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February 19, 2015

Senior Telegraph writer Peter Oborne alleges paper suppressed reports on HSBC

Filed under: Archived,Banking,Europe,HSBC,Journalism,Media,United Kingdom — admin @ 5:00 am

Senior Telegraph writer Peter Oborne alleges paper suppressed reports on HSBC

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Thursday, February 19, 2015

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Peter Oborne, former chief political commentator at British broadsheet newspaper the Daily Telegraph, has alleged the paper suppressed and under-reported stories involving banking giant HSBC so as to avoid a loss of advertising revenue. In a public resignation from the paper published on the openDemocracy website on Tuesday, the veteran journalist and columnist alleges the division between advertising and editorial had not been kept watertight and that editors were committing a form of “fraud” on readers of the newspaper.

In Oborne’s article, he details how he submitted a story to the Telegraph regarding HSBC closing a number of prominent British Muslims‘s accounts — despite assurances to the contrary, the story was not published by the paper. This led to Oborne investigating other coverage of HSBC in the newspaper. He cites the example of a story written by the Telegraph banking correspondent Harry Wilson on problems with HSBC’s accounts, which Oborne claims was quietly removed from the Telegraph website. Oborne says the failure of the Telegraph to cover HSBC is also present in the relative coverage given in November 2014 after the bank had to allocate a fund of £1 billion to compensate customers, as well as an investigation into manipulation of the currency market: Oborne argues these developments were given considerable coverage in competing newspapers including the Guardian, Times, and Mail but the Telegraph covered them only briefly several pages into the business section.

Oborne’s article alleges a number of other examples of suppression — calling the coverage of pro-democracy protests in Hong Kong “bizarre”, and noting that the paper under-reported news of false accounting at Tesco but gave significant prominence to stories about the company without a critical edge.

Following Oborne’s article, a spokesman for the Telegraph responded: “Like any other business, we never comment on individual commercial relationships, but our policy is absolutely clear. We aim to provide all our commercial partners with a range of advertising solutions, but the distinction between advertising and our award-winning editorial operation has always been fundamental to our business. We utterly refute any allegation to the contrary. It is a matter of huge regret that Peter Oborne, for nearly five years a contributor to the Telegraph, should have launched such an astonishing and unfounded attack, full of inaccuracy and innuendo, on his own paper.”

Media commentator Roy Greenslade, writing for the Guardian, described Oborne’s allegations against the Telegraph as “dynamite” and said they go “to the heart of a paper’s credibility”. The Barclay brothers, owners of the Telegraph, “are being held to account”, according to Greenslade, and Oborne “has shone a light on a dark reality”.



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October 3, 2013

Bank of America leads Consumer Financial Protection Bureau complaints about mortgages

Bank of America leads Consumer Financial Protection Bureau complaints about mortgages

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Thursday, October 3, 2013

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A review this week by Wikinews of US Consumer Financial Protection Bureau (CFPB) complaints about mortgages in the United States shows Bank of America leads all lending institutions in complaints.

Since mortgages complaints were recorded in December 2011, 77,622 total have been added to CFPB’s database. 29.2% of these complaints involved Bank of America, with the second most received by Wells Fargo, accounting for 15.5% of all complaints. JPMorgan Chase ranked third by volume of complaints with 9.8%. Ocwen was fourth with 8.7% and Citibank was fifth with 4.8%. Nationstar Mortgage; Green Tree Servicing, LLC; HSBC; PNC Bank; U.S. Bancorp; OneWest Bank; SunTrust Bank; Flagstar Bank; and Select Portfolio Servicing, Inc. each had between 1.0 and 3.8% of total complaints. The remaining 14.4% of all complaints about consumer mortgages were divided between about 530 other lending institutions.

The Motley Fool reported last month that for the past fiscal quarter, the biggest US based mortgage lenders were from first to fifth Wells Fargo, JPMorgan Chase, Bank of America, Quicken Loans and U.S. Bancorp.

According to the US Federal Reserve, debt for family residences stands at US$10.706 trillion for the second quarter of 2013. As of the end of June of this year, Bank of America is the United States’s second largest commercial bank with US$1.343 trillion in domestic assets. Wells Fargo is the fourth largest commercial bank with US$1.251 trillion in domestic assets. JPMorgan Chase is the largest US commercial bank with US$1.329 trillion in domestic assets and US$1.947 trillion in total assets.

The mortgage complaints in the CFPB report include several subproducts. Conventional fixed mortgages account for 27.1% of all complaints. Conventional adjustable mortgages account for 10.0%. FHA mortgages account for 7.7% of all complaints. Home equity loans or lines of credit account for 3.8% of all complaints. VA mortgages are 1.4% of all complaints. Second mortgages and reverse mortgages each account for 0.6% of complaints. The remaining 48.7% of complaints are about other mortgages or other mortgage issues. A few years ago, FHA loans accounted for about 10% of all US mortgages while VA loans accounted for about 3%. Prime loans accounted for over 75% of the market and the rest were subprime mortgages.

Total complaints against mortgage companies by state
Image: Laura Hale.

California leads all states by volume of complaints with 14768. It is followed by Florida, New York, Georgia and Texas. When complaints are divided by a state’s total population, New Hampshire leads. The state is followed by Washington D.C., Maryland, Georgia and Florida. Complaints do not correlate with national rankings for August’s foreclosure rate by state where Nevada topped the list, followed by Florida, Ohio, Maryland and Delaware.

Two zip codes account for over 1,000 total complaints between them. 565 complaints originated in the 48382 zip code, which is in Commerce Township, Michigan, located in suburban Detroit. 553 complaints originated in the 33071 zip code, in Coral Springs, Florida. According to real estate website Zillow, there are currently 1,033 properties in foreclosure in Coral Springs while Commerce Township only has 131 properties currently in foreclosure. Four other zip codes have 100 plus complaints originating from them. 91730, in Rancho Cucamonga, California, had 158 complaints. 33409, in West Palm Beach, Florida, had 132. 92626, in Costa Mesa, California, had 125 complaints. 92660, in Newport Beach, California, had 122 complaints. Respectively, the towns had 534, 1,068, 153, and 134 properties currently in foreclosure. These numbers are higher than for the cities of a few sampled zip codes where there was only one complaint, such as Gold Hill, Oregon which has 4 properties in foreclosure, and Decatur, Illinois which has 6 properties in foreclosure.

For the top 5 lenders by volume of complaints, the percentage of complaint types against them.
Image: Laura Hale.

The CFPB categorizes complaints into six categories: “Loan modification, collection,foreclosure” or problems when a person is unable to pay; “Loan servicing, payments, escrow account” or problems with making a payment; “Application, originator, mortgage broker”; “Credit decision / Underwriting”; “Settlement process and costs”, and “Other”. The CFPB says the complaint types indicate consumers “appear to be driven by a desire to seek agreement with their companies on foreclosure alternatives. The complaints indicate that consumer confusion persists around the process and requirements for obtaining loan modifications and refinancing, especially regarding document submission timeframes, payment trial periods, allocation of payments, treatment of income in eligibility calculations, and credit bureau reporting during the evaluation period.” Currently, 59.6% of all complaints against lenders deal with being unable to pay. 25.1% deal with problems in making a payment. 7.0% have to do with the application process.

Of the complaint-heavy zip codes, for 48382 in Commerce Township, Michigan, 98.9% of all complaints have to deal with being unable to pay. Accounting for 23.4% of all mortgage complaints in Commerce Township, 132 of the complaints for being unable to pay were made regarding Bank of America, accounting for 97.8% or all but 3 complaints against them from the zip. 121 of the Bank of America responses in Commerce Township were closed with explanation and 12 were closed with non-monetary relief. 33071 in Coral Springs is different, with 537 of the 553 complaints being categorized under other. Only 11 complaints relate to foreclosure and issues with being able to pay. 92626 in Costa Mesa, where 32% of the mortgage complaints were about Bank of America and 26.4% were about Wells Fargo, had 93.6% of its complaints dealing with being unable to pay. 5 total complaints dealt with payment issues and 3 dealt with applications.

Beyond regional variance in complaint types lodged, the top five mortgage lenders by volume of complaints all had being unable to pay as their top complaint category, ranging between 55.8% for Citibank and 69.4% for Bank of America. Problems with payment accounted for the second largest area of complaints, with Ocwen having the largest percentage of complaints at 31.9% and Bank of America having the smallest at 18.8%. Foreclosure was the top area of complaints for a number of other lending institutions including 1st Alliance Lending, OneWest Bank, Ally Bank, Banco Popular de Puerto Rico, Bank of the West, BMO Harris, BOK Financial Corp, Caliber Home Loans, Inc, Capital One, Deutsche Bank and EverBank.

By state complaints against mortgage lenders by month
Image: Laura Hale.

Nationally, complaints reached a high of 5,840 for January 2013, 1,107 more than the next highest month of April 2013. The total emerging for September is the second lowest since records were first kept in December 2011. On a state by state level, this pattern largely repeats with a major exception for Florida which saw a peak of 849 complaints in June 2012. Then, as now, Florida was one of the top five states in the nation in its foreclosure rate. The national January spike came as the Qualified Mortgage standard required by the The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 came into play. It required mortgage lenders to take steps to insure borrowers could repay their mortgages.

Bank of America’s complaint volume follows the national trend, with a spike in January 2013 with 1,925 total complaints. Unlike nationally, the next month by volume of complaints was February of this year with 1,598 complaints. Prior to that, the highest month was May 2012 with 1,418 complaints. The lowest volume of complaints is September this year with 334.

Wells Fargo matched national trends for volume of complaints by month, with the exception of the current month being the lowest on record for number of complaints with 197 compared to the next lowest month, December 2011, when they had 221. JPMorgan’s complaint volume by month spiked in January and March of this year with 504 complaints. April of this year was the next highest month with 493 complaints, edging out May of last year with 488 complaints. September this year is on track to be the lowest month by complaint volume.

The federal government shutdown is unlikely to impact the current mortgage situation in the United States directly for most consumers, though mortgage processing by the Federal Housing Administration could be slower, resulting in fewer mortgages processed.



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April 6, 2009

Asian countries call for global currency

Asian countries call for global currency

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Monday, April 6, 2009

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Leaders and central banks in Russia, China, Malaysia, Indonesia, Thailand, and Kazakhstan have called for an international currency system.

Speaking on April 1 in advance of the G-20 summit in London, Russian president Dmitry Medvedev argued that the international finance system needed a “new construction” including “new currency systems”, saying that such a new system could be the purpose of a revamped IMF and World Bank. The IMF was originally founded in 1946 as the overseer of the Bretton Woods system, which from its founding until the 1970s tied the western world’s currencies to the US Dollar, which was in turn backed by gold. Russia’s proposal was for the new currency to serve as a reserve currency, one which would take the place of the dollar, euro, and other heavily-traded currencies as an international standard of exchange.

Medvedev’s comments are a reversal of Russian position from a lukewarm response following a looser outline for a worldwide currency by Kazakhstani president Nursultan Nazarbayev. On March 11, Nazarbayev suggested the establishment of the “acmetal”, a portmanteau of “acme” and “capital”, as a reserve currency replacing the ruble in international transactions, first for Central Asia and then worldwide. 1999 Economics Nobel laureate Robert Mundell, speaking to the Daily Telegraph, endorsed the idea, saying “It would be a very good idea if the G-20 took that idea up in London”.

2001 Nobel economics prize winner Joseph Stiglitz, meanwhile, said the new currency could come about quickly if it was based on an expansion of the IMF’s already established system of Special Drawing Rights, units of exchange used by the IMF which already have some of the features of currency. Stiglitz argued that, as the US dollar has become the standard global reserve currency, it has inadvertently created a system which hurts the world economy. “It’s a net transfer, in a sense, to the United States of foreign aid,” he argued, reasoning that when other countries purchase US dollars in order to use them on international markets (such as for the buying and selling of petroleum), they effectively give the US a zero-interest loan — sometimes at times when they can least afford it. Stiglitz made his comments as head of a United Nations panel of economists giving recommendations to address the global financial crisis.

In the weeks leading up to the G-20 conference, the People’s Republic of China also began discussing a new system for reserve currencies. In a March 23 speech, Zhou Xiaochuan, governor of the People’s Bank of China, endorsed a new reserve currency, saying “the desirable goal of reforming the international monetary system, therefore, is to create an international reserve currency that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies.” Zhou went on to endorse the expansion of the SDR system in the long-term creation of a reserve currency government by the IMF. While Zhou did not mention the US dollar specifically, analysis by Qu Hongbin, chief China economist for HSBC, for the Financial Times said that the speech “is a clear sign that China, as the largest holder of US dollar financial assets, is concerned about the potential inflationary risk of the US Federal Reserve printing money”.

China holds $740 billion as assets; inflation in the US economy, which has been low in recent years, would directly cause those assets to lose value.

While the Chinese government has engaged in currency swaps with several other growing economies, such as South Korea, Argentina, Malaysia and Indonesia, the Chinese Yuan cannot be used itself as a reserve currency as it cannot be freely traded on the global market.

The Chinese-Russian proposal was not entered onto the agenda at the G-20 meeting itself. Nonetheless, British Prime Minister Gordon Brown said that the G-20 was open to considering the proposal if and when a detailed one is presented. United States President Barack Obama, meanwhile, endorsed the continuation of dollar supremacy, saying that the US dollar is “extraordinarily strong” and arguing that its strength was the result of the intrinsic stability of the United States economic and political system; US treasury secretary Timothy Geithner had, the week before, made comments that while he supported an expansion in the SDR mechanism he rejected the idea of a global currency. Rather than change the role of SDRs, the G-20 meeting instead added $250 billion in support to the fund backing SDRs.

After the G-20 conference ended on Thursday, Malaysia’s The Star BizWeek reported that the central banks of Indonesia, Malaysia and Thailand had endorsed the Chinese proposal. All three countries have close economic ties with China and suffered heavily from the collapse of their currencies in the 1997 Asian Financial Crisis; the sudden growth in the value of the US dollar relative to those countries’ native currencies sharply increased debt in Southeast Asia’s economies, leading to a wave of bankruptcies.

International reaction from other economies has been mixed and guarded. Luiz Inacio Lula da Silva, President of Brazil, said that the currency proposal was important to discuss but did not give extensive comment. And while UPI reports that India supported the SDR proposal at the G-20 conference, the Indian Press Trust quotes Indian Prime Minister Manmohan Singh as saying last month, “It is too early to talk about common currency.”

Calls for an independent global reserve currency are not new. In 1944, John Maynard Keynes proposed the “bancor”, a unit like the SDR supported by a basket of commodities. Keynes’ idea was rejected and the US dollar took the equivalent role under the Bretton Woods system. Keynes proposed that the bancor system would be reinforced by a tax on participating countries’ current accounts, the difference between their exports and their imports, in order to encourage balanced trade. Meanwhile, monetary unions have become more popular since the end of the gold standard, with most of the European Union now trading the euro, and several countries outside the EU using it as a de facto currency; five West African countries adopting the eco at the end of this year; and the African Union planning to introduce the afro in 2028. Proposals for a North American currency union based around the so-called “amero” have been frequently discussed as the focus of conspiracy theories in the United States, but none of the US, Canada or Mexico have actively pursued the establishment of any such monetary union, however the dollar is the currency of several Latin American countries.



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October 10, 2008

WTO calls meeting on trade finance and economic crisis

WTO calls meeting on trade finance and economic crisis

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Friday, October 10, 2008

The head of the World Trade Organization, Pascal Lamy, has called for a meeting to assess the trade finance situation, including the impact on developing countries. The meeting, which is schedule for November 12, will allow credit institutes and government officials to review the current trade credit situation.

Pascal Lamy in 2003
Image: Agência Brasil.

“A number of WTO members, in particular developing countries, have flagged the problems they are facing in arranging trade financing,” wrote WTO Director-General Lamy.

“The purpose of our next meeting will be to review how the international market for trade-financing is faring in view of the current very difficult conditions on international financial markets,” he continued.

Credit is vital to trade with around 90 percent of the US$14 trillion in world trade financed by credit. While this market has done well compared to other credit markets, bankers are suggesting that problems might occur shortly. Rates on these trade loans have increased by 3 percent.

Developing countries have seen several recent years of positive growth but the effects of the global financial crisis on these countries have pushed growth levels down.

Lamy has asked that the heads of the World Bank, International Monetary Fund, and other regional development banks to attend. He also invited the five leading commercial banks in trade finance: Citigroup, Commerzbank, Royal Bank of Scotland, JPMorgan Chase, and HSBC.

Lamy also said that work on the Doha Development Round of trade is continuing but did not say if it would be finished this year.



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January 19, 2008

Fire reported at One HSBC Center in downtown Buffalo, New York

Fire reported at One HSBC Center in downtown Buffalo, New York

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The tower in downtown Buffalo.
Image: Skoniecz40.

Saturday, January 19, 2008

Buffalo, New York — According to scanner frequencies of the Buffalo, New York fire department, smoke was reported on at least five floors at the northeast side at One HSBC Center in downtown Buffalo. The call came in around 10:50 p.m. (Eastern Time) on Friday January 18, not long after the ending of the NHL hockey game: the Sabres versus the Atlanta Thrashers which was held at HSBC Arena, a few blocks away from the tower.

According to firefighters communications the people that were on the 22nd floor made it out of the building safely. Firefighters saw “white smoke of varying intensities, believed to have been electrical” on floors 9 through 13. The source of the smoke was not identified, but the first alarm was on the 13th floor, followed by the 10th then the 9th.

Because of the cold temperatures and wind chills in the 10’s, workers at the tower were allowed back into the first floor, which has been cleared by firefighters earlier in the call.

At 11:41 p.m., firefighters gave the all clear to begin packing up with no conclusion as to where the smoke originated. They used ventilation fans to clear the floors of smoke and then shut them off to see if anymore smoke would reappear, which it did not. Remaining employees and personnel have since been allowed back to work. No damage is reported.

The tower, built in 1970, is the tallest in Buffalo and is home several agencies including the Consulate General of Canada. HSBC currently occupies 75% of the tower which has 40 floors. It stands at 529 feet (161.2 meters) tall.



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January 13, 2008

Interest rate increases prompt criticism of new Australian treasurer

Interest rate increases prompt criticism of new Australian treasurer

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Sunday, January 13, 2008

Treasurer of Australia Wayne Swan.
Image: james_tCA.

Australia’s Opposition Party laid blame for recent interest rate increases at the feet of new federal treasurer Wayne Swan. Swan, in turn, criticised the banks, saying they risk being “judged very harshly” if they “try to take advantage of the U.S. sub-prime crisis by lifting interest rates excessively.”

Following the National Australia Bank (NAB) lifting its rates 0.12 percent independently of the Reserve Bank of Australia, Swan consulted with Australian Prudential Regulation Authority (APRA), which monitors bank liquidity, and was advised that rises of around 0.1 percent were reasonable.

However, following his moderate response to NAB’s rise, ANZ Bank announced a 0.2% rise, prompting Swan’s warning. Since then other banks, including Westpac, BankWest and Bendigo Bank, have announced rises between 0.1 and 0.2 percent, while St.George Bank lifted its rates by 0.2 percent.

Former Howard government treasurer Peter Costello criticised Swan as inexperienced, saying, “They’ve taken the opportunity of a new treasurer who is not on top of the job to increase their margins, and he came out and, on behalf of the Labor Party, he approved it.” While opposition treasury spokesman, Malcolm Turnbull claimed the treasurer was “all over the shop.”

HSBC chief economist Dr John Edwards said, “It is all a learning experience for him but it is very difficult to say anything that is less than critical about the banks. The ANZ was the real lesson for Swan because they betrayed his belief, which was probably well informed, the banks would be reasonable and keep any rise to about the level imposed by the NAB.”



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