1 'Eurozone banking system threat to global financial stability' (Phillip
Inman in The Guardian) The eurozone's creaking banking system poses a serious
threat to global financial stability, according to the International Monetary
Fund, which warned European leaders to accelerate plans to support weak banks
and create a banking union. IMF financial counsellor José Viñals said the end
of low interest rates in the US, coupled with a failure by the Obama
administration to monitor risky lending, a sharp slowdown in China and
disruption to emerging markets could all upset expectations of a smooth
recovery.
He said the eurozone's incomplete repair of bank and corporate balance sheets continued to place a drag on the recovery, while the widening gap between Germany and the poorest of the 18 member states was restricting the flow of funds around the currency zone and hampering the growth of smaller businesses. "Thus, further efforts must be made to strengthen bank balance sheets, through the European comprehensive bank assessment and follow-up, and to tackle the corporate debt overhang," he said.
Since last May's signal from the US Federal Reserve that interest rates would soon begin to rise, policymakers have been wary of the knock-on effects of a return to more normal rates in the US. The hint by former Fed boss Ben Bernanke caused a flight of investor capital from Turkey, Brazil and South Africa back to the US in the expectation of better returns.
Willem Buiter, chief economist at US bank Citi, said a refusal by the European Central Bank and its boss Mario Draghi to make borrowing cheaper for local banks was also a concern, he said. "The markets are strong, but investors are still sniffing the glue provided by Draghi and his declaration to do whatever it takes to rescue the euro." Buiter said the banking union needed a €1tn fund to underwrite European banks and not the €55bn proposed by Brussels.
http://www.theguardian.com/business/2014/apr/09/imf-europe-banking-system-threat-global-financial-security-us-china
2 Students will be repaying loans into their 50s (Richard Adams in The Guardian) The majority of undergraduates now at university will be paying off their student loans well into their 40s and 50s, with three-quarters of them unable to clear the debt before it is written off after 30 years, according to an analysis. The report by the Institute for Fiscal Studies and the Sutton Trust in UK estimates that the average student will leave university more than £44,000 in debt. A middle-earning graduate will still owe about £39,000 at today's prices by the age of 40, and will still owe about £32,000 by 50.
Although large numbers will repay more than they borrowed, most will not return their loan in full, the study says. "We estimate 73% will have some debt written off at the end of the repayment period, compared with 32% under the old system. The average amount written off will be substantial – about £30,000." Liam Byrne, the shadow universities minister, said the student finance system had lost fiscal credibility. "Degree costs have trebled yet costs to the taxpayer have gone up, and now we learn our children and grandchildren will be paying off their student debt well into their 50s," he said.
The report follows forecasts that 45% of the £10bn in loans made each year will have to be written off. Meanwhile, data published by the Higher Education Funding Council for England on Wednesday showed a steep decline in the number of students studying part-time at universities since the new fee regime was introduced.
3 Saying 'no' to having an HR department (Lauren Weber & Rachel
Feintzeig in The Wall Street Journal) Sometimes the only thing worse than
having an HR department is not having one. Companies seeking flat management
structures and more accountability for employees are frequently taking aim at
human resources. At the same time, a booming HR software industry has made it
easier than ever to automate or outsource personnel-related functions such as
payroll and benefits administration.
Some workers say they feel the absence of an in-house HR staff acutely, especially when it comes to bread-and-butter HR responsibilities such as mediating employee disputes and resolving pay problems. Some companies that are going it alone say they are working out the glitches as they go.
In 2012, US employers had a median of 1.54 HR professionals for every 100 employees, up slightly from a low of 1.24 in the recession year of 2009, according to the Society for Human Resource Management. They earn a median annualized wage of about $51,000, government statistics show. Startups usually launch without personnel teams, but SHRM advises that companies bring on a human-resources staffer once they reach 15 employees, the point at which personnel issues become complex enough to require specialized skills.
Managers often lack specialized knowledge that is crucial for keeping a company competitive and on the right side of the law. If they don't understand the latest rules under the Family and Medical Leave Act, for example, they can open their company up to lawsuits; if they don't know where to find qualified engineers, they can end up behind in the battle for talent.
Interpersonal issues must be handled differently when HR isn't around to mediate. Klick Health, a Toronto-based marketing agency focused on health care, has forgone a human-resources department partly in favor of two "concierges," employees with customer-service backgrounds whose job is to create what CEO Leerom Segal calls a "frictionless" work experience for employees. For the concierges, that means chores ranging from setting up mentoring sessions and career-development paths to picking up a birthday gift for a worker's spouse.
Former Klick employees applaud the creative thinking that drives its culture, but say they sometimes felt like they were on their own there. "There's no HR department to coach you," he said. "When you have an HR person, you have a point of contact that's confidential."
He said the eurozone's incomplete repair of bank and corporate balance sheets continued to place a drag on the recovery, while the widening gap between Germany and the poorest of the 18 member states was restricting the flow of funds around the currency zone and hampering the growth of smaller businesses. "Thus, further efforts must be made to strengthen bank balance sheets, through the European comprehensive bank assessment and follow-up, and to tackle the corporate debt overhang," he said.
Since last May's signal from the US Federal Reserve that interest rates would soon begin to rise, policymakers have been wary of the knock-on effects of a return to more normal rates in the US. The hint by former Fed boss Ben Bernanke caused a flight of investor capital from Turkey, Brazil and South Africa back to the US in the expectation of better returns.
Willem Buiter, chief economist at US bank Citi, said a refusal by the European Central Bank and its boss Mario Draghi to make borrowing cheaper for local banks was also a concern, he said. "The markets are strong, but investors are still sniffing the glue provided by Draghi and his declaration to do whatever it takes to rescue the euro." Buiter said the banking union needed a €1tn fund to underwrite European banks and not the €55bn proposed by Brussels.
http://www.theguardian.com/business/2014/apr/09/imf-europe-banking-system-threat-global-financial-security-us-china
2 Students will be repaying loans into their 50s (Richard Adams in The Guardian) The majority of undergraduates now at university will be paying off their student loans well into their 40s and 50s, with three-quarters of them unable to clear the debt before it is written off after 30 years, according to an analysis. The report by the Institute for Fiscal Studies and the Sutton Trust in UK estimates that the average student will leave university more than £44,000 in debt. A middle-earning graduate will still owe about £39,000 at today's prices by the age of 40, and will still owe about £32,000 by 50.
Although large numbers will repay more than they borrowed, most will not return their loan in full, the study says. "We estimate 73% will have some debt written off at the end of the repayment period, compared with 32% under the old system. The average amount written off will be substantial – about £30,000." Liam Byrne, the shadow universities minister, said the student finance system had lost fiscal credibility. "Degree costs have trebled yet costs to the taxpayer have gone up, and now we learn our children and grandchildren will be paying off their student debt well into their 50s," he said.
The report follows forecasts that 45% of the £10bn in loans made each year will have to be written off. Meanwhile, data published by the Higher Education Funding Council for England on Wednesday showed a steep decline in the number of students studying part-time at universities since the new fee regime was introduced.
http://www.theguardian.com/education/2014/apr/10/university-students-loans-fees-graduate-debt
Some workers say they feel the absence of an in-house HR staff acutely, especially when it comes to bread-and-butter HR responsibilities such as mediating employee disputes and resolving pay problems. Some companies that are going it alone say they are working out the glitches as they go.
In 2012, US employers had a median of 1.54 HR professionals for every 100 employees, up slightly from a low of 1.24 in the recession year of 2009, according to the Society for Human Resource Management. They earn a median annualized wage of about $51,000, government statistics show. Startups usually launch without personnel teams, but SHRM advises that companies bring on a human-resources staffer once they reach 15 employees, the point at which personnel issues become complex enough to require specialized skills.
Managers often lack specialized knowledge that is crucial for keeping a company competitive and on the right side of the law. If they don't understand the latest rules under the Family and Medical Leave Act, for example, they can open their company up to lawsuits; if they don't know where to find qualified engineers, they can end up behind in the battle for talent.
Interpersonal issues must be handled differently when HR isn't around to mediate. Klick Health, a Toronto-based marketing agency focused on health care, has forgone a human-resources department partly in favor of two "concierges," employees with customer-service backgrounds whose job is to create what CEO Leerom Segal calls a "frictionless" work experience for employees. For the concierges, that means chores ranging from setting up mentoring sessions and career-development paths to picking up a birthday gift for a worker's spouse.
Former Klick employees applaud the creative thinking that drives its culture, but say they sometimes felt like they were on their own there. "There's no HR department to coach you," he said. "When you have an HR person, you have a point of contact that's confidential."
http://online.wsj.com/news/articles/SB10001424052702304819004579489603299910562?mod=trending_now_4
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