It’s a taxing problem for the wealthy Greeks

By Tracy Corrigan, Assistant Editor


Published: 9:44PM GMT 04 Mar 2010

Belatedly, this is what the Greek government is undertaking. It is a crucial
element in the latest austerity package, which includes a cut in public
sector bonuses, a freeze on all pensions and a hike on value added tax.

“These measures substantially boost the government’s chances of reducing
the deficit by 4 percentage points to 8.7pc of GDP this year,”
according to Deutsche Bank.

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Debt markets suffer a crisis of confidence

By Ben Harrington, Markets Reporter


Published: 9:46PM GMT 01 Mar 2010

Confidence was initially hit by mounting worries about the prospect of a hung
parliament.

Bank of England data also showed that in January foreign investors sold the
most gilts in nine months, offloading £1.49bn of government bonds – although
domestic investors bought £2.5bn of gilts, the first increase since
September.

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Shares tumble and pound plummets as crisis looms for the Eurozone

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By
Lucy Farndon
Last updated at 1:01 AM on 06th February 2010

Stock markets tumbled worldwide yesterday amid fears that crippling debt levels in southern Europe could destabilise the euro and derail economic recovery. Portugal and Spain became the latest Eurozone countries to cause a panic among investors, as economists cast doubt on their ability to control their national debt. With Greece already expected to need a bail-out of up to £16billion from the European Central Bank, there are real concerns that the Eurozone may become unviable in its present form.

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Deutsche Bank to absorb cost of bonus supertax

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Deutsche Bank has become the first bank to disclose the impact of Britain’s bonus tax, saying that it would take a €225 million (£196 million) charge to cover the levy.
Strong sales and trading resulted in a swing back to profit and Deutsche signalled that it was paying its 8,000 UK staff an average bonus of about €62,500 for last year.
However, payments for its senior London-based investment bankers will be much higher because Deutsche has said it would spread the pain of the tax across its global bonus pool.
The move contrasts with other banks. After pressure from shareholders and senior bankers in other countries, Credit Suisse reduced compensation for its UK managing directors by 30 per cent from their planned level, while Goldman Sachs capped its 100 UK partners at £1 million each.

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Davos: Banks ‘wake-up to reality’ on wind-down levy

Barney Frank, the chairman of the US House Financial Services Committee, today
praised bankers for their backing of a global wind-down fund, branding the
move as a “major recognition of reality”.

On the last full day of the World Economic Forum in Davos, Mr Frank, the
Democrat congressman, lauded bankers after some of the sector’s biggest
lenders, led by Deutsche Bank, revealed they would support a levy that would
cover the cost of a bank’s collapse – shifting the burden from taxpayers.

Mr Frank told Reuters: “Dropping the objections to (the levy) in
principle is a major recognition of reality by them.”

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Davos: Banks make ‘positive progress’ on reforms

Bankers and politicians emerged from crunch talks in Davos today saying
“positive” progress had been made on banking sector reforms.

A group of banking chiefs met Chancellor Alistair Darling and US regulators on
the sidelines of the conference to discuss a global bank levy, capital
adequacy and remuneration issues

Mr Darling said there was agreement on the need to increase capital and
so-called living wills, which would allow a quick wind-down of a failed bank.

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Davos: Banks ‘wake-up to reality’ on wind-down levy

Barney Frank, the chairman of the US House Financial Services Committee, today
praised bankers for their backing of a global wind-down fund, branding the
move as a “major recognition of reality”.

On the last full day of the World Economic Forum in Davos, Mr Frank, the
Democrat congressman, lauded bankers after some of the sector’s biggest
lenders, led by Deutsche Bank, revealed they would support a levy that would
cover the cost of a bank’s collapse – shifting the burden from taxpayers.

Mr Frank told Reuters: “Dropping the objections to (the levy) in
principle is a major recognition of reality by them.”

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Davos 2010: the people, the place, the politics

Josef Ackermann, chief executive of Deutsche Bank, made it very clear that in his view splitting banks into smaller ones would damage the economy.

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Surprise fall in UK unemployment

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Cooper: ‘Unemployment will rise’

The number of people unemployed in the UK has fallen unexpectedly for the first time in 18 months.Total unemployment stood at 2.46 million for the three months to November, down 7,000 on the figure for the previous three months. It ends the continuous rise in unemployment that begin in the summer of 2008 after the recession began. Ministers welcomed the figures but warned that joblessness could rise again in the coming months. The rate of unemployment now stands at 7.8%, down from the 7.9% reported last month, the Office for National Statistics (ONS) said. Meanwhile, the number of people claiming Jobseeker’s Allowance fell to 1.61 million in December. That is a fall of 15,200 over the month - significantly greater than the 2,500 anticipated by analysts. The number of 16-24-year-olds out of work also fell over the three-month period between September and November, down from 943,000 to 927,000. Part-time impactBut the fall in unemployment was fuelled partly by an increase in people taking part-time work. The number of people in part-time employment increased by 99,000 over the quarter to reach a record high of 7.71 million.

More than a million of these were working part-time because they could not find a full-time job - the highest figure since records began in 1992, according to the ONS. The number of people neither employed nor looking for work - not included in unemployment figures - was up to 21.2% of the population. That was the highest rate since August 2007. George Buckley, chief UK economist at Deutsche Bank, said workers were more willing in this recession to accept low pay and shorter hours in return for keeping their jobs, helping to stem job losses. “These figures are encouraging,” he said. “In previous recessions it took years for unemployment to stop rising, but that hasn’t happened this time.” Mr Buckley admitted previous predictions of the unemployment rate reaching 10% now looked unrealistic. ‘Still tough’The figures, which came as a surprise to many analysts, were welcomed by Work and Pensions Secretary Yvette Cooper. “The jobs market is still tough for a lot of people, but the drop in unemployment and youth unemployment is very welcome,” she said.

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Britain’s bonus tax will raise about £300m from JP Morgan

By Philip Aldrick, Banking Editor

Published: 1:28PM GMT 15 Jan 2010

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JP
Morgan’s full-year results reveal that its 24,654 investment
bankers will share $9.3bn (£5.7bn) in compensation after the company almost
doubled net income last year from $5.6bn to $11.7bn. Around 5,000 bankers
operate in London, making their share of the pool about $1.9bn – of which
roughly $1bn will be paid in bonuses.

Analysts expect the Government’s 50pc “payroll tax” on all bonus payments
above £25,000 to raise between $400m and $500m, or £250m-£300m. Similar
levels of tax are expected to be paid by the likes of Goldman Sachs,
Deutsche Bank and Barclays. Analysts now expect the tax, which the Treasury
said would net £550m when it was unveiled in December’s the pre-Budget
report, to raise £2bn to £3bn.

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