Bl***y Banks Again

Lloyds: Osborne Plans Taxpayer Stake Sale


The Government will set 61p as the price at which it will
begin selling Lloyds Banking Group shares, Sky News learns.


8:00am UK, Friday
01 March 2013

The UK Government holds a 39% stake in the banking
group











]







By Mark Kleinman, City Editor


The Government will signal today that it will begin the sell-off
of its stake in Lloyds Banking Group when the lender's share price hits 61p - a
far lower level than previously thought.


I have learnt that UK Financial Investments (UKFI), which manages the
taxpayer's 39% stake in Lloyds, and the Treasury will indicate today that the
privatisation of the Government's stake can begin within months.


The 61p level is the price at which the stake - bought in 2008 at the height
of the banking crisis - is booked at in the national accounts.


The £1.48m bonus awarded to Lloyds boss Antonio Horta-Osorio can vest if the
Government sells at least one-third of its stake above 61p, Lloyds confirmed
today.


"This award is subject to the normal performance adjustment policy and will
only vest if a share price of 73.6p has been reached for a given period of time
or the Government has sold at least 33% of its shareholding at prices above
61p," Lloyds said, confirming a report on Sky News.


"The board believes that these additional conditions are in the interests of
all shareholders and support our common aim of repaying the taxpayer.


"HM Treasury has informed us that 61p is the average price at which the
equity support provided to Lloyds Banking Group is recorded in the Public
Finances."


The news comes as Lloyds reported a loss for last year of £570m, down from
£3.5bn in 2011.


The loss was attributable to a £3.5bn provision during 2012 for mis-selling
payment protection insurance, £1.5bn of which was taken during the fourth
quarter.


Lloyds paid out £365m in bonuses for the year, with an employee average of
£3,900.

==============================
latest report from Lloyds is the reduction of loss, 2 years ago it was £3.5 billion, last year £570 million .
£6.9 billion has been set aside for PPI mis-selling.

Standard Chartered investor turns on bank for paying $340m fine


One of Standard Chartered’s key UK investors has questioned the bank’s
decision to pay a $340m (£216.6m) fine for suspect Iranian dollar trades,
despite insisting that the claims against it were flawed.








Standard Chartered lost a
quarter of its market capitalisation when the DFS announced its
accusations Photo:
AP






By Helia Ebrahimi, and Kamal
Ahmed

9:46PM BST 18 Aug 2012


11 Comments




The bank surprised some shareholders last week when it agreed to pay the fine after the New York
State Department of Financial Services (DFS) alleged that up to $250bn worth of
transactions involving Iranian clients could have been unlawful.


The DFS accused the bank of entering “a scheme” with the Iranian government
to “hide from regulators roughly 60,000 secret transactions involving at least
$250bn”.


Although Standard Chartered initially denied the
claims – and said suspect transactions only amounted to $14m – it agreed to pay
the amount and could now face further fines totalling $700m from other American
regulators.


“I do not understand how paying $340m has been the right thing to do,” the
shareholder said. “If the bank did not do anything wrong, why has it chosen to
settle so quickly? Their behaviour makes no sense whatsoever.


“Generally, the tone at the top is very good. This is a bank with a very good
chairman. Their initial statement was in line with protecting this reputation.




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“What is not clear is why their position changed so radically. If they did
not breach the rules, why have they agreed to pay the settlement and open
themselves up to further fines with other US regulators?”

Sources at the bank have made it clear that many investors were keen to reach
a settlement as a protracted battle with the American authorities would have
weighed heavily on its share price. There were also fears at the top of the bank
that the DFS could unilaterally suspend the bank’s New York licence for a 90-day
period.

Standard Chartered lost a quarter of its market capitalisation when the DFS
announced its accusations. The share price has recovered some value since.

The bank’s key investor, the Singaporean sovereign wealth fund Temasek, which
owns 18pc of the bank, is thought to be one of those who pushed for a deal.

In an effort to put Standard Chartered back on the front foot, the bank is to radically overhaul its board
following the scandal to make it better positioned for running a global bank.
Sir John Peace, the bank’s chairman, wants to hire at least two “international
big hitters” before the end of the year, probably from outside the UK, with
America and Asia favoured locations. Although the process of strengthening the
board was initiated before the DFS allegations, it is now seen as more urgent.
Announcements could be made as soon as next month.

Investors are concerned that many of the present board members have been
serving for a decade or more and that the vast majority are from the UK.
Standard Chartered operates in more than 70 countries and has little presence in
Britain.

A spokesman for the bank said: “We continuously refresh our board membership
to ensure it retains the right dynamics.”

Investors are concerned that many of the present board members have been
serving for a decade or more and that the vast majority are from the UK.
Standard Chartered operates in more than 70 countries and has little presence in
Britain.

A spokesman for the bank said: “We continuously refresh our board membership
to ensure it retains the right dynamics.”
Unquote.

Plainly they respect the British version of banking standards and Dynamics.... 'Rob, lie, cheat, steal, corrupt, twist, profit at all cost, damn the law, bribery, fornicate, rent boys, miss sell, Libor and foreclosure.

My God, the list of applicable and acceptable standards in British Banking Ethics is endless....

malena stool wrote:Investors are concerned that many of the present board members have been
serving for a decade or more and that the vast majority are from the UK.
Standard Chartered operates in more than 70 countries and has little presence in
Britain.

A spokesman for the bank said: “We continuously refresh our board membership
to ensure it retains the right dynamics.”
Unquote.

Plainly they respect the British version of banking standards and Dynamics.... 'Rob, lie, cheat, steal, corrupt, twist, profit at all cost, damn the law, bribery, fornicate, rent boys, miss sell, Libor and foreclosure.

My God, the list of applicable and acceptable standards in British Banking Ethics is endless....

====================
The Banks face never ending Fines for mis-selling PPI's, and the Libor scandal and I don't think Britain should even try to bail any more out. At least the EU is prepared to do something about it, unlike lily livered Government who think Banking is all Britain can do. Our reputation is shot to ribbons , no good trying to do anything about it, let's go back to the Barter system.

We need someone like Lenin to lead us out of the hell hole created by the last three administrations who have run this nation into the ground.

The U.S. debt is frightening, Britain too , under the BOE supremo Bernard King who was also too eager to go for quantitivie easing will take years to get back to any kind of profit . I think we ought to abandon Political Parties for a few years and get the best brains from all Political parties given carte blanche to get the Country back on it's feet . We have a new Canadian BOE Guy so he won't have any bias towards Politicians and apparently was very successful , we shall see.

PERHAPS SLIGHLY OFF TOPIC,SWITZERLAND HAS HAD A REFERENDUM SAYING EXESS PAY SHOULD BE APPROVED BY SHAREHOLDERS.

Badboy wrote:PERHAPS SLIGHLY OFF TOPIC,SWITZERLAND HAS HAD A REFERENDUM SAYING EXESS PAY SHOULD BE APPROVED BY SHAREHOLDERS.

Badboy, Switzerland is not part of the EU and is a prosperous Country and is a tax haven for rich people trtying to avoid tax. It's no wonder they don't want compulsory capping of Bank Staff.!!!!

HSBC disappoints with fall in profits to $20.6bn


HSBC has reported a fall in pre-tax profits for 2012 to $20.6bn as Britain's
biggest bank was hit by record fines and the cost of compensating customers
mis-sold financial products.








HSBC shares fell in early
trading. Photo: John
Taylor






By Harry Wilson, Banking
Editor

9:11AM GMT 04 Mar 2013


6 Comments




Profits were down 6pc year-on-year, missing City expectations by nearly $3bn.






The fall was largely due to a $5.2bn charge against changes in the value of
the bank's own debt, as well a $1.9bn fine related to a US money-laundering
investigation, and $1.4bn of provisions for the mis-selling of payment
protection insurance and interest rate swaps.

Bonuses across the bank
totalled $3.7bn, down from $4.2bn, while the bonus pool for staff in the lender
investment banking arm rose slightly from $1.21bn to $1.27bn.

The fall in
the size of HSBC's overall bonus pot reflected the cost of the fines imposed on
the bank, which it said had been "taken into account" when deciding pay levels
for the year.

Stuart Gulliver, chief executive of HSBC, hailed the
"significant progress" made by the business last year, saying the bank had
exceeded its annual cost savings target of $3.5bn.


"We increased revenues, performed well in most faster-growing markets and
enjoyed a record year in Commercial Banking. We’ve made the business easier to
manage and control by disposing of non-core businesses and surpassed our
sustainable savings target," said Mr Gulliver.


Commercial Banking reported a 7pc rise in profit before tax to $8.5bn.




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Mr Gulliver's own pay package was worth £7.4m, including an annual bonus of
£1.95m. This compares to a bonus last year of £2.2m and long-term share awards
worth £3.75m, compared to £3m this year.

HSBC is paying an 18 cent a share dividend in the fourth quarter, taking the
total payout for the year up 10pc to 45 cents. The bank also said it planned to
bump up its first three interim dividends for next year by 11pc to 10 cents a
share.

Shares in bank fell more than 2pc in early trading.

Share

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IT GOOD TO HEAR ABOUT A FALL IN PROFITS BECAUSE SOME COMPANIES HAVE TOO MUCH MONEY.

Badboy wrote:IT GOOD TO HEAR ABOUT A FALL IN PROFITS BECAUSE SOME COMPANIES HAVE TOO MUCH MONEY.

Not now they havn't BadBoy with all the fines they have paid, compensation for mis-selling of PPI and the Libor scandal .

Banks withdraw £1.88bn from economy, offsets rise in lending


Thirteen UK lenders have pulled £1.88bn out of the economy despite signing
up for taxpayer subsidies worth as much as £140m through a state-backed cheap
credit scheme designed to boost lending.

















560
315
TelegraphPlayer_9907325























By Philip Aldrick, Economics
Editor

2:55PM GMT 04 Mar 2013


110 Comments




The 13 banks and building societies have drawn £13.8bn of cheap funds from
the Bank of England’s Funding for Lending scheme (FLS), which was launched on
August 1 to help revive the economy by cutting borrowing costs and increase the
supply of credit for households and businesses.


Of those that did draw down on the taxpayer-subsidised funding between August
and December, 10 increased lending but their efforts were more than offset by
massive withdrawals by Royal Bank of Scotland, Lloyds Banking Group and
Santander, the latest figures from the Bank show.


Business groups described the data as “clearly disappointing”, and both the
Bank and the Treasury tried to alleviate concerns. The Bank pointed out that the
fall reflected seasonal borrowing behaviour, and that it expected “a gradual
pick up in net lending over the course of 2013”.


A Treasury spokesman added: “[The FLS] has already succeeded in reducing
borrowing costs, with some mortgage rates at their lowest for five years. For
example, a two-year £100,000 mortgage with a 10pc deposit is £1,000 cheaper in
the first year than before the scheme started.”


The FLS was launched to much fanfare in August but take-up has been slow,
denting hopes it will spur a return to economic growth. At the time, the
authorities said they wanted lenders to use the scheme for £68bn of cheap
funding by January 2014.



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Michael Saunders, UK economist at Citi, said: “So far, take-up is running
well below that [£68bn] pace and, while mortgage lending spreads have fallen,
lending is weak and credit availability for business is poor.”

In total, 39 lenders have signed up to the FLS, but 26 have yet to use it.
Lending by all 39 was also disappointing, the Bank’s figures showed. They
withdrew £1.5bn of credit between August and the end of December.

The FLS was designed to use taxpayer guarantees to reduce banks’ funding
costs so they could then pass on those lower rates to borrowers, who in turn
would respond by increasing demand. In the first instance, the scheme was
expected to cut lenders’ costs by about one percentage point a year, handing
them a subsidy of £138m on the £13.8bn of FLS drawings so far.

However, economists said at least some of those savings are being passed
through to the mortgage market. In August, the average two-year fixed rate deal
for buyers with a 10pc deposit – a standard first-time buyer product – was
5.93pc. By January, it was just 4.67pc.

Savers, though, have suffered a big reduction in the interest they can earn
as banks no longer need to compete so hard for deposits. The average instant
access savings account paid 1.53pc in August. That had fallen to 1.09pc by
January.

Business groups remain concerned about the lack of impact the FLS is having
on lending to companies. The British Chambers of Commerce said yesterday’s
figures were “clearly disappointing”, while John Walker, chairman of the
Federation of Small Businesses, said: “It is clear that Funding for Lending is
benefiting the mortgage market more than the small business sector.”

Of the scheme’s users, Barclays was the biggest. It tapped the FLS for £6bn
between August and December, increasing net lending by £5.7bn. Nationwide
Building Society has been the other major provider of credit, using the scheme
for £2.01bn of funding and boosting lending by £3.6bn.

By contrast, RBS has drawn down just £750m and has reduced lending by
£2.36bn. Santander has raised £1bn through the FLS, and has cut lending by
£6.31bn. And Lloyds has taken £3bn from the FLS, and reduced lending by £5.64bn.


The reductions reflect a reshaping of their businesses. Lloyds is reducing
its share of the UK mortgage market from 28pc to 25pc, but has committed to
increasing small business lending by £5bn this year. Similarly, Santander is
cutting its mortgage book back to use the released capital to grow small
business lending.

The Bank and the Treasury are confident that the next data, for the first
quarter of 2013, will be better, especially after related lending figures for
January alone showed growth of £3.1bn compared with the £2.7bn that was
withdrawn in the fourth quarter of 2012.

Last week, Paul Fisher, executive director for markets at the Bank, said: “I
would not expect to see a return to rising aggregate quantities until we start
getting data for 2013 at the earliest. Nevertheless, it does seem that we have
the beginnings of a revival in mortgage activity.”

MPC to reject calls for more money printing


Bank of England policymakers are expected to reject calls for more
quantitative easing this week in what would be seen as a snub for the outgoing
Governor, Sir Mervyn King.








Bank of England policymakers are
expected to reject calls for more quantitative easing this week. Photo: PA







By Philip Aldrick

7:30PM GMT 02 Mar 2013


21 Comments




Sir Mervyn last month voted to increase the
stock of QE by £25bn to £400bn, but was over-ruled by the
nine-strong Monetary Policy Committee (MPC).


He has been in the minority on three previous occasions, but each time he
voted for a change in policy the rest of the committee fell into line at the
next meeting.


Most economists now expect policy to remain unchanged when the decision is
announced on Thursday, with the vote likely to fall the same way as last month,
when Sir Mervyn was joined by external MPC member David Miles and Paul Fisher,
the Bank’s executive director for markets.


“If they don’t vote with him it will be a first,” Geoff Dicks, chief
economist at Novus Capital Markets, said. “I would interpret that as Mervyn
King’s swansong.”


The Governor has just four rate-setting meetings left before he hands over to
Mark Carney, the current Governor of the Bank of Canada, and many economists
believe the Bank is preparing to take further action on QE before then.




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Kevin Daly, at Goldman Sachs, said that while “it would not be a major
surprise” if the MPC voted for more QE this month, “this is not our central
expectation”. Instead, he reckoned the committee will devise new stimulus
measures to be unveiled “in the months ahead”.

Similarly, Howard Archer, IHS Global Insight’s chief economist, said: “We
lean towards the view that the Bank will hold fire on more QE.”

Irish Seek Formal EU Approval of Bonus Deal U.K. Opposes


By Jim Brunsden & Rebecca Christie - Mar 5, 2013 11:05 AM GMT

• 
  

Ireland seeks backing from other European Union nations for draft rules on bank capital requirements that include bonus curbs opposed by the U.K. and criticized by lenders as a threat to competitiveness.
Finance ministers from the EU’s 27 nations are discussing the pay curbs in Brussels today along with other parts of a compromise deal brokered by Ireland, which holds the EU’s rotating presidency, and the European Parliament. The U.K. signaled the discussion would be more than a formality.





Enlarge image
Irish to Seek Formal Approval of Bank Bonus Deal Opposed by U.K.



Jock Fistick/Bloomberg
The bronze statue "Europe" sits outside the European Union parliament building in Brussels.
The bronze statue "Europe" sits outside the European Union parliament building in Brussels. Photographer: Jock Fistick/Bloomberg
“We continue to have real concerns about the proposals,”Jean-Christophe Gray, a spokesman for U.K. Prime Minister David Cameron, told reporters in London yesterday. “We are in discussions with other member states.”
Bonus rules were a late addition to EU legislation on how it will apply global rules drawn up by the Basel Committee on Banking Supervision. Talks between national governments and the EU Parliament had dragged on for 18 months before the Irish presidency negotiated the pay agreement in order to move the broader effort forward.
If finance ministers give their formal endorsement today, the Irish presidency will move forward in collaboration with EU lawmakers to finish drafting the legislation. The bill must then be approved by a weighted majority of EU states and the Parliament.
‘High-Risk Deals’

The U.K. appeared isolated this morning as an array of ministers told reporters that they could accept the draft compromise.
France, Austria, Denmark, and Luxembourg, in addition to Ireland, publicly backed the deal.
“Maybe we can find a solution that also includes the U.K.,” Luc Frieden, Luxembourg’s finance minister, told reporters before today’s meeting.
The goal of the measures is to stop bankers “making high-risk deals only to increase their income and in this way put in danger the stability of the entire system,” Frieden said.“This has to be a goal that a country like the U.K. could also share.”
Should the bill not be completed by March 22, the EU may miss its January 2014 deadline for the measures to take effect, the Irish presidency has said. The target date has already been pushed back by one year.
Bonus Curbs

Changes to the current deal aren’t out of the question, Dutch Finance Minister Jeroen Dijsselbloem told reporters yesterday after euro-area ministers met in Brussels. “Yes that is possible,” Dijsselbloem said. “But it would lead to a delay and I would regret that very much.”
While bonuses that are more than twice fixed pay would be banned, the draft deal would offer banks some leeway on how to apply the measure when parts of the award are deferred for at least five years.
Banks have warned that the bonus curbs would place them at a disadvantage in hiring the best recruits and force them to boost executives’ basic pay. The Association for Financial Markets in Europe, which represents international lenders including Deutsche Bank AG (DBK) and BNP Paribas SA (BNP), said last week the proposals would “have a negative impact on the real economy.”
U.K. Concerns

EU regulations must be “flexible enough” to allow banks“to continue competing and succeeding while being located in the U.K.,” Cameron said last week. “We have major international banks that are based in the U.K., but have branches and activities all over the world.”
French Finance Minister Pierre Moscovici said the U.K. was isolated in its objections to the Basel III rules deal.
“Everyone has to live with these rules, so I do not accept that some say we can’t live with them,” Moscovici told reporters in Brussels yesterday. “Rather than say the 26 should go toward the 27th, say the 27th should go toward the 26.”
Denmark and the Netherlands have said that they plan to put in place national measures that are even tougher than the EU rules.
The Federation of European Employers, which represents corporate human resources departments, said last week that the bonus curbs would go “beyond the powers vested in the European Union under the EU Treaty.” The treaty “clearly states that EU legislative powers shall not apply to pay,” the group said.
‘Financial Incentives’

The European Commission said today that it was sure that the plans are legal, as the treaty provisions on pay apply to social policy, not bank regulation.
“The argument that the social policy provisions of the EU treaty would prohibit good prudential regulation is absurd,”Stefaan De Rynck, a spokesman for Michel Barnier, the EU’s financial services chief, said in an e-mail.
The EU “can make rules on financial incentives. It has done it before in regulating sales commissions,” Sharon Bowles, chairwoman of the Parliament’s economic and monetary affairs committee, said in a telephone interview.
“The Parliament would have loved to put a cap on overall pay, but we backed off from doing that over doubts about legality,” she said. “In the past something similar has been attempted for footballers and they discovered it exceeds the treaty.”
Legal Challenge

The U.K. has previously resorted to the EU courts to overturn measures it sees as a threat to its financial services industry. In 2011, Britain sued the European Central Bank over its plans to block trades in some euro-denominated securities from being cleared outside of the 17 countries that share the currency. Last year, it lodged a legal challenge against plans to give the European Securities and Markets Authority powers to ban short selling.
In addition to the U.K. concerns on bonuses, EU ministers are discussing provisions in the draft law that would force banks to publish the profits they make and taxes they incur on a country-by-country basis.
Other outstanding points include French concerns over how limits on how much business a bank can do with a single counterparty might interact with planned bank structure rules.
Nations are also debating the timetable for applying the Basel rules, with some countries opposed to the provisional start date of Jan. 1 2014, according to a document published on the EU’s website.
‘Toughest Rules’

“The planned EU banker pay rules would be the toughest in the world,” Alex Beidas, an employee-incentives specialist at law firm Linklaters LLP, said by e-mail.
The EU’s push on banker bonuses comes as Switzerland also takes steps to regulate executive pay after a March 3 referendum.
Swiss voters overwhelmingly backed plans to give shareholders the power to take a binding vote each year on managers’ pay awards. Switzerland also would ban big payouts for new hires and for managers when they leave.
“The Swiss measures hand powers to shareholders, but don’t seek to cap pay,” Beidas said.
The rules “will only apply to the top layer of management at publicly traded companies,” while “the EU banker pay plans will apply more broadly to material risk takers, or possibly throughout the firm,” she said.
The European Commission said yesterday that it is also working on broader proposals on executive pay, to be published this year, that would force shareholders to vote on remuneration.

BOE’s King Says Government Should Split Up RBS, Accept Loss


By Gavin Finch & Scott Hamilton - Mar 6, 2013 5:30 PM G


Bank of England Governor Mervyn King urged the government to split up Royal Bank of Scotland Group Plc (RBS) and speed up the return of Britain’s biggest publicly owned lender to private ownership following its bailout in 2008.
“We’re four and half years on and there’s no sign of it going back to the private sector,” King told the Parliamentary Commission on Banking Standards at a hearing in London today. “That indicates we’ve not been sufficiently decisive in recapitalizing or restructuring it.”
RBS should be split into a so-called good bank that could fund itself and a bad bank, where loss-making assets would be transferred, King told lawmakers today. That would require the lender to accept losses on some assets, he said.
The government is pressing Edinburgh-based RBS to sell assets and bolster capital as it tries to recoup some of the 45.5 billion pounds ($69 billion) it pumped into the lender in the biggest bank bailout in the world. Chief Executive Officer Stephen Hester has cut assets by 907 billion pounds, eliminated 36,000 jobs and scaled back the securities unit since he took over from Fred Goodwin. The stock still trades for less than the price the government paid for it.
“Hester has struggled manfully to try and reduce the size of the balance sheet,” he said. “What I’m talking about is different: It’s a much more decisive restructuring. It shouldn’t take more than a year to do,” he said.
Stock Decline

RBS dropped 1.2 percent to 309.1 pence in London trading today, extending its decline this year to 4.8 percent. The government values its stake in the bank at about 407 pence a share, three people with knowledge of the matter said last week.
“The key thing is to accept that whatever we do now will mean recognizing losses relative to where the public accounts currently show them,” King said.
RBS has been criticized by lawmakers for failing to boost lending to the economy, even though the taxpayer owns more than 80 percent of the lender. Figures released by the Bank of England this week showed the bank pared net lending by 1.7 billion pounds in the fourth quarter. At the same time, regulators are pressing the loss-making bank to shrink its balance sheet and bolster capital.
Lawmakers including Vince Cable have said the government should have fully nationalized the lender, a move opposed by Chancellor of the Exchequer George Osborne, who said last month taking full ownership would require as much as 10 billion pounds of public money.
U.K. Prime Minister David Cameron said today that he agreed with Osborne’s approach to returning RBS to private hands, Jean- Christophe Gray, the premier’s spokesman, said in London today.
‘Lessons of History’

“The whole idea of having a bank that is 82 percent owned by the taxpayer, run at arm’s length from the government, is a nonsense,” King said. “It cannot make any sense.”
King said the purpose of taking banks into public ownership was to restructure them and recapitalize them quickly. He contrasted Japan’s failure to restructure its banking system with Sweden’s nationalization, overhaul and rapid return of its lenders to private ownership in the 1990s. RBS has crimped lending and growth in the U.K. since its bailout, King said.
“The lessons of history show very clearly that it is not a good idea to have banks in the public sector for very long,” King said. “The financial markets realized that the losses out there don’t go away. It’s better to face up to it.”
The bank said last month it would sell a stake in Citizens Financial Group Inc., the U.S. consumer and commercial lender it acquired in 1988, and further pare back its investment-banking unit after coming under pressure from the government and regulators. Still, efforts to reduce the government’s stake are being hampered by regulatory fines for manipulating Libor and provisions for customer redress.
RBS last month posted a full-year loss of 5.97 billion pounds after setting aside an additional 1.1 billion pounds to compensate clients wrongly sold insurance and interest-rate hedging products.
“The arguments for a restructuring sooner rather than later are powerful ones,” King said. “I’d be willing to lend my support. We shouldn’t worry about the consequential impact.”

Banks: Bonuses too big to prevail

8 March 2013The Guardian London

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Olle
After the whopping bailouts to Europe’s banks failed to trigger growth, a new zeitgeist is sweeping the continent. The tide has turned against corporate excess. The public wants revenge and the bankers have only themselves to blame, writes a British columnist.

Simon JenkinsThe peasants are revolting across Europe. They want bankers' blood and mean to get it. Until now, public response to the credit crunch has been one of general bafflement and wrist-slapping. The banks persuaded the world it was all an act of fate. As it was, they were too big to fail and their leaders too saintly to atone for it. For four years, British banks were showered with nearly half a trillion pounds of public and printed money. They duly recovered and stayed rich, while everyone else went poor.
The worm has turned. The banks and government alike have failed to deliver recovery. The people want revenge, and have found it – of all places – in the European parliament. It has declared that EU bankers cannot get bonuses bigger than their salaries, or twice as big if shareholders approve. This applies wherever EU bankers work, and to any overseas banker working in the EU.
Meanwhile, a Swiss referendum now requires top executives to seek explicit shareholder approval for their pay, with a ban on golden hellos and goodbyes. The Netherlands is talking of a tighter 20 per cent cap on bonuses. Even laissez-faire Britain has seen the National Association of Pension Funds demand that boards keep executive pay rises down to inflation.
Europe's once omnipotent banking lobby has been all but neutered by the scale of scandal. The German government caved in to the EU parliament under pressure from the opposition Social Democrats. This was after the Libor scandal revealed Deutsche Bank cutting one trader's bonus by £34m [€39m], thus implying a staggering original sum. The Swiss campaign was kicked into life by the drugs firm Novartis giving its departing chairman a $76m [€58m] gift. Some 68 per cent of Swiss voted for the new curb.
Still dancing to the bankers’ tune

Only in Britain do ministers still dance to the bankers' tune. Last month RBS executives brushed aside their state shareholder and paid themselves £600m in bonuses after posting a £5bn loss. Loss-making Lloyds dipped into its till and gave senior staff an extra £365m. Money-laundering HSBC announced 78 of its London executives would take home more than £1m each. They all say bonuses were unrelated to fines or losses, but they always say that. George Osborne was humiliated in Brussels on Tuesday by having to plead their fruitless cause.
Last year the City of London's much-heralded "shareholder spring" got nowhere. Revolts against executive pay at WPP, Barclays, Trinity Mirror and elsewhere had little noticeable impact. While overall pay stagnated, that of top executives rose 12 per cent. Opinion polls showed the public overwhelmingly hostile to top pay. Only the government and the London mayor stand between the very rich and a furious public. The peasants' revolt means that even British ministers cannot defy opinion for ever.
The reality is that the banking community has allowed this thirst for revenge to build up for over four years, and it just did not care. Ever since the 1980s and financial deregulation, the profession took home sums of money unheard of in any other line of work.
This had nothing to do with free markets, except within a tight group of high-rolling traders. Modern bankers derive "economic rent" from exploiting oligopolistic cartels in financial services, with shareholders kept at one remove. The astronomical traders' bonuses are asymmetric returns on cash that properly belongs to depositors and shareholders whose money bears the risk. In any other business such bonuses would be regarded as theft from the firm.
Only themselves to blame

No trade unions are fiercer in defending their interests than the rich professions. As we saw this week with lawyers, cut their largesse and they threaten to take it out on the poor, the economy, the government, everyone.
The banks howl that the bonus cap means their greed will go "offshore". This seems exaggerated. But the EU curbs could possibly see the start of the high-rollers moving out of over-regulated Europe towards the Americas and Asia.
This would not be wholly good news for Britain: finance has been the boom industry of the past quarter-century. But more likely is that the more toxic activities will go, and that is no loss.
Either way, the banks have themselves to blame. They flew their golden wings too near the sun, and rage has melted them. They have only one plea on their side. The culture of greed in the City was nothing to the culture of ineptitude at the Bank of England and the Treasury. They pumped out the money. Never in British economic history can so much have been so wasted on so fruitless a cause. And still no hint of remorse.

That's an excellent article by Simon Jenkins , Britain will be the only Country who refuses to curb Bankers bonuses paid out of of shareholders money with no conscience . If Britain wants to keep it's status as the honest Banking system, it has to be seen to be putting it's house in order. Sharia Banks have already opened in london.

Treasury Row With FSA Delays New Bank Rules


The Government and the FSA clash over plans to speed up the
approval regime for new high street banks, Sky News understands.


7:38pm UK, Monday
25 February 2013

Metro Bank is one of the new ventures to gain a foothold
in the market

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By Mark Kleinman, City Editor


New rules designed to sweep away barriers to entry for start-up
retail banks are being held up by tensions between the Treasury and the City
regulator over the scope of the reforms.


I have learnt that the Treasury and the Financial Services Authority (FSA)
are embroiled in a disagreement over the length of time that the regulator
should take to authorise new banks which have applied to it for a licence to
become operational.


People familiar with the dispute said the Treasury was pushing for the
authorisation period to be reduced to three months, a timeframe that FSA
officials are understood to have argued is unworkable.


The disagreement is understood to be a factor in delays to an FSA discussion
paper that will set out proposals for changes to the regulatory framework for
new lenders.


Originally due to be published in January, the paper is now expected to see
the light of day next month. George Osborne, the Chancellor, told the
Parliamentary Commission on Banking Standards on Monday that the proposals would
be set out "soon".


The tensions between the FSA and the Treasury underline the desperation of Mr
Osborne to see the emergence of a new wave of credible retail banks to challenge
what he has called the "oligopoly" of the established high street banks.


Among the central proposals contained in the paper will be a relaxation of
the requirement for new lenders to hold comparable capital buffers to
established banks during the early stages of their existence.


Under current rules, new banks must significantly increase the capital they
hold during their third year of operation, a measure that the FSA will propose
is abolished.


Another idea will be for a new pre-submission period that enables prospective
bank applicants to work with the FSA outside a formal process, which will enable
discussions to take place without the bureaucracy that has typically shrouded
such negotiations.


The existing capital regime has been criticised as excessively onerous by
some executives who have attempted to launch banks in the aftermath of the
financial crisis.


Only one new high street lender - Metro Bank - has opened its doors in recent
times, and ministers are keen to encourage further efforts to assail the
dominance of the likes of Barclays, Lloyds Banking Group and Royal Bank of
Scotlan



A number of other projects, including a telephone and internet-based lender
called Home & Savings Bank, have failed to see the light of day because of
capital-raising difficulties.


===============================

It looks as though the FSA has finally woken up to remembering what their responsibilities are, not before time. The last thing we need at the momnet are more Banks until the existing mess has been cleared up.Do we really need a new Bank relying on the internet when there are so many hackings already.??

THE GUARDIAN SAYS THERE COULD BE ANOTHER BANKING CRISIS CONCERNING PRIVATE EQUITY FUNDS WHO HAVE BORROWED TO BUY DEBT-RIDDEN COMPANIES,ONLY MOST DEALS WERE DONE AROUND 2007 AND THESE DEBTS ARE DUE 2014.
PEFS BROUGHT FIRMS LIKE EMI WHICH ARE NOT DOING ALL THAT WELL IN THIS ECONOMIC CLIMATE.

Badboy wrote:THE GUARDIAN SAYS THERE COULD BE ANOTHER BANKING CRISIS CONCERNING PRIVATE EQUITY FUNDS WHO HAVE BORROWED TO BUY DEBT-RIDDEN COMPANIES,ONLY MOST DEALS WERE DONE AROUND 2007 AND THESE DEBTS ARE DUE 2014.
PEFS BROUGHT FIRMS LIKE EMI WHICH ARE NOT DOING ALL THAT WELL IN THIS ECONOMIC CLIMATE.

============================
Yes badboy , the Banks are still facing massive payments for the PPI mis-selling and the LIBOR crisis still has to contend with the Lawsuits by Councils , Fund Managers etc .

Panda wrote:

Badboy wrote:THE GUARDIAN SAYS THERE COULD BE ANOTHER BANKING CRISIS CONCERNING PRIVATE EQUITY FUNDS WHO HAVE BORROWED TO BUY DEBT-RIDDEN COMPANIES,ONLY MOST DEALS WERE DONE AROUND 2007 AND THESE DEBTS ARE DUE 2014.
PEFS BROUGHT FIRMS LIKE EMI WHICH ARE NOT DOING ALL THAT WELL IN THIS ECONOMIC CLIMATE.

============================
Yes badboy , the Banks are still facing massive payments for the PPI mis-selling and the LIBOR crisis still has to contend with the Lawsuits by Councils , Fund Managers etc .

£100 BILLION IS POSSIBLY AT STAKE HERE
$200BILLION IN USA AND ELSEWHERE.

In the U.S. Senate on Friday, legislators will try yet again to answer a question of great concern to the country: How did JPMorgan Chase & Co., a bank large enough to bring down the U.S. economy, rack up losses of $6 billion in a unit that was supposed to be managing its excess cash and mitigating risk?
Allow us to suggest a follow-up question: Why should any bank be big and threatening enough to bring down the U.S. economy?
In recent editorials, we’ve explained how recurrent bailouts have encouraged banks to become as large and scary as possible. The more damaging their failure would be, the more certain they and their creditors can be that the government will rescue them in an emergency. This certainty allows the biggest banks to borrow at lower rates than their competitors -- a subsidy from taxpayers worth tens of billions of dollars a year.
JPMorgan is a prime example of where the too-big-to-fail policy has gotten us. Under international accounting standards, it is the largest bank on the planet: Its total assets stood at almost $4 trillion as of mid-2012, according to an estimate by Federal Deposit Insurance Corp. Vice Chairman Thomas Hoenig. That’s equal to more than a quarter of the country’s entire annual economic output. The bank’s tangible equity, the bedrock capital available to absorb losses, amounted to just $121 billion, or 3.1 percent of tangible assets. In other words, a decline of 3.1 percent in the value of JPMorgan’s assets could be enough to render it insolvent and necessitate a taxpayer bailout.
Growing Support

Lately, the idea that we should stop paying banks to become dangerous has garnered support on both ends of the political spectrum. Notably, the American Conservative Union has invited a major proponent of caps on bank size, Dallas Federal Reserve Bank President Richard Fisher, to address its annual conferencethis week outside Washington, D.C.
The essence of Fisher’s solution is twofold. He would impose an asset limit on banks that, according to Bloomberg News, could force some of the biggest banks to shrink their consumer and commercial-lending units by more than half. He would also roll back government subsidies from banks’ trading and investment-banking operations by requiring them to be walled off from the units that take deposits and make loans.
Size constraints of some form could significantly reduce the subsidy enjoyed by the largest financial institutions. If a bank has $250 billion in assets instead of $4 trillion, it’s much easier to believe that the FDIC could take it over and wipe out some of its creditors without triggering a systemwide crisis. As a result, creditors would be less likely to count on bailouts.
Problem is, making banks smaller doesn’t necessarily reduce the chances that they will fail -- and many failures happening at once could be just as threatening and bailout-worthy as a single big one.
To make the whole system more resilient, banks need to get a larger share of their funding in the form of equity from shareholders, as opposed to loans from depositors and other creditors. We have advocated $1 in equity for each $5 in assets, a level that would absorb a 20 percent drop in the value of a bank’s investments, compared with JPMorgan’s 3.1 percent. The latest global banking rules require only $1 in equity for each $33 in assets, and use a lenient approach for measuring the ratio.
Higher equity requirements reduce taxpayer support to banks in a different way, by making them less likely to require bailouts. The added discipline would also put natural pressure on banks to shrink: Once shareholders fully realized how poorly the largest banks perform in the absence of subsidies, they would have more incentive to demand that they be broken up into smaller, more profitable units.
That said, size constraints can be useful to augment the desirable effects of equity, guaranteeing that banks get down to a manageable scale. Think of it as a dual containment system for too-big-to-fail institutions: One measure deals with the “big,”while the other deals with the “fail.”

Senate report blasts JPMorgan Chase risky trades



Kevin McCoy and Gregory Korte, USA TODAY8:18p.m. EDT March 14, 2013


JPMorgan Chase office in New York City.(Photo: Justin Sullivan, Getty Images)

Story Highlights

• Bank lost at least $6.2B in high-risk securities trades by London office in 2012
  
• Investigators say JPMorgan misinformed investors, regulators and public about trades' risks
  
• Report calls for stricter oversight of banks' derivatives trading activities
  

The nation's largest bank hid high-risk derivatives trading that ran up $6.2 billion in losses by inflating trade values, dodging federal regulators, and misinforming investors and the public about the dicey strategy, a scathing new congressional report charges.
The so-called London Whale trades in early 2012 by JPMorgan Chase were so large that they roiled world credit markets, despite bank CEO Jamie Dimon's initial and since withdrawn dismissal of the losses as a "tempest in a teapot," the Senate Permanent Subcommittee on Investigations reported Thursday in a 301-page analysis that disclosed new details of the financial debacle.
The bank's use of federally insured deposits for at least part of the risky trades reprised some of the questionable financial practices that led to the national recession, the report concluded. The bank said Thursday "while we have repeatedly acknowledged significant mistakes, our senior management acted in good faith and never had any intent to mislead anyone."
MORE: Highlights of JPMorgan Chase e-mails
The Senate panel is scheduled to question several current and former JPMorgan Chase officials, along with federal regulators, at a Capitol Hill hearing Friday. Four bank employees deeply involved in the trading ducked Senate subpoenas by arguing they lived outside the U.S. Nonetheless, the bipartisan report, based on bank personnel interviews, internal documents, e-mails and other electronic records, concluded that the bank and its Chief Investment Office:
• Gambled billions of dollars in hidden "high-risk, complex, short-term trading strategies" by London-based traders from the bank's Synthetic Credit Portfolio. The strategy and trading were known by several bank managers, but were only fully disclosed to federal regulators in the Office of Comptroller of the Currency after the massive losses drew news media attention.
"I am going to be hauled over the coals. … (Y)ou don't lose 500 M(illion) without consequences," bank trader Bruno Iksil wrote in a March 2012 instant message after a day of heavy losses. He was among the four who declined subpoenas.
• Claimed at times that the strategy functioned as a hedge against credit risks — even though the bank failed to identify the assets being hedged or show how the trading lowered, rather than increased, risk. Although a Dimon e-mail requested a report to document the hedging claim, the subcommittee "found no evidence this analysis was completed."
• Hid more than $660 million in preliminary losses for months in 2012 by overstating the value of credit derivatives and "ignoring red flags that the values were inaccurate."
• Breached all five of the major risk limits on the trading — and then raised the limits and disregarded red flags to continue the strategy. Bank managers were aware of the breaches "but allowed them to continue, lifted the limits, or altered the risk measures after being told that the risk results were 'too conservative,' not 'sensible,' or 'garbage.' "
• Misinformed investors, the public and policymakers about the risk and total losses after the disastrous trading became public. The strategy forced JPMorgan Chase to reduce and restate first-quarter earnings last year. It ultimately led to a 50% cut in Dimon's 2012 pay, reducing his annual compensation to $11.5 million.
The Senate panel called for tougher oversight of bank-based derivative trading, including procedures used to gauge prices and costs of executed trades. The report concluded that the Office of Comptroller of the Currency failed to spot the risky strategy and rein in the bank even though it had approximately 65 examiners and related personnel physically located at JPMorgan Chase.
Until 2012, the OCC "had very little understanding of the strategies, size, or risk profile" involved in the derivatives trades, the report concluded. That was due "primarily to a lack of disclosure" by JPMorgan Chase about when the trading strategy "was established, when it delivered unexpected revenues, or when it began to increase in size and risk in 2011," the report said.
The OCC didn't catch some red flags, including a tenfold growth in risky trading volume in 2011, the subcommittee report said. But the regulators at the same time coped with what they told investigators was strong push-back from Ina Drew, then JPMorgan's chief investment officer, in response to a 2011 regulatory report that cited some needed corrections.
The OCC told Senate investigators Drew complained that the agency was trying to "destroy" JPMorgan Chase's business. According to the report, regulators quoted her as saying "that investment decisions are made with the full understanding of executive management including Jamie Dimon." The report adds, "She said that everyone knows that is going on and there is little need for more limits, controls, or reports."
OCC examiner Elwyn Wong characterized the bank's purported anti-risk hedging strategy as a "make believe voodoo magic 'composite hedge' " in a May 18, 2012, e-mail. But that came after media reports brought the financial debacle to light.
"The bottom line is that the bank did not disclose and the OCC did not learn of the extent and associated risks ... until media reports on April 6, 2012, described the book's outsized credit derivative holdings," the report concluded.
JPMorgan Chase "piled on risk, ignored limits on risk-taking, hid losses, dodged oversight and misled the public," said Sen. Carl Levin, D-Mich., the subcommittee chairman. The bank's London trading office created a "runaway train that barreled through every risk warning," he said.
Sen. John McCain, R-Ariz., the panel's ranking minority member, added that the findings documented "a shameful demonstration of a federally insured bank taking substantial risks and gambling away billions of dollars on ill-advised traders while regulators were asleep at the switch."
Congress approved the Dodd-Frank Act financial reforms in 2010 in part with the aim of preventing risky trading by large banks that could threaten the domestic and global economy. Part of the law, known as the Volcker Rule, was included in an effort to prevent banks from engaging in proprietary trading with federally insured deposits.
But after missing earlier deadlines for completing Volcker Rule provisions, U.S. financial regulators are still working on finalizing specifics.

"Bank lost at least $6.2B in high-risk securities trades by London office in 2012"
Another example of how lax the FSA was and why the reputation of London Banks has been sullied.

JPMorgan Complicit In Vatican Bank Money-Laundering ~ Jamie Dimon Seeks Time Alone With Pope To “Confess”


Posted on July 7, 2012 by Gillian
Silver Vigilante | July 3 2012

Embroiled in another financial scandal pertaining to the laundering of money, the Vatican bank has been called by Forbe’s “the most secret bank in the world” and faces international scrutiny in its highly secretive banking model. Although details are limited to the public, it is clear that the Vatican bank is facing pressure from Italian and European officials over its innerworkings. In short, the bank has laundered billions of dollars. It has had help of course, in the deeply interwoven network of high finance, and none other than US bank JPMorgan abetted highly suspicious transactions, although the bank has yet to be accused of laundering itself. Though, this is a no-brainer considering the accounts the bank hosted for the Vatican.
This part of the story begins when Gottii Tedeschi, now former head of Vatican bank, was relieved when four men waiting for him in the street while he was on his way to work were not hit men. They were investigators with the Carabinieri, Italy’s national military police force. Before he had reached his car, they had served him a search warrant. They escorted him back to his house, where they for many hours searched through his home office. Simultaneously, the military police force was searching through Gotti Tedeschi’s office in Milan. They confiscated two computers, two cabinets’ full of binders, a planner and his briefcase. The documents confiscated from Gotti Tadeschi, who was once a confidant of the pope, “provided Italian law-enforcement officials insight into the innermost workings of the Vatican bank.” According to Germany’s Der Spiegel:
The secret dossier includes references to anonymous numbered accounts and questionable transactions as well as written and electronic communications reportedly showing how Church banking officials circumvented European regulations aimed at combating money-laundering.
Tedeschi came under pressure from high-level Vatican officials for his running of the Vatican bank. He was pushing a model more transparent than the Vatican establishment could allow. In short, he upset powerful forces within the Roman Curia, the Vatican’s administrative and judicial apparatus. Where fore?
The bank, officially called the Institute for Works of Religion (IOR), has functioned for centuries as a trust company “for clandestine monetary transactions.” The bank is not only used by the Church, but also the mafia, corrupt politicians and transnational corporations. One of Tedeschi’s seized memos purportedly reads: “I’ve seen things in the Vatican that scare me.”
Correspondence from May 22 by a member of the bank’s supervisory board to the Vatican’s Secretariat of State reads that the Vatican bank is currently “in an extremely fragile and precarious position.” The situation, the memo reads, had by then reached “a point of imminent danger.”
On Wednesday, July 4, money-laundering experts from the Council of Europe are set to present a preliminary report on the Vatican in Strasbourg. The group is likely to indicate, in most likely a vague and resigned manner, that the IOR has seemingly taken insufficient steps against money-laundering. Or, the committee will be wholesale bought off and will present a glowing review of the bank, thus “white-listing” the Vatican bank.
Because the bank has kept accounts hidden from Italian authorities, it’s bid for inclusion on the Organization for Economic Cooperation and Development’s so-called “white list” of financial institutions not suspected of money-laundering or terrorism financing remains dubious. Gotti Tedeschi apparently lamented, “If we continue…we’ll never get off the black list.” Der Spiegel maintains:
The Vatican leadership is alarmed. Archbishops and cardinals are far from thrilled that Italian officials are now rummaging around in their secret affairs. Papal spokesman Federico Lombardi has openly threatened Italy’s law-enforcement apparatus and urged it to kindly respect “the sovereign rights of the Holy See.” In other words, he believes that all those documents including confidential details about the Vatican bank that were seized during the search of Gotti Tedeschi’s home should not be in the hands of Italian investigators.
The incidence, when one looks through an historical episteme, should come as no surprise, as, for more than 40 years, the IOR (founded in 1942) has oft gotten caught up in scandal, such as bribery, money in political campaigns, mafia money-laundering and anonymous accounts. For nearly twenty centuries before that, the same was true.
Many persons stuck in the middle of illegal business dealing with the Vatican bank have been killed. Others have spent many years behind bars. Riding the coattails of history, the Vatican remains a cesspit of money-laundering. The bank’s modus operandi is to remain shrouded in mystery, keeping everything possible away from public light. At the bank, many times anonymity is guaranteed, and so capital gains go untaxed, financial statement undisclosed.
The bank is headquartered within a medieval defensive tower called Niccolo V. It sits abutting the Apostolic Palace, the pope’s official residence. On the record, 33,000 accounts totaling $7.6 billion reside at the bank. The direct beneficiary is the pope and the Church. Officially, reported earnings in 2010 for the bank were 55 million euro. These are merely estimates, as the Vatican has yet released its business practices of decades. “There is fear that, owing to the transparency necessary today, one will find something in the past that one doesn’t want to,” says Marco Politi, a Rome-based Vatican expert.
In other words, there is more going on at the bank beyond the already discovered array of ghost accounts and shell companies discovered as Archbishop Paul Casimir Marcinkus was its head in the 1980s. Back then the bank was involved in foreign currency and weapons with the Milanese banker Robert Calvi as well as mafia financier Michele Sidona. The bank helped to launder illegal profits the mafia made via drug-trafficking. Bribes were also paid to Christian-conservative Italian.
Calvi was found hanged beneath Blackfriars Bridge in London. His private secretary fell to her death from the window of his Banco Ambrosiano. In 1986, four years later, Sidona died in prison after a morning espresso came with cyanide. The bank continued its money-laundering activities. On a weekly basis, suitcases were brought to the Vatican filled with “donations” from Italian companies as cash and securities. The origin of the money would be hidden using accounts with numbers, like 001-3-14773-C, which was owned by the nonexistent “Cardinal Spellman Foundation.”
Three years ago, 4,000 documents came to light. They had been amassed and hidden by Vatican financial expert Renato Dardozzi before his death in 2003. In his will Dardozzi wrote: “These documents should be published so that everyone can learned what has happened here.”
In 2009, the year Gotti Tedeschi took over as president of the IOR, the bank opened up an account with the Milan-based branch of JPMorgan Chase. According to Spiegel:
From that point on, millions started flowing on an almost daily basis from JPMorgan’s Milan office to the one in Frankfurt, where the IOR also had a JPMorgan account. Vatican officials opted for a special account in Milan with the number 1365, a so-called “sweep facility account,” which was automatically zeroed out at the end of each day. The Vatican bank confirmed the existence of this account late last week, though it said it was primarily used for handling securities transactions.
This financial account allegedly processed more than a billion euros for the Vatican bank through last year. Italian investigators suspect the account was used to launder funds from “dubious sources.” According to the strict anti-money-laundering laws to which financial institutions are supposed to be held, JPMorgan should be considered a primary suspect in massive money-laundering operations in Europe, centered at the Vatican bank. Considering the blatant record amassed by the Vatican – it’s fraudulent and illegal dealings – JPMorgan worked as one of the pope’s banksters with complete disregard for moral hazard. It was not until JPMorgan was caught naked in bed with the pope, engaging in massive and illegal transfers, did the bank begin scrutinizing the Vatican’s financial dealings to which it was an accomplice. To this point, the mainstream media has focused on the shadyness of the Vatican – an age old story, literally – and not directly implicated JPMorgan in yet further financial crimes.
The transfers did not come with information regarding account holders or purposes for the transfers. Of that amount, 20 million pounds apparently was heading to the Vatican’s JPMorgan account in Frankfurt. The other 3 million euros were heading for an account at a different bank in Rome.
Federal prosecutors in Rome froze the funds. Investigations followed implicating Tedeschi, for one, in violating anti-money laundering regulations. Then, JPMorgan leaped into action late, and “started asking Vatican officials where the money that had been regularly flowing through the Milan account was actually coming from. But they didn’t get any satisfactory answers. As a result, the bank then gave the IOR an internal classification as a high-risk client and started monitoring its transactions for clues that might point to money-laundering.”
By the end of 2010, Pope Benedict issued a decree. The Vatican bank would now abide by EU anti-money-laundering policies. The Financial Information Authority came into existence through this decree. Italian officials released the 23 million euros in frozen IOR funds.
The tempest has not cleared, however. First, there are Strasbourg-based Council of Europe money-laundering experts. The Vatican had to let them investigate their operations. A slew of other agencies out of Europe have evaluated the bank. Further, federal prosecutors in Rome are continuing their investigations. In October of last year, they requested German assistance in obtaining information related to the IOR account at the JPMorgan branch in Frankfurt. A judge in Frankfurt, in November, struck down the request due to “lack of evidence.”
Early this year, JPMorgan closed the IORs transfer account in Milan. The bank wrote that anti-money-laundering regulations no longer make available “additional deposits or withdrawals via account No. 1365.” Cardinal Secretary of State Bertone rewrote Benedict’s decree, restating that monitoring of the Vatican bank is only permissible with the consent of Bertone himself. An undated and anonymous document, which, according to the Roman daily Il Fatto Quotidiano, comes from “the very top,” reads that there is a “concrete risk of a rating downgrade and, thereby, of a significant loss in the prestige of the Holy See.”
It is clear that JPMorgan is complicit in money-laundering in Europe with the Vatican, having abetted Vatican bank money-laundering and fraud by allowing IRS-defined suspicious transactions pass through their institution. The bank, knowing fullwell what it was dealing with, shucked its financial responsibility and put the Vatican’s critical transfers through, never questioning or putting the transactions through the basic financial scrutiny. The US Press has been silent, and the banks $9 billion loss has taken over the headlines – a rehash of an old story. In the meantime, JPMorgan has partaken in the illegal and unconscionable with some of civilization’s deepest-entrenched institutions, in this case the twenty century-old religious center of Catholicism.