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Friday, September 28, 2012

Spain Set to Unveil How Much Money Banks Need to Avoid Collapse

Spain will reveal the state of its banking system when it releases the results of stress tests carried out against 14 of the country’s lenders. The results will help the Spanish government decide how much money it will need from the €100 billion (US$129 billion) loan facility extended by its Eurozone partners, with the figure expected to be near €60 billion (US$76 billion). It is expected that the larger Spanish banks will not need propping up, but many of the country’s regional banks are known to carry toxic assets since the country’s property market crashed and will need significant help. The audit results will be released after the close of the European financial markets on Friday. Spain had already outlined an emergency budget yesterday, complete with spending cuts and tax rises.

Bo Xilai Expelled from China’s Communist Party, Faces Criminal Charges

Chinese politician Bo Xilai has been expelled from the country’s ruling Communist Party and will face multiple criminal charges, according to a decision by the country’s 25-member Politburo. Bo once belonged to the ruling committee, but will now face the country’s biggest political trial since the sentencing of the Gang of Four in 1981. The trial occurred after China’s Cultural Revolution and involved Mao Zedong’s last wife, Jiang Qing, and three of her associates. Bo is accused of abusing power, taking bribes, maintaining improper sexual relationships with multiple women and bearing “major responsibility” in relation to his wife’s murder of a British businessman. The scandal involving his family will cast a long shadow over the Chinese Communist Party’s 18th Congress in November, which will mark the transition of power to a new generation of cadres. Bo, the former party secretary of Chongqing, a major city in southwest China, had been tipped for higher office in this transition before his fall from grace.

Top 10 Percent of French Earners to See Taxes Rise in New Budget

France confirmed on Friday that a new 75 percent tax rate would be imposed on people earning more than €1 million (US$1.3 million) a year. French Prime Minister Jean-Marc Ayrault said that these measures would only affect the top 10 percent of French citizens and that the rest would not see their income taxes rise in the new budget. He added that the government’s priorities were young people, education, training and spending cuts to the tune of €10 billion (US$13 billion). Some of France’s top earners had threatened to leave the country as a result of the tax rises and the budget is seen as the first big political test for the administration of President François Hollande.

Libor Riggers To Face Criminal Prosecution

A report published by a specialist panel convened by the British government to look into the Libor rate-rigging scandal has suggested that the system is broken and that those who tried to manipulate the rate should be criminally prosecuted. The recommendation comes months after Barclays was fined over US$450 million for trying to manipulate Libor, a rate that is used as a reference to determine the interest charged on loans to individuals and companies. The report’s author, regulator Martin Wheatley, said that “society has lost confidence in banks and we need to restore that”. Wheatley, who manages the U.K.’s Financial Services Authority, also said that the rate will now be based on actual rates, not the current estimates provided by banks.
Libor

Switzerland Votes Against Banning Burkas

The Swiss House of Representatives has voted against a measure banning burkas worn in public places in the country, effectively killing an initiative put forth by the canton of Aargau in 2010. The northern Swiss canton had initially backed the proposal made by the Swiss People’s Party, a right-wing organisation. Speaking for the majority, centre-right Radical Party representative Hughes Hitpold said the banning of the head cover would be excessive and would drive away tourists from the country. “Today in Switzerland, wearing this type of clothing for religious reasons doesn’t pose any problems in daily life”, said Hitpold, adding that “banning the niqab or burka in Switzerland would have adverse consequences for Swiss Muslims”. The country had previously voted to ban the construction of new minarets in November 2009, with 57 percent of voters voting in favour of the ban.

Weekend Read: The Entebbe Option

No one in the Obama administration knows whether Israel will attack Iran. American war planners are “flying blind” in their attempt to limit the chances of the U.S. being drawn into the conflict because Israel refuses to share its plans. In Foreign Policy.

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