There is a question about when policy makers of the Federal Reserve System will raise interest rates. But before that question, it is important to know if the policy makers have figured out how to do that. And the answer is: they haven't quite figured it out.
Since 2008 financial crisis, the United States central bank has been trying to control near-term borrowing costs, but in that case, the central bank has faced troubles. While the bank's main new tool has enabled the Federal Reserve System to exert more influence over money-market rates in the last year, experts at investment banking companies like Barclays to Goldman Sachs said that the bank's program is too small to stop rates from falling.
Bank of New York Mellon has agreed to pay $714 million to settle federal and state allegations. The allegations are that the bank defrauded pension funds and other clients by wrongly representing how it managed their foreign exchange transactions.
According to the US Department of Justice and New York's top legal official, the investment services and management company said that it wrongly informed customers that it would give them the `best rates' available in a process. The process was designed to maximize the proceeds of every trade in the foreign currency exchange market.
On Wednesday, the central banking system of the United States Federal Reserve released results of the second round of its stress tests called 'Comprehensive Capital Analysis and Review (CCAR)'. The stress tests included 31 big banks that are currently operating in the U. S. market.
While two foreign banks, Santander and Deutsche Bank, failed the tests, the remaining banks managed to pass the second round. According to reports, the result was not as bad as analysts had predicted.
Another bank, Bank of America, which somehow passed the test, was put on a 'warning' by the central banking system of the country. The multinational banking and financial services corporation headquartered in Charlotte was found to have some weaknesses in aspects of revenue modeling.
The National Association of Business Economists conducted a survey in which 293 economists took part. As per them, the Federal Reserve can increase interest rates in the second half of the year.
However, it has been noticed that uncertainty over the plans is no affecting the US economic growth. As many as 71% of the total economists who took part in the survey said that they do think that the Federal Open Market Committee will increase the federal funds target rate this year.
Since the end of 2008, the rate has been almost zero. Experts do not think that even if the Fed takes time to increase the rate, it will have much impact on the pace at which economic recovery is taking place.
Many big banks in the United States have been urging the Federal Reserve to modify the methodology used in annual stress tests.
Annual stress tests are used by the Federal Reserve to determine the ability of banks to survive a recession and keep lending after being affected by potential economic shocks, such as a spike in unemployment or a crash in stock market.
The test requires lenders to project losses on various loans and operations using a standard index through which the resiliency of the entire financial system is judged. They were launched in 2011 under the 2010 Dodd-Frank financial reform bill to gauge how much capital banks can use for dividends or stock buybacks.
Standard Chartered PLC informed that it has lowered a key financial target and also informed that it is going to take new action in order to conserve capital after profit dropped sharply last year.
It has been informed that net profit fell 37% to $2.51 billion from $3.99 billion. It is expected that the earnings will be not good. An announcement was made by the bank that former J.P. Morgan Chase & Co. executive Bill Winters is going to replace Chief Executive Peter Sands. Departure of Mr. Sands was announced last week after months of pressure from some shareholders to put new leadership in place after two years of waning earnings.
London, Feb 26 - The two top HSBC chiefs have reportedly apologised for "unacceptable" practices at its Swiss bank that helped clients evade millions of dollars in tax.
While Group Chief Executive Stuart Gulliver admitted that it had caused "damage to trust and confidence" in the company, Chairman Douglas Flint said that he felt ashamed and would take "his share of responsibility" for the failings, reported the BBC.
The two bosses were responding to questions from the UK Members of Parliament of the Treasury Committee.
However, on being asked who was responsible for the problems in HSBC's Swiss private bank, Flint pinned the blame on the management in Switzerland. He estimated that about 30 percent of relationship managers were still employed by HSBC. (ANI)
Mumbai: Analysts and economists at the nation's largest lender SBI today joined the call for stretching the fiscal deficit target by a few notches so that the government can boost capex without impacting the fiscal consolidation process.
"We believe, the government must step up capital expenditure meaningfully to stimulate investment. We firmly believe fiscal deficit for 2015-16 should be set higher at 3.8 per cent of GDP, up from 3.6 per cent envisaged in the current Budget. This is unlikely to impact fiscal consolidation," the economic research arm of SBI said in a note.
London, Feb 23 - A former Director of Public Prosecutions has accused banking giant HSBC of "grave" cross border crime and of engaging in "a systematic and profitable collusion in serious criminal activity" in the UK.
According to the Independent, in a damming intervention Lord Ken Macdonald, who led the Crown Prosecution Service until 2008, said there existed "credible evidence" of HSBC's involvement in "grave" cross border crimes that should have been the subject of urgent and "sustained criminal investigation".
He said that the decision by Her Majesty's Revenue and Customs to not launch a probe into allegations of tax evasion by HSBC was "seriously legally flawed".
Mumbai - The Indian Banks Association has decided to hold further talks with leaders of public sector bank unions who have given a call for four-day nation-wide strike from February 25.
"The IBA has invited us for talks on Monday in Mumbai and we have agreed to participate in the talks," United Forum of Bank Unions (Maharashtra) and All-India Bank Employees Union vice-president Vishwas Utagi said.
The unions have threatened the strike to press wage-hike demand. This will be their fifth strike this fiscal.
IBA has offered a 13 percent hike which will put a burden of Rs 4,095 crore on the banks, against the unions' demand of 19.5 percent hike which would increase the salary bill by Rs 10,000 crore per annum.
London - HSBC's Indian banking unit is at the heart of fresh revelations around tax evasion, days after a global expose showed tax dodging through accounts in the British major's Swiss banking unit, a media report said today.
It is alleged that representatives of HSBC India, which has employees based in America, assured customers that details of their accounts would not be reported to tax officials.
The latest revelations came even as the bank issued full-page advertisements in British newspapers as a public apology after reports that its Swiss banking arm had helped some wealthy clients avoid tax.
New Delhi: Private lender HDFC Bank today reported 20 percent jump in net profit at Rs 2,794.51 crore for the third quarter ended December 2014 on account of higher interest income.
The bank had reported a net profit of Rs 2,325.70 crore during the same period of last financial year, HDFC Bank said in a filing to stock exchanges.
Total income of the bank rose to Rs 14,930.74 crore during the October-December period of FY15 from Rs 12,738.95 crore in the corresponding quarter of last financial year.
Net non performing assets (NPAs) stood at 0.26 percent as compared to 0.3 percent a year ago, while gross NPAs were at 0.99 percent as against 1.01 percent a year ago.
Mumbai - Improvement in asset quality and high interest income pushed State Bank of India's net profit in December quarter by 30 percent to Rs 2,910 crore, boosting the shares of country's largest lender by 6.8 percent.
The bank had reported a net profit of Rs 2,234 crore in the October-December quarter of previous fiscal, SBI said in a statement.
The gross non-performing assets (NPAs) as a percentage of total advances came down to 4.90 percent at the end of third quarter from 5.73 percent in the year-ago period while net NPAs stood at 2.80 percent.
During the quarter, the net interest income increased by 9.20 percent to Rs 13,777 crore as against Rs 12,616 crore in the October-December period of last fiscal.
Mumbai: RBI Deputy Governor H R Khan on Tuesday said though the country's forex kitty was at an all time high of USD 330 billion, there should be no complacency as no amount of reserves may be enough to fight extreme volatility.
"Foreign currency reserves have improved. Right now we're at USD 330 billion, highest ever. But there is also a view that no amount of foreign exchange reserves can cushion when there is extreme volatility or external shocks," Khan said, days after weekly data showed an over USD 6 billion jump in forex to an all-time high.
"We are much better placed. In terms of fool proofing our balance sheet we have done quite a few things," Khan said, referring to the jump in reserves.
New Delhi: Public sector lender Punjab National Bank on Tuesday said it has raised Rs 1,000 crore through long term bonds on private placement basis.
"The bank has raised Rs 1000 crore long term bonds at an annual coupon of 8.23 percent on private placement basis on February 09, 2015, through five arrangers," the company said in a BSE filing.
During the third quarter ended December 31, 2014, the company reported a marginal 2.5 percent increase in net profit to Rs 774.56 crore.
This was against a net profit of Rs 755.41 crore for the October-December quarter of the 2013-14 financial year.
London, Feb 09 - A report has said that Britain's biggest bank, HSBC, helped its customers evade millions of pounds in tax.
The report was based on details of thousands of accounts from HSBC's private bank in Switzerland, which were leaked by a whistleblower in 2007, reported the BBC.
They showed that bankers helped its customers dodge tax and offered them deals to help them stay ahead of the law.
While admitting that some bank account holders took advantage of bank secrecy to hold undeclared accounts, HSBC said that it has now "fundamentally changed."
The documents, leaked by a computer expert working for HSBC in Geneva in 2007, contained details of about 100,000 clients worldwide. (ANI)
New Delhi, Feb 7 : The Centre has decided to infuse Rs. 6990 crores in nine public sector banks (PSBs) for which orders are being issued.
This year, the Centre has adopted a new criteria in which the banks which are more efficient would only be rewarded with extra capital for their equity so that they can further strengthen their position.
The methodology for arriving the amount to be infused in these banks has been based on efficiency parameters. First of all, weighted average of return on assets (ROA) for all PSBs for last three years put together was arrived at and all those who were above the average have been considered.
Mumbai: Country's largest lender by market value HDFC Bank on Thursday raised Rs 9,880 crore in the largest share sale in the secondary market by a private entity to overseas and domestic investors through a mix of qualified institutional placement and American depository shares.
Merchant bankers said the issue has been successfully closed and the final pricing is expected shortly.
According to merchant bankers who include Barclays, JM Financial, Citi, JP Morgan and BofA-ML among others, said the bank opened the QIP issue first and the ADR was launched a few hours later.
The bank has plans to raise Rs 2,400 crore from QIP and the rest from ADRs, but sources said the composition got changed after the sale began.
Mumbai: Encouraged by foreign exchange reserves touching record levels, the Reserve Bank on Tuesday doubled the annual overseas investment ceiling for individuals to USD 2,50,000.
"On a review of the external sector outlook and as a further exercise in macro-prudential management, it has been decided to enhance the limit under the Liberalised Remittance Scheme (LRS) to USD 2,50,000 per person per year," the RBI said in its Bi-Monthly Monetary Policy Statement.
New Delhi - Punjab National Bank on Tuesday posted a marginal 2.5 percent increase in net profit to Rs 774.56 crore for its third quarter ended December 31, on account of higher provisioning for bad loans.
The country's second largest public sector bank by assets had reported net profit of Rs 755.41 crore for the October- December quarter of the 2013-14 financial year.
Poor performance of the bank pulled its share price down by nearly 7 percent to Rs 179.20 on the BSE after the numbers were announced.
As far as PNB's asset quality is concerned, gross NPAs as a percentage to total advances rose to 5.97 per cent from 4.96 per cent in the same quarter an year ago.