Press Reviews

Banks and consumers: Who

Communicate with regulators by banks looks like a well-known game "Shmyakni mole, where a mole is hit in one burrow, he immediately leans out the other. And in the U.S.: Once banks forbid something, they immediately come up with something new.

The August law on cards introduced a ban on a number of commissions, including the fees for overdrafts and late fees. But already a month later, banks started to raise the existing committee and find ways to get customers to pay more for credit cards, so-called "free" current accounts and banking services.

Article on the website CNNMoney.com warned what to expect from the banks.

Just last week, Bank of America announced its intention to increase the requirements for a minimum amount of balance in the next 12 months and charge a monthly fee for maintaining accounts with customers who would be unable to support such a balance.

Customers who subscribe to the discovery of new current accounts eBanking, will pay $ 8.95 per month for the right to receive paper statements and contact the bank branch, instead of to solve financial matters online. Since launching the program in August, fall into this category for half of all new current accounts.

Earlier this year, some credit card accounts Bank of America were used in the commission of between $ 29 to $ 99.

Wells Fargo, which was once fiercely fought for the right to merge with Wachovia, now Wachovia teaches customers to new rules, raising committee. For obtaining a sample from a paper check cashed extract - $ 2. The use of savings as overdraft protection - $ 10 for each transfer. Previously, the commissions have already existed for clients Wells Fargo, but applied only to a small number of clients Wachovia.

Annual fee of $ 19 charge HSBC (HBC) to customers who open a credit line, with effect from 1 July, and an additional $ 10 daily for using this line of credit as overdraft protection on the account.

Other banks allow customers to combine payment and savings accounts for overdraft protection, but not HSBC. Here, customers either pay a fee for opening a credit (if they have bad credit history), or pay a fee for overdraft protection from another account or receive a denial of a credit card.

This month, Citibank announced the changes in policy regarding the settlement of accounts: now a monthly fee for service will be up to $ 30, depending on the type of accounts and compliance with customer specific requirements, such as committing a certain number of monthly transactions or maintain a certain minimum balance. Previously, the commissions were only about $ 3, depending on the type of account.

Earlier this year, Citi has introduced an annual fee of $ 60, which could be revoked if the customer spends about $ 2400 a year. But because of new regulations that prohibit charging fees for active accounts, the bank was forced to cancel this fee shortly after its introduction.

American Express added the commission in the amount of $ 29 for most of their cards.

In highly competitive environments, typical of an already tough industry, banks must still ensure that you do not go too far, as it is fraught with a loss of customers in which they now desperately need. In this regard, experts advise clients to benefit from this heightened competition, and discuss the commission with their banks.

Another interesting fact about credit cards results in The New York Times. Initially, a significant reduction in credit card debt in the U.S. since 2009 attributed to unusually frugal consumers. But analysts found that a substantial part of the recession is actually a result of the fact that financial institutions wrote off the debts as losses of billions of dollars.

In the past two years, the volume of consumer debt has been steadily decreasing. As the representatives of the Federal Reserve, in the second quarter of 2010, commitments for mortgage loans, credit-card accounts and the accounts of non-renewable, such as auto loans, totaled $ 13.9 trillion., A $ 200 billion compared with the same quarter in last year.

The volume of defaults on revolving credit, such as credit cards, down from $ 915 billion to $ 832.2 billion during the same period.

But economists say they have tried to calculate the extent to which the decline in credit-card debt is a result of bank writedowns.

Moody's analysts said that the study of accounts of private borrowers, he waited to find out which debtors to voluntarily pay their debts, who climbs to new and existing borrowers as reducing debt, making the sum greater than the minimum payment.

Although the study is not finished yet, it appears that most of the reduction of debt falls on write-offs.

Analyses CardHub.com, showed that the quarterly financial institutions wrote off nearly $ 20 billion since early 2009 to early 2010, roughly comparable to the decline in outstanding debt on credit cards. According to specialists, these write-offs also suggests that "many banks continue to suffer serious losses and are experiencing great difficulties."

However, according to Gregory Dacko, chief economist at IHS Global Insight, consumer behavior is not explained only debt indicators for revolving loans, which are only "give an overall picture of consumer credit."

In Asia, the banking secrecy

For centuries, Switzerland was a haven for many rich people who want to hide their condition and take shelter from taxes. Now, amid growing pressure on the Swiss Institute for the provision of banking services to private clients, wealthy people go to Singapore and Hong Kong, which still offer the most secret accounts in the world.

Authors of articles in The New York Times told about this phenomenon. As it turned out, many banks that grow in these oases of low taxes, of Swiss origin, and among their customers include not only Asian millionaires, but wealthy Americans and Europeans, fearful of increased control by the tax authorities in their own countries.

Develop in this region are going to Swiss bank accounts of different "caliber" of UBS, the control center for training in Singapore, to smaller private banks such as Julius Baer.

Experts note that in Singapore and Hong Kong has been a massive recruitment of hundreds of private bankers, as well as call these Asian regions "new alternative" to the Swiss bank secrecy laws after last year's attack on UBS in the United States.

Over the past two years, UBS, Switzerland's largest bank, has lost about 200 billion Swiss francs (about $ 200 billion) in client assets subdivisions private banking. But in Asia, the bank managed to earn more than he lost. Without providing, however, more precise figures, representatives of the bank's reported intention to hire 400 more "consultants" or private bankers, for units in the Asia-Pacific region, in addition to those already working there 867.

In February, UBS has increased the size of the premium for those unit employees in Singapore, which result in new customers. One of the largest shareholders are the Singapore government, whose share is about 9%.

Walter Berchtold, executive director of private banking Credit Suisse, said that the volume of new assets flowing into the banks of wealthy Asian clients, an increase of more than 20%, which is three times more than the average forecast for the bank around the world.

According to Ronen Pal, Professor of Political Economy and an expert on offshore finance at the University of Birmingham, "everything indicates that Singapore is working hard to become the new Switzerland.

Such a shift has occurred in connection with the attack on the Swiss industry of banking services for private clients. First, U.S. Department of Justice launched a criminal investigation against UBS, and then the other Swiss banks, for helping wealthy Americans in tax evasion. Then the European tax authorities, to obtain disks with information about several thousand customers stolen from banks in Switzerland, demanded that banks hold a minimum level of taxes, even with secret accounts.

Founder of the Tax Justice Network, Richard Murphy, described the recent changes: "Singapore has become a place where the Swiss could take the bank secrecy, which they lost at home." According to him, Hong Kong is in second place after Singapore.

Critics, which include and Murphy point to the secrecy in the Swiss style, which offers Singapore, the absence of taxes on capital gains and dividends, and most of the foreign system that allows depositors to open accounts under the guise of corporations, trusts and limited liability companies.

While in Hong Kong do not have formal bank secrecy laws, it allowed the creation of companies, which often serve as conduits for tax evasion. There is also no tax on capital gains or interest rate on deposit, in addition, tax is levied only income earned in Hong Kong.

However, the label of "tax haven" are worried about both countries. According to a representative of the central bank of Singapore, the law of this country "protects the mystery of the contribution of legitimate investors, while at the same time allow for the transfer of banking information to foreign authorities when it comes to crime or the conduct of the investigation."

The representative of the Hong Kong Office of Financial Services and the Treasury stressed that Hong Kong "can not be compared with countries that create conditions to make life easier for those who evaded taxes.

However, U.S. tax authorities are showing increasing concern. According to court documents, some customers are UBS, detained in a criminal investigation against the bank, used offshore companies in Hong Kong or to conclude the deal with unknown banks located in Singapore.

At least two banks

Last week, the number of banks in the U.S. declined for two more. According to Reuters, the Federal Deposit Insurance Corporation announced the closing of North County Bank, and Haven Trust Bank Florida, which is why the number of problem banks in the country was currently 127.

The volume of assets North County Bank, Washington, was $ 288.8 million, deposits - $ 276.1 million All deposits will go to the OU Washington Banking Company, Whidbey Island Bank.

Assets of Haven Trust Bank Florida, Florida, totaled approximately $ 148.6 million, while total deposits reached $ 133.6 million All deposits of the bank moved to First Southern Bank.

Bankruptcy of these banks have cost the corporation FDIC to $ 104.7 million projected Corporation, which insures individual accounts up to $ 250,000, the number of bankruptcies this year will exceed last year's figure, but the total assets of the bankrupt will be lower.

More dollar

In February 2009, Citigroup head Vikram Pandit said that as long as the bank does not return to earnings, his salary will not exceed $ 1.

However, since 2011, the board of directors intends to increase the salary of director general, regardless of his wishes. Write about it CNN Money and Reuters.

Chairman of the Board Richard Parsons noted that the amount of compensation to Pandit should be commensurate with his position. He duly appreciated the "tireless" work of CEO for the company's restructuring, through which the bank returned to profitability.

Guide Citi also announced plans to pay the salaries of 25 top managers of companies in the form of shares, despite the fact that the U.S. authorities no longer require banks to do so. The size of bonuses for these isotopes will determine at the end of the year.

Vikram Pandit has sold the assets of the bank, has cut some staff and tried to focus the activities of Citigroup's core area, including investment and retail banking for wealthy clients around the world.

For the first two quarters of 2010 earnings Citigroup is more than $ 7 billion

But all is not smooth in the Danish kingdom. According to Reuters, recently the central bank of Norway has filed a lawsuit against Citigroup Inc, accusing the bank of fraudulent concealment of information on the deteriorating financial condition, resulting in a loss of $ 835 million

Sued by Norges Bank are the 20 current and former employees and directors of Citigroup, including the CEO Vikram Pandit, his predecessor, Charles Prince and Chairman Richard Parsons.

The lawsuit alleges that the bank hid their investments in risky or illiquid securities such as mortgage-class subprime, collateralized debt obligations and so-called structured investment products that threaten its stability.

Norges representatives were told that the bank acquired the securities of Citigroup at inflated prices during the period from January 2007 to January 2009 period, and lost more than $ 735 million in common stock and $ 100 million in preferred stock and bonds. Bank accused of fraud and demanding compensation for damages.

The representative of Citigroup Danielle Romero-Apsilos said the bank believed the accusations baseless and intend to defend its position.