Archives for November 2014

OPEC oil ministers attend the OPEC meeting in Vienna (Reuters / Leonhard Foeger)

Should OPEC decide to cut production this week in an effort to boost oil prices, media reports suggest that Iraq, Iran, and Libya could be given an exemption from making supply reductions.

The three counties may not have to cut production since they are not operating at full capacity, and are not likely to do so, Bloomberg News reported, citing two sources close to the proposal.

“It makes sense that these three countries shouldn’t have to make further cuts,” Abhishek Deshpande, oil markets analyst at London-based Natixis, told Bloomberg News on Monday.

The 12 members of the Organization of Petroleum Exporting Countries meet Thursday in Vienna to decide whether to cut production or not.

Swiss bank UBS believes they will make a cut to boost oil prices, which have fallen more than 30 percent from a $115 peak in mid-June.

“We do think they are going to cut, by somewhere between 0.5-1 million barrels per day. And we think that provides a lot of upside on the oil price given the market position right now,” Wayne Gordon, a commodity analyst at UBS Wealth Management told Bloomberg News.

The current $80 a barrel price has been driven by ramped production from American shale, as well as a general decrease in global demand, spurred by economic lethargy in Europe and China.

The Organization of the Petroleum Exporting Countries or OPEC includes Iran, Iraq, Kuwait, Saudi Arabia, the UAE, Qatar, Venezuela, Algeria, Angola, Libya, Nigeria, and Ecuador. Together they produce more than 40 percent of the world’s oil.

Low oil prices have put many OPEC members under budget pressure, as the oil exporting countries use oil prices as a foundation for setting state budgets. Iran needs a price at $140 per barrel to balance its budget, whereas Saudi Arabia needs a price of $90.70 per barrel, Qatar $77.60 per barrel, and the United Arab Emirates $73.30 per barrel.

Venezuela, which has been pushing for a decrease in production, as it needs oil to settle above $120 to balance its budget.

“On a revenue basis, it’s their best proposition to cut production, here at UBS we think they will cut production, that’s our view,” Gordon told Bloomberg.

Moscow’s wish

Russia is not an OPEC member nor does it have an official presence at Thursday’s talks, but Rosneft CEO Igor Sechin and Russia’s Energy Minister Aleksandr Novak are holding meetings with OPEC officials on Tuesday.
Russia, after Saudi Arabia, is the single biggest producer of oil, accounting for 14 percent of world supply.

Last week Energy Minister Aleksandr Novak said the Russian government is considering decreasing oil production in order to buoy world prices, but a final decision hasn’t been made. Russia may suggest cutting its oil production by around 300,000 barrels per day as long as OPEC reduces its production by 1.4 million barrels per day, Kommersant reported, citing a source close to the government.

Article source: http://rt.com/business/208719-opec-immunity-iraq-iran/

Image from fairlife.com

US grocery stores will get a new brand of milk next month from beverage giant Coca-Cola. It will cost twice the price of standard milk, and the company expects the new product will be a money-spinner.

The milk called Fairlife will contain 50 percent more protein and 50 percent less sugar than standard milk, no lactose and 30 percent more calcium. According to the company, the milk will “rain money.”

“We’re going to be investing in the milk business for a while to build the brand so it won’t rain money in the early couple of years. But like Simply, when you do it well it rains money later,” Sandy Douglas, senior vice-president and global chief customer officer at Coca-Cola, said November 19 at the Morgan Stanley Global Consumer Conference, Seeking Alpha reported.

Douglas boasted the milk will “taste better and we’ll charge twice as much for it as the milk we are used to buying in a jug.” The way the milk is filtered will remove the fat and sugar, which will put it in competition with energy and protein drinks, and not just milk.

Since the 1980s, milk has been mass-marketed to America as something that strengthens bones, however a recent study published in the BMJ debunks this theory, showing that high sugar levels may not, as commercials claim, prevent osteoporosis.

Douglas said that test markets have so far been “amazing” and he expects the milk’s brand to take off.

The company has already created a joint venture with several dairy farmers at a time of record-high milk prices. In September, the national average price of milk was $3.73 per gallon, and for the first time since 2011 more expensive than gasoline. The biggest milk processor by sales, Dean Foods, has raised gallon prices by $0.30 after being forced to shut down several plants because of low demand.

Though expensive, the milk industry is struggling, as sales have been riding a four-decade losing low as milk has lost market share to other beverages, such as protein shakes and energy drinks.

The US Agriculture Department foresees improvements next year for the milk industry, which has been turbulent over the past twelve months.

Article source: http://rt.com/business/208555-coca-cola-milk-fairlife/

AFP Photo / Spencer Platt

Only 28 percent of 6,100 companies surveyed across the world said they anticipate a rise in business activity in the next year, a five-year low dating back to the start of the financial crisis.

The last time business confidence was measured in June, it was a more upbeat 39 percent.

“Clouds are gathering over the global economic outlook, presenting the darkest picture seen since the global financial crisis,” Chris Williamson, chief economist at Markit wrote in a report published Monday.

Optimism sharply fell in the worlds’ major economies in October; six years after the world received its first dose of financial panic when the UK began to bail out the countries’ banks and Iceland’s three largest banks collapsed.

Pessimism ran high in the flagging eurozone, which may be poised to enter recession again as the biggest economies of Germany and France don’t see major expansion in the coming year. France has the lowest confidence level of all major European countries, with many companies already planning to cut staff in the next year.

Geo-political risks from the crises in the Middle East and Ukraine, and the possibility of the US and UK increasing interest rates, and the general economic peril of the eurozone all weighed heavily on companies.

“A key factor that has held back economic growth in recent years has been the disappointing performance of major emerging market economies, and this looks set to continue, and perhaps even intensify, over the coming year,” Williamson said, also warning that business optimism in the BRICS countries had also sunk to a financial crisis low.

Some countries are more upbeat about the future than others. British businesses, for example, scored a 55 percent confidence rating, as firms plan on increasing staffing and capital expenditures. Another bright spot was Spain, which beat the eurozone and global average. China was one of the few countries to see its confidence increase from the last survey.

Markit Global BusinessOutlook Index October 2014

Country

% of Companies that Expect Higher Business Activity in the Next 12 Months
UK 55% Spain 49% Italy 37% India 34.6% US 31% China 27% Germany 24% France 13% Japan 13% Russia 10%

Source: Markit Economics

The view is most gloomy in Russia, which hit a new survey low as sanctions, high inflation, and geopolitical tensions all threaten the business climate.

Optimism in 650 US corporations disappointed over the uncertainty of future domestic policies and the increasingly competitive job market.

“US growth therefore looks likely to have peaked over the summer months, with a slowing trend signaled for coming months,” Williamson wrote.

“This survey is a timely reminder that the US economy has not been immune from weakening global business conditions, with euro area woes and heightened geopolitical risk weighing on firms’ business outlook and job hiring intentions for 2015,” Tim Moore, a Senior Economist at Markit, wrote in the note.

The Markit Global Business Outlook Survey polls businesses in 12 countries in order to compile a business sentiment barometer, and has been conducted three times a year over the last five years.

Article source: http://rt.com/business/208306-global-business-confidence-october/

Russia’s Finance Minister Anton Siluanov.(Reuters / Maxim Shemetov)

Russia is losing around $40 billion a year due to Western sanctions, but they are not as critical to the economy as lower oil prices, which add $90-100 billion in losses, says Russian Finance Minister Anton Siluanov.

“We lose about $40 billion a year because of the political sanctions and around $90-100 billion a year due to the 30 percent reduction in oil prices,” RIA quotes Siluanov speaking Monday at the International Financial and Economic Forum.

Lower investment and foreign loans along with capital outflow, estimated at $130 billion this year, are the key components of the loss, Siluanov explained.

READ MORE: Economic contraction, oil price fall won’t be as severe as 2008-2009 – Finance Minister

Siluanov believes the decline in oil prices has a more significant impact on the Russian economy than the international sanctions.

“If we talk about the consequences of geopolitics, of course, they are important for us,” he said. However, he added that “it is not as critical for the course, and even for the budget, as the prices of goods exported by us.”

READ MORE:Russia prepared for ‘catastrophic’ drop in energy prices – Putin

Talking about the ruble’s depreciation, Siluanov said that fluctuating oil prices should serve as a principal indicator of the ruble’s exchange rate amid a period of high volatility.

“The price of oil has fallen by 30 percent since the beginning of the year. Incidentally, the ruble has weakened by the same 30 percent. When people ask me – listen, you’re the Minister of Finance, what’s the ruble rate going to be? It is impossible to answer because there are a lot of factors. I say, look at oil prices. The behavior of the ruble will depend on them,” said Siluanov.

READ MORE:Russian ruble continues recovery, as oil back to $80

The price of Brent crude, which is used to calculate the price for Russian Urals blend, has fallen by 30 percent to about $80 a barrel since the end of June; its lowest price for four years.

According to the International Energy Agency, the total supply of oil on the world market in October increased by 35 thousand barrels to 94.2 million (2.7 million barrels more than in October 2013). In the same period, the average daily volume of oil supplies by OPEC countries in the world market amounted to 30.6 million barrels.

OPEC countries are also adding to the oversupply as they’ve been exceeding their quota of 30 million barrels per day for the last six months.

According to IEA experts, the decline in oil demand from China, world’s second largest oil consumer, and rising oil production in the US will lead to a sharper decline in prices in early 2015.

On November 27, OPEC leaders will meet in Vienna to decide whether to shore up oil prices by cutting output.

Article source: http://rt.com/business/208263-russia-losses-sanctions-oil/

READ MORE: Russian ruble continues recovery, as oil back to $80

Overall, oil prices have dropped drastically since Brent topped out at $115 per barrel in June. By mid-October prices had sunk to $84, and on November 13 hit a new nadir at $77.50 per barrel.

READ MORE: Brent tumbles below $80 threshold as OPEC surplus continues

Venezuelan Foreign Minister Rafael Ramirez says it is pretty clear there are attempts to damage Russia, Iran, and other oil producing countries by manipulating oil prices.

“It is a particular geopolitical position of some powerful political players in the world. But the common interest of all oil producing countries is to have a fair price. We believe its $100 per barrel,” Ramirez said in Caracas Friday.

Many of the countries in OPEC require a price above $75 per barrel to keep their national budgets balanced.

If oil prices remain below $80 per barrel, oil producing countries will continue to feel the economic squeeze, since for many selling oil under $80 per barrel is unprofitable

Oil exporting countries base their budgets on oil prices. Iran needs a price at $140 per barrel to balance its budget, whereas Saudi Arabia needs a price of $90.70 per barrel, Qatar $77.60 per barrel, and the United Arab Emirates $73.30 per barrel.

Not a ‘price war’

Saudi Arabia is one of the leading voices among the 12 OPEC members, and has temporarily stopped intervening in the oil market as its economy can withstand lower prices.

Much speculation has been tossed around that Saudi Arabia is intentionally lowering prices to squeeze out US dominance in the crude market, which Oil Minister Ali al-Naimi dismisses as nonsense.

Russia is not an OPEC member and will not have an official presence at Thursday’s talks, but Rosneft CEO Igor Sechin will meet with partners from Venezuela on Tuesday, and Russia’s Energy Minister Aleksandr Novak will also be present.

Tumbling oil prices have hit the Russian currency hard; in November the ruble lost nearly 45 percent of its value before recovering slightly. On Friday at 15:30MSK the ruble improved to 45.52 against the dollar, and 56.59 against the euro.

On November 7, the ruble hit its record low of 60 rubles to the euro, and grazed just above 48 against the dollar. Soon after the Central Bank announced it was abolishing automatic currency interventions, to protect the ruble from heavy speculation.

Article source: http://rt.com/business/207643-politicized-oil-prices-lavrov/

Reuters / Darren Staples

About 13 percent of global wealth of adults is concentrated in the hands of 0.004 percent of the population, according to a new study. And the trend is set to continue with the number of high net worth individuals reached a record 211,275 in 2014.

Swiss bank UBS and consulting firm Wealth-X compiled the World Ultra Wealth Report 2014 released Thursday.

“Ultra-high net worth” (UHNW) individuals are defined as people with a fortune of about $30 million. Of the 211,275 that fall into the category, 2,325 are billionaires, a 7.1 percent increase since last year. Experts believe the number of billionaires could rise to 4,000 by 2020.

“Even amidst geopolitical conflicts, socio-economic strife, and volatile currency markets, the world’s equity markets displayed strong performances, thereby enabling UHNW individuals’ wealth to increase and their influence across industries and sectors to grow — from their importance in wealth management to their consumption of luxury goods,” the report said.

READ MORE: Number of billionaires hits new record high in 2014-report

The UHNW adult population account for approximately 1 in every 35,000 people in the world, or just 0.004 percent.

“Such a large concentration of wealth in the hands of these few individuals means that they tend to have a large degree of influence, whether on global equity markets or specific industries,” the report says

Average wealth of an UHNW individual has risen to $139.4 million, up $1.8 million last year, a more than 77 percent increase.

The geographical heavyweight was again North America, which accounts for nearly a third of the total $30 trillion, at $9.7 trillion in held wealth. Europe is home to about 25 percent and Asia 23 percent.

Another major trend the report forecasts is that Asian wealth will overtake Europe in 2017. Currently Asia is home to 44,505 super-wealthy individuals with a combined fortune of $6.6 trillion, and Europe’s wealth stands at $7.7 trillion, shared between 58,065 people.

Latin America is the only region in 2014 to incur a fall, down 600 individuals and $75 billion.

Eighty-seven percent of the list is men, and more than two-thirds struck it rich on their own, 13 percent by inheritance, and the rest a combination.

Women, on the other hand, are more likely to become wealth via inheritance. Almost 50 percent got rich through inheritance, and one-third was “self-made.”

The average UHNW individual spends $1 million a year on luxury goods and services, the report says.

Article source: http://rt.com/business/207575-super-rich-control-30-trillion/

RIA Novosti / Aleksey Babushkin

Russia’s largest hydroelectric company RusHydro says it is looking for an Asian buyer for its share of a loss-making energy distribution business in the Far East. Media reports say Chinese company Sanxia is a likely candidate.

RusHydro wants to sell a blocking share of its subsidiary RAO Energy System of East within three to five years, said George Rizhinashvili, Deputy President of RusHydro to Kommersant newspaper.

During this period RusHydro will try to consolidate 100% of the holding’s shares and solve a number of operational problems, including increasing EBITDA (earnings before interest, taxes, depreciation, and amortization) and the optimization of costs.

“We would like to consider offers from strategic Asian investors before selling a blocking share,” said Rizhinashvili, adding that “Asian partners” do not necessarily mean Chinese companies.

READ MORE:Russia-China APEC deals reflect ‘natural synergy’

Formally, RusHydro refers to Asian investors in general, but, according to Kommersant, the proposal has already come from China’s Sanxia, which is creating a joint venture with RusHydro to construct hydropower plants in the Far East.

RusHydro owns 84.39 percent of RAO Energy System of East. The holding group operates in the Far Eastern Federal District of Russia is in an extremely difficult financial situation.

The problem is that energy market mechanisms do not operate in this region. Instead, there are regulated tariffs which make it difficult to attract foreign investment.

At the end of the first half of the year RAO Energy System of East was $1.6 billion (77.5 billion rubles) in debt. Annual loan servicing costs the company $150 million (7.5 billion rubles), which is higher than the $128 million (6 billion rubles) it spent on repairs.

The company’s revenue in 2013 was $3.2 billion (152.8 billion rubles) with net profit of $100 million (4.7 billion rubles), according to its latest figures. However, it makes an operating profit only because of the $282 million (13.2 billion rubles) in state subsidies. RusHydro also partly provides the company with loans.

Rizhinashvili also said RusHydro intends to list its shares on the Hong Kong Stock Exchange next year.

Currently about 28 percent of the company’s securities are in circulation, and a depositary receipts program covers about 5 percent. Shares in RusHydro are listed on the London Stock Exchange and the Moscow Stock Exchange.

George Rizhinashvili says there is already interest from Asian investors in RusHydro’s securities, taking into account “significant projects and deals with Chinese partners.”

On November 16 RusHydro agreed an $8 billion (370 billion ruble) deal with PowerChina and Sanxia Corporation to construct hydroelectric and pump-storage plants in Russia.

RusHydro’s deputy chairman also said it is ready to offer up to 25 percent of the company’s shares to Asian investors in 3-5 years time after a 100 percent consolidation of the holding.

Article source: http://rt.com/business/207551-russia-asia-hydropower-partners/

Reuters/Arnd Wiegmann

Ukraine’s Central Bank chief has divulged some shocking intel: its gold stockpile has reached a new nadir – almost zero. Since the beginning of the year, gold reserves have dropped nearly 16-fold, which begs the question, where did all of it go?

“Official statistics of the National Bank show that the amount of gold in the vaults drastically fell, and it is unclear where it went. At the beginning of this month, the volume of gold was about $1 billion, or 8 percent of the total gold reserves,” the head of Ukraine’s National Bank, Valeria Gontareva, said in an interview with Ukraine’s Kharkiv TV.

As of November 1, the latest available data, foreign currency reserves stood at $12.6 billion, which puts Ukraine’s national gold stockpile at just $123.6 million, ZeroHedge reported.

However, this figure contradicts the $988.7 million, which is the level gold should stand at, if the ratio of gold to total reserves was 8 percent.

In February, before then-President Vicktor Yanukovich was toppled, gold reserves stood at about 21 tons, according to then chairman of the National Bank of Ukraine Sergey Arbuzov.

One theory is that Ukraine decided to shift its gold reserves to the US shortly after the presidential coup when Prime Minister Arseniy Yatsenyuk held a meeting with President Obama.

At the end of February, gold stood at $1.8 billion, or about 12 percent of reserves. The Central Bank reported that reserves stood at $1.6 billion in both July and August, and $1.7 billion in September.

In October, the bank was forced to sell $874 million worth of gold to service domestic and foreign public debts, according to the International Monetary Fund.

One of the main functions of the National Bank of Ukraine is to accumulate and store foreign exchange reserves and precious metals.

In May, the previous bank head, Stepan Kubiv, said that Ukraine planned to use part of its first tranche of International Monetary Fund loan to boost gold and currency reserves to stabilize the ailing currency, the hryvnia.

The IMF, which has denied Ukraine loans before due to corruption, in April pledged $17 billion over two years to help the country trying to closer align itself with Europe, and not Russia.

The bank stopped supporting the currency in mid-November when it fell into complete free fall. The hryvnia has lost 50 percent of its value against the dollar since the beginning of the year.

“The devaluation of the hryvnia is now 100 percent. At the last minute, businesses began to panic. Even after the devaluation of 50 percent, which began in July, we were able to stabilize the situation, but then the war started,” Gontareva said.

Ukraine’s economy has spun out of control since revolution and war gripped the country. The new government is facing rock-bottom reserves, sky-high inflation, contracting growth, natural gas shortages, and a looming default on debts.

Article source: http://rt.com/business/207347-ukraine-gold-reserves-gone/

Reuters/Srdjan Zivulovic

Global pharmaceutical spending will surpass the trillion dollar threshold in 2014, with high prices for innovative hepatitis C and cancer drugs in the US, a new study says. By 2018 spending is expected to increase by another 30 percent.

With an increase of 7 percent over 2013, total spending on medicines will amount to $1.06 trillion in 2014, says the report “The Global Use of Medicines: Outlook through 2018” from the IMS Institute for Healthcare Informatics, released Thursday.

In the next few years, by 2018, the increase to $1.3 trillion will be due to about $100 billion on hepatitis C drugs, the same sums spent on cancer treatment, and $78 billion on diabetes care.

The 30 percent increase is to be driven by more specialty drug innovation, greater patient access to medicines and reduced impact from patent expiry dates.

The American share in the total drug spending is about one third. IMS experts estimate that in 2014 it will rise 11.7 percent. The US has particularly high prices, according to the report, but drug makers defend this by citing the soaring cost of new medicine development.

“Within the US market, we are seeing in aggregate higher levels of rebate, especially in the diabetes and respiratory therapy areas,” said Murray Aitken, executive director of the IMS Institute for Healthcare Informatics, according to Reuters.

“The higher level of spending growth we’re projecting over the next five years reflects an unusual combination of higher spending on the surge of innovative medicines for patients and lower savings from patent expiries,” said Aitken, according to The Pharma Letter, a pharmaceutical and biotechnology news and analysis service.

“This is particularly evident this year and next in developed countries – and especially in the USA, which accounts for more than a third of the global market,” he added.

Spending on medicines in “pharmerging markets” will rise more than 50 percent over the next five years, The Pharma Letter said, citing IMS.

With its goal of universal healthcare system coverage by 2020, China is expected to transform the medicine market, becoming the second largest after the US. In the next five years, China expects per capita spending to grow by 70 percent.

As researchers forecast, nearly 200 new drugs are to be launched in the next five years.

More than 80 percent of the drug spending growth will be based on non-branded medicines – biologic therapies among them. Nearly 40 percent of the growth will correspond to specialty medicine in the oncology, autoimmune and respiratory therapy areas.

However, IMS’s figures could be lowered by about $60 billion to $80 billion, as the institute hasn’t taken into account manufacturer rebates, coupons and discounts.

Article source: http://rt.com/business/207255-usa-medicine-global-spending/

Reuters/Bernadett Szabo

Society expects bank employees to be honest when entrusting them with money. However, new research involving bankers suggests they are more likely than other professionals to be dishonest if they are reminded about their professional role.

When bank employees were primed to think less about their profession and more about normal life, however, they were less inclined to dishonesty, the study by the University of Zurich reveals.

“Many scandals..have plagued the financial industry in the last decade,” Ernst Fehr, a researcher at the University of Zurich who co-led the study, told Reuters. “These scandals raise the question whether the business culture in the banking industry is favoring, or at least tolerating, fraudulent or unethical behaviors.”

READ MORE: Banks fined record $4.3 bn for corrupting integrity of currency trading

The subjects took part in a simple experiment of flipping a coin, and involved around two hundred bankers, including 128 from a single unnamed international bank. They were divided into two groups. The people from the first were asked specifically about their jobs in banking, while the other half were asked unrelated questions.

“The rules required subjects to take any coin, toss it 10 times, and report the outcomes online,” the researchers reported in the journal Nature. “For each coin toss they could win an amount equal to approximately $20 depending on whether they reported ‘heads’ or ‘tails’.”

The point is that the players were told ahead of the game whether “heads” or “tails” would win as well as in which case they could keep their winnings.

Given maximum winnings of $200, there was “a considerable incentive to cheat,” wrote the team of researchers.

The bankers were asked to fill out questionnaires before tossing each coin. Those who were asked about things unrelated to their job hardly ever cheated in the coin toss, reporting 51.6 percent wins.

But those asked about their banking careers made the cheat rate go up – they reported 58.2 percent as wins. If everyone was completely honest, the proportion of winning tosses in each group would be 50 percent.

To check whether the effect is only in banking, the researchers carried out the same experiments with employees in other sectors. It showed people unrelated to banking aren’t likely to cheat when their professional identity is emphasized.

The researchers believe getting the participants to identify themselves primarily as bankers made them think primarily about money and less about the ethical obligation to not cheat.

For those who want to heal the industry’s reputation, the researchers suggest introducing ethical rules, such as ethics training or making bankers take a professional oath similar to the Hippocratic Oath for doctors. They believe it would “prompt them to consider the impact of their behavior on society rather than focusing on their own short-term benefits.”

Past financial wrongdoing

The issue of financial fraud has become one of the top concerns for regulators across the globe. Most recently, regulators from the US, UK and Switzerland slapped a record $4.3 billion fine on some of the world’s biggest banks for manipulations in foreign exchange market – a global decentralized market of foreign currency with a daily turnover of more than $5 trillion.

READ MORE: Banks fined record $4.3 bn for corrupting integrity of currency trading

That comes along with a headline-making case of the rigging with Libor (London Interbank Offered Rate) interest rates.

In early October, a senior London banker became the first person to be prosecuted for fixing Libor and is now facing up to 10 years in jail.

READ MORE: London banker pleads guilty to fixing Libor, faces up to 10 yrs in jail

The country’s Serious Fraud Office (SFO) revealed that between 2005 and 2008, traders working for several major banks were asked to submit Libor positions that would put the bank in a favourable position, as well as other illegal activity such as colluding with other banks to manipulate the overall rate.

The unveiling of the scandal resulted in Barclays bank being fined £290 million in June 2012, while other multinational banks including Lloyds, UBS and ICAP have paid more than $3 billion worth of fines to British and American authorities as a result of an ongoing investigation.

Manipulating with Libor rate has resulted in billions worth of losses for savers. Libor is used by banks to borrow from each other and determines the cost of up to $350 trillion worth of global financial products, including mortgages, bonds and consumer loans.

Bank of America has so far been hit the most with fines. The country’s second largest lender has reached a record $16.65 billion settlement with US federal authorities for fraud with mortgage.

READ MORE: Bank of America agrees to record $17bn settlement over mortgage fraud

JPMorgan Chase Co. received a second largest fine in the American history. The bank has agreed to the details of a $13 billion settlement for selling “bad loans” before the US financial crisis.

READ MORE: Busted: JPMorgan inks record $13bn settlement

In September JP Morgan Chase was fined for $1 billion by U.S. and British regulators in probes related to the ‘London Whale’ trading scandal. The case saw a team of traders bet heavily on complex derivatives that ultimately resulted in $6.2 billion in losses. The Justice Department is still pursuing a criminal investigation over an alleged cover-up.

READ MORE:Ex-JPMorgan traders charged in $6.2bn ‘London Whale’ case

Article source: http://rt.com/business/207175-banking-cheating-financial-gain/