CBI head warns banks over 'toxic' bonuses

Richard Lambert, director-general of the CBI (Confederation of British Industry), urges politicians to avoid levying taxes on banks, as it would eventually be the customer paying these in bank charges.  The reason politicians are levying a tax on banks is to try and avoid continuous payments of high bonuses.

Taxes will be levied once banks grant their bankers too much bonuses, hence why Lambert warned the banks to be cautious about so called ‘toxic bonuses’.  Despite Lambert’s  urge, charges on banks’ balance sheets will soon be implemented by George Osborne, a British Conservative Politician.

Source

Wim Verhoeven

Fool's Gold

Gold has always had a reputation of being a save investment in times of crisis. Despite that gold hasn't got any functional use, investors keep putting their money on gold bricks.
Some speculators claim it is the ultimate soap bubble, and that from the moment the economy restores, only the few quick sellers will gain profit from their investment. Others have no worries, confident that a record price of 850 dollar per ounce in the eighties -converted: 2300 dollar- will not be exceeded for a long time.

Tom Van Raemdonck

article: "Mystiek metaal met eeuwig leven" De Tijd zaterdag 2 oktober 2010
pic: http://www.open2.net/blogs/money/index.php/2008/06/12/gold_fever?blog=5

Youth and money management?

Youngsters aren’t very concerned about their finances, they do think writing down their incomes and expenses would be very useful, but realizing this seems difficult. Often young people start saving their money, but the moment they are going out they stop looking after it and spend more money than they should. The most money is spend on social purposes or on status, youngsters want to be popular, so they buy drinks or gifts for their friends, or luxury goods (for example designer clothes) for themselves to ‘buy’ a status. Lending money seems no option for young people, they would feel stressed by the idea, but lending a little amount of money from friends or family is a possibility for most of them, because they see it as advancing not as lending.

Sofie Verdonckt

Source: http://www.managersonline.nl/nieuws/10185/jongeren-regelen-hun-financin-uit-de-losse-pols.html

A Swiss finish

Swiss banks are enlarging their safeguards beyond the BASEL III accord to restore the clients’ faith in private banking. In response to the financial crisis, new capital rules were introduced, forcing banks to hold up to 7% risk-adjusted assets, but this won’t do the trick for historically safe Switzerland. Swiss banks add an additional 3%, augmented with another 9% of contingent convertible bonds (CoCo bonds), equaling a total buffer of 19%, not extraordinary compared to the losses caused by the financial crisis. These requirements will not be limited to Switzerland, this is an evolution to be expected in all large global firms; the combination of core capital and a percentage of debts, convertible into equity. (Source: The Economist)

Rémi Wildschut

Stop saving, get spending ... Or not?

Knowing there’s a £379bn pensions gap, being told to save less is hard to understand. But Charlie Bean (deputy governor of the Bank of England)is urging consumers to stop saving and get buying again. The main cause of the global economic crisis was the excessive debt and the economy can’t start to work properly until this debt is brought back to more reasonable levels, this according to Justin Urquhart Stewart is far more important to the economy than consumers spending more. Jeremy Batstone-Carr thinks Bean's underlying message may have been spend while you can because tomorrow, your savings will be worthless – hyperinflation is a much more serious problem than deflation and we may have already taken the first steps to this situation because of the huge amount of support already pumped into the economies.

Source :  http://www.guardian.co.uk/money/2010/oct/06/saving-makes-sense

Magali Vervaele

Inflation stays at 3.1% after record jump in clothing costs

Inflation remains steady at 3.1% during the month of September which strengthens the controversy about how to decrease the alarming inflation rate. A fall in the cost of petrol and air fares failed to reduce inflation due to high clothing, food and furniture prices. There exists disagreement among the economists about the idea of the Bank of England to invest more money in the economy since the first round of quantitative easing didn’t make any improvement. The decision to adopt the consumer price index is also criticized because it would affect pensioners and members of the private sector. (the guardian)

Sacha Van de Sype

Settling down thanks to your bank.

Nowadays, some of the biggest banks collaborate with property dealers to assist customers in their search of a cosy home. 'Home Banking' is an upcoming trend since it has numerous mutual benefits for both parties. For example, it's worth considering advantages like less intermediary costs for customers and increased confidence between bank and their clients. The fact that people consider banks as institutes which take care of their money rather than snapping every possible penny, certainly boosts this win-win situation.

Source: http://www.financialexpress.com/news/home-banking/694652/

Lennert Van Vooren

Mobile applications are smarter than you think.

In the beginning of the month research has shown that mobile banking accounts are used three times more a month by consumers for managing their money than internet banking and for that reason banks and financial services companies are launching new applications for users of smartphones such as iPhone and BlackBerry. Those particular programs are available for different aims, for example in the banking sphere is the consumer able to check his account balance with the possibility to set up a limit alert, the bank will send a text to the owner when his account reaches the upper or lower limit. The difference with internet banking is that it doesn't allow to make payments or transfer money. Other categories of very interesting applications, who give you a lot of useful information, are investment, pension, mortgage, salary, property and currency, which is a converter by Thomas Cook that covers more than 80 currencies.

Evelyne Verhasselt

How to invest in the car of tomorrow?

While many companies worry about how they can reduce their costs to survive the economic crisis, Google invests a lot of money in a completely new adventure. After ‘Google Earth’ and ‘Google Streetview’, ‘the car who can drive itself’ is the latest toy of the innovative enterprise. The cars are normal Toyota cars but stuffed with expensive and new technology, which is developed by Google engineers. The car can drive itself, that’s for sure but if it’s safe and practical attainable we will have to wait and see!


Joris Finck

Prepare yourself financially for your child's higher education

Because of the high tuition fees, most British students graduate with great debts. If the student doesn't have a scholarship, parents should try to save as much as possible during the first 18 years of the child's life. Although experts claim that parents should put £170 aside at an interest of 5 %, most families search for alternatives. The best investments on the long term are those on the stock market, which generate the highest return, or you can always ask for the help of friends or grand parents.

Source: http://www.guardian.co.uk/money/2010/oct/12/how-to-fund-university-education

Alexandre Van Laere

Helping your parents; financial suicide?

Adult children are supporting their parents during the recession by lending them money, but they could leave themselves financially exposed. Parents use this "bonus"  to pay off debt, spend money or living expenses, or they use it for a house purchase or deposit. The problem is that the offspring has to dip into their savings and investments so they can give their parents the cash. The best way of preventing the adult children from exposing themselves financially is helping parents and their children to start planning their finances as soon as possible.

Source: http://www.guardian.co.uk/money/2010/aug/20/bank-of-mum-and-dad-bites-back

Big risks for little savings.

Poor people often save money using unconventional methods, such as christmas saving clubs, or other so-called "hawa groups". Those groups offer a simple and easy way to save, but the arrangements are usually completely informal and unregulated. Therefore the government as well as the banks will have to put more effort in convincing the less fortunate to use a savings account in order to reduce the risk for them to lose the little money they save. One big player in the financial market, Citibank, has already understood the message and has invested billions in designing new products for the financially marginalised people... and it's paying off. (The Guardian)

Bram Van Hijfte

Obama announces dramatic crackdown on Wall Street banks

President Barack Obama announced his plans to introduce new rules which will prevent banks to make risky investments with their own capital. Barack Obama states that as America tries to get out of the financial crisis they can't forget to try and solve the problems which caused the crisis in the first place. Therefore the banks have to take their responsibility and contribute to the "financial crisis responsibility fee" he announced last week.

Source

Mathis Van Engelgem

A tax on the financial sector

The International Monetary Fund (IMF) believe that new bank taxes and financial supervision is very practical to avoid a renewed crisis. Dominque Strauss-Kahn, the managing director of IMF, said that there was a lot of speculation but the Robin Hood tax (FTT) was not the best way to attack the speculation. There is a lot of reckless behaviour in the financial area but the FTT is not very helpful to attack that because it is a bad proxy for speculation. Instead, the IMF think that a bank impose and a financial activitities tax on the sector's pay and profits is very useful.

Source: http://www.guardian.co.uk/business/2010/oct/07/imf-strausskahn-banks-crisis-warning

Jasmien Van de Vijver

Bonus Time May Not Come Early for Wall St. Banks

Half of financial professionals are expect to recieve a bigger bonus and a larger payout. Wall Street banks are very unlikely about the news. There is obviously a fear of taxes changing. Analysts confirmed that a raise of payouts and bonuses would  be a public relations disaster for a sector which is already guitly for the economic depression.

Olivia Verstraete

Never too young for a pension pot

More and more grandparents and parents are putting money into savings schemes or pensions for children. Investors can chose between two options: an investment that they designate to the child, so the original investor has to pay taxes on the interests but also has control over the investment, or the investor can chose for a bare trust for children, in this case they don’t receive interests but  they don’t have to pay income tax. The reason for this phenomenon is simple: what people want is that they and their families profit from tax relief.
(FT.com)

Soeliko Vercauteren

University graduates should pay more for degrees.

Traditionally, graduates have more advantages  than non-graduates during their career. That is why universities increase the cost for graduates to start their higher education instead of rejecting students or offering low-quality  teaching. According to the government, universities should stress more the importance of their educational activity. Although tuition fees are rising, more and more students see the necessity to get their degree.

Sofie Van Wilder (Group 4)

Source : http://www.guardian.co.uk/education/2010/sep/09/david-willetts-graduate-tax-university

Why the banks should agree to a ceasefire on bonuses.

To regain public trust, banks should stop competing each other with higher bonuses. These days, financial institutions continue spending large amounts on their staff, while they claim that financial times are hard and higher interest rates on saving accounts can't be given. Banks admit this antinomy. They say there is a general will to lower bonuses, but they can't trust their rivals to respect this commitment.

Source: tp://www.guardian.co.uk/business/2010/oct/11/banking-cbi

Steff Van den Bruele

Where should you save for your child now?

2010 has almost passed, still it seems very difficult for parents to save money for their children’s future. Last week, the British indebted Government has decided to reduce the child benefit for higher earning parents with £20 a week, to refill the treasury. By this it will not be easy for parents to give their offspring additional nest eggs, aside from university fees, when they reach the age of 18. The Child Trust Funds, which always had a sincere connection with the government, also lose reputation.

Tessa van Meerten
Source: http://www.thisismoney.co.uk/savings-and-banking/article.html?in_article_id=516161&in_page_id=7

Fine: €4.9bn

Jérôme Kerviel, a French rogue trader, was last week sentenced to jail and he has to pay Société générale a dazzling  €4.9bn, the amount of money his risky strategy costed his former employer in 2008. Kerviel accepts his detention, but according to him the fine is ridiculous, as it equals the GDP of Monaco; at his current wage, it would take him about 177.000 years to repay this sum.
He believes the imprisonment is good to scare of other rogue traders to do the same, but the monetary penalty is much to high, as he believes not only him, but more employees of the bank are responsible for the loss.
But his decisions endangered about 144.000 jobs, including his own, and did put SocGen in some serious problems.

Pieter Vanwelsenaere

Source: guardian.co.uk

http://www.guardian.co.uk/business/2010/oct/05/jerome-kerviel-jail-sentence

Sir Philip Green says government waste 'shocking'

The government of the United Kingdom could save a huge amount of money if it improved its spending processes. That's what Sir Philip Green found out when he did a review on government spending.

It would be impossible for a normal company to be in business when it operates like this. There is too much money thrown away.
Every pound that we can take out of the cost of government is a pound we can protect on the front line.

There must come some changes but there is no reason why government should not be as efficient as any good business.

http://www.bbc.co.uk/news/business-11512287

Tim Vanthournout

Any information online is fair game, no matter how personal.

More and more companies are spending their money to get personal information from individuals so they can have an idea about their interests and can improve their marketing strategy.
The practice is called 'web scraping' and it is rapidly expanding to a data economy where marketers easily pay a half a billion dollar according to statistics. We can generally accept that no site is safe anymore. Even highly personal sites like PatientsLikeMe.com, where people can discuss about their personal diseases and emotional disorders, are working with those emerging businessess and it seemes like you can't get your detailed information removed. So... be careful!

Burcu Vardar
http://online.wsj.com/article/SB10001424052748703358504575544381288117888.html?mod=WSJEUROPE_hpp_LEFTTopStories

Too small to fail

Regulators’ response to the financial crisis of the past few years mainly punishes small community banks instead of the big ones.

In order to avoid a repetition of the past financial crisis, banks are forced to investigate risks more severely before lending money to potential clients in the USA.

However, this measure increases banks’ compliance costs and thereby affects particularly small banks who have less financial means to cover these costs.

This all results in small banks giving up while big banks get off rather easy letting others help them pay their dues.

Kelly Vercauteren

Source: wall street journal:

http://online.wsj.com/article/SB10001424052748703735804575536094104047302.html?

Student loans more expensive in the future?

The political parties of England want to reform the university finance to help the poorest graduates. Now all students with a student loan are charged a low rate of interest depending on their maintenance loans, tuition fee and the base rate. Their first idea was to tie the interest rate of the loans to the earnings of the student, but this would mean that students who earn more, would pay more interest on their loans. Currently the ministers are discussing to apply a flat, market interest rate for most borrowers while only those with a low salary will enjoy a lower interest rate.

Sofie Vandenheede

Source: BBC News

Savings to fill child benefit gap

The government is planning to dispose of child benefit payouts for higher-rate taxpayers, thus by transferring more money down to the generations, wealthy families are hoping to save on inheritance tax. Many households in the UK will soon be confronted by a savings gap as they will no longer receive a child benefit payout. Due to taxation rules, grandparents will pass on their savings to their grandchildren, which they can on up to £3,000 a year while still avoiding the probability of becoming liable to inheritance tax. Experts believe that investors will presumably set up more saving schemes which might lead to a resurgence in investment accounts for children.

Wouter Verstringe

Financial Times

Anti-discrimination in insurance pricing

The EU thinks about introducing the end of sex discrimination in all areas of insurance pricing. Originally they expected a great impact in car insurance, but the effect on pension policy may be even bigger. The anti-discrimination rule means that the pension of men will decrease. On average women live three years longer than men, so these years have to be subsidized by a decrease in the pension of men.

http://www.independent.co.uk/money/pensions/changes-to-eu-law-mean-cut-in-pension-income-for-men-2102460.html

Aline Van Den Daele

Online banking gets safer every day, or doesn't it?

The UK Cards Association reported that the amount of money lost to online banking fraud rose by 14% in the past year. With all the improvements in online security systems, you could wonder how this is possible. A spokesman of the UK Cards Association explains that fraudsters have switched their attentions to individual household computers rather than trying to hack the internal bank systems. To get the secret information of the bank's customers, hackers tend to use the infamous 'phishing'-method. (The Guardian)

Michiel Van Ruymbeke

Happiness for only £5,000!

The financial crisis and the current instability in the world economy has made people happier with less. A recent survey showed that 82% of the people would be happy with £5,000 on their savings account, compared to 2004 when happiness was a lot more expensive. Those days, only 66% could be happy with this amount of money!

On the downside, fewer people believe that £5,000 would suffice to pay off their current debts.

Hannes Vanderdonckt

(Telegraph)

Banks forced to reveal numbers of millionaire staff

A new law will be introduced forcing banks to reveal how many of their employees earn more than £1m a year. One of the fundamental causes of the financial crisis was bad management but this new rule will cause a new code of stewardship encouraging responsible behavior instead of reckless-risk taking management caused by bonuses. However, this new regulation could harm the ability of banks to provide customers with proper financial services and lead to an increase in fees and charges. Foreign-owned banks will also have to show pay received outside the UK to avoid any circumvention of the rule.

Dries Vander Meeren

Source: http://www.guardian.co.uk/business/2009/nov/26/bank-pay-walker-report

Is this a good time to buy a new home?

 

Halifax announces record breaking price falls in real estate business, many people would think this is the time to consider buying a new house, but far more factors (beside prices) should - and will – influence potential investment decisions. First of all, necessity doesn’t have to be scaring nowadays, but investments won’t do really well (due to the permanent price falls). It is important you avoid needing a mortgage that represents a very high proportion of the property prices, this can be done, for example, by making regular or one-off overpayments. Finally James Cotton advises to have a big deposit from saving, which is not only a way to get a mortgage, but also to a better rate.

Tim Van den Berghe

http://www.guardian.co.uk/money/2010/oct/07/buy-new-house-good-time

Banks remunerate loyal investors

More and more banks are launching saving books with high loyalty premiums.  There are 2 main trends we are facing now;  the first one includes that several banks are lowering their interests on classic bank accounts. The second important trend is the expansion of loyalty bonuses to attract ‘long’ term investors. But does it pay to be a loyal customer, or are there any other and better investments with a higher return on invest?

Nicolas Vandermarliere

Source: 

http://netto.tijd.be/sparen_en_beleggen/sparen/Spaarboekjes_met_hoogste_getrouwheidspremie.8970075-2212.art 

Welfare reforms strike the sick

People who are on long-term sickness benefit need to take action. Nearly 500,000 long-term sick will have to find jobs or they will lose a third of their welfare payment. Nowadays, 2.1 million people receive incapacity benefits, which has cost the taxpayer £ 135 billion over the past ten years. The cut by the UK-Government is estimated to save up £ 4 billion, which is only a fourth of the economies the administration must find from Iain Duncan Smith’s welfare budget by 2014-15.

Tom Van Roye

Source: www.thetimes.co.uk/tto/news/politics/article2761390.ece

Women and managing money

Finally the misunderstanding has been modified: women seem to be better with money than men. The latter are more likely to spend their income on gadgets, and this by using the credit card. However, their main problem is the lack of responsibility to pay back their debts on time. The female gender, by contrast, is more aware of the expenses and has less debts on loans and credit cards.

http://knack.rnews.be/nl/actualiteit/nieuws/ondertussen/vrouwen-beter-met-geld-dan-mannen/article-1194704436143.htm

Clara Verhoeven



The future of payment

Nowadays in the Spanish village Sitges a trial project for mobile payment, organized by Visa, the Spanish savings bank La Caixa and mobile phone company Telefónica, is running. Due to this new technology a customer can pay his purchases with his mobile phone, which contains a chip similar to the chip in a credit or debit card. The buyer has to place his mobile phone next to the pay terminal, type in his PIN code and the money is transferred. Since mobile manufacturers like Samsung and Apple are already developing phones that will support this technology, mobile payment could be reality by 2012.

Sam Vander Vennet

Source: http://www.guardian.co.uk/money/2010/oct/02/mobile-payments-technology