The European Commission has slapped record fines of 1.7 billion euro on eight major banks for manipulating lending rates that play a key role in the global economy. The penalties will add to already escalating costs for leading global lenders.
The EU fines marks the latest to be levied on banks and financial institutions for making profits or masking their problems by fraudulently rigging the rates that reflect the cost of lending money to each other.
The banks fined are Citigroup, Deutsche Bank, Royal Bank of Scotland, JPMorgan, Barclays, Societe Generale, UBS and RP Martin, the EC said in a statement.
The borrowing rates involved – the London interbank offered rate (Libor), the Tokyo and the euro area equivalents – are used to set price of trillions of dollars of financial products, ranging from mortgages to derivatives.
“What is shocking about the Libor and Euribor scandals is not only the manipulation of benchmarks, which is being tackled by financial regulators worldwide, but also the collusion between banks who are supposed to be competing with each other,” said Joaquín Almunia, European Commission Vice-President in charge of competition policy.
“Today’s decision sends a clear message that the Commission is determined to fight and sanction these cartels in the financial sector,” Almunia said in the EC statement. “Healthy competition and transparency are crucial for financial markets to work properly, at the service of the real economy rather than the interests of a few.”
The EC ruling said that the fine for each lender was calculated on the basis of the level of its involvement in the manipulations and how well it was cooperating with the investigation.
The fines from the EU are the first time a US bank has been involved in the rate-rigging scandal, as Citigroup has been fined 70 million pounds.
The record antitrust penalties comes as a reminder of the banks’ past “financial sins,” when global lenders artificially lowered the cost of interbank lending, partially to hide their financial troubles.
The Libor rate is seen as an indicator of a lender’s stability. Put simply, the stronger the bank, the lower the interbank lending rate it has.
Barclays, RBS, UBS, Rabobank and brokerage ICAP have already paid out a total of $3.5 billion in fines to settle the accusations related to Libor rate-rigging, the Financial Times reported. – RT
Tokyo’s benchmark Nikkei 225 index jumped 1.80 percent to its highest close in almost six years Thursday as a weak yen and record finishes on Wall Street helped propel the market.
The headline Nikkei finished up 277.49 points to 15,727.12, its best close since mid-December 2007, while the broader Topix index of all first-section shares added 1.12 percent, or 13.96 points, to 1,261.04. – AFP
Turkish cellphone company Turkcell has opened a lawsuit in South Africa against rival telecoms company MTN Group seeking damages for losses it says it incurred in Iran.
Turkcell filed a $4.2-billion lawsuit in Washington last year alleging the Johannesburg-based cellphone giant used bribery to win a mobile licence in Iran that was first awarded to Turkcell.
It dropped the suit in May after a US Supreme Court ruling in a separate case made clear that US courts would not have jurisdiction in a matter involving two foreign firms in a dispute outside the United States.
“In a continuation of this process, Turkcell today [Wednesday] opened a lawsuit against MTN in the South Gauteng high court in Johannesburg seeking damages for losses incurred as a result of MTN’s actions,” the Turkish company said.
In its US filing, Turkcell claimed MTN won the Iranian contract in 2005 by offering to use its influence in Pretoria to help Tehran obtain military hardware and sway South Africa’s votes at the International Atomic Energy Agency.
‘Brazen orchestra of corruption’
Backed by a collection of alleged MTN internal documents including emails, invoices, memos and presentations, Turkcell’s lawsuit accused the South African company of a “staggeringly brazen orchestra of corruption”.
MTN rejected the Turkcell allegations and appointed a retired British judge to lead an external investigation into them. That probe dismissed the accusations as “a fabric of lies, distortions and inventions”.
An MTN spokesperson declined immediate comment. – Reuters
Federal Reserve Vice Chair Janet Yellen moved closer on Thursday to becoming the first woman to lead the U.S. central bank after a Senate committee approved her nomination and sent it to the full Senate for a final vote.
If confirmed, as is widely expected, Yellen would replace Fed Chairman Ben Bernanke when his term expires on January 31 and become the most powerful woman in world finance.
The vote was 14-8. Three Republicans backed her appointment and one Democrat voted no.
A Democratic leadership aide said the aim was to hold a confirmation vote in the full Senate in December.
Nominated by President Barack Obama, Yellen is viewed as a monetary policy dove more concerned about the costs to society of high unemployment than about the risk aggressive actions to lower it will ignite future inflation or fuel asset bubbles.
She will preside over a central bank that has taken dramatic and unconventional steps to spur economic growth, and which is now wrestling with a decision on when to scale back a bond-buying program that has sought to drive down long-term market interest rates.
The Fed has held benchmark U.S. interest rates near zero since late 2008 and has quadrupled the size of its balance sheet to $3.9 trillion through three massive asset purchase campaigns. It is currently buying $85 billion in bonds a month.
Both Yellen and Bernanke have emphasized in recent days that the Fed will keep interest rates low for some time even after it winds down its asset purchases, remarks that have bolstered expectations of policy continuity at the central bank.
Friends and foes
Minutes of the Fed’s October meeting released on Wednesday showed policymakers were debating how best to enhance their forward guidance on when to expect rates to rise to help temper any economically disruptive moves in financial markets once the central bank starts tapering its bond buying.
The Fed has said it would not raise rates before the U.S. jobless rate falls to 6.5 percent, as long as inflation looked set to stay below 2.5 percent. Unemployment stood at 7.3 percent in October.
When Bernanke first broached the possibility of a near-term reduction in the asset purchases in May and June, he sparked a bout of global financial market turmoil that sent bond yields soaring and hit emerging markets hard.
The Fed’s aggressive actions have drawn fire from Republican lawmakers worried about the risk of inflation and asset bubbles. Many also complain the central bank has abetted big spending by the Obama administration by snapping up the bulk of new Treasury debt issuance.
“The long-term costs of these policies are unclear and frankly worrisome,” Senator Michael Crapo, the top Republican on the banking panel, said before voting ‘no.’
Despite those concerns, Yellen is expected to handily win confirmation when the full Senate considers her nomination.
Democrats control 55 of the 100 votes in the Senate, which means she would need the backing of only a handful of Republicans to secure the 60 votes necessary to clear any procedural hurdles that might be thrown in her path.
She looks well on the way to reaching that threshold.
Yellen received support from three Republicans on the committee: Bob Corker of Tennessee, Tom Coburn of Oklahoma and Mark Kirk of Illinois.
In addition, Republican Senators Susan Collins of Maine and Lindsey Graham of South Carolina have also indicated they are inclined to back her.
The Democrat who voted against her in committee was Joe Manchin of West Virginia.
(Reporting by Alister Bull and Margaret Chadbourn; Editing by Tim Ahmann and Andrea Ricci) – Reuters
Government departments and other public entities wasted almost R31-billion in unauthorised, irregular and fruitless spending during the financial year to the end of March.
This is according to a consolidated general audit report for the 2012-2013 financial year released in parliament yesterday by outgoing auditor-general Terence Nombembe.
Nombembe lambasted the government for not implementing his recommendations for improving financial controls.
Government departments awarded R233-million in tenders to companies in which public servants or their close family members had an interest – even though Public Service and Administration Minister Lindiwe Sisulu has prepared legislation to ban public servants from trading with the state.
The report identified several areas in which the risk of incurring unauthorised, irregular or fruitless spending was greatest, including: poor supply-chain management, weak IT systems, lax human resources management and poor preparation of financial statements.
Nombembe criticised cabinet ministers, saying “it is apparent that almost half of the executive authorities do not yet have a direct impact” in turning around the poor financial management of their departments.
The report found:
That 32 government departments incurred R2.3-billion in unauthorised expenditure;
That 294 departments and public entities irregularly spent R26.4-billion; and
That 227 entities and departments incurred fruitless and wasteful expenditure of R2.1-billion, with four provincial departments being responsible for half that amount.
Nombembe said most of the improper expenditure was in provincial departments of health, education, and public works “right across the country”.
Sisulu said that – together with Minister in the Presidency for Performance Monitoring and Evaluation Collins Chabane – she would ensure that all ministers were able to supervise financial management in their departments.
“Politicians must take accountability for what happens in their departments,” she said. – timeslive.co.za
As more information comes to light about the global snooping being conducted by the NSA and GCHQ, it is becoming clearer that much of it had little to do with combating terrorism, as a recent EFF article makes plain. But most damaging to the idea that massive surveillance was justified, because it was to protect people from extreme threats, is the revelation that commercial espionage was also being conducted. So far, the chief example of that is in Brazil, but The Sydney Morning Herald (SMH) now has information about large-scale industrial spying on Japanese companies carried out by Australian secret services:
BHP [BHP Billiton — the world’s largest mining company] was among the companies helped by Australian spy agencies as they negotiated trade deals with Japan, a former Australian Secret Intelligence Service officer says.
A former diplomat has also confirmed Australian intelligence agencies have long targeted Japanese companies. Writing in The Japan Times, Professor Gregory Clark said Australian companies were beneficiaries of intelligence operations.
“In Australia, favoured firms getting spy material on Japanese contract policies and other business negotiations used to joke how [it had] ‘fallen off the back of a truck’,” Professor Clark wrote.
The article has more details, but doesn’t reveal how the materials were obtained. However, since Australia is part of the “Five Eyes” inner circle of snooping countries that also includes the US, UK, Canada and New Zealand, it seems likely that information of interest from those partners also found its way to Australian companies. SMH quotes Clark as saying:
Business information is a main target for [intelligence] agencies
It will be interesting to see if later releases from Snowden’s hoard of documents show any evidence of this Australian use of NSA materials for industrial espionage. – techdirt.com
Speakers at the inaugural Investing in Resources and Mining in Africa conference in Johannesburg tackled executives’ remuneration, with fund managers in particular scathing about the way chief executives are rewarded, said Business Day.
Gold Fields chief executive Nick Holland’s R45 million pay packet last year was a case in point, the newspaper reported.
“The mining industry is heading in the wrong direction and very rapidly I shall say,” Old Mutual gold fund portfolio manager Mike Schroder said.
Mining executives’ pay is not consistent with their companies’ performance and should be reviewed, according to a report on Thursday.
“My advice to the CEOs: Julle bly fokken lekker. R45m? Bliksem! (You’re sitting fucking pretty. Damn!) Your personal greed is the biggest obstacle for the turning of this trend. Come down with the pay packages or get out.”
Conference chairman and former Harmony chief executive Bernard Swanepoel, said pay packets were “exorbitant and over the top”.
A new pay determination formula was needed.
“The credibility of executive management gets undermined by pay which is disproportionate to performance of companies,” Swanepoel reportedly said. – Sapa
Shoprite has backtracked on a decision to fire 3,000 striking workers in Zambia after the government threatened to revoke its licence, Labour and Social Security Minister Fackson Shamenda said on Thursday.
“We told them we would revoke their trading licence if they went ahead with the dismissals,” Mr Shamenda said.
“I have now given them 10 days in which to negotiate and resolve the problem. All the outlets are working normally now and I am on my way to buy bread from Shoprite.”
A spokeswoman for Shoprite declined to immediately comment.
Shoprite announced the sackings on Wednesday after workers went on strike this week for higher wages, the labour minister said. The government wanted the company to pay wages “far above” the minimum wage, he said.
Shoprite spokeswoman Sarita van Wyk said on Wednesday that the striking workers had ignored Shoprite’s second ultimatum to return to work on Tuesday, following an initial ultimatum on Monday.
As such, the company “terminated their employment” late on Tuesday afternoon with an option for the workers to reapply from Wednesday, with no guarantee of being taken back, she said.
While the striking workers had been urged by the two deputy ministers of labour and social security and their union president to return to work, they had initially “flatly refused”, and by the time they had agreed to return to work, “the terminations had taken effect”.
Shoprite, Africa’s largest retailer, has 30 stores in Zambia, according to its website: 21 Shoprite stores in Zambia and nine Hungry Lion fast-food outlets. The country has the highest number of Shoprite stores outside South Africa, the report shows.
Shoprite shares were little changed on the JSE on Thursday morning, off 0.2% at R174.63 rand at 10.46 am. – Business Day
In March 1985 when Chase Manhattan Bank led a string of banks to the South African Reserve Bank and demanded their money back, the economic pressure on South Africa intensified dramatically. Some speculate that Chase’s move was what really pulled the rug out from under the Afrikaner government.
Threats of disinvestment were loud and insistent then and companies from Kodak, to Mobil and Barclays bank started to withdraw from South Africa.
Today the same bank, responsible for the rape and looting of South Africa, Chase Bank, has moved to limit cash withdrawals while banning business customers from sending international wire transfers from November 17 onwards, prompting speculation that the bank is preparing for a looming financial crisis in the United States.
Numerous business customers with Chase BusinessSelect Checking and Chase BusinessClassic accounts have received letters over the past week informing them that cash activity (both deposits and withdrawals) will be limited to a $50,000 total per statement cycle from November 17 onwards.
The letter reads;
Dear Business Customer,
Starting November 17, 2013:
– You will no longer be able to send international wire transfers. You will still be able to send domestic wires and receive both domestic and international wires. We’ll cancel any international wire transfers, including reccurring ones, you scheduled to be sent after this date.
– Your cash activity limit for these accounts(s) will be $50,000 per statement cycle, per account. Cash activity is the combined total of cash deposits made at branches, night drops and ATMs and cash withdrawals made at branches (including purchases of money orders) and ATMs.
These changes will help us more effectively manage the risks involved with these types of transactions.
Another letter received by Peak to Peak Charter School, a college in Colorado, states that the option to send both international and domestic wire transfers has been withdrawn from Chase business savings account holders.
Other Chase business customers confirmed they had also received similar or identical letters.
“I’m a Chase customer with both of the type accounts mentioned and got the letter posted,” wrote one.
“I have been a loyal customer of Chase for 11 years and I received the letter for my business and when I called about this I was told basically piss off and find another bank!” added another.
Chase is obviously very keen to make it hard for their customers to have any kind of control over their savings and is trying to prevent them from sending dollars abroad, prompting concerns that Cyprus-style account gouging could occur in America.
The move to limit deposits and withdrawals while banning international wire transfers altogether is a bizarre policy and will cripple many small and medium-sized businesses with Chase accounts. Buying stock from abroad in any kind of quantity will now become impossible for many companies, while paying employees will also be a headache.
Why has Chase announced such a ludicrous and restrictive policy change and is it related to the potential for a US debt default?
Speculation is rife that the bank is preparing for some kind of economic crisis by “locking down” its customers’ money. Although most still expect a deal to be struck to prevent a US debt default, its impact would “shake financial markets to a degree not seen since the Great Depression,” according to experts.
Others fear the move to restrict international wire transfers is part of a plan to protect against a near-future collapse of the US dollar.
Whatever the truth behind the policy change, Chase really needs to publicly explain its reasoning in order to quell the speculation.
The bank’s reputation was already under scrutiny after an incident earlier this year where Chase Bank customers across the country attempted to withdraw cash from ATMs only to see that their account balance had been reduced to zero. The problem, which Chase attributed to a technical glitch, lasted for hours before it was fixed, prompting panic from some customers.
Earlier this month it was also reported that two of the biggest banks in America were stuffing their ATMs with 20-30 per cent more cash than usual in order to head off a potential bank run if the US defaults on its debt. – praag/prisonplanet.com
Britain has relaxed stringent rules for Chinese banks willing to set up in London. Beijing in turn opened up its markets to British-based investors, marking the latest move to establish the yuan as one of the world’s key currencies.
“A great nation like China should have a global currency,” said UK Chancellor of the Exchequer, George Osborne, during his official five day visit to China. And the UK is gladly willing to contribute “through the international center of finance: London”.
Under the agreed pilot program, China sanctioned London-based investors to buy up to 80 billion yuan ($13.1 billion) of stocks, bonds and money market instruments directly, avoiding Hong Kong transactions, Reuters reports.
Meanwhile, Britain will let Chinese banks set up wholesale branches in London, easing regulations the country had imposed after the financial crisis broke out. Since 2008, Britain has insisted that most foreign lenders should set up their UK operations as “subsidiaries” rather than branches, which provides greater protection for depositors and taxpayers. Less regulation will be welcomed by Chinese lenders who have always complained the rules made it hard to operate in Britain, prompting them to move much of their business to Luxembourg.
On top of that, London and Beijing will trade the yuan against the dollar directly, avoiding the dollar.
“The Chinese currency, the renminbi, is not terribly well known in Britain at the moment. But over my lifetime I think it’s going to become almost as familiar as the dollar, and I want British businesses involved in trading it, investing in it,” Osborne told BBC television in China.
Currently London accounts for 62 percent of yuan trades outside China and Hong Kong, according to data from financial services provider SWIFT. The latest move will give the renminbi a firmer footprint in Europe and strengthen London’s platform to develop the offshore RM (renminbi) bond market.
According to an HSBC forecast, within 5 years a third of China’s total trade will be in yuan, which will make it fully convertible and elevate it into the top 3 exchange currencies. According to data compiled by Bloomberg, the yuan has already strengthened 36 percent against the dollar and 47 percent versus the pound since 2005. – RT
The government will take a 20% “free carry” in all new oil and gas projects, and reserve the right to buy another 30% at market-related rates, which will allow it to take its interest in projects to an effective 50%, it emerged on Thursday.
Mineral Resources Minister Susan Shabangu broke the news when she announced that the technical regulations for shale gas hydraulic fracturing (fracking) in the Karoo and other petroleum sector technical regulations had been approved by the Cabinet.
The regulations will be published in the Government Gazette next week.
However, it was not yet clear yesterday whether the free carry and the reserve will be included in these regulations.
The size of the free carry stake has surprised the industry.
Ms Shabangu told a post-Cabinet media briefing that Cabinet had approved the free carry and reserve last November, but did not explain why they had not been made public until now.
Free carry in the oil and gas sector takes place when a government is able to take a percentage of production without having contributed to the capital and exploration costs of the project.
Ms Shabangu said previously the mining sector had contributed little to the country’s direct economic development.
“The petroleum industry is completely new and the state will have to also be a free carrier … the reason for the technical regulations, particularly for the hydraulic fracturing, is how is it going to happen,” she said.
“The policy agreed to by the Cabinet of November says the state will have 20% free carry, but it also says if the state has another interest it can be up to 50%, but the 30% can be market related.”
During last month’s public hearings on amendments to the Mineral and Petroleum Amendment Act, oil and gas companies, especially ExxonMobile and Royal Dutch Shell, criticised the draft law for not having stated up front what the free carry obligations would be.
Several other oil and gas representative bodies complained that leaving the free carry and other state interests to regulations and not including them in the act made their planning and risk assessment very difficult.
They also pointed out during their oral presentations that the world norm was for governments to take a 10% free carry.
ExxonMobile’s SA GM Russ Berkoben told Parliament last month that South Africa’s potential offshore oil and gas reserves were possibly located in some of the most dangerous seas in the world, entailing significant exploration risks.
Therefore, he said, the fiscal and regulatory terms had to be as attractive as possible to encourage investment in the sector, otherwise companies would rather go to other countries with more accessible resources and simpler laws.
The regulations to be published next week will allow for a 30-day public consultation.
The immediate reaction from Royal Dutch Shell, Sasol and the South African Oil and Gas Alliance to Ms Shabangu’s announcements was that they welcomed the clarity emerging from them. However, they would have to study the regulations extremely carefully before making further comment.
Shell is exploring prospects off the west coast, while Exxon plans to search for crude and natural gas after acquiring rights to blocks near Durban.
Webber Wentzel partner Jonathan Veeran said that “10% ( free carry) was what one would have expected”. While the clarity on the percentages is helpful, it does mean that companies would have to test whether it would still be economically viable to continue with their projects, he said.
Mr Veeran said South Africa had a very underdeveloped upstream oil and gas sector and this meant it would still have to be seen whether even local companies could absorb this state interest.
Democratic Alliance MP James Lorimer said: “If the Cabinet was deliberately trying to sabotage the prospects of South Africa developing an offshore oil industry, they could hardly be going about it any differently to how they are behaving.”
He added that after listening to what the industry said in the public hearings on the new mineral and petroleum bill, the minister should have been moving towards realism rather than descending into “kleptocratic fantasy land”.
Treasure the Karoo Action Group and civil rights organisation Afriforum said yesterday that they did not believe this to be a proper consultation and were preparing to stop fracturing in the Karoo in the courts if necessary. Treasure the Karoo Action Group CEO Jonathan Deal said: “Government is effectively embarking on a business plan without proper consultation with the public.”
He said that should the government go ahead with its plans to frack in the Karoo, it would effectively lead to another e-tolling saga where a lot of money is invested with no real return and no popular support.
“The fact of the matter is that government has not heard the total story about fracking and is only listening to one side. It is not just about the ecology, but also that fracking is not a sustainable option,” he said.
Ms Shabangu said one of the report’s main recommendations was to ensure that the regulatory framework was robust enough to mitigate any negative effect should fracking be approved.
Mr Deal referred to comments by outgoing Royal Dutch Shell group CEO Peter Voser in the Financial Times this week that he regrets entering his company in the US fracking sector where it had to take a $2.1bn impairment. – Business Day
Twenty percent of GDP in Argentina is agriculture-related, making it an important country for agriculture production due its high yields.
Argentina is the world’s largest exporter of sunflower oil, a leading exporter of soybean oil and among the top five exporters of soybeans and corn. More than a third of Argentina’s exports are in agri products, which earned them $25 billion in 2010/2011.
Export oportunities is a key driver for agricultural production for 1014/2015, particulary for grains, rice and sugar. However a key risk is the county’s rising food inflation, which could force the government to try and stem exports as has been done to beef exports in the past.
The government is taking positive steps to change grain seed laws to increase the biofuel blending limit, which could increase production in the medium term.
It could help foster a good relationship with the farmers and capitalize on its strong production potential.
Beef consumption is expected to decline as consumers switch to poultry. It has unintended consequences.
Farmers will build stocks on the back of high prices and Argentina could return to being one of the world’s largest beef exporters over the medium term.
The long-term soybean forecasts should be revised as the government passes new seed laws to encourage farmers to use genetically modified GM seeds.
Only 35% use it now and that could change to 80% shortly. It would cut production costs while allowing farmers to earn more revenue from their output.
It could mean that Argentina could surpass Brazil and become the world’s second largest soybean exporter. At the moment they are in third place.
A continued rebound in corn is expected as Buenos Aires Grains Exchange already saw a 4% area increase in corn planted for the 2011 season. Argentina is the world’s second largest corn exporter.
China, the biggest foreign creditor of the United States, has waded into the American budget crisis, warning Congress that it must resolve the political impasse over the debt ceiling without further delay.
The Chinese Vice Foreign Minister, Zhu Guangyao, told America’s deadlocked politicians on Monday that “the clock is ticking” and called on them to approve an extension of the national borrowing limit before the federal government is projected to run out of cash on 17 October.
“We ask that the United States earnestly takes steps to resolve in a timely way the political issues around the debt ceiling and prevent a US debt default to ensure the safety of Chinese investments in the United States,” Mr Zhu told reporters in Beijing. “This is the United States’ responsibility,” he added.
The American government entered its seventh day of shutdown on Monday, following the failure of Congress to approve the national budget a week ago. And there was little sign of progress on the still more crucial issue of the fast-approaching “debt ceiling” deadline. Yet rather than indicating a willingness to negotiate, the Republican Speaker of the House of Representatives, John Boehner, stated on Sunday that it was “time for us to stand and fight” over the budget. He added that a default was “the path we’re on”. American stock markets opened down in response to the belligerent comments yesterday, with the S&P 500 Index of leading shares shedding 0.5 per cent.
In September 2008 China eclipsed Japan to become the biggest single foreign creditor of the US federal government. The US administration estimates that the China government holds at least $1.3 trillion of its bonds. The total could be higher because Beijing is known to hold American debt through intermediaries. And, in total, the Beijing authorities have $3.5trn of dollar-denominated assets, which would also be hit hard in the event of a default.
These vast foreign exchange holdings are a by-product of China’s closed financial system and persistent current account surplus, which means that most foreign currency that enters the country accumulates with the central bank. The central bank then invests the money in normally “safe” dollar assets. The vast dollar reserves are also a legacy of China’s policy in recent decades of artificially holding down the value of its currency, the renminbi, in order to boost the overseas sales of its politically influential export industry.
However, economists have criticised the popular idea that China could exert political or economic leverage over Washington by threatening to sell its dollar investments, since such a drastic shift would ultimately serve to undermine the paper value of Beijing’s own vast investment portfolio. Nevertheless, China’s creditor position and its status as the world’s second largest economy gives its voice some authority in Washington and Mr Zhu made it clear that private representations had already been made. “The US is clearly aware of China’s concerns about the financial stalemate and China’s request for the US to ensure the safety of Chinese investments,” he said yesterday.
Since the global financial crisis, which led to a sharp depreciation in the value of the dollar against the renminbi, the authorities in Beijing have been concerned about the fact that so much of their national reserves are held in the form of the American currency. China has been promoting the idea of a new reserve currency to replace the greenback, with some analysts suggesting that the renminbi could one day take its place.
Mr Zhu stressed that it was vital, not only for China but the wider global economy, for America to resolve its budget impasse. “Safeguarding the debt is of vital importance to the economy of the US and the world,” he said. Referring to a similar deadlock in 2011, which led to a downgrade of the US AAA credit rating by the Standard & Poor’s agency, Mr Zhu said: “We hope the United States fully understands the lessons of history.”
The concerns over the stability of the dollar come at a time of geo-political flux. Barack Obama has sought to “pivot” his foreign policy to Asia to counter China’s growing military influence. But the shutdown has forced the US President to cancel his visit to Asia this week to attend a summit. – The Independent
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The European Commission has slapped record fines of 1.7 billion euro on eight major banks for manipulating lending rates that play a key role in the global economy. The penalties will add to already escalating costs for leading global lenders.
![‘Mining execs sitting [expletive] pretty’](https://praag.org/wp-content/uploads/2013/10/nickholland.jpg)
