Money Laundering In The Eurozone

Cyprus has put together a presentation to convince the Eurozone that it is not a haven for money laundering.

One of the slides shows how Cyprus and other Eurozone countries score wrt complying with recommendations on 49 areas evaluated by the Organisation of Economic Co-operation and Development’s financial action task force.

The highest ranking country for non compliance was Greece, scoring 13.

Barclays Discovers Ethics

Barclays discovers that ethics is not a county near London!

Blockbuster

Blockbuster has gone the way of HMV and Jessops, and has gone into administration.

Deloittes will act as administrators.

Lee Manning, joint administrator at Deloitte, said:

“In recent years Blockbuster has faced increased competition from, internet based providers along with the shift to digital streaming of movies and games.

We are working closely with suppliers and employees to ensure the business has the best possible platform to secure a sale, preserve jobs and generate as much value as possible for all creditors.

The core of the business is still profitable and we will continue to trade as normal in both retail and rental whilst we seek a buyer for all or parts of the business as a going concern. During this time gift cards and credit acquired through Blockbuster’s trade-in scheme will be honoured towards the purchase of goods.”

 Blockbuster employs over 4,000 people.

Bundesbank Repatriates Gold Bullion

The Bundesbank is to repatriate gold reserves held abroad in order to tighten control and combat future currency crises. It will repatriate a large percentage of its holdings from New York and all of its bullion from Paris.

This move signals the demise of the the Dollar as a reserve currency (as the gold stored in the Fed can be pledged to shore up the Dollar), and the resurgence of a quasi gold standard.

The lesson is clear, if you invest in gold do not rely on mere paper certificates to validate your holding.

Why LIBOR Matters

As per Max Keiser:

"LIBOR and other mrk riggers have just dropped UK 10-yrborrowing costs below 2%. Each £ saved in interest loses 2 £'s from pensions/savers."

In other words the LIBOR riggers profited at the expense of the rest of us!

HMV Collapse

Now that HMV has gone the way of Jessops and placed itself in administration, aside from the worries faced by the staff of HMV those with gift vouchers will also be worried.

As of today HMV have stopped accepting HMV gift vouchers. Whilst the administrators may choose to accept them at some stage in the future, there is no guarantee that they will. Additionally, if any part of the chain is sold to a third party the new owner is under no legal obligation to accept the gift vouchers.

Which? recommend that those holding gift vouchers in failed chains such as Jessops and HMV write to the administrators to ask for a refund (a process that offers no guarantees and may well take at least 12 months). Which? have a helpful Q&A section wrt failed retailers, which also has a link to a template for a letter asking for a refund of gift vouchers held.

Ironically, not everyone has done so badly out of the failure of HMV. A number of companies/individuals heavily shorted HMV in the days running up to its demise in the hope of making a killing out of its failure.

#Grexit Morphs To #Crexit

The eye of the storm moves to Cyprus.

FSCS £3M Campaign

FundWeb reports that the Financial Services Compensation Scheme (FSCS) is to spend £3M on a second advertising campaign to make consumers aware their savings are safe if banks go bust. The first campaign that cost £4M in 2011 was halted, after it failed to make a positive impact.

The campaign will be funded by banks and building societies, and will run until 31 March 2014.

The rationale for the scheme was explained by FSCS chief executive Mark Neale:

“Our research showed a lack of understanding and knowledge about the protection we provide. We want to reassure the majority their money and savings are safe, and warn those who unwittingly put their money at risk.

We need to build awareness over time and cannot wait for the next crisis to try to engage people. By then it will be too late and queues will already be forming.”

In other words the banking industry is scared stiff of a run on the banks as and when the next crisis occurs.

Advice To Bankers

Ethics is not a county just outside of London!

The PPI Ill Wind

The old saying "it's an ill wind that blows nobody any good" has been proved by some statistics released by the Financial Ombudsman Service (FOS).

The FOS, which deals with PPI claims when banks and their customers cannot agree a settlement, said it had increased the number of expected new cases for the 2011/2012 financial year to 375,000.

In view of this increased workload it has taken on 1,000 extra staff to deal with the backlog.

Jessops On The Verge of Administration

The Telegraph reports that Jessops the camera retailer is on the verge of administration.

As such there is a risk that, once in administration, Jessops's gift vouchers may no longer be accepted if the administrator decides they are no longer valid in the stores.

UPDATE

PwC has now confirmed that Jessops has now filed for administration.

The Emperor's Clothes of Banking

Kudos to Vernon Soare, executive director of professional standards at ICAEW, for exposing the emperor's lack of attire in yesterday's Parliamentary Commission on Banking Standards wrt the banking "profession" by noting that there:

"isn’t actually a banking profession".

Well said!

Eurozone Unemployment At All Time High

The number of unemployed people in the Eurozone rose to record levels in November, rising to 11.8% from 11.7% the previous month. Spain, at 26.6%, had the highest level of unemployment.

In total 18.8 million people were unemployed in the Eurozone, an increase of 113,000 from the previous month.

The seeds of the Eurozone's destruction have been sown, the only question is when will the harvest be reaped.

Basel III - Kicking The Can Down The Road?

Banks have been given several years to meet new rules governing the amount of liquid assets they must hold on their books to see them through a short-term market crash.

The Basel Committee on Bank Supervision has stated that banks would only need to have 60% of the necessary short-term funding in place when the rules become effective in January 2015, and would have until 2019 to fully implement the liquidity coverage ratio (LCR).

The new rules also widen the range of assets that banks can put in the buffer; these now include shares and retail mortgage-backed securities (RMBS), as well as lower rated company bonds. Despite the fact that these can only be included at a hefty discount, this is an indication that the Committee recognises that there are problems within the banks' balance sheets.

The rationale for this easing of the rules was explained by Sir Mervyn King, who told the Telegraph that it had decided to opt for a “graduated approach” to avoid “disruption to the orderly strengthening of banking systems or the ongoing financing of economic activity”.

In other words the Committee was worried that the rules would knock any nascent recovery for six. As to whether this slackening of rules actually helps banks and the global economy recover, or simply kicks the can further down the road, remains to be seen.

Accountancy Age's Financial Power List 1013: Big Hitters

I have been placed 25th on Accountancy Age's Financial Power List 2013: Big Hitters, a rundown of who the magazine thinks will be the biggest players in accounting and finance during 2013.

25 Ken Frost, serial blogger and HMRC agitator
A long-time thorn in the side of the ICAEW in his blogging capacity, Frost has found that HMRC's travails have taken up a bigger chunk of his social media efforts. Not that the institute is out of his line of vision, but his probing questions and good contact base make http://hmrcisshite.blogspot.co.uk an amusing and revealing read.