way our health care system has become outdated. How it focuses on acute care, when our society is facing an epidemic of chronic disease. How it rewards doctors and hospitals for providing lots of care, whether or not they are providing good care. How one in three dollars we spend on our health has little or no clinical value. An understanding of how we have to both figure out how to insure everyone and how to reinvent our health care delivery system so it makes sense, for our people's physical health and our country's fiscal health. Maybe not all politicians have said this in public yet. Maybe we are not quite at such a tipping point that reform can pass in 100 days. But it's what we here at New America's Health Policy Program have begun calling a "pre-tipping point" that will see major health reforms enacted maybe not in days or weeks, but in a reasonable, workable time frame. And that's progress.

Yes we enter 2009 with trepidation about our nation's economy, about what's ahead. But we also enter the New Year with hope. Inspired in part by the passion of Sen. Kennedy, leaders in both the House and Senate have already begun the hard work that an historic legislative initiative demands. President-elect Obama has made clear that health reform is a priority for his administration, not just a slogan for his campaign. He has shown that he understands that fixing health care is part of fixing our economy. Health care costs are part of what's wrong with Detroit and the auto industry. Part of what's hurting our ability to compete globally. Part of our housing and foreclosure crisis. Part of what's eating away at our small businesses. Part of what's hurting American families. So here's to 2009. Here's to hope.

Thank you and all the best -- Len Nichols, Joanne Kenen and the rest of the New America Health Policy Program.

Saturday, December 20, 2008

Queen's bank Coutts accused of giving disastrous investment advice


By Simon Duke
Last updated at 2:59 AM on 20th December 2008

The Queen's bankers have been accused of giving disastrous investment advice to their well-heeled customers.

Coutts allegedly told clients to keep their cash with the American insurer AIG even though the stricken group has had to be rescued by the U.S. government.

Angry patrons, who include the Royal Family and Premiership footballers, are threatening to sue the bank over its financial guidance.
It raises the prospect of some of Britain's richest figures suing a Government guaranteed bank, as the institution is owned by Royal Bank of Scotland.
Coutts clients must have around ?500,000 in liquid assets and the bank offers free services only to those always £10,000 in the black.
Sir Keith Mills, the tycoon behind the Nectar loyalty card, yesterday launched a campaign to shame Coutts into compensating clients who have lost out by investing in the AIG savings bonds.
Sir Keith, a key figure in London's bid for the 2012 Olympics, threatened to sue Coutts if it does not agree to make up the 'several millions of pounds' he has lost.
'Given the advice it gave clients Coutts should guarantee our losses. If it doesn't legal action would be a last resort,' he said.

The entrepreneur made around ?160million after selling the Nectar Card business last year, and is believed to have invested a significant portion of the windfall in AIG.
According to Sir Keith, Coutts recommended the AIG Life Premier Bonds as a safe, but more profitable alternative to leaving his cash in the bank.
Wealthy Britons put almost ?6billion into the fund, which had a minimum investment of ?100,000.

But after the dire financial turmoil of recent months, even the safest AIG investment bonds have plummeted in value.

AIG had to be rescued by a ?100billion U.S. government cash injection in September after running up huge losses on credit insurance business.
Investors who have pulled their money out lost 13 per cent of their investment, even though Coutts assured them the products were very low-risk.
A spokesman for Coutts said: 'At the time of sale it was made clear that the investment was low risk, not risk free, and it was explained that the value of the investment could go up as well as down.'
Coutts was set up by Scotsman John Campbell of Lundie in 1692.
It boasts an illustrious history, counting Charles Dickens, Lord Nelson, Jane Austen and generations of royals among its customers.
In recent years it has started advising sportsmen. Customers are thought to include David and Victoria Beckham.

Friday, December 12, 2008

Morgan Stanley Insured Municipal Bond Trust Adopts Investment Policy Changes


Morgan Stanley Insured Municipal Bond Trust (NYSE: IMC) (the "Trust") has received shareholder approval to adopt the investment policy change, as described below. This change is designed to expand the investment universe in which the Trust can invest, thereby providing the Trust's portfolio management team with important flexibility to respond to ongoing developments in the insured municipal bond market. The Trust seeks to achieve its investment objective by providing income which is exempt from federal income tax. The Trust is not changing its investment objective.

In connection with the recent instability in the marketplace, some of the insurers of municipal obligations have experienced ratings downgrades by the ratings agencies that rate such insurers' claims paying ability. This affects many funds that invest in insured municipal obligations because many of these funds (including the Trust) currently have policies that require such funds to invest 80 percent of their net assets in municipal obligations that are insured by an insurer rated "AAA" at the time of purchase. At a meeting held on December 12, 2008, the Trust's shareholders have approved the following investment policy change:


To allow the Trust to invest, under normal market conditions, at least 80 percent of the Trust's net assets in municipal obligations which are covered by insurance guaranteeing the timely payment of principal and interest thereon and that are rated at least "A" by a nationally recognized statistical rating organization ("NRSRO") or are unrated but judged to be of similar credit quality by the Trust's Investment Adviser, or covered by insurance issued by insurers rated at least "A" by a NRSRO.
The Trust's Management believes that the changed policy allows the Trust to continue to purchase higher quality insured municipal obligations, while acknowledging the changing market and economic conditions. While the market risk and the credit risk of the Trust investing in insured municipal obligations generally should be lower than the risks of a fund investing in similar municipal obligations that are uninsured, insurance does not eliminate the market risk or credit risk of the securities in the Trust's portfolio. A downgrade of an insurer would generally subject the Trust to potential market value declines and increased credit risk on the municipal obligations insured by such insurer.

Morgan Stanley Investment Management, together with its investment advisory affiliates, has nearly 1000 investment professionals around the world and approximately $570 billion in assets under management or supervision as of August 31, 2008. By leveraging its global 'community of boutiques' structure and the strength of Morgan Stanley, MSIM strives to provide outstanding long-term investment performance, service and a comprehensive suite of investment management solutions to a diverse client base, which includes governments, institutions, corporations and individuals worldwide.

Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, investment management, wealth management and credit services. The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 600 offices in 35 countries. For further information about Morgan Stanley, please visit www.morganstanley.com.

Sunday, December 7, 2008

HSBC announces £1bn fund for UK businesses


HSBC has announced the establishment of a $5 billion (£3.4 billion) global fund to lend money to small and medium-sized businesses affected by the credit crunch.

The banking industry has come under fire for not passing on the full benefit of interest rate cuts to consumers, for charging higher interest rates on loans to businesses and for reducing the savings rates on instant access accounts.

But in a move aimed at stemming such criticism, a total of £1 billion has been kept to assist businesses in the UK.

A spokesperson for the banking giant, which has 9,500 offices around the world, said: "The fund has been designed to help customers with fundamentally sound businesses weather short-term shocks caused by the downturn, by supplying working capital to help businesses with their cash flow needs and support businesses that trade or aspire to trade internationally.

"The fund represents new money and will be funded from HSBC's own resources, allocated on a case-by-case basis using the bank's normal lending criteria."

The bank claims that it has lent more this year than last in spite of the higher costs of lending between banks and also states that 32,000 businesses had moved their business bank accounts to it since the beginning of the year.

Business secretary Peter Mandelson welcomed the move and urged other banks to maintain charges and rates available to small and medium enterprises.

HSBC's move follows the Royal Bank of Scotland's pledge to not begin proceedings to reclaim a person's home until at least six months after a customer falls behind on mortgage payments.

Chancellor Alistair Darling has urged banks to institute a three-month wait before beginning repossession proceedings on lenders who have failed to pay an installment on their mortgage.

Pressure has been increasing on banks to help extend finance to ailing businesses after the government's £37 billion bailout plan saw it take stakes in the Royal Bank of Scotland, HBOS and Lloyds TSB.

Other high street banks were provided with emergency funding and liquidity support as part of the other measures in the bailout.

Monday, December 1, 2008

Barroso backs euro for Britain


Those who matter in Britain are considering a renewed drive to abandon the pound, European Commission president Jose Manuel Barroso has hinted.

His comments have sparked speculation that senior politicians including prime minister Gordon Brown may now be mulling the option over.

"I'm not going to break the confidentiality of certain conversations, but some British politicians have already told me: 'If we had the euro, we would have been better off'," the AFP news agency quoted Mr Barroso as saying on French radio.

"The British have an enormous quality, one of many, that is they are pragmatic," he added. "This crisis has emphasised the importance of the euro, in Britain as well."

Sterling has suffered in recent months because of the credit crunch. Many analysts believe its declining fortunes could reinvigorate the dormant argument over whether Britain should join the eurozone.

Downing Street has refused to comment on the issue. It maintains the five economic tests outlined when Mr Brown was in No 11 still stand – that a referendum will only be held when five economic tests are met.

These include the euro's impact on foreign investment, jobs and financial services, in addition to flexibility and convergence criteria.

Opinion polls have in the past suggested Britons remain opposed to abandoning sterling, as Mr Barroso freely admitted.

He added: "I don't mean this will happen tomorrow, I know that the majority are still opposed, but there is a period of consideration underway and the people who matter in Britain are currently thinking about it."

Friday, November 28, 2008

It's the restive season


Massive discounts are on the cards this festive season as South African retailers across the board brace themselves for the bleakest Christmas sales season in nearly two decades, experts say.

"Retailers will have to go all out this Christmas to entice consumers. I would not rule out big discounts from durables, semi-durables and non- durables retailers," Luke Doig, senior economist at Credit Guarantee Insurance Corporation, told I-Net Bridge in a phone interview in Friday.

Black Friday

Today, known as Black Friday in the US, marks the beginning of the traditional Christmas shopping season - putting retailers "in the black" - but sales forecasts for the season are gloomy, with Doig saying his initial forecast of a two percent real decline "looks optimistic" at this stage.

Supporting this forecast is this week's survey by the Bureau for Economic Research (BER) and Ernst & Young, which showed that 13 percent of the retailers expect lower sales volumes in Q4 2008, the weakest result since the 1992 festive season.

Retail sales, as released by the Statistics SA, have dropped every month since May, highlighting the distress faced by consumers given the lagged effects of interest rates hikes between June 2006 and June 2008 and uncomfortably high debt levels.

Meanwhile, earnings reports from several listed retailers show a common theme – slowing top line growth. This raises concerns about retailers' ability to implement steep price markdowns without affecting the quality of earnings.

Better volumes

"What are they going to do? Better volumes at the expense of margin? I think there is still room to give up some margin, otherwise they'd be sitting with high stock levels in January," said Doig.

According to BER/Ernst & Young survey, while more than three-quarters of the respondents raised prices in the third quarter, this came down to 61 percent in Q4, and less than 50 percent expect to increase prices in the first quarter of 2009.

"The combination of weak sales growth and reduced ability to raise prices amid falling commodity prices and weak consumer demand have seen retailer profitability decline to levels last seen in 2001/02," said Derek Engelbrecht, retail and consumer products director at Ernst & Young.

Fuel price declining

But with fuel prices declining, with the latest cut being a substantial R1.61 per litre, both the retailer and the consumer will have a little bit of extra cash this festive season.

Doig estimates that the fuel price cut in December will add an extra R2- billion, easing production costs for retailers and adding more muscle to fight for a slice of R10.3-billion estimated to be spent this holidays.

A snap website glance-through of major retailers showed that they are on furious promotional campaigns, with retail chains from Woolworths and Edgars to Game running massive shopping competitions.

Monday, November 10, 2008

Berkshire Hathaway Q3 profit down 77pc


Warren Buffett's Berkshire Hathaway has reported a third-quarter profit fall of 77 percent, the fourth straight quarterly decline, hurt by weaker results from insurance underwriting and a big loss on derivatives contracts.


Net income for the Omaha, Nebraska-based insurance and investment company fell to US$1.06 billion (NZ$1.83 billion), or US$682 for an A share, from US$4.55 billion, or US$2942 a share, a year earlier.

Operating profit fell 18 percent to US$2.07 billion, or US$1335 a share, from US$2.56 billion, or US$1655.

It fell short of analysts' average expectation of US$1429 a share. Revenue fell 7 percent to US$27.93 billion.

Buffett, an economic adviser to president-elect Barack Obama, has committed more than US$27 billion of Berkshire's money this year to make acquisitions, finance takeovers and invest in blue-chip companies such as General Electric and Goldman Sachs Group as the credit crisis drives asset values down and makes it harder to borrow.

The investments give Berkshire new ways to grow as insurance operations, which generate about half its business, come under pressure. Last month, Buffett pledged to move all his personal holdings apart from Berkshire stock, which is pledged to charity, into United States stocks from government bonds, citing long- term optimism in corporate America.

Profit from insurance underwriting fell 83 percent to US$81 million, hurt by increased price competition and about US$1.05 billion of losses tied to Hurricanes Gustav and Ike. Berkshire had boosted insurance premiums after Hurricane Katrina in 2005, but prices and profit margins have since fallen.

Insurance investment income declined 12 percent in the quarter to US$809 million, and profit from other businesses declined 8 percent to US$1.08 billion. Berkshire also had US$1.01 billion of net losses from investments and derivatives.

The company has disclosed many derivative contracts tied to the performance of the Standard & Poor's 500 and three foreign stock indexes, and to the credit quality of high-yield bonds. Accounting rules require Berkshire to regularly report unrealised gains and losses on those contracts.

Saturday, November 1, 2008

Central bank gets $60 mln for technology upgrade


The World Bank said Friday it is lending US$60 million for a project that will provide better training and technology to the State Bank of Vietnam, helping it modernize to international standards.


The credit would help the central bank, the Credit Information Center (CIC), and the Deposit Insurance of Vietnam (DIV) “to reform and modernize the financial sector by improving delivery of their main functions in line with international standards,” the bank said in a press release.

Much of the loan would be used to build a modern, centralized information and communications technology platform to support the State Bank of Vietnam's evolving role as a central bank.

The project would also help the Credit Information Center and the Deposit Insurance of Vietnam with funding from the International Development Association, the Washington-based World Bank's concessional arm.

“The project is aimed at contributing to the achievement of the government's strategic goal of a stable and sound financial sector in Vietnam,” said Xiaofeng Hua of the bank’s East Asia and Pacific Region.

“This effort is critical in ensuring Vietnam's sustainable economic growth and continued progress in poverty reduction, especially at a time of global financial turbulence.”

Source: Thanh Nien

Monday, October 13, 2008

Obama vs. McCain: healthcare smackdown


Those who don't navigate over to our other Health pages are missing out, especially this week. Staff writer Susan Brink has put together a comprehensive roundup of differences between the healthcare plans of Sens. Barack Obama and John McCain, and, not surprisingly, a lively discussion has broken out. You can read the full thread at this link, but for those who prefer (or only have time for) an abridged debate, here are several unedited samples:

From "Joan Walthers:"

"John McCain's plan would be the best. It isn't perfect but at least the insurance would not be handled by the government. We have medicare ins. It is very difficult to get a doctor to accept our insurance even with a supplement because the government is so slow at paying bills and then will pay such a small amount. Doctors can't wait until some gov. office decides to pay the bill. And what sick person can afford to wait for some politician to decide whether the illness should be covered or not and to what extent. No Thanks. Government needs to stay out of people's business. It needs to enable people to make choices, not make them for them."

From "Laura Remson Mitchell:"

"The McCain approach would be a disaster for anybody who has--or ever gets--a major health problem. If you want health care to remain essentially a private rather than a public good, we need *more* regulation, not less. The tax credit promised by McCain would be meaningless without *significant* regulation of private insurance underwriting practices, among other things. What good is the McCain health-care credit if you can't buy the coverage you need at *any* price, much less an affordable one?"

From "Strauss:"

"Obamas Healthcare Plan? McCain's Healtcare Plan ? None of the above will win. Just another campaign promise that will never happen. It never ceases to amaze me that people continue to believe candidates who make promises to get elected and then never keep them. You have a better chance of winning the lottery than getting a national health care plan. Here's a better idea. Start exercising and loose weight and quit taking blood pressure medication. Quit eating junk food and stop tsking cholesterol pills. The US is currently 45 in the world in life expectancy."

There's plenty more of that, and you are welcome to add your comments over there (or here).

-- Martin Beck

Tuesday, September 23, 2008

Rescue can't be hasty, Specter says


By Spencer Soper

WASHINGTON | - Congress needs to carefully review a proposed $700 billion plan presented by the Bush administration to save financial markets, U.S. Sen. Arlen Specter told a crowd of more than 200 students at DeSales University Monday.

''These legislative proposals need to percolate Â… and the American people need to know what's going on,'' said Specter, R-Pa., adding that the reviews should run into October if necessary. ''If they don't like the amount of time it's taking, that's too bad.''

His statements run counter to the Bush administration's push for swift action on the plan, which would be one of the government's biggest-ever private sector bailouts. The proposal calls for the U.S. Treasury to buy bad mortgages from ailing financial institutions, which are seen as clogging credit markets and dragging down the economy.

Specter said he wants to make sure such a plan has adequate oversight. He'd also like bankruptcy judges to be empowered to rework mortgages for distressed homeowners so they don't lose their homes to foreclosure. Some of those homeowners may have been misled into complex adjustable rate mortgages with payments that climb drastically after a period of lower initial payments used to entice them, Specter said.
Students applauded when Specter said limits should be placed on the compensation of executives at the companies benefiting from government help.

''The companies that created the problem shouldn't profit from it,'' he said.

Larry Meo, a student at the Center Valley school, said Specter made a convincing argument about the need for the government to move cautiously. ''I'm just as confused as everyone else about the financial crisis,'' he said.

Specter also fielded questions from the audience about Republican vice presidential candidate Sarah Palin, special education funding, illegal immigration and health care.

He told the students he thinks the government should reassess its funding priorities, and he would like to see more government money invested in health

Tuesday, September 16, 2008

A Race for Cash at AIG as Ratings Are Downgraded


Major credit ratings agencies downgraded the American International Group late Monday, worsening its financial health, as Federal Reserve officials and two leading investment banks were in urgent talks to put together a $75 billion line of credit to stave off a crisis at the company, The New York Times’s Mary Williams Walsh and Michael J. de la Merced reported.

The credit downgrades are likely to force the company to turn over billions of dollars in collateral to its derivatives trading partners.

Without the financing, which was being arranged by Goldman Sachs and JPMorgan Chase in talks with the Federal Reserve officials, A.I.G. might be forced to declare bankruptcy, according to The Times.

The talks, which began last week and continued through the weekend, added to the sense of agitation in the stock market on Monday, as investors grappled with the implications of the bankruptcy ofLehman Brothers, which, like A.I.G., was a large counterparty to derivatives contracts held by countless financial institutions.

Shares in A.I.G. tumbled more than 60 percent on Monday morning as concerns grew that the firm lacked capital to withstand cuts to its debt rating, which were borne out later in the day. The company’s potential write-offs are mounting and may reach $60 billion to $70 billion, according to The Times.

Most of A.I.G.’s businesses are healthy, but its troubles grew from one unit that dealt in complex debt securities and derivatives and now threatens to drain cash more quickly than the financing package can be assembled.

The day started off with news that A.I.G. had requested a $40 billion bridge loan from the Fed, a request that was rebuffed, and ended with the word that its need had soared to $75 billion. The firm suffered several credit-rating downgrades Monday evening, including cuts by Standard & Poor’s and Moody’s.

The complex discussions, continuing into the night as a deal was sought before United States markets open on Tuesday, involved New York state regulators, federal regulators, private equity firms and Wall Street banks that rely on A.I.G.’s ability to honor its derivatives contracts, as they do with Lehman Brothers.

“It’s not just the failure of one company,” Julie A. Grandstaff, vice president and managing director of StanCorp Investment Advisers, told The Times. “It’s the ripple effect of the disappearance of counterparties” that was spurring urgent efforts to bolster A.I.G.

A large counterparty to derivatives contracts has not declared bankruptcy since the market grew to such enormous size, so Lehman will be a test. Financial officials fear another failure of a big counterparty could start a chain reaction.

The need to find fresh money for A.I.G. is bringing new layers of complexity to the credit crisis. As an insurance concern, A.I.G. has wholly different regulators and capital requirements than the banks and Wall Street firms that have suffered most of the huge losses so far. One person briefed on the matter told The Times that potential lenders doubted that the facility could come together without the Fed’s backing.

A.I.G. itself has had three chief executives in the last three and a half years, and one person briefed on Monday’s discussions told The Times that its officials seemed uncertain about how to proceed. The Fed was not able to provide the $40 billion bridge loan because it oversees banks, not insurers.

The talks about backing up A.I.G. began last week, when the company approached regulators, saying it was concerned that if a deal could not be put together to save Lehman, A.I.G.’s own future would be in doubt. A.I.G., through its financial products unit in London, has exposure to the same mortgage-linked debt securities that brought about the downfall of Lehman.

The talks between A.I.G. and its regulators led to the announcement at midday by Gov. David A. Paterson of New York that the state would allow A.I.G. to borrow $20 billion from its own subsidiaries, to help bolster its capital in the face of potentially disastrous credit downgrades.

Mr. Paterson said he had authorized the state insurance superintendent, Eric R. Dinallo, to include the $20 billion asset transfer in the broader plan being worked out at the New York Fed.

Normally state insurance regulations would prevent a holding company like A.I.G. from pulling assets out of its subsidiaries, which are insurance companies that need sufficient liquid resources to pay their claims.

But Mr. Paterson said the situation was dire.

“I hope you’re aware of the risks if we don’t act,” he told journalists at a midday news conference. “It is a systemic problem.”

People briefed on the matter told The Times that if JPMorgan and Goldman Sachs were able to raise a $75 billion credit line by Tuesday, it could avert an escalating series of collateral calls. But it was unclear whether they could put together such a complicated package in time.

A.I.G. has also considered sales of virtually all of its business assets, but conducting such sales quickly would be hard.

During the weekend, A.I.G. had been negotiating for a capital infusion from three private equity firms, The Times said. But A.I.G. rejected an offer from J.C. Flowers & Company to buy $8 billion in preferred shares, because the bid included an option to buy the rest of the company at a steep discount.

Two other buyout firms, Kohlberg Kravis Roberts and the Texas Pacific Group, withdrew their offers to buy preferred shares as the Fed made clear that it would not provide any sort of backstop.

But Maurice R. Greenberg, the visionary leader who built A.I.G. but was removed during an accounting scandal in 2005, has offered to help with any restructuring. Mr. Greenberg and his lawyers asked on Saturday if he could play a role in overhauling A.I.G. The deadpan response, according to a person close to the company, was: If you are willing to make a multimillion-dollar equity investment, we are happy to talk.

Mr. Greenberg has seen the value of his holdings plummet as A.I.G. shares have sunk. He holds about 39 million A.I.G. shares directly and an additional 243 million through his private equity firm, Starr International. The shares were worth about $15.8 billion at the beginning of this year, but just $1.3 billion as of Monday.

Wednesday, September 3, 2008

Student finance guide: Best of the banks


Choosing the right student bank account is crucial. Banks will offer all sorts of incentives, from cashback tickets to free railcards, and while these can be a great bonus, there are other important things to consider. For most penniless students, the key factor will be an interest-free overdraft facility. Those lucky enough to have savings will want better savings rates.


BEST FOR INTEREST-FREE OVERDRAFT:

Halifax Bank of Scotland


If by 'best' you mean biggest then HBOS tops the table with a whopping interest-free overdraft of up to £3,000 throughout your studies.

However, those who exceed the overdraft limit will be charged eye-watering interest of 24.2%. There is also a £28 penalty for going over the limit. Move to another bank after university, one with a graduate account that gives an interest-free overdraft for three years.

Royal Bank of Scotland isn't far behind, offering £2,750 fixed from day one. But again, this is marred by the punitive 29.84% interest above this limit.


BEST FOR FREEBIES:

NatWest

It's hard to top NatWest's free five-year 16-25 Railcard worth £125. This knocks a third off rail fares and will save students a fortune. For those who don't travel by train, Lloyds TSB offers £100 cashback for joining.


BEST ALL-ROUNDER:

HSBC

Doesn't offer the biggest overdraft at £1,000 in the first year, increasing to £2,000 in year five, but its rate of 8.3% if you exceed your overdraft limit without permission is one of the lowest. There are also no additional penalties.

The incentives are useful - two years' free worldwide travel insurance, plus overdraft limit alerts at cash machines. And it pays 6% on your first £1,000 of savings - if you have any! - in your first year.

Wednesday, August 27, 2008

Six Ideas for Insuring Your Deposits


As consumers continue to be rattled by a seemingly bottomless pit of bad financial news, they're looking for ways to ensure their entire bank deposits are covered by the Federal Deposit Insurance Corp.

It's not difficult to exceed the $100,000 limit on individual accounts, or the $250,000 limit on certain retirement accounts. In fact, the FDIC says that less than 62 percent of the $6.88 trillion on deposit in FDIC-insured banks was covered at the end of 2007. That leaves more than $2.5 trillion unprotected in the event of bank failures.
Fortunately, there are many ways you can have excess deposits covered, and you should take the trouble to use one of these methods or, through your own research, find other ways. Uninsured depositors receive an average of 72 cents on the dollar when their bank fails. Imagine having excess money in a bank and losing more than a quarter of it. In addition, it can take years for the FDIC to settle a bank failure.

The six examples of excess deposit coverage that we'll highlight here primarily involve accounts at community or state-chartered banks. Some larger institutions carry their own excess deposit insurance, so if you prefer banking at larger institutions, ask if they have it. Companies such as BancInsure and Progressive Casualty Insurance provide excess deposit insurance to financial institutions. Excess share insurance is available to credit unions. But don't assume you're covered -- always ask.

Saturday, August 23, 2008

Aggressive male ostriches not the same as locked garage


If an insurance policy stipulates a vehicle must be kept in a locked garage at night, not even chaining the insured vehicle, several dogs, a locked gate and aggressive male ostriches, can substitute as suitable security measures.


Abrie Burger found that several measures he had taken to protect his off road vehicle which was parked in his yard outside at night were not good enough for his insurance company when he submitted a claim for theft of the vehicle.

The insurance company rejected the claim on the basis that the vehicle had not been parked in a locked garage at night, as was required in the policy.

Burger, a sales representative from Sasolburg, complained to the FAIS Deputy Ombud that he was not aware of the requirement to keep the vehicle in a locked garage as he did not receive the policy schedule and policy wording from his broker, Heritage Insurance Brokers (Pty) Ltd of Sandton.

He said that on the day of the theft, his and his friend’s vehicles were chained and locked together and left outside for the night because they had been washed and he had arrived home late that afternoon.

He said there were several dogs on the premises but they had been poisoned during the night of the theft and one died as a result.

Outside the fence there were five ostriches of which three were “very aggressive males”. Entry to the yard by the burglar/s was gained by breaking or cutting off the lock on the gate.

The issue for determination before Ms Noluntu Bam, the Deputy Ombud for Financial Services Providers, was whether the respondent was negligent in not making the complainant aware of the condition of insurance which was breached, thus leading to the insurer rejecting the claim for theft of the vehicle.

During investigation, it was found that the complainant had stated in his own handwriting in the proposal form dated 24th February 2005 that the vehicle would be kept in a locked garage at night.

The respondent said a letter dated 2 March, 2005 accompanied by the policy schedule and policy wording was sent to the complainant shortly after inception of the policy to the postal address furnished by him in the proposal form.

The letter stated that “unless otherwise provided for, overnight theft from the permanent place of residence is EXCLUDED unless the ATV/Off road vehicle is kept in a fully enclosed garage or carport and both any door and any gate leading to the garage or carport is kept locked at all times and there is proof of visible, violent or forcible entry/exit”.

This condition is also mentioned in the policy “confirmation of cover,” which was sent to the motor dealer, as well.

Ms Bam said when motor vehicles are financed, the credit supplier requires insurance cover to protect its interests.

The insurer on the other hand, seeks to minimise its exposure to the risk materialising. To this end, the question is asked in the proposal form “where is the vehicle kept at night? – not address”. In this case, Burger answered “locked garage”.

A further clause in the form states: “I agree that this proposal shall be the basis of the contract between the insurer and myself.”

Ms Bam said that in the circumstances, it cannot be said that the complainant was unaware of the relevant condition that was breached and which led to the rejection of the claim, even assuming the complainant did not receive the policy schedule and wording as alleged by him.

“In any event, I note that two letters were posted to the complainant regarding non-payment of premiums. He thereafter paid the premiums. The probabilities seem to favour the conclusion that he did in fact receive the letter with the policy schedule and wording as well.

“There rests a duty on a broker to draw the insured’s attention to material clauses in the insurance contract.

“However, in the matter before me the complainant himself stated the vehicle would be kept in a locked garage at night and then failed to do so when it was stolen.

“It, therefore, cannot be said that in this case the respondent was negligent in rendering the service to the complainant.”

Ms Bam said it was clear that had the complainant abided by the condition about keeping the vehicle in a locked garage at night at his premises as he had warranted in the proposal form, the theft may have been avoided.

“That he had dogs and ostriches on the premises do not detract from his warranty,” she added, in dismissing the complaint.

Monday, August 18, 2008

Morgan Stanley updates lending systems: report


(Reuters) - Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) and Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz) are responding to the credit crisis with a system that uses the market's view of their own creditworthiness as a basis for lending decisions, the Financial Times reported.

Wall Street's second-largest investment bank Morgan Stanley is essentially tying its promise to provide financing to hedge fund clients to the price of credit insurance on its own debt, it said.

If the cost of the protection rises to a certain level, that would trigger a reduction in Morgan Stanley's commitments to hedge funds, the quoted people familiar with the situation as saying.

The message is that "if our firm is in trouble, we would rather fund ourselves than fund you (hedge funds)," the paper quoted a brokerage executive with knowledge of the arrangements as saying.

Goldman Sachs, which has largely avoided the credit losses hobbling its rivals, is understood to have a similar arrangement that uses its bond prices as a reference point for credit commitments to hedge fund clients, the paper said.

Morgan Stanley and Goldman Sachs did not immediately return calls seeking comment.

Last week, Morgan Stanley and JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz) agreed to buy back billions of dollars of illiquid auction-rate securities and pay fines to settle charges that they misled investors about the debt's risk.

Morgan Stanley had agreed to buy back $4.5 billion of debt and pay a $35 million fine to settle the charges.

In June, it reported a 57 percent drop in quarterly earnings on weak trading, investment losses and a slowdown in investment banking, even after it realized $1.43 billion in one-time gains.

Tuesday, August 12, 2008

Govt for commissioner for finance code of practice


The Government is backing a proposal for a commissioner to develop a code of conduct and set up a disciplinary body for finance advisers and institutions.

A select committee considering legislation to regulate the industry made the recommendation in an interim report.

Commerce Minister Lianne Dalziel said the approach would give strong central supervision while using the experience and knowledge of industry participants.

"It will help ensure that the Securities Commission can act as both the statutory enforcer and the professional regulator."

The committee also suggested a two-level approach to imposing obligations on financial advisers depending on the complexity of the financial product involved.

"The industry and officials have been grappling with the problem of defining who should be captured by the new rules regulating financial advisers. By focusing on the actual product rather than financial decisions or occupations we are able to provide certainty about who is covered by the bill."

Category 1 would include advice on complex securities or investment and savings planning. Anyone providing category 1 advice woul have to be individually authorised by the Securities Commission.

Category 2 would cover advice on credit, general insurance or simple securities such as bank term deposits or call accounts. Individuals would not need to be individually authorised to provide these services.

In addition, the committee is considering adopting a model whereby the Securities Commission can certify financial institutions which meet the standards under the bill.

Certified Financial Institutions would then be responsible for financial advice offered by their staff on simple products.

Sunday, August 10, 2008

Irish bus pass is ‘identity card by stealth’


When John Welford fumbles in his pockets for change as he boards the bus, fellow passengers often nod sympathetically at the pensioner and ask him if he has forgotten his free travel pass. Those who strike up a conversation with Welford will come away thinking that he is either paranoid or has discovered an unsettling plan by the authorities to introduce a national identity card by stealth.

Welford, an Edinburgh pensioner, is interested in the introduction of the Irish public services card, a seemingly innocuous travel pass to be distributed to the country’s 640,000 free travel recipients next year. He sees a parallel between the introduction of the card in Ireland with the rollout of the travel pass in Scotland.

Two years ago, Welford returned his bus card and asked for it to be destroyed. His fear is that the apparently benign identity card, which contains a name, photograph and unique number, is a Trojan horse, the first step by the Scottish government to usher in a national ID by the back door.

There are echoes of his suspicion in the comments of privacy campaigners last week in Ireland. They claim that although the public service card will be introduced as a free travel pass, it may gradually form the basis of a national identity card.
“In 2005, a majority of Scottish members of parliament rejected a national ID. So instead they’ve issued a unique card to the most vulnerable members of society that can be expanded into what they call an ‘entitlement card’,” Welford said. “This will eventually be used for all interaction with state agencies. Because it has been introduced incrementally, there has been little debate.”

In Ireland, the “soft” introduction of the public services card has caused barely a stir. The legislation to introduce the card in Ireland was included in the 2007 Social Welfare and Pensions Act, with scarcely a mumble in the Dail or Seanad.

But what is there to be afraid of? The Department of Social and Family Affairs (DSFA) claims that the card technology will cut bureaucracy, offer improved security and reduce the potential for welfare fraud. There are an estimated 5m identity cards in circulation in Ireland, including the garda proof-of-age card, medical card and free travel pass, so would it not be convenient to create a single, universal ID card?

Civil liberties groups disagree. Privacy International, a civil rights lobby group, claims that once a national ID card is introduced, citizens’ rights will be steadily eroded.

“In Greece and Argentina, for example, being caught cardless could land you at the local police station, where your identity will be established using other means, such as fingerprinting,” the group warns.

But what have the innocent to fear?

In AUSTRALIA a proposal for a national identity card in the 1980s to combat welfare fraud initially met with enthusiasm in polls. But when the Australia card was debated by government, it was blocked by opposition parties and the Senate and public enthusiasm cooled.

In Ireland, welfare fraud is cited as the chief reason a public services card is needed. The DSFA claims to have uncovered more than 1,000 examples of people trying to collect welfare using bogus identity papers in the past four years.

The public will most likely see the public services card for the first time next year when they are given to the 640,000 recipients of free travel. The first cards will include only a photograph and name, but they will be capable of storing far more information.

When the department tendered for a company to create the cards, it stated that they should be “designed to evolve over time” so that “eventually any service provider will be able to use it”.

It should also be suitable for storing biometric data, such as fingerprints, and should be capable of being easily turned into a chip and pin card.

Radio frequency technology will also eventually be integrated to allow the card be used in a similar fashion to Transport for London’s Oyster card. The card’s specifications were drawn up in conjunction with Consult Hyperion, an IT consultancy that has worked on the introduction of national ID cards in Malaysia and Hong Kong. The card developed in Malaysia, the MyKad, contains a thumbprint and must be carried by all citizens over 12.

The department says that it is judicious to design a card that can be adapted. But privacy campaigners suggest that now is the time to debate the card, before it becomes part of the fabric of everyday life.

“Nobody is going to raise an issue about a bus pass. And when it eventually doubles as your medical card, or as garda proof of age ID, it will seem very convenient. But the more information linked to the card, the more possibility there is for function creep — when data collected for one reason is used for another — or for information to be shared between agencies, however trustworthy they may be,” said Tanya Ward, a director of the Irish Council for Civil Liberties (ICCL).

Few will be reassured by the recent audit of the DSFA carried out by the data protection commissioner. It found serious weaknesses in the protection of the personal data of more than 300,000 people. Ward is also concerned by Ireland’s “piecemeal privacy and data protection laws”.

“We want to know what safeguards are being put in place for the operation of this new system. Who will have access and how will it be used? Can we trust the DSFA to keep our data safe?” she said.

Niall Barry, the DSFA’s project director, said the public services card would be secure because of the paucity of information contained on it. “It will contain as little information as possible. Sensitive data will be held on a secure server than can be linked to the card using an ID number or, eventually, chip and pin. The card is just a key to the information,” he said.

In a book called The Internet Galaxy, the sociologist Manuel Castells argues that it is not Big Brother, an omnipotent government, that we should be afraid of but his legion of “little sisters” — the hundreds of databases that store the details of our lives.

“There is no need to worry about a card,” Welford said. “But what is the card linked to?”

He argues that in Germany, for example, confidentiality legislation prohibits the allocation of unique ID numbers to citizens. This prevents hundreds of databases being linked together to form a rounded picture of a person’s interaction with the state. In Belgium and Austria, instead of identifying numbers, people are recognised through encrypted codes.

In Ireland, though, the roll-out of the PPS (Personal Public Service) number has already paved the way for every citizen to have a personal identification number. First introduced as the RSI (Revenue and Social Insurance) number in 1993, the PPS came into being in 1998. In the intervening decade, it has gone from being used by just two bodies — the Revenue and Department of Social Welfare — to 63, including An Post, the Garda Siochana and the Legal Aid Board.

Micheal O’Dowd, who was commissioned by the European Commission to write a paper on the public services card, said that the new card would “link a person unequivocally to their PPS number”.

“There are currently restrictions on the gardai and defence forces using the PPS number. But how long the government is able to resist the temptation to lift what restrictions remain on the use of the PPS number is anyone’s guess,” he said. “At present, we have the peculiar anomaly whereby PPS numbers of non-nationals, and ID cards also, one must assume, may be examined and used by the gardai. With increased demands from Britain for an Irish ID card that more closely resembles their own proposals, one can only conclude it is matter of time before the new public services card will be used for purposes far broader than interacting with the public service.”

Barry argues that such “usage progression” would require legislation and would almost certainly stimulate debate. He concedes, though, that there is no reason the card envisaged could not be used in the medium term as a proof-of-age ID, to cite one example. Another obvious private sector application would be to use it to buy credit for a transport company, such as the purchase of electronic tokens for the Luas.

He claims it will differ from the national identity card being introduced in Britain because it will not be mandatory. Welford disagrees. “The bus pass here in Scotland is not mandatory either but the only alternative for someone who doesn’t want to use it is to pay on the bus. As it is gradually rolled out to become a library card or medical card, it becomes, in effect, compulsory,” he said.

Welford argues that identity cards were last introduced in Scotland during the second world war when there was a serious risk of German occupation. “We’ve managed fine since then without them, as has Ireland. What has changed in recent years?”

The ICCL argues that the Irish people have never been polled about their opinion towards a national identity card. While there is presumably strong opposition to welfare fraud, would we follow the Australian example by rejecting an ID card, or follow the lead of Britain, where polls show a majority support the introduction of one next year?

The arrival of the public services card only came under scrutiny because of the data protection commissioner’s audit of the DSFA, the ICCL says.

“It has come into the public sphere almost by accident. We are not aware of any privacy impact statement to date in relation to the card and we don’t know how much it costs,” Ward said.

She claims that the appetite for introducing the card is coming from government, not the users of public services. “Where does the motivation lie?”

In Britain, ID cards have been pushed as a crucial weapon in the fight against terrorism. Their introduction could be the factor that forces the Irish government to introduce a comparable card here. In 2005, Michael McDowell, then justice minister, admitted that the government may have to introduce “some form of national ID” because of our shared border and common travel area.

McDowell said he believed that a fundamental philosophy of our common law system is that citizens should not be obliged to carry documentation. “Historically, identity cards have been used to discriminate against minorities,” he said.

Despite his philosophical opposition, he admitted that Ireland must respond to Britain’s decision.

“If it becomes mandatory in the UK, how can Irish people travel into Britain without some form of ID?”

Will that form of ID be the public services card?

Tuesday, July 29, 2008

Welcome to Tesco-bank: Supermarket giant to offer current accounts and mortgages


Tesco is to become a stand alone bank, offering cheap home loans and current accounts alongside credit cards, insurance and savings deals.

The supermarket will go head-to-head with the traditional banks in a bid to grab a share of a £20 billion profit pool from UK customers.

It will operate out of branches within more than 200 Extra stores and also over the internet and telephone both in Britain and other countries where it has stores.
Tesco is promising simple cut-price financial products alongside the shelves of baked beans, washing powder, fruit and veg.

The retail goliath will have to launch a series of market leading 'best buy' deals on home loans, savings and current accounts if it is to grab the public's imagination.

Tesco believes it can tap into customer dissatisfaction with the existing 'big five' High Street banks - HSBC, Lloyds-TSB, RBS/NatWest, Barclays and Halifax Bank of Scotland.

The company says the public will be willing to switch to a Tesco bank because the brand is trusted.

It has set itself a target of making profits of £1 billion a year from the bank and a number of related services, including its shopping website, within five to 10 years.

Tesco has hired Benny Higgins, who ran the retail arm of the UK's biggest mortgage bank, Halifax, to head the banking operation.

Mr Higgins, who left HBoS after just one year at the bank having been head-hunted from RBS, is expected to take an aggressive approach to attracting customers.

The Tesco bank will be part of a new division at the retailer headed by Andrew Higginson, who has been promoted from the job of Finance Director.

Outlining the new bank's plans, he said: 'There is a real appetite for Tesco in this area.

'If you put together simple, easy to understand, relevant products, we feel people will buy them.

'I think the current account is one we will look at very carefully. That is often at the core of people's relationship with their financial service providers.

'There are big opportunites for savings products and mortgages is something we will look at. Mortgages may well be something we offer.'

Mr Higginson said Tesco has an advantage over existing banks which have been criticised for offering complex 'labyrinthine' deals and hidden charges on current accounts.

'We start from a position where we can be more transparent,' he said.

'A lot of it is about giving customers what they really want at a really fair price and treating them well. That is really where Tesco's reputation lies.

'We have a good reputation for simpler, straight-forward, good value products.'

He said the bigger stores will have a 'branch' within them, which will help recruit customers.

Mr Higginson said: 'We have a physical presence through our stores. People come to our stores in large numbers to do their shopping, we have a terrific brand and good knowledge of customers.

'All three of those things we can exploit when it comes to build the bank.'

The decision by Tesco amounts to a major expansion of its existing personal finance business, which has been run in partnership with the Royal Bank of Scotland for 11 years.

It is buying out RBS, which currently owns 50per cent of the finance business, at a cost of £950 million.

Tesco's profits for the last financial year hit £2.8billion. While this is gargantuan in terms of retailers, it is relatively small compared to financial services.

The store's chief executive, Sir Terry Leahy, indicated expanding into this sector could bring a powerful new profit stream.

'Services are bigger and faster-growing markets than food. As consumers look to make every pound work harder, it is a good time for Tesco to expand its presence,' he said.

'With a renewed focus on growth in the UK and internationally, we can unlock the true potential of Tesco's retailing services.'

Tesco admitted that it will take three years before it is a fully functioning bank. It will be six to 12 months before it begins to roll out a range of new products.

The store's banking operation employs around 300 people in Edinburgh, Redhill and Ireland. These workers will keep their jobs, while the company is looking to expand.

Tesco Personal Finance was founded in 1997 and now has more than five million customer accounts. It generated profit before tax of £206 million last year, with the figure expected to exceed £240 million this year.

Sunday, July 20, 2008

Businesswomen urged to use loan fund


The economic climate may pose challenges for new business start ups, but women entrepreneurs across the county are being urged to kick-start new ventures with support from a £120,000 loan fund.

The Women's Employment and Enterprise Training Unit (WEETU), based in the city centre, is offering fixed-rate loans to help establish new enterprises and develop existing ones.

It is hope the fund - which has already helped set up and expand 115 Norfolk women's businesses in the past 10 years with loans totalling more than £100,000 - will provide alternative sources of cash to women who have been denied bank loans.

The money is being offered through WEETU's Full Circle programme in which women entrepreneurs join “enterprise circles”, groups of four to six women who provide peer support and mutual encouragement.

About 30 enterprise circles are currently active in Norfolk.

Businesswomen must come up with a business plan for their venture, which must be backed by fellow WEETU circle members, to qualify for loans of £250 to £2,500.

Jeanette Flemons, enterprise support officer at WEETU, said: “There are many women in Norfolk who want to go into business and self-employment but find it difficult to borrow through high street lenders and other traditional routes because they have a poor credit history, for example, or they are not homeowners.

“We want more women to be aware of WEETU's Full Circle loan fund, which can prove invaluable and make all the difference when it comes to getting a business off the ground.

“We're not talking about big businesses. These are more micro-businesses - people who require funding for things like computers, stock, raw materials, transport, cooking or craft equipment, or for attending training courses. We want to hear from women with business ideas and see how we can help them move forward.”

One entrepreneur who has benefited from a WEETU loan is Kate Jackson, who set up educational business the Minimonsters Creepy Crawly Roadshow, in 2004.

Ms Jackson, who lives in Bungay, takes an assortment of insects, arachnids and reptiles around schools in the Norwich area.

Facing a big public liability insurance bill in her first year she got an £850 loan from WEETU to help her through her first year.

She said the money, which she has repaid with interest, and the support and training offered by the organisation had been a big help.

She said: “I would have struggled to get into business if it hadn't been for them.”

To contact WEETU visit www.weetu.org or call 01603 230625.

Are you a woman who has achieved major business success? Call Evening News reporter Sam Williams on 01603 772447 or e-mail sam.williams@archant.co.uk

Friday, July 18, 2008

US Birthrates Are Highest in August: Farmers


LOS ANGELES--(BUSINESS WIRE)--A study by the U.S. Census Bureau (2005) shows that August is the month with the highest number of births recorded in the United States. Unfortunately, in today’s economic climate, many parents are experiencing more than labor pains, because while still in the hospital, the identities of mother and child are being stolen.

The Federal Trade Commission released its national ID theft survey, which for the first time contains statistics specific to medical identity theft. According to the FTC report (p. 21), 3 percent of all identity theft victims in 2005 were victims of medical identity theft, which means of 8.3 million ID theft victims, approximately 250,000 people were victimized by medical identity theft in that year alone.

Jeff Dailey, Farmers President of Personal Lines explains, “A baby’s name can be used to open accounts by using the information the mother gives at the hospital, including her maiden name.”

It could take years before parents realize that their child’s identity has been used fraudulently. “Bank accounts can be discovered when a child first goes for a driver’s permit; or a child can be turned down when applying for college education loans or when opening a checking account,” Dailey notes. “There are some precautionary steps that parents can take to protect their children and themselves.”

Do not leave identity papers in your clothing that you hang up in your hospital room. Make sure you empty your pockets and put any identification information in a safe place.
Leave all of your credit cards at home in a safe, or somewhere you know will be safe.
Once your child has been given a social security number, make frequent checks of your child’s and your credit reports. Your child should have a clean credit record until 18 years of age.
Keep a look out for any solicitations for credit that your child might receive in the mail, or telephone calls offering credit cards, magazines, books or other offers.
“If you follow the precautions you should not have any ID problems after your stay in the hospital,” Dailey continued. “Since Identity Theft is the fastest growing crime in the world today, Farmers insurance has developed comprehensive identity theft coverage. Farmers Identity Shield not only helps you restore your identity after an identity fraud, but also provides protection for your children by alerting you when such activity begins. Those who have experienced its devastating effects know how hard it is to fix and how much time it takes,” he added.

Dailey explained that Identity Shield includes a 24/7 advocate to guide and assist victims. An expert also is on call to answer any questions policyholders may have about children or adult identity theft. “There is much more, including assistance in replacing lost, stolen or damaged identification documents and prevention tips,” Dailey said.

For more information on identity theft and how to prevent it, contact your local Farmers agent or visit www.Farmers.com

Farmers Group, Inc. is a wholly owned subsidiary of Zurich Financial Services, an insurance-based financial services provider with a global network of subsidiaries and offices in North America and Europe as well as in Asia Pacific, Latin America and other markets. Farmers® is the nation's third-largest Personal Lines Property & Casualty insurance group. Property and casualty products are underwritten and issued by the Farmers Exchanges and their subsidiaries, which Farmers Group, Inc. manages but does not own. Headquartered in Los Angeles and doing business in 41 states, the Farmers insurers provide Homeowners, Auto, Business, Life insurance and financial services to more than 10 million households. For more information about Farmers, visit our Web site at www.farmers.com

Saturday, July 12, 2008

The next billion


Till a few years ago, N. Padmavathy and her six friends were daily-wage workers in an export unit in Chennai, with a monthly income of not more than Rs 2,000.

At times, when she had to pay her children's school fees or take her children to the doctor, she had to borrow at hefty rates from the local money lender.

As a daily-wage worker, she could never predict her income, till she discovered the power of microcredit. A Rs 15,000 loan each, taken by Padmavathy and her six colleagues, has made entrepreneurs of these daily-wage workers.

Today, they are the proud owners of a tailoring unit, which is an exclusive franchisee of a leading exporter.

Says P.N. Vasudevan, managing director of Equitas: "The loans we provide not only help the customers improve their business activity levels but also because of lower rates and easy repayment periods, customers can come out of the debt trap laid by money lenders."

Thanks to urban micro-finance institutions (MFIs) like Equitas, Padmavathy and others of her ilk now have access to credit and a better way of life.

Seeing an aching need among this category, often referred to as the Next Billion, a new set of players are coming up in urban hubs to offer financial solutions—primarily credit and insurance—to this economically active group of consumers.

If daily wage workers in Chennai are buying out garment manufacturing units, in Mumbai puran poli makers are doubling their turnover with easy access to microcredit.

Micro-finance may have started as an idea by the not-for-profit sector to cater to those who were out of the ambit of any financial sector, it has, however, emerged as a market share opportunity that banks and non-banking financial companies are fast lapping up.

Conceptually it's an irony-because what started out as an answer to the neglect by the financial sector is fast turning out an opportunity for it-and poses a dilemma- because regulation of this sector is through social pressure only.

Wednesday, July 2, 2008

Azerbaijan to adopt Law on Money-Laundering Counteraction at autumn parliamentary session


Baku, Fineko/abc.az. The process of adopting the law begun in 2004 on counteraction of legalization of money resources and property received by criminal way and financing of terrorism has all chances to be completed in 2008.

The National Bank of Azerbaijan General Director and Director of Workgroup for Law Elaboration Rufat Aslanli said the Bill has already been adopted in the first reading.

“We expect it to be adopted in further readings straight after resuming parliamentary activity in autumn,” R.Aslanli said.

The law which is the country’s obligation while entering into the European Council introduces system of monitoring under transactions and the operations exceeding the amount of AZN 20,000. The monitoring will cover credit institutions, insurance and reinsurance companies, professional participants of a securities market, leasing services of credit institutions, money transfers through post offices and other organizations, pawnshops, investment funds, transactions with precious metals and stones and purchase of precious products, non-governmental and religious organizations, organizers of lotteries rendering real-estate sale-purchase services (realtors) as well as lawyers, auditors, real estate deals, client assets, securities and property, client bank and depot accounts. A special state body will be established for the monitoring.

Elaboration and international expertise of the Law was completed in May 2005.

Monday, June 30, 2008

Disney Lost My Social Security Number


Back in 1994, Hunter Walker bought five shares of stock in theme park giant Walt Disney Company...

I invested in the House of Mouse because they were one of the only companies I knew of as a 10-year-old. Over the years, I held on to the stock as Disney made a killing by becoming a farm system of teenie bopper talent. But I just found out that Disney lost my identity.

I got a lovely letter in the mail informing me that on February 27, 2008, a company doing archive services for Disney lost a box of "data back-up tapes" that contained my name, address, and best of all, my social security number. Fun!

Apparently the people working for Disney shareowner services at Bank of New York Mellon had someone from Archive America driving my personal info through New Jersey, and it fell off the truck or something. Schmucks. Supposedly, Disney was unable to notify me about this sooner because

It took us some time to determine whose information was contained on the tapes.


Now, they've set me up with two years of identity theft insurance and credit monitoring to make up for the mistake. There's also a useless "missing box hotline." The lost box was one of two screw-ups by Archive America and Bank of New York already this year that have resulted in the loss of the "sensitive information of more than 4.5 million people and 747 companies."

Now, I'm busy filing police and FTC reports and trying to figure out whether or not this security breach has caused me any serious problems. Either way, it's a whole lot of stress. They totally owe me sushi at Epcot and a free breakfast with Mickey next time I'm at Disney World.

Wednesday, June 25, 2008

hello good afternoon, I'm in internet shop with your sister maybe we will use internet around 1 hour. what do you do now?


by Adam Aigner-Treworgy

Tue. Jun 24, 2008

Republican presidential candidate John McCain had some observers scratching their heads last week over his decision to head north to Ottawa to deliver remarks on the economy and U.S. trade policy. For his part, Democrat Barack Obama was quick to take up the issue, saying on Friday that it was "interesting" that McCain "chose to talk about trade in Canada instead of in Ohio or Michigan."

"You know, I think Senator McCain should have shared some of his views there to American voters," the Illinois senator said.

So why did McCain go all the way to Ottawa to give a speech on the positive effects of the North American Free Trade Agreement?

In his speech, McCain contended that he had simply gone to thank the people of Canada for their work "to advance one of the finest friendships between any two nations in the world today." Despite flying to Ottawa aboard his campaign plane, accompanied by his campaign staff and with campaign reporters in tow, the Arizona senator argued that his trip was of a purely diplomatic nature, and he refused to publicly address the election while on foreign soil.

McCain spoke to reporters after his speech but balked when a questioner mentioned his Democratic rival.

"This is not a political campaign trip," McCain said, adding that he just wanted to thank Canadians and their government for their "enormous contribution to our friendship, to our relations, to trade, to our economy and to the defense of freedom in the world."

Even when given the chance to criticize Obama for proposing to renegotiate NAFTA, McCain demurred. In an effort to explain his campaign's decision to fund a nonpolitical trip to a foreign capital, the candidate said he "didn't feel it was appropriate for the taxpayers -- while I am the nominee of my party -- to pay for a trip that would have accrued to the cost of the taxpayers."

However, less than two weeks after McCain officially secured enough delegates to claim his party's nomination, he took off on a congressional delegation to the Middle East and Europe, visiting Iraq, Jordan, France and England with two of his biggest supporters, Sens. Joe Lieberman, I/D-Conn., and Lindsay Graham, R-S.C.

At the time, the McCain campaign was hammered by Democrats for the candidate's participation in a politically beneficial trip on the taxpayers' dime. Campaign officials said they were much more careful on this trip abroad. After a visit to the Economic Club of Toronto, however, McCain held two private meetings with Canadian business leaders in which the candidate's ambassadorial tone gave way to one more familiar from the campaign trail.

First, McCain participated in what the campaign described as a private roundtable with 15 to 20 Canadian business leaders. He then addressed a meeting of the Canadian Council of Chief Executives at the exclusive Rideau Club in downtown Ottawa.

McCain was introduced to the group as the "presidential nominee for the Republican Party of the United States of America," and although he stuck mostly to pleasantries in his brief remarks, he didn't hesitate to slip back into campaign mode when it came time for questions.

When asked about his plan for the American economy, McCain ran off a litany of issues that needed to be addressed, concluding with his campaign slogan: "Restoration of trust and confidence in government is the first step, and that means reform, prosperity and peace."

McCain also outlined his campaign's health care proposal when asked about the large number of children in the U.S. who remain uninsured.

"We need to make [health care] affordable and available, and we need to do that by giving American families a $5,000 refundable tax credit so they can go anyplace in America to get the health insurance of their needs," McCain said.

And in response to a question about repairing the American economy, McCain repeated another familiar line from the trail, saying that as president he would "veto every earmark, porkbarrel bill that comes across my desk, and I'll make 'em famous."

According to Ross Laver, the chief executives council's vice president for policy and communications, his organization is "absolutely nonpartisan," but it does represent business leaders who are heavily invested in an active trading relationship between the U.S. and Canada. Events like the reception with McCain help those members "stay plugged in with what's happening in the world," Laver said, as well as giving members an opportunity to share their views about the future of North American trade.

Such an event, where a presidential candidate is able to discuss his policies with foreign business leaders using political language, could be seen by some as a campaign event, and Federal Election Commission law prohibits the involvement of foreign groups in U.S. campaigns.

Although a spokesperson for the FEC was not allowed to comment on an issue that may come before the commission, FEC rules say, "A foreign national shall not, directly or indirectly, make any expenditure, independent expenditure, or disbursement in connection with any Federal, State, or local election." That includes foreign associations or partnerships.

Democrats criticized the trip even before McCain had set foot in Canada, and the Democratic National Committe on Friday filed a Freedom of Information Act request concerning the role played by U.S. Ambassador David Wilkins in arranging the visit.

Monday, June 23, 2008

Living costs for Londoners jump


London families are desperately trying to cut back their spending as the impact of rising prices really starts to bite.

The Evening Standard's credit crunch panel have all reduced or stopped so-called 'discretionary' spending on treats such as new clothes and eating out. Each panel member has agreed to have their monthly spending monitored to help track changes to the cost of living.
Their latest reports come after the official inflation measure - the consumer price index - rose to 3.3% and Bank of England Governor Mervyn King warned that it could hit 4% this year.

Our panel found that despite making savings, their outgoings continue to go up as fuel, food and utility bills soar. They have also been hit by 'hidden horrors' on top of regular purchases, such as the cost of moving house.

Two households moved this month, one moved last month and the fourth is moving in two weeks. In two cases, the families are downsizing to cut costs.

The panel members all said grocery and fuel costs had increased the most. According to our survey, the average cost of a litre of unleaded petrol rose to £1.18 this month, up from £1.12 in May and £1.09 in April. A basket of 10 everyday goods bought in London increased by 0.45% between mid-April and mid-June, while food bills across the capital have risen by 6% in the past year - almost twice the official rate of inflation.


Family with two children

Emmanuel Bourdon, 28, wife Davinia, 28, and sons Olivier, two, and Sebastien, 11 months

Occupations: Emmanuel is a wine specialist and Davinia is a full-time mother.
Home: a rented two-bedroom flat in Hampton, west London.
Outgoing costs: Rent £900; council tax £125; electricity £40; gas £40; water £35; TV licence £11; petrol £85; travel £90; road tax £17; car insurance £21; groceries £648; eating out £250; going out (including children's playgroups) £208; clothes £60; credit cards £30; phone/internet £158; unexpected expenses (BT bill to re-connect line, fee for moving out, professional cleaner for previous house) £580.

Friday, June 20, 2008

Geneva Finance refunds more than $500,000


Geneva Finance has refunded customers more than $500,000 after admitting it breached the law by not providing rebates on insurance when some debtors paid loans early.

The company made an out-of-court settlement with the Commerce Commission to refund $510,966 to 3700 customers, after breaching the Credit Contracts and Consumer Finance Act.

The finance company had not provided rebates on payment protection insurance premiums for loans repaid between April 2005 and December 2007, the commission said.

Those insurance policies ensure that repayments will be made if debtors are unable to meet them for reasons including accident, sickness or redundancy.

During the period, about 24,000 loans were repaid early or terminated by Geneva Finance, of which about 3700 did not receive the correct rebate.

Geneva Finance had been cooperative and provided rebates when the issue was identified, said commission chairwoman Paula Rebstock.

"Many consumer finance companies require customers to take out payment protection insurance. The commissions from those policies represent a source of revenue to the finance companies.

"When customers wish to repay their loans early they rely on creditors to calculate the correct settlement balance, including any rebates due to them. We expect others in the industry to ensure that they are not making the same mistakes Geneva Finance made," Ms Rebstock said.

Geneva also settled out of court with the commission last October over breaches of the Fair Trading Act and refunded $589,114 to over 900 debtors who had been overcharged fees and interest.

Monday, June 16, 2008

Irish Financial Regulator Financial Capability Survey: 17% don’t have a current bank account - 44%


The Irish Financial Regulator today published a preliminary report on its first major study of the financial capability of consumers in Ireland. The Financial Capability Studyis the largest-ever research project undertaken by the Financial Regulator. The aim of the study is to gain a better understanding of how people in Ireland manage their money, plan ahead and make provision for their financial futures and how people assess and make choices between financial products.

Monday, June 9, 2008

Bleak May for consumers


UK consumer confidence was at an all-time low in May, with a third of respondents having serious economic concerns.

The British Retail Consortium (BRC) UK Consumer Confidence index now stands at 79 points, compared to 91 a year ago – as fears of rising inflation, a slumping economy and falling house prices combine with the credit crunch.

"The fact that the score has plummeted a further 12 points is telling of how much consumers are being stretched," said Mike Watkins, senior manager at Nielsen, which compiled the data.

"Our survey reveals that 55 per cent of people ranked inflation as their main concern during periods of economic downturn while 39 percent said high interest rates.

"Unfortunately they are being hit with both at present. This has caused significant unease among consumers."

Behind inflation and higher interest rates, unemployment and falling property prices were cited as the greatest worries if the economy slumped – by 38 per cent and 25 per cent respectively.

The poll also showed 22 per cent of people have no spare cash.

BRC director general Stephen Robertson added: "With one in five people saying they have no spare cash, the highest-ever recorded by this survey, customers are telling us they are cutting back on spending on all sorts of non-essentials.

"It's clear we are seeing the effects of customers' concerns about the future and about their own levels of debt."

When asked about major concerns, the economy was cited by 31 per cent of people, followed by debt (26 per cent), work/life balance (20 per cent) and immigration (16 per cent).

Wednesday, June 4, 2008

NHL Inks Sponsorship Deal With Anheuser For North America


The National Hockey League has signed Anheuser-Busch's Bud Light as official beer of the NHL through the 2010-11 seasons. While the NHL has the unique position of being a pro league with both Canadian and U.S. teams, it had not offered bi-national marketing platforms. The deal with Anheuser-Busch (and Labatt, which markets and distributes Bud Light in Canada) changes all that. Bud Light has brand category exclusivity across North America for NHL media, games and special events.


Bud Light has been the Official Beer Sponsor of the NHL since 1998, and at the local level, sponsors 21 of the league's 24 U.S. teams.

Keith Wachtel, NHL's SVP/sales and marketing, says the arrangement with A-B reflects a new league strategy of offering marketers category sponsorship in both in the U.S. and Canada, via games, NHL special events, and on NHL-controlled media.

Three years ago, Labatt signed a licensing deal to distribute Bud Light in Canada, but the NHL marketing program gives Bud Light official beer status in both countries. "That's what is unique for us," he says. "Other sports properties don't have businesses north of the border. So we are uniquely positioned to provide a North American platform for our partners."

He says the NHL controls its content, whether at NHL.com (broadband or the NHL Network, broadcast partners. "If we don't have one brand aligned, we have either conflicting messages or we eliminate a key partner.

In past years, NHL's beer partner in Canada was Labatt Blue. Wachtel says the league is trying to bring partners across borders. "For example, in our old deals, we might have Home Depot in Canada, but no home-improvement partner in the U.S." He says the league is talking to Home Depot to expand their presence to the U.S. market as well.

"Because there are differences in how the U.S. and Canada consume and view hockey, in Canada we are trying to elevate the brand; in the U.S. we are trying to activate it," he says, explaining that in Canada hockey is religion, and the NHL is not the only league. "It's their heritage and pastime, and everyone activates against hockey," he says. "We want to be at the top of the pyramid. We want everything to emanate from NHL, and we want our partners to use hockey to elevate NHL as the leading hockey brand in Canada."

In the U.S., where there is a plethora of sports, he explains, it's about awareness, and activating the partner brands against the sport of hockey, "so you look at partners using NHL in creative." Player Sidney Crosby appearing in Gatorade ads, for instance--or NHL in Pepsi Amp ads.

He says that the A-B renewal will include the beer brand's first national NHL promotion. They will put full weight behind it. We don't want people to just license the rights to NHL," says Wachtel.

The unified U.S./Canada brand approach for NHL includes more cross-national grassroots efforts, such as next year's All Star game, to be held in Canada. "Bud Light will not only be able to market and promote around the game, but leverage it on media. You will see Bud Light on the ice, on backboards."

Wachtel says NHL is working on sponsors in auto, insurance, technology and a credit card company and a Canadian wireless partner, "the first time in a long time the league has entered into exclusive content and marketing rights partnership for a Canada wireless partner."

"We have always been one of the major pro sports leagues with a great demographic of consumers; but we have developed a strategy of having a lot more to offer partners," says Wachtel. Karl Greenberg can be reached at karl@mediapost.com