HONG KONG: ‘ OSCO hits Criminals in their pocket by grabbing back HK$2.7 from Launderers & Traffickers ‘

#AceFinanceNews – CHINA:July.27: A further HK$8.4 billion has been “restrained” or put beyond the reach of crime lords over the same period thanks to the landmark Organised and Serious Crimes Ordinance (OSCO) which turns 20 this year and was designed to hit criminals where it hurts most – in the pocket.

Official figures – published for the first time today – also reveal that the amount of criminal assets recovered by the government in the past 10 years – a total of HK$2.6 billion – is 28 times more than was recovered in the preceding decade under OSCO.

As concerns mount about creeping crime rates after a wave of robberies at the homes of some of the city’s wealthiest residents and the kidnap for ransom of a city heiress, one of the law’s main architects, senior counsel Michael Blanchflower, said it was as relevant today as it was when it was conceived two decades ago.

“If you look at the figures and undoubted maturing of its application across what we’re considered organised crimes when we drafted the law in 1995 and those which were not even on the radar, I think it has to be said that OSCO has been a success,” he said.

“It was a response to a real and very sincerely felt community concern all those years ago that something had to be done about a rising tide of very serious and organised crime in the city. That it has gone a significant way in dealing with that is not in doubt.”

OSCO is based in part on the United States’ RICO laws that brought down powerful Mafia families. The most high-profile, and perhaps only, case in which OSCO received the sort of exposure normally granted to mafia dons was that of the larger-than-life crime boss, “Big Spender” Cheung Tze-keung.

In 1999, it was used to freeze about HK$160 million in assets belonging to Cheung, who had been executed on the mainland a year earlier for kidnapping one of the sons of Hong Kong’s richest man Li Ka-shing, among other offences. But OSCO snatched defeat from the jaws of victory, when the seized assets had to be released to the late Big Spender’s family due to a lack of evidence.

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#BREAKING ‘ Durable Goods Orders Rise Higher than Expected in June ‘

#AceFinanceReport – July.27: The Commerce Department reports orders for long-lasting goods rose 3.4% in June, surpassing expectations for a 3% increase Fox Business reports.

Excluding the volatile transportation component, orders rose 0;.8%, also topping forecasts for a 0.5% rise.

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Glass-Steagall: ‘ Senator’s Warren, McCain, Cantwell & King propose to reinstate much of the Act ‘

#AceFinanceNews – Featured Report:WASHINGTON:July.27: Eleanor Bloxham writes that Senators Warren, McCain, Cantwell, and King have proposed a new measure to reinstate much of the original Glass-Steagall banking act of 1933, a Depression-era law that prevented commercial banks from taking on business ordinarily done at investment banks.

Banking Act of 1933, commonly called Glass-Steagall

June 16, 1933
by Julia Maues, Federal Reserve Bank of St. Louis

     The emergency legislation that was passed within days of President Franklin Roosevelt taking office in March 1933 was just the start of the process to restore confidence in the banking system. Congress saw the need for substantial reform of the banking system, which eventually came in the Banking Act of 1933, or the Glass-Steagall Act. The bill was designed “to provide for the safer and more effective use of the assets of banks, to regulate interbank control, to prevent the undue diversion of funds into speculative operations, and for other purposes.” The measure was sponsored by Sen. Carter Glass (D-VA) and Rep. Henry Steagall (D-AL). Glass, a former Treasury secretary, was the primary force behind the act. Steagall, then chairman of the House Banking and Currency Committee, agreed to support the act with Glass after an amendment was added to permit bank deposit insurance.1 On June 16, 1933, President Roosevelt signed the bill into law. Glass originally introduced his banking reform bill in January 1932. It received extensive critiques and comments from bankers, economists, and the Federal Reserve Board. It passed the Senate in February 1932, but the House adjourned before coming to a decision. It was one of the most widely discussed and debated legislative initiatives in 1932.

     Some background: In the wake of the 1929 stock market crash and the subsequent Great Depression, Congress was concerned that commercial banking operations and the payments system were incurring losses from volatile equity markets. An important motivation for the act was the desire to restrict the use of bank credit for speculation and to direct bank credit into what Glass and others thought to be more productive uses, such as industry, commerce, and agriculture.

     In response to these concerns, the main provisions of the Banking Act of 1933 effectively separated commercial banking from investment banking. Senator Glass was the driving force behind this provision. Basically, commercial banks, which took in deposits and made loans, were no longer allowed to underwrite or deal in securities, while investment banks, which underwrote and dealt in securities,  were no longer allowed to have close connections to commercial banks, such as overlapping directorships or common ownership.  Following the passage of the act, institutions were given a year to decide whether they would specialize in commercial or investment banking. Only 10 percent of commercial banks’ total income could stem from securities; however, an exception allowed commercial banks to underwrite government-issued bonds. The separation of commercial and investment banking was not controversial in 1933. There was a broad belief that separation would lead to a healthier financial system. It became more controversial over the years and in 1999 the Gramm-Leach-Bliley Act repealed the provisions of the Banking Act of 1933 that restricted affiliations between banks and securities firms.

     The act also gave tighter regulation of national banks to the Federal Reserve System, requiring holding companies and other affiliates of state member banks to make three reports annually to their Federal Reserve Bank and to the Federal Reserve Board. Furthermore, bank holding companies that owned a majority of shares of any Federal Reserve member bank had to register with the Fed and obtain its permit to vote their shares in the selection of directors of any such member-bank subsidiary.

     Another important provision of the act created the Federal Deposit Insurance Corporation (FDIC), which insures bank deposits with a pool of money collected from banks. This provision was the most controversial at the time and drew veto threats from President Roosevelt. It was included at the insistence of Steagall, who had the interests of small rural banks in mind. Small rural banks and their representatives were the main proponents of deposit insurance. Opposition came from large banks that believed they would end up subsidizing small banks. Past attempts by states to instate deposit insurance had been unsuccessful because of moral hazard and also because local banks were not diversified. After the bank holiday, the public showed vast support for insurance, partly in the hope of recovering some of the losses and partly because many blamed Wall Street and big bankers for the Depression. Although Glass had opposed deposit insurance for years, he changed his mind and urged Roosevelt to accept it. A temporary fund became effective in January 1934, insuring deposits up to $2,500. The fund became permanent in July 1934 and the limit was raised to $5,000. This limit was raised numerous times over the years until reaching the current $250,000. All Federal Reserve member banks on or before July 1, 1934, were required to become stockholders of the FDIC by such date. No state bank was eligible for membership in the Federal Reserve System until it became a stockholder of the FDIC, and thereby became an insured institution, with required membership by national banks and voluntary membership by state banks. Deposit insurance is still viewed as a great success, although the problem of moral hazard and adverse selection came up again during banking failures of the 1980s. In response, Congress passed legislation that strengthened capital requirements and required banks with less capital to close.  

     The act had a large impact on the Federal Reserve. Notable provisions included the creation of the Federal Open Market Committee (FOMC) under Section 8. However, the 1933 FOMC did not include voting rights for the Federal Reserve Board, which was revised by the Banking Act of 1935 and amended again in 1942 to closely resemble the modern FOMC. 

     Prior to the passage of the act, there were no restrictions on the right of a bank officer of a member bank to borrow from that bank. Excessive loans to bank officers and directors became a concern to bank regulators. In response, the act prohibited Federal Reserve member bank loans to their executive officers and required the repayment of outstanding loans.

     In addition, the act introduced what later became known as Regulation Q, which mandated that interest could not be paid on checking accounts and gave the Federal Reserve authority to establish ceilings on the interest that could be paid on other kinds of deposits. The view was that payment of interest on deposits led to “excessive” competition among banks, causing them to engage in unduly risky investment and lending policies so that they could earn enough income to pay the interest. The prohibition of interest-bearing demand accounts has been effectively repealed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Beginning July 21, 2011, financial institutions became allowed, but not required, to offer interest-bearing demand accounts. 

Endnotes
1 Glass and Steagall also cosponsored the Banking Act of 1932, which was also commonly referred to as the Glass-Steagall Act prior to the passage of the Banking Act of 1933.

Bibliography
Federal Reserve Bank of St. Louis. “Banking Act of 1933.” June 16, 1933, https://fraser.stlouisfed.org/scribd/?item_id=15952&filepath=/docs/historical/ny%20circulars/1933_01248.pdf.

Friedman, Milton and Anna J. Schwartz. A Monetary History of the United States 1867-1960. Princeton: Princeton University Press, 1963.  

Meltzer, Allan. A History of the Federal Reserve Volume 1: 1913-1951. Chicago: University of Chicago Press, 2003.

Preston, Howard H. “The Banking Act of 1933.” The American Economic Review 23, no. 4 (December 1933): 585-607.

Shughart II, William. “A Public Choice Perspective of the Banking Act of 1933.” Cato Journal 7, no. 3 (Winter 1988).

Silber, William. “Why Did FDR’s Bank Holiday Succeed?” Federal Reserve Bank of New York Economic Policy Review, July 2009.

Wells, Donald. The Federal Reserve System: A History. Jefferson, NC: McFarland & Company, 2004.

White, Lawrence J. “The Gramm-Leach-Bliley Act of 1999: A Bridge Too Far? Or Not Far Enough?” Suffolk University Law Review 43, no. 4 (August 2010).

Written as of November 22, 2013. See disclaimer.

The new bill will also address risky activities that bankers had not dreamed up 80 years ago.

Read more here. 

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#federal-reserve, #federal-reserve-bank, #federal-reserve-board, #federal-reserve-system, #franklin-roosevelt

BRITAIN: ‘ Mayor told Cameron give me the Money for Bristol before EU ‘

#AceFinanceNews – BRITAIN:July.27: The mayor of Bristol convinced British Prime Minister David Cameron to let him turn his city into a “laboratory for change”, telling him, “Give me the money!” before securing millions in funding for the “Green Capital” of the European Union.

George Ferguson, the first directly elected mayor of Bristol, told EurActiv in an exclusive interview that EU environmental laws can protect national and regional governments from pressure over unpopular policy choices such as commuting restrictions.

Under Ferguson’s watch, Bristol has brought in a range of green policies, which are also having a positive economic impact on his city, as well as winning Green Capital status from the EU.

Initiatives include energy efficiency measures, such as a building renovation programme, setting up a Bristol energy company and partnering with universities to deliver innovative new eco-technologies based on maritime power.

Ferguson, who famously always wears red trousers, told deputy news editor James Crisp about the lessons learnt during Bristol’s year as a Green Capital. You can hear the interview by pressing play on the SoundCloud below.

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#GREECE: ‘ Leftist government members planned to hack taxpayers accounts to prepare for return to Drachma – Reports ‘

#AceFinanceNews#GREECE:July.27: With creditors arriving today it was reported by EuroActiv that some members of Greece’s leftist government wanted to raid central bank reserves and hack taxpayer accounts to prepare a return to the drachma, according to reports on Sunday (26 July) that highlighted the chaos in the ruling Syriza party.

It is not clear how seriously the plans, attributed to former Energy Minister Panagiotis Lafazanis and former Finance Minister Yanis Varoufakis, were considered by the government and both ministers were sacked earlier this month. However the reports have been seized on by opposition parties who have demanded an explanation.

The reports came at the end of a week of fevered speculation over what Syriza hardliners had in mind as an alternative to the tough bailout terms that Prime Minister Alexis Tsipras reluctantly accepted to keep Greece in the euro.

Around a quarter of the party’s 149 lawmakers rebelled over the plan to pass sweeping austerity measures in exchange for up to €86 billion in fresh loans and Tsipras has struggled to hold the divided party together

In an interview with Sunday’s edition of the RealNews daily, Panagiotis Lafazanis, the hardline former energy minister who lost his job after rebelling over the bailout plans, said he had urged the government to tap the reserves of the Bank of Greece in defiance of the European Central Bank.

Lafazanis, leader of a hardline faction in the ruling Syriza party that has argued for a return to the drachma, said the move would have allowed pensions and public sector wages to be paid if Greece were forced out of the euro.

“The main reason for that was for the Greek economy and Greek people to survive, which is the utmost duty every government has under the constitution,” he said.

However he denied a report in the Financial Times that he wanted Bank of Greece Governor Yannis Stouranaras to be arrested if he had opposed a move to empty the central bank vaults. In comments to the semi-official Athens News Agency, he called the report a mixture of “lies, fantasy, fear-mongering, speculation and old-fashioned anti-communism”.

In a separate report in the conservative Kathimerini daily, Varoufakis was quoted as saying that a small team in Syriza had prepared plans to secretly copy online tax codes. It said the “Plan B” was devised to allow the government to introduce a parallel payment system if the banking system was closed down.

In remarks the newspaper said were made to an investors’ conference on 16 July, Varoufakis said passwords used by Greeks to access their online tax accounts were to have been copied secretly and used to issue new PIN numbers for every taxpayer to be used in transactions with the state.

“This would have created a parallel banking system, which would have given us some breathing space, while the banks would have been shut due to the ECB’s aggressive policy,” Varoufakis was quoted as saying.

Varoufakis, an outspoken academic economist who became deeply unpopular with other European finance ministers during his five months in office, stood down earlier this month to facilitate bailout talks. He has been a strident opponent of the deal ever since.

Under the plan, which the report said went back to before Tsipras was elected in January, transactions through the parallel system would have been nominated in euros but could easily change into drachmas overnight, he was quoted as saying.

Varoufakis denied the report. “So, I was going to ‘hijack’ Greek citizens’ tax file numbers? Impressed by my defamers’ imagination,” he wrote on Twitter.

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#bank-of-greece, #government, #leftist-government, #minister-panagiotis-lafazanis, #minister-yanis-varoufakis, #panagiotis-lafazanis

JW Special Report: ‘ Michelle Obama’s Trip to China Cost American Taxpayers Plenty ‘

#AceFinanceNews – Special Report:July.27: We just obtained records from the U.S. Department of the Air Force revealing that Michelle Obama’s 2014 trip to China cost American taxpayers $362,523.53 in air travel expenses alone. The First Lady, her daughters and her mother spent March 19 – 26 in China, in a trip highlighted by extended visits to some of the country’s most popular tourist sites.

Your Judicial Watch received Air Force records on June 25, 2015, in response to a June 19, 2014, Freedom of Information Act (FOIA) request seeking:

Any and all records concerning mission taskings of First Lady Michelle Obama’s March 2014 tip to China;

Any and all records concerning transportation costs for Mrs. Obama’s March 2014 trip to China;
Any and all passenger manifests for Mrs. Obama’s March 2014 trip to China.

According to the newly released records, the transportation costs for the seven-day trip to China were based on a flight cost of $11,092 per hour for the Obama family, and support personnel in a C-32A presidential aircraft.  The $362,523.53 air travel expense tab for the Obama entourage was more than 225 times what the average American family spends on an entire week-long vacation.

The U.S. Secret Service has not yet responded to the request for attendant costs for personnel, accommodations, meals, rental cars, and related expenses.

Read More:>>>

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China stocks tumble, suffer biggest one-day loss in eight years

#AceMarketsNews – SHANGHAI (Reuters):July.27: Chinese shares tumbled more than 8 percent on Monday amid renewed fears about the outlook for the world’s No. 2 economy, reviving the spectre of a full-blown market crash that prompted unprecedented government intervention earlier this month.

Major indexes suffered their largest one-day drop since 2007, shattering a period of relative calm in China’s volatile stock markets since Beijing unleashed a barrage of support measures to arrest a slump that began in mid-June.

The CSI300 index of the largest listed companies in Shanghai and Shenzhen plunged 8.6 percent, to 3,818.73, while the Shanghai Composite Index lost 8.5 percent, to 3,725.56 points.

While the falls followed lacklustre data on profit at Chinese industrial firms on Monday and a disappointing private factory sector survey on Friday, there was little to explain the scale of the sell-off.

Some analysts said fears that China may hold off from further loosening of monetary policy had contributed to souring investor sentiment.

“The recent rebound had been swift and strong, so there’s need for a technical correction,” said Yang Hai, strategist at Kaiyuan Securities.

He said the trigger was “a sluggish U.S. market amid stronger expectations of a Fed rate rise in the fourth quarter. That, coupled with China’s rising pork prices, fuels concerns that China would refrain from loosening monetary policies further.”

In late June and early July, Chinese authorities cut interest rates, suspended initial public offerings, relaxed margin-lending and collateral rules and enlisted brokerages to buy stocks, backed by central bank cash, to support share prices.

The battery of stabilisation measures followed a peak-to-trough slump of more than 30 percent in China’s benchmark indexes, which had more than doubled over the preceding year.

Chinese share markets had recovered around 15 percent since then, before Monday’s renewed sell-off.

Stocks fell across the board on Monday, with 2,247 companies falling, leaving only 77 gainers.

Index heavyweights, including China Unicom, Bank of Communications and PetroChina, slumped by their daily downward limit of 10 percent.

More than 1,500 shares listed in Shanghai and Shenzhen dived by the daily limit.

(Editing by Alex Richardson and Richard Borsuk)

China stocks tumble, suffer biggest one-day loss in eight years

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