senior officials

China to Investigate Top Economic Policy Maker

May 12, 2013 by NewsMaker Leave a Comment

The agency, the Central Commission for Discipline Inspection of the Communist Party, which runs corruption inquiries involving senior officials, said Mr. Liu was “suspected of grave violations of discipline, and is now under investigation by the organization,” according to a report from Xinhua, the state news agency.

The report came more than five months after the journalist, Luo Changping, boldly challenged Mr. Liu and investigators by publicly accusing Mr. Liu of shady business deals and other wrongdoing like threatening to kill his mistress and overstating his academic qualifications. Mr. Luo laid out the charges on the Internet in early December. They lingered there, despite a denial by a spokesman for Mr. Liu and the power of censors to erase the postings, which fanned a public uproar.

Yet for months it appeared that Mr. Liu might survive the scandal. Since 2008, he has been a deputy chairman of the National Development and Reform Commission, an agency that oversees many areas of economy policy. Until March, he was also head of the National Energy Administration, and he made several public appearances after Mr. Luo made the accusations, according to Chinese news reports.

The Xinhua report did not detail the official allegations against Mr. Liu. But Mr. Luo, a deputy editor of Caijing Magazine in Beijing, said he was sure they were related to his accusations.

“I know there’s a direct connection, but I can’t say any more,” Mr. Luo said in a telephone interview.

“I had felt panicky before because nothing was happening, but I’ve breathed a sigh of relief now that this has happened,” he said, referring to the inquiry.

Mr. Liu, 58, could become a trophy in the effort by China’s new leader, Xi Jinping, to persuade disenchanted citizens that he is serious about ending abuses by officials. Since becoming party chief in November, Mr. Xi has vowed to clamp down on corruption, extravagance and self-enrichment; he has said both “flies” and “tigers” — junior and senior officials — would come under scrutiny.

Other officials under investigation for corruption and other crimes include Bo Xilai, a former Politburo member whose wife, Gu Kailai, was convicted and in August given a death sentence, which was then suspended, on charges of murdering a British businessman. In April, the former railway minister, Liu Zhijun, was charged with corruption and abuse of power.

The Central Commission for Discipline Inspection wields broad powers to detain officials and pursue secretive inquiries. In serious cases, the commission can hand officials over to the police and prosecutors to be investigated on criminal charges, which almost always end in convictions and sentences by party-run courts.

Despite Mr. Luo’s apparent vindication, Chinese leaders are wary of letting the public seize the initiative in fighting corruption. “What I really hope to see is more change at the institutional level to fight corruption, not just focusing on individual cases,” Mr. Luo said.

Article source: http://www.nytimes.com/2013/05/13/world/asia/china-eyes-liu-tienan-an-official-challenged-by-a-journalist.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: grave violations, party chief, senior officials

DealBook: A.I.G. Says It Will Not Join Lawsuit Against Government

January 10, 2013 by NewsMaker Leave a Comment

Mark Lennihan/Associated PressMaurice R. Greenberg, A.I.G.’s former chief executive, met with the company’s board on Wednesday.

9:09 p.m. | Updated

The American International Group will not join a lawsuit against the federal government over its $182 billion financial crisis bailout, the company said on Wednesday.

The decision by A.I.G.’s board follows a public uproar that erupted after The New York Times reported on Monday night that the company was weighing whether to join a $25 billion lawsuit filed by its former chief executive, Maurice R. Greenberg, on behalf of fellow shareholders.

That case argues that shareholders lost tens of billions of dollars when the government attached onerous terms to the bailout. Lawmakers and others had pilloried the company, saying that joining a lawsuit against its rescuers would make it “the poster company for corporate ingratitude and chutzpah.”

Fed Ties Rates to Joblessness, With Target of 6.5%

December 13, 2012 by NewsMaker Leave a Comment

It was the first time the nation’s central bank had publicized such a specific economic objective, underscoring the depth of its concern about the persistence of what the Fed chairman, Ben S. Bernanke, called “a waste of human and economic potential.”

To help reduce unemployment, the Fed said it would also continue monthly purchases of $85 billion in Treasury securities and mortgage-backed securities until job market conditions improved, extending a policy announced in September.

But the Fed released new economic projections showing that most of its senior officials did not expect to reach the goal of 6.5 percent unemployment until the end of 2015, raising questions of why it was not moving to expand its economic stimulus campaign.

At a news conference after a two-day meeting of the bank’s top policy committee, Mr. Bernanke suggested that the Fed was approaching the limits of its ability to help the unemployed.

“If we could wave a magic wand and get unemployment down to 5 percent tomorrow, obviously we would do that,” he said when asked if the Fed could do more. “But there are constraints in terms of the dynamics of the economy, in terms of the power of these tools and in terms that we do need to take into account other costs and risks that might be associated with a large expansion of our balance sheet,” referring to the monthly purchases of securities.

The changes announced Wednesday continue a shift that began in September, when the Fed announced that it would buy mortgage bonds until the job market generally improved.

As it did in September, the Fed sought to make clear on Wednesday that it was not responding to new evidence of economic problems, but increasing its efforts to address existing problems that have restrained growth for more than three years.

In focusing on job creation, the Fed is breaking with its long history of treating the inflation rate as the primary focus of a central bank. But the Fed is charged by Congress with both controlling inflation and minimizing unemployment. And over the last year, a group of officials led by Charles L. Evans, president of the Federal Reserve Bank of Chicago, convinced their colleagues that the Fed was falling short on the unemployment front.

The unemployment rate in November was 7.7 percent — it has not been below 6.5 percent since September 2008 — while the rate of inflation in recent months is lower than the 2 percent annual rate that the Fed considers healthiest.

“Imagine that inflation was running at 5 percent against our inflation objective of 2 percent,” Mr. Evans said in a September 2011 speech first describing the proposal. “Is there a doubt that any central banker worth their salt would be reacting strongly to fight this high inflation rate? No, there isn’t any doubt. They would be acting as if their hair was on fire. We should be similarly energized about improving conditions in the labor market.”

That argument was easier to win because inflation is under control, and the Fed expects the pace of price increases to remain at or below 2 percent through 2015. But in perhaps the clearest indication of the Fed’s philosophical shift, the Federal Open Market Committee said Wednesday that it would not relent in its focus on unemployment unless the medium-term outlook for inflation rose above 2.5 percent.

The change was supported by 11 of the committee’s 12 members. The only dissent came from Jeffrey M. Lacker, president of the Federal Reserve Bank of Richmond, who has repeatedly called for the Fed to do less. He says he believes the policies are ineffective and could inhibit the central bank’s ability to control inflation.

The Fed has held short-term interest rates near zero since December 2008, and it said in September that it intended to do so until at least mid-2015. The forecast was intended to reduce borrowing costs by persuading investors that interest rates would remain low for longer than they might have expected.

Mr. Bernanke said Wednesday that the shift to economic targets was not significant in the short term because the Fed still expected its goals to be reached no sooner than mid-2015. He said the bank chose 6.5 percent as its target because analyses showed that full-throttle stimulus beyond that level of unemployment could result in higher inflation.

Stock prices jumped after the Fed released its policy statement at midday, then began falling during Mr. Bernanke’s news conference about two hours later as he insisted that the Fed was not significantly increasing its efforts to bolster the economy. The Standard Poor’s 500-stock index rose 0.04 percent on the day.

Article source: http://www.nytimes.com/2012/12/13/business/economy/fed-to-maintain-stimulus-bond-buying.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: persistence, senior officials, treasury securities

Karzai Demands U.S. Hand Over Afghan Banker

December 12, 2011 by NewsMaker Leave a Comment

The former governor of the Central Bank, Qadir Fitrat, is living in Virginia. He fled Afghanistan, saying he feared for his life after he was involved in making public the massive fraud at Kabul Bank and removing its senior management.

Neither of the top bank officers nor any of the major shareholders, who include a brother of Mr. Karzai’s and a brother of the first vice president, Marshal Fahim, have been prosecuted, although all of them are still in Afghanistan.

Referring to Mr. Fitrat, Mr. Karzai said, “The government of the United States should cooperate and hand him over to us.”

“Bring Fitrat and hand him over to Afghanistan to make clear who is to blame,” he said. “But our hand can’t reach to America.”

Mr. Karzai made the remarks at an event sponsored by the United Nations to mark International Anti-Corruption Day. Afghanistan is one of the world’s most corrupt countries, tying for second worst in rankings by Transparency International, which tracks perceptions of global corruption.

Several Western diplomats and officials working with the Afghan government said they were disappointed by Mr. Karzai’s speech, in which he appeared to again shift much of the blame for corruption to foreigners. While foreigners are unquestionably involved in some of the corruption, they shared responsibility with the Afghans and were only peripherally involved in the Kabul Bank debacle.

Mr. Karzai also asked that foreigners who give aid to the country tell Afghan officials if government officials or their relatives ask for bribes. Foreign governments have helped finance anticorruption efforts, but the Afghans have often squashed high-profile corruption prosecutions of senior officials. That has been a continuing effort by NATO to comb through military contracts with Afghan businesses to detect corruption and terminate contracts in which there has been manifest abuse. That effort has gone on largely behind the scenes, so it is difficult to tell if it has had much success.

Ryan C. Crocker, the American ambassador, said he believed that corruption was now being taken more seriously, although progress was slow and none of the main people responsible for the Kabul Bank fraud had been prosecuted. The Afghan government lost more than $850 million in the bank’s collapse. While some of that money has been recovered — more than expected, according to several officials — the government will probably have to pay $450 million to $500 million to cover losses.

“I am told they have a series of indictments that have been kept in the pending file as they concentrate on asset recovery,” Mr. Crocker told reporters on Saturday. “Look, it’s hardly a perfect world. And it isn’t going to be for quite some time. What I look for is a trajectory: Is the line going up or down? Very cautiously and very incrementally, I see it going up. In other words, corruption is being taken more seriously at higher levels.”

“Does that mean we’ve turned the corner? We’ll see,” he added.

Mr. Karzai’s focus on Mr. Fitrat and his jab at the United States are the latest in a series of similar comments he has made about the fraud at Kabul Bank. In an interview with the German magazine Der Spiegel last week, he also blamed the United States for Kabul Bank’s troubles, saying, “The Americans never told us about this.”

“We believed a certain embassy was trying to create financial trouble for us,” he said. “We felt the whole bank scam was created by foreign hands.” Mr. Karzai declined to be specific, but the American Embassy is the only one that has deeply consulted with the Afghan banking system.

Article source: http://www.nytimes.com/2011/12/12/world/asia/karzai-demands-us-hand-over-afghan-banker.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: global corruption, senior management, senior officials

S.E.C. Punishes 8 Workers in Mistakes Related to Madoff

November 12, 2011 by NewsMaker Leave a Comment

The sanctions stem from Inspector General H. David Kotz’s 2009 report on the agency’s dealings with Mr. Madoff, according to John Nester, an S.E.C. spokesman. Mr. Kotz had urged the S.E.C. to act on an “employee-by-employee basis” to prevent a recurrence of mistakes that kept the agency from halting the fraud.

Of the 21 people “whose performance or conduct were called into question” by Mr. Kotz, 10 were not subject to review because they had already left the S.E.C., Mr. Nester said. Of those remaining, nine were recommended for discipline, and one of them left the agency before the matter was resolved, he said.

“We thoroughly examined all factors relevant to the imposition of discipline, including employees’ performance history — both before and since the Madoff events,” he said.

An official who was recommended for firing was given a 30-day suspension and a pay reduction after it was determined that the firing would hurt agency operations, Mr. Nester said. Several others were given suspensions ranging from three to 30 days, with some reduced in pay grade. Two people received “counseling memos,” the mildest level of agency discipline.

“The S.E.C. could have uncovered the Ponzi scheme well before Madoff confessed” in 2008, according to Mr. Kotz’s report, which detailed the agency’s failure to act on tips about Mr. Madoff’s multibillion-dollar fraud. The internal investigation didn’t find misconduct or “inappropriate influence” from senior officials in reviews of Mr. Madoff, who is serving a 125-year prison term after he pleaded guilty in 2009 to defrauding clients.

The S.E.C. hired a Washington law firm, Fortney Scott, to make disciplinary recommendations, with the S.E.C. chairwoman, Mary L. Schapiro, making the final decisions, Mr. Nester said. He declined to identify employees or the offices where they worked.

Article source: http://feeds.nytimes.com/click.phdo?i=d1d863d9488bbdf464c4058590b5f5b3

Filed Under: Business News Tagged With: performance history, ponzi scheme, senior officials

Italy Sees Borrowing Costs Fall

August 30, 2011 by NewsMaker Leave a Comment

But Rome’s financial position remains precarious and investors said it would require continued support from the European Central Bank to avoid seeing its funding costs rise again.

The auction of 10-year bonds was the first since the E.C.B. started buying Italian and Spanish debt in the secondary market three weeks ago — an extraordinary measure begun after their borrowing costs soared to 6 percent.

On Tuesday, the Italian Treasury sold €3.75 billion, or $5.4 billion, of 10-year securities at 5.22 percent. That compared to a rate of 5.77 percent at a sale of similar bonds in late July.

Demand at the auction was 1.27 times the amount on offer, down from the level at the last auction of 1.38 times. The Treasury also sold €2.99 billion of bonds maturing in 2014.

“Italy is still able to fund itself at ‘market rates’ but those are being artificially depressed by the E.C.B.’s bond buying,” said Eric Wand, an interest rate strategist at Lloyds Bank Corporate Markets in London.

He said that there had been speculation among traders that the E.C.B. had bought Italian bonds in the market after the auction. “If the E.C.B. was not around, the situation would be a lot worse,” Mr. Wand said.

The E.C.B. is not permitted under European treaties to buy bonds directly from governments, meaning it can only provide secondary market support.

The yield on the country’s benchmark 10-year bond was stable around the auction at about 5.13 percent. It has dropped more than 100 percentage points since the E.C.B. began buying Italian and Spanish debt on Aug. 8.

Italy had €1.6 trillion of debt at the end of last year, according to its debt management office, making it Europe’s biggest national bond market.

Seeking to address concerns about its fiscal position, Prime Minister Silvio Berlusconi and other senior officials met Monday to amend a recently drawn-up fiscal package designed to net €45.5 billion in savings. Among the changes being discussed are dropping a tax on the high earners and limiting funding cuts to regional governments, Bloomberg News reported from Rome.

The Lower Chamber of Parliament will start debating the program next week and it is expected to be voted on by mid-October.

Euro-area governments are working on ratifying changes aimed at bolstering the region’s primary bailout mechanism, known as the European Financial Stability Mechanism. But analysts said that will take time and in the interim, countries like Italy and Spain will continue to need support from the E.C.B.

Last week, the bank bought €6.651 billion in euro-area bonds, and that figure is expected by analysts to rise this week.

Spain is also planning a bond sale of five-year paper on Thursday.

While the Italian bond auction appeared tepid, there was also more evidence Tuesday that the European economy is slowing amid the escalation in the sovereign debt crisis and recent turmoil in financial markets.

The European Commission’s economic sentiment index for the euro area fell to 98.3 in August from a revised 103.0 in July. The reading was lower than analysts’ estimates of 100.5 and was the lowest level since February 2010.

The weakening in sentiment in August was across the board, with both industry and services confidence shedding around 4 percentage points, while consumer confidence was down more than 5 percentage points.

“All in all the current level of the economic sentiment indicator, if confirmed in September, probably indicates that the recovery in the euro-zone has come to a standstill,” said Peter Vanden Houte, an analyst at ING. “A small negative growth figure in the third quarter seems no longer excluded.”

Bucking the general trend, however, Italian business confidence unexpectedly rose in August as manufacturers become more optimistic about demand for their goods, another report showed.

Over all, the recent data on the economy and growth are adding to expectations that the inflation rate in the euro area may have peaked.

Jean-Claude Trichet, the E.C.B.’s president, told a committee of the European Parliament on Monday that the economic recovery might be weaker than expected, suggesting the bank might lower its growth and inflation assessments.

Preliminary inflation figures for August from Germany and Spain have both been below market expectations. Euro-area data will be released Wednesday.

Stock markets were mixed Tuesday. The FTSE-100 rose by over 2 percent in London, following a public holiday in Britain Monday. But other European indexes declined. The SP 500 futures contract slid 0.5 percent, indicating a weaker start on Wall Street.

Article source: http://feeds.nytimes.com/click.phdo?i=f0ca778617808330cb3333f818d7fefb

Filed Under: Business News Tagged With: 10 year bonds, bond market, senior officials

DealBook: European Regulator Criticizes U.S. on Banker Bonuses

June 2, 2011 by NewsMaker Leave a Comment

Olivier Hoslet/European Pressphoto AgencyMichel Barnier, the European Union’s top financial regulator.

5:43 p.m. | Updated

LONDON —The European Union’s top official for banking regulation has accused the Obama administration of being too lax on bonuses for bankers and not putting in place capital rules fast enough.

Michel Barnier, the European commissioner for the internal market and services and a former foreign minister of France, warned that a failure to unify financial regulation in Europe and the United States could give some banks an unfair advantage over their foreign rivals.

“The level playing field must be a reality, not an empty slogan,” Mr. Barnier wrote in a letter to the Treasury secretary, Timothy F. Geithner, whom he is to meet in Washington on Thursday.

At the meeting, Mr. Barnier indicated that he planned to discuss the difference in progress between the United States and the European Union in tightening financial regulation and to urge Mr. Geithner to bring American rules closer to those of Europe.

As lawmakers on both sides of the Atlantic push ahead with their own changes to financial regulation, senior officials and banking executives accused one another of lacking the political will for stricter rules. The issue has also been a great source of controversy on Wall Street, where banking executives warned about so-called regulatory arbitrage.

“As you may recall, we implemented Basel II already in 2006,” Mr. Barnier wrote in the letter, which was reported earlier by The Financial Times. “It is essential to respect the deadlines agreed last year.”

Mr. Barnier also criticized the American approach to restrictions on bonuses as leaving “too much latitude” for financial institutions to “circumvent globally agreed principles.”

“I think you agree with me that ‘bankers’ bonuses’ is a matter that continues to cause public outrage,” Mr. Barnier wrote in the letter. “Getting this matter right is key to restoring our citizens’ confidence in the financial system — and ultimately — their confidence in the public authorities regulating the financial institutions.”

The United States and other major economies agreed at the Group of 20 meeting in Pittsburgh in 2009 to find ways to limit incentives for excessive risk taking, which was partly blamed for the financial crisis. But Mr. Barnier argued that only the European Union had imposed binding rules for bonuses.

Under those rules, which were approved last year, banks must defer as much as 60 percent of bonuses to senior managers for at least three years. Half of the remaining amount must be paid in shares as opposed to cash.

Mr. Barnier also plans to ask Mr. Geithner for an update on the writing of Dodd-Frank rules for derivatives markets, credit rating agencies and accounting standards.

Article source: http://feeds.nytimes.com/click.phdo?i=65ee6e2d39e6338e5ce66fd4eb4059be

Filed Under: Business News Tagged With: financial institutions, senior officials, slogan