1 Bleak day for British banking (Jill Treanor in The Guardian) The reputation of Britain's banking industry took a fresh battering when HSBC was slapped with a record $1.9bn fine by US regulators for money laundering and sanctions busting, the first arrests were made in the Libor-rigging investigation, and nationalised Northern Rock handed the taxpayer a £270m bill to compensate customers affected by a mistake in its paperwork.
The US department of justice (DoJ) detailed how HSBC, Britain's biggest bank, allowed drug traffickers to launder billions of dollars in the US and billions more to be moved across borders to countries facing sanctions, such as Burma, Cuba and Libya. The fines are just the latest setback for an industry which is reeling from the revelations in the Libor investigations at Barclays, where traders offered each other bottles of Bollinger to fix rates. The scandal prompted the departure of Barclays' chairman Marcus Agius, chief executive Bob Diamond and Barclays also received a £480,000 fine from Spanish authorities for under-rating the risk of bonds it sold to clients in 2008.
The rest of Britain's banks are now braced for a series of fines from the Financial Services Authority for manipulation of Libor. The Royal Bank of Scotland and Swiss bank UBS are expected to settle with the FSA in the coming days and both will face huge fines.
2 Who pays for banks’ sins? (Robert Peston on BBC) There is a trend here - which is that every big British bank is struggling to keep control of the costs of fines and compensation relating to a great variety of forms of sloppy practices and misbehaviour in the boom years. It won't be long before we begin to learn the fines that Royal Bank of Scotland will pay to regulators all over the world for its involvement in the Libor interest-rate rigging scandal.
Then there are the stupendous costs of paying compensation to UK retail customers who were missold PPI credit insurance - which, according to the FSA, was more than £7bn by the end of September and looks set to end up being considerably more than £10bn. And then there are the difficult-to-pin-down costs of compensating small businesses who were sold inappropriate interest-rate swaps - which will certainly be rather more than £1bn in aggregate and possibly a multiple of that. In addition, most of the banks face civil cases from disgruntled investors related to these and other alleged failings that stem from the exuberance of the boom years.
All of which is of material interest to the banks' customers and shareholders. The point, as the Governor of the Bank of England said recently, is that banks may not have adequate capital to absorb the full financial cost of all the punishment being meted out for banks' past sins. Capital is expensive. And when banks are obliged to raise more of it, the burden falls initially on investors and subsequently on customers - who are forced to pay more for banking services to reward the providers of the capital. Or to put it another way, we are all punished when banks are found guilty.
3 UK Christianity in dramatic decline (Robert Booth in The Guardian) Government statisticians sliced a cross-section through England and Wales and exposed a place that is healthy, increasingly multi-faith and more likely than ever to be talking in Polish, Hindi or Urdu around the dinner table. The results of the 2011 census of 56 million people, the most thorough analysis yet of how life changed in the first decade of the 21st century, revealed that our towns and cities are global villages with an extra 2.9 million foreign-born people living in England and Wales since 2001 – most from India, Poland and Pakistan – and an additional 1.1 million Muslims, bringing the total to 2.7 million.
Christianity, or at least the number identifying themselves as followers of the largest religion, is on the slide with more than 4 million fewer saying they followed the church than in 2001. The march of the faithless has also continued with 14.1 million people, about a quarter of the entire population, saying they had no religion at all, a rise of 6.4 million over the decade.
Buried in the statistics, changing social mores were writ large. The number of married people fell below 50%; there were 400,000 more single parents and 504,000 extra cohabiting unmarried couples. Four out of five people said they were in good or very good health but the impact of an ageing population loomed, with 2.1 million people reporting that they were giving 20 hours or more of unpaid care for someone with an illness or disability, almost half a million more than in 2001. Growing economic hardship figured with 1.8 million of the economically active population unemployed and 2 million households overcrowded – half a million more than in 2001.
4 India college bans jeans for girls (Dawn) An Indian college announced it had banned girls from wearing jeans, short dresses and T-shirts to crack down on sexual harassment, sparking outrage from pupils and rights campaigners. The Adarsh Women’s College in Haryana state, 70 miles west of New Delhi, said students would be fined 100 rupees (1.8 dollars) each time they broke the dress code. Skinny jeans, T-shirts and other Western fashions have rapidly grown in popularity among young Indians, spreading from cities to rural states such as Haryana, though many older people disapprove of such clothes.
Pupils at the Adarsh college, which teaches girls between 16 and 19, complained that they were being punished unfairly instead of being protected from harassment. “A ban on wearing jeans and T-shirts doesn’t mean that there will be no crimes and boys will not pass lewd comments on you,” Ritu, a college student, said. Mamata Sharma, head of the National Commission of Women, told reporters that sexual harassment in India could not be tackled by ordering girls to wear saris and other traditional styles of dress. “Our country is progressing, we have entered into 21st century and it is very disappointing to hear or see such things,” she told reporters. “The government should take action against the college management or such institutions who impose diktats on girls.”
5 India far from overtaking China (Tom Wright in The Wall Street Journal) The US National Intelligence Council report this week does say India’s economy will be growing at a faster rate than China’s by 2030. But to put that into perspective, it also says China’s economy will be the largest in the world by that date as global power continues to shift away from the US and Europe toward Asia. India will have to wait a lot longer – perhaps until the end of the century – before it overtakes China’s economy, according to the report.
The report does say India, by 2030, “could be the rising economic powerhouse that China is seen to be today.” It’s worth recapping how far behind India’s economy has fallen, even after reforms in 1991 that opened the country’s economy to greater foreign competition. Back then, gross domestic product per head in India and China were almost equal. China’s GDP per capita this year will be about $9,000, more than double that of India’s, according to the International Monetary Fund. The report says India’s main advantage in the years ahead will be the age structure of its population. While China’s working-age population is set to peak in 2016, India’s won’t do so before the middle of the century. The portion of the country’s population aged between 15 and 65 will rise to 69% by 2030 from 65% today, the report says.
But the report also lays out a number of issues that India will have to
confront. Tensions with its neighbors, including Pakistan and China, could
cloud the growth picture. Inequality between India’s citizens is another
potential destabilizing factor. Poor education and health services are another
negative. And a potential shortage of key resources like water could also throw
a wrench in the works.
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