Noticias

No eruptions on the horizon

GOOD times are rolling again in Iceland. In June it beat England in a football match. On The Economist’s “glass-ceiling index”, it is the world’s best country for working women. And the economy is purring. After a thumping crash in 2008-09, GDP is expected to grow by 5% this year, faster than any other rich economy. The ruling (conservative) Independence Party has been rewarded: it won 30% of the vote in the election in October, more than any other party. But some fret that Iceland’s economic stability is, again, built on molten lava.

The biggest worry is over its treatment of foreign creditors. When the crisis hit, the country slapped on capital controls, protecting the krona by preventing investors from pulling capital from the country. Recently the government has been loosening restrictions. Icelanders may soon no longer have to present airline tickets in order to buy foreign currency for their holidays.

One group of foreign investors, however, accuses Iceland of, in effect, defaulting on its debts. They own offshore, krona-denominated, assets worth…Continue reading

IN ITS never-ending quest to rein in profligate local officials, China this week ordered its indebted cities and provinces to draw up detailed repayment plans. But for these rules to work, the central government must prove that it is willing to let the miscreants default. Creditors doubt its resolve and expect it to go on bailing out the spendthrifts. As a result, they systematically give more generous lending terms to state-owned enterprises (SOEs) than to their private peers.

The bias is not immediately obvious. Looking at interest costs, China seems to have a level playing field. A 2011 survey, for example, revealed that the median interest rate on bank loans to private firms was 7.8%, just above the 7.5% average at the time. Borrowing rates for both SOEs and private firms have remained in line with each other since then, declining in tandem.

But this appearance of parity is superficial. Borrowing costs only tell half the story. The other half is the borrower’s quality. When investors assess the risk of lending to Chinese companies, they price in the assumption that the state will stand behind SOEs. How much is this…Continue reading

THE fines paid to America’s financial regulators by errant bankers vary enormously these days: from sky-high to stratospheric. Deutsche Bank is fighting a demand for $14bn. BNP Paribas paid $9bn last year for facilitating the evasion of American sanctions. So eyebrows were raised at the final settlement disclosed this month between the state-controlled Agricultural Bank of China (ABC) and New York’s Department of Financial Services (DFS). The fine imposed on the bank was a mere $215m.

The comparative leniency towards ABC is probably a consequence of a failure to prove that many illegal transactions took place. But that by itself produced unresolved suspicions; compliance systems made transfers untraceable. In 2014 a new compliance officer at the two-year-old New York branch reported finding an “alarming” pattern of transactions; 20-30% were “virtually impervious to screening” for sanction violations.

In the “alarming” category were large transfers between Chinese companies and companies in Russia and Yemen; dollar-denominated payments from the United Arab Emirates; and dollar transfers from a Turkish bank to an Afghan one…Continue reading

SINCE Donald Trump won the election, American bank shares have surged on traders’ hopes of a bonfire of financial regulations. So a proposal from Neel Kashkari, head of the Minneapolis Federal Reserve, vastly to increase capital requirements looks ill-timed. On the other hand, the plan mimics the direction—if not the extent—of one backed by congressional Republicans.

Mr Kashkari is an experienced financial firefighter. An alumnus of Goldman Sachs, best-connected of investment banks, he spent much of 2008 and 2009 in the Treasury department overseeing the Troubled Asset Relief Programme, under which the American government bought more than $400bn of toxic assets to prop up teetering financial institutions. In 2014 he ran to become governor of California as a Republican. He now says that, despite the efforts of regulators since the crisis, much more needs to be done to avoid future bail-outs of banks that are “too big to fail”.

Using an IMF database, the Minneapolis Fed logged the levels of bank capital that would have been needed to avert 28 financial crises in rich countries between 1970 and 2011. Based on the historical…Continue reading

IN A world of low investment returns, many a pension scheme is in trouble. In both Britain and America employers who have promised to pay workers a pension based on their final salary are struggling to cope with huge deficits.

But the problem is not confined to those with so-called defined-benefit (DB) pensions. It also affects those saving for retirement via a defined-contribution (DC) scheme, where both employer and employee contribute, and the worker takes charge of the pot when his career ends. In America the most popular form of DC savings are called 401(k) schemes after a section of the tax code.

In an article* in the Journal of Retirement, three authors from AQR Capital Management, an investment group, argue that workers in 401(k) schemes are simply not putting enough money aside.

What you get out of a pension depends on what you put into it. One would expect a DC pension to deliver a smaller income than a DB scheme because less money tends to be put in the pot. Total DC contributions average around 9% of payroll (6% from employees; 3% from employers). But figures from the Centre for Retirement Research at…Continue reading

El presidente de Iberdrola, Ignacio Galán, ha indicado que los suministradores son fundamentales para llevar a cabo el plan de inversiones de más de 24.000 millones previsto por la empresa hasta 2020. Leer

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El Ministerio Público reclama esa sanción adicional a la devolución de los 29,7 millones de euros defraudados por la subvenciones para residentes

El Ayuntamiento abre a raíz de las informaciones de EL PAÍS un expediente que podría acabar con una sanción, la rescisión del contrato o la inhabilitación de la empresa

La compañía Airbus ya ha suministrado otras 33 aeronaves a cinco países