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Switzerland presses ahead with stricter bank rules

Switzerland presses ahead with stricter bank rules

The Swiss
government pushed ahead on Wednesday with plans to make UBS (UBSN.VX)
(UBS.N) and Credit Suisse (CSGN.VX)(CS.N) reach tough new capital
standards, saying the benefit to the economy outweighed costs to the
banks.

As it finalised
legislation to go to parliament, the Swiss cabinet said the general
thrust of a draft law it issued in December was unchanged, but it had
made a few minor changes following a consultation period.

Finance minister,
Eveline Widmer-Schlumpf, said Switzerland was compelled to take a
tougher line on bank regulation than other countries as UBS and Credit
Suisse were so big that any failure could bring down the small Alpine
economy.

“There will be
adjustment costs for the banks but all in all, the net effect will be
positive. I am convinced that the Swiss banking sector will be the
winner,” she told a news conference.

The government has
proposed both big banks will need an equity Tier 1 capital ratio of at
least 10 per cent, versus the 7 per cent minimum set under the Basel
III global standards, which will start to take effect in 2013.

Both UBS and the
powerful right-wing Swiss People’s Party (SVP) have warned the plan
risks making UBS and Credit Suisse less competitive, raising questions
about whether the rules might still be watered down during the
legislative process.

Ms Widmer-Schlumpf
rejected suggestions the government was rushing ahead with the
proposals, saying they had taken more than two years of consultation
since the Swiss government was forced to bail out UBS at the height of
the financial crisis.

She said the plans
had been broadly endorsed by experts and the banking industry –
including Credit Suisse – and said only the SVP and UBS had expressed
fundamental opposition.

Ms Widmer-Schlumpf
said the government addressed concerns raised by the SVP and others
about powers proposed for the FINMA regulator in a crisis, saying FINMA
would only intervene to impose an emergency plan if a failing big bank
did not do so.

Competitive disadvantage?

The government
proposed publishing a report on international developments every year
to address concerns about Switzerland forging ahead and Widmer-Schlumpf
said she expected other countries would enact similar regulations.

Jason Nason, spokesman of the Swiss Bankers Association, criticised the formulation of the review provision as too vague.

“The Swiss
authorities should clearly commit themselves to reviewing and adapting
the regulation should Switzerland’s two globally-active universal banks
find themselves placed at any serious competitive disadvantage,” Mr
Nason told Reuters.

Britain too is
considering capital standards more stringent than Basel III, though
these would apply only to big retail banks and its comparatively
lenient treatment of investment banks has provided ammunition to
opponents of the Swiss rules.

UBS chief
executive, Oswald Gruebel, has said the stiff Swiss standards could
force UBS to move units abroad. In response, Widmer-Schlumpf noted the
bank benefited from Switzerland’s other advantages such as low taxes
plus political stability.

Credit Suisse said
it wanted to study the proposal in detail before commenting but
referred to a recent interview by CEO, Brady Dougan, in which he
reiterated his broad support.

“I fear that people
may have forgotten what happened in 2008. The financial system needs to
be made more robust and secure,” he said, adding that he assumed
regulators elsewhere would also demand other global banks hold more
capital.

“If that is the case, we will see the emergence of a reasonable competitive landscape around the world,” he added.

Helvea analyst,
Peter Thorne, said the fear the rules would make Swiss banks
uncompetitive was “a gross exaggeration” but they would have to cut
their investment banking businesses.

“Implementation of
the rules should see CS and UBS downsize their investment banking
operations … and this should liberate capital, which is probably not
earning its cost of capital for the benefit of shareholders,” Mr Thorne
said.

The government said
parliament could vote on the matter before the end of the year so the
plans could come into force by the start of 2012 at the earliest, with
a transition period up to 2018 to allow implementation.

However, in a taste
of a likely heated debate to come ahead of Swiss elections on October
23, the centre-left Social Democrats and Greens both said they wanted
the proposals made still tougher, suggesting they may still be amended
or delayed.

Reuters

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Gold breaks $1,500 as investors seek security

Gold breaks $1,500 as investors seek security

Gold shot up above
$1,500 an ounce on Wednesday for the first time ever, as worries over
the health of the global economy boosted the metal as a safe haven.

Spot gold hit a
high of $1,505.21 an ounce and was bid at $1,505.16 an ounce against
$1,493.90 in New York on Tuesday. U.S. gold futures for June delivery
rose $10.60 an ounce to $1,505.70.

Silver tracked gold
higher, extending a stellar performance that has seen the grey metal
outperform other precious metals this year. Silver hit a 31-year high
at $44.56 an ounce and was later bid at $44.51 against $43.89.

Gold prices are up
5 per cent in April and look set to extend gains as the metal’s appeal
as a haven from risk was boosted by talk that Greece may have to
restructure its debt and Standard & Poor’s threat to downgrade
America’s triple-A credit rating.

“There is still
going to be a lot of uncertainty over the strength of growth, in the
United States in particular,” said Macquarie analyst, Hayden Atkins.

“It looks like that
is going to be quite weak in the first quarter, so that may rattle a
few people. Then we have a critical policy point coming up with the
expected end of (the second round of) quantitative easing. There is
enough uncertainty floating around heading into the middle of the year
for people to stick with gold,” Mr. Atkins said.

While investors in
the United States and Europe are seeing the metal chiefly as a safe
store of value and a hedge against currency devaluation, stronger
inflation and rising consumer incomes in China and India are also
boosting demand there.

“The theme of
longer term higher inflation than we have seen in the last 10 years in
China is a pretty solid view, so gold is going to be an asset class
that is probably going to be more in favour in China than it has been
in the past,” Mr. Atkins further said.

China is the world’s second biggest gold consumer behind India, as well as being its biggest producer.

Rising oil, weaker dollar

In the short term,
losses in the dollar on Wednesday are supporting the precious metal
above $1,500 an ounce. The euro rose to a session high against the U.S.
dollar after an auction of Spanish bonds saw decent demand from
investors.

Weakness in the
dollar boosts gold’s appeal as an alternative asset and makes
dollar-priced commodities cheaper for holders of other currencies. Gold
priced in euros and sterling remained off recent highs on Wednesday.

Oil prices also
recovered, rising back toward the multi-year highs they hit earlier
this year as unrest in the Middle East and North Africa sparked fears
of a supply outage.

Higher oil prices
tend to benefit gold, both because they can boost commodities as an
asset class and lift interest in gold as a hedge against oil-led
inflation.

The gold:silver
ratio – the number of silver ounces needed to buy an ounce of gold –
meanwhile fell to its lowest since 1983 at 33.8.

“The last time
silver was this expensive in relation to gold was almost 28 years ago.
Both precious metals are still reaping the benefit of the news of
recent weeks and days,” said Commerzbank in a note. Platinum was at
$1,786.24 an ounce against $1,761.50, while palladium was at $753
against $726.95.Reuters

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OIL POLITICS: Shell’s fracking moves in the Karoo

OIL POLITICS: Shell’s fracking moves in the Karoo

There are some
words that those who develop dictionary software appear somewhat slow
to catch up on. One of such words is ‘fracking’. While the word is
still kept on the fringes of everyday discourse, the process it
describes is already pitting citizens against corporate power in North
America, Europe, and in Africa.

As the sound of the
name suggests, fracking has to do with fracturing. The New American
Oxford dictionary defines fracture as “the cracking or breaking of a
hard object or material … a crack or break in a hard object or
material, typically a bone or a body of rock…the physical appearance of
a freshly broken rock or mineral, esp. as regards the shape of the
surface.”

Fracking has
already raised serious problems in the United States and is being
questioned and resisted elsewhere. The nearest flash point is the
resistance to Shell in their efforts to engage in fracking in the
Karoo, South Africa. The community resistance in South Africa is
especially interesting in the sense that Shell has been confronted
there by their Nemesis: Ogoni activists displaced by their activities
in Nigeria.

In the case of the
plan by Shell for fracking in South Africa, they plan to bore holes 5
kilometres down into the belly of the earth in order to extract gas
trapped in a layer of shale stones. This is another signal that the age
of cheap oil is over.

Fossil fuels are
being sought for in increasingly less accessible locations such as
deep-water locations and in locations previously considered off limits
to extractive activities. As someone said, some of the processes can be
likened to a “societal scraping of the barrel.”

This process is not
exactly new, as it has been going on in the U.S.A. for decades,
according to some records. The causes of current anxieties are
primarily two-fold. Companies involved in this business have not
released the names and quantities of all the chemicals they use in the
fracking processes.

Secondly, the
process uses huge amounts of water, a serious concern in a season of
water scarcity. After pumping in huge volumes of water, about half of
this water is pumped out and the bubbles or gas are removed. The
wastewater with all its highly toxic dregs is then disposed of. The
question is whether this is handled in a manner that assures of safety.

According to the
experts, Shell’s “proposed exploration will apparently entail drilling
8 boreholes in each precinct (i.e. 24 boreholes in total) of up to 5
kilometre depth over a three-year period, extendable to nine years.

It appears that
each well will need between 0.3 million and 6 million litres of water
(i.e. a scenario of between 7.2 million and 144 million litres of water
required). Shell has been extremely vague as to its anticipated source
of water, with no concrete indication being given in the draft EMP or
in the public consultation meetings as to where the multinational
intends to source the requisite water from.”

While some people
argue that there are yet to be analyses showing actual water
contaminations related to chemicals used in fracking, there are several
confirming water contamination due to fracking processes.

For one, some of
the chemicals used in the process are known as carcinogens. The US
Environmental Protection Agency is examining the potential impacts on
drinking water of the various stages in the hydraulic fracturing
process. Such stages include when drillers mix water with chemicals and
sand and inject the fluid into wells in order to release oil or natural
gas.

Some 46 House of
Representative Democrats sent a letter to the Secretary of Interior in
which they stated, “communities across America have seen their water
contaminated by the chemicals used in the hydraulic fracturing process.”

Other concerns over
fracking plans have been raised in Canada and France. A report from the
Tyndall Centre in the United Kingdom, and an enquiry by the House of
Commons, has trailed the fracking business in that country.

The Tyndall Report
found a paucity of information on which to base serious analysis “of
how shale gas could impact on GHG emissions and what environmental and
health impacts its extraction may have; that there is a clear risk of
contamination of groundwater from shale gas extraction.”

Fracking folks have
enjoyed exclusion from regulation in the USA for years and are very
reluctant to accept accountability today. With Barack Obama’s intent to
accelerate the weaning of his country from heavy reliance on crude oil
imports, the shift to fracking seems good to some investors,
irrespective of its highly toxic and water-guzzling nature.

The exportation of
that anti-regulation operational latitude to other lands is meeting
serious resistance. The people of Karoo are basing their resistance,
among other things, on the indelible footprints that Shell’s operations
etched into the hearts, veins, and blood of the Ogoni.

The linkage between
the Ogoni and the Karoo deserves an applause as ordinary people rise up
to ask to know “what the frack is going on” and link hands across
political boundaries to globalise the struggle and hope for the
security of humankind in a globalised world.

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Interior ministry generates N59.3bn from e-passports

Interior ministry generates N59.3bn from e-passports

The Ministry of Interior has generated
a total of N59.3 billion since the inception of the e-passport system
project, said the minister of Information and Communication, Labaran
Maku, yesterday.

Speaking after the Federal Executive
Council meeting which was chaired by President Goodluck Jonathan, the
minister, flanked by the now-acting minister of Interior and the
ministers of Police Affairs and National Planning, Humphrey Abbey and
Shamsudeen Usman, respectively, said the money generated has gone into
the national treasury.

During the FEC meeting, which lasted
for about three hours, the council ratified the contract awarded for
the production of six million e-passport booklets and 3.5 million
wafers and laminate, to a total of N13.9 million.

“The minister of Interior, in
continuation of his programme to deliver e-passport as part of the
internationally agreed deadline of April this year to cross over to
e-passport across the world, today brought a memo to council for
ratification for the award of contract for the production of six
million e-passport booklets and 3.5 million wafers and laminate in the
total sum of N13,950,280,000 to Erin Smart Nig. Ltd.”

He said the company that won the
contract has been the one involved in the production of e-passports for
the Ministry of Interior since the inception of the e-passport system.

He also said the award of the contract
will help the immigration service meet the demand for e-passports for
Nigerians at home and in the diaspora.

“Also this contract involved
maintenance services for the entire e-passport infrastructure at home
and in about 53 e-passport centers domiciled in Nigerian embassies
abroad. This project has been on for some years on the public-private
partnership. Government does not budget for it at all; it is a
contractor-financed programme which indeed has been generating
resources for the Ministry of Interior.”

Developing the Niger DeltaMr Maku also
said during the council meeting that the Niger Delta received lot of
attention. In the first memo that came to the FEC, the NDDC gave
contracts for the construction of six key roads in the region. The
minister noted that the purpose of these roads is to improve
infrastructure in the region and enhance development in line with the
government priority of bringing development in the Niger Delta to a
level that is commensurate with the resources that the region has
brought to the nation.

“As part of the amnesty programme,
government has made it a key national priority to facilitate the speedy
development of the oil producing strata,” he said. Roads worth a total
of N20,978,585,691.74 were ratified by council. He explained that these
contracts had earlier been approved by the president but because of the
work and value involved, “traditionally, the council ought to approve.”

The roads to be constructed as part of
this package include Ididep Ikot Odiong Ikot Ibiono Road, as well as
the construction of roads and a major bridge in Akwa Ibom State.
Erosion control project in Ibiono Ibom also in Akwa Ibom state. The
third road construction project is the road from Ayan Ikot Ikpayak to
Ikot Offiong, and Ikot Enine to Ikot Iboanam, also in Akwa Ibom State.
The fourth is the construction of Ama Oboke Eze Ofia Isu Nzerem Ikpe
Road in the Isiokwe Ehime Mbano local government area in Imo State.

The fifth road to be built is the Asa
Obile Road also in Imo State, and the last is the Mbiama Junction West
road in the Igbogene Ahoada West LGA of Rivers State. The roads are
expected to be completed at various period ranging from one to two
years.

The minister said the second memo was
presented by the president on the ratification of contracts for
infrastructure projects in the Niger Delta. “The total cost of project
is N27,560,764.525. Again, these projects that range from roads
construction to hospitals are allocated in various part of the Niger
Delta,” he stated.

The projects include: the construction
of Afia Nsit Ikot Mbang Road in Akwa Ibom State; the Ibaka Bati Jetty;
and Ibak Ikot Akoedo Ibom Ikot Road located in Akwa Ibom State. In
Bayelsa State, construction will commence on two 50-bed coastal
hospital complexes at Ekowe and Ekeremo, as well as the Akogbene Esama
Ogbenama road. Imo State will receive funding for the Ughelli flood
remediation, the construction of the Oguta Lake bridge, and the
construction of the Umudike international drainage system. Finally,
construction in Rivers State will comprise of Kula International Road
and the construction of Akujagu Ama forestry protection.

“These projects on completion are expected to add value to the Niger
Delta development area in terms of provision of infrastructure and
improvement in health and medical services in the region. Also, it is
expected to generate thousands of jobs for the youth, especially those
that have joined the amnesty programme as well as other unemployed
youths across the Niger Delta region,” Mr Maku said.

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Kaduna relaxes curfew, calls for calm

Kaduna relaxes curfew, calls for calm

The Kaduna State
government yesterday adjusted the 24-hour curfew that was imposed due
to the post-election violence in many parts of the state. In a
statement signed by the special adviser to the governor on media,
Reuben Buhari, the government said people would be allowed to move from
8am to 4pm on Thursday, noting that the restriction will be suspended
completely as soon as the security situation normalises. While
explaining that the adjustment was made to enable people have access to
food and other needs, the government also advised people to comply with
the directive.

Meanwhile, the
traditional ruler of Kagoro, Ufuwai Bonet, yesterday appealed to the
people of Kaduna State to embrace peace and desist from engaging in
violence and instability which would compromise development.

The ruler spoke
passionately to the people of southern Kaduna after touring the areas
affected by the crisis, saying, “We must embrace peace and our people
should know that we cannot progress without [the] peace and stability
of our state and country at large. Development and growth that we all
are aspiring for cannot be realised without peace and harmony and so I
am begging you to desist from all forms of violence and instability.”

He urged the people to remember the future of the country, saying,
“We should remember our past and as well the present, because we have
no reason to resort to violence.”

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Ibadan traditional ruler wants security beefed for governorship election

Ibadan traditional ruler wants security beefed for governorship election

The traditional ruler of Ibadan, Samuel Odulana, Odugade 1, has called on security agencies operating in Oyo State to be more prepared as the nation goes to elects state governors on Tuesday.

The ruler made the request in Ibadan, the state’s capital, on Wednesday, in a statement signed on his behalf by I.A. Akinpelu and made available to journalists.

He also denied the rumour that voting took place in his Ibadan residence during the last presidential election, blaming ‘mischief makers’ for spreading the speculation.

He specifically urged the security agencies to provide adequate security for the people of the state before, during and after the poll, to enable the eligible voters exercise their right.

According to him, if adequate security is provided, the electorate would be encouraged to come out in large numbers to vote the candidates of their choice.

Ahead of the governorship election, the state is already engulfed with fear of possible breakdown of law and order as the candidate of the ruling Peoples Democratic Party (PDP) and the sitting governor, Adebayo Alao-Akala, bids to return to office, while his opponents mobilize to rebuff him.

No voting in the palace

The ruler said the rumour of voting in his house prompted security agencies to storm his residence on the election day to verify the claims, but had to go back without finding any incriminating item in the yard.

“For the past four decades, His Royal Majesty has not engaged in partisan politics. People should please recall that immediately on his ascension to the throne, one of his first pronouncements was that members of Olubadan-in-Council should not participate in partisan politics. For the avoidance of doubt, that is still his stand,” the statement read in parts.

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Kwara ANPP candidate endorses opponent

Kwara ANPP candidate endorses opponent

The governorship
candidate of the All Nigeria People’s Party (ANPP) in Kwara State,
Khaleel Bolaji has declared his support for the candidate of the
People’s Democratic Party (PDP), Abdulfattah Ahmed, putting an end to
his own gubernatorial ambition. Mr Bolaji, a one-time commissioner for
water resources and rural development, made this announcement yesterday
in Ilorin while speaking with journalists.

He says it was the
party’s decision to support the PDP after several meetings, not to
mention pressure from traditional and community leaders and interest
and opinion groups from his senatorial district, especially in Ifelodun
local government where he and Mr Ahmed hail from.

Right time for change

He also argued that
he had been in the struggle to govern the state since 1999, aiming to
create the greatest happiness for the greatest number of people. He
said having been guided by the principle of justice for all, it was
high time he gave his support to the PDP, whose zoning system has
produced a flag-bearing candidate from the Kwara South senatorial
district.

“I, therefore, call
on all members of my party, my supporters and admirers across party
lines in the state to vote for Mr Ahmed, the gubernatorial candidate of
the PDP in the governorship election scheduled to hold in Kwara State
on Tuesday April 26. I wish Mr Ahmed and his party a resounding victory
in the gubernatorial race,” he added.

Others in attendance at the occasion such as the party’s public
relations officer, women’s leader and other members of the ANPP
executive pledged their support towards the PDP in the forthcoming
election.

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Workers disagree over union election

Workers disagree over union election

Controversy has
continued to trail the recent general meeting of the Ondo State chapter
of the Nigeria Labour Congress. The meeting which took place a few
weeks ago was almost marred by protest. Although, Bosede Daramola,
emerged the new chairman of the labour union in the state, workers from
the private sector have rejected the outcome of the election, insisting
that its candidate, Kayode Sotire, was the elected chairman. The
private sector workers described the emergence of Mr. Daramola as a
farce, saying those in the public sector had ruled the union for eight
years, arguing the private sector ought to have produced the next
chairman of the union in the state.

The group claimed
Mr Daramola was a stooge imposed on the union by the outgone chairman,
Momodu Braimoh. They wondered why the congress was allowed to hold when
they had agreed to postpone the election.

Mr Braimoh, however said the election was duly conducted in the
presence of the two officials from the National Secretariat, Abuja, who
served as returning officers. He noted that five unions out of 26
pulled out of the election on the pretence that the election had been
postponed through a radio announcement by the state government. But the
former chairman said they could not take directive from the state
government, stressing that only the National Executive Council of the
union could order postponement of the election.

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Bar association boss wants governorship election postponed

Bar association boss wants governorship election postponed

The Nigerian Bar
Association (NBA) yesterday called on the Independent National
Electoral Commission (INEC) to postpone governorship elections in
states where cases of violence were recorded following the presidential
election of last week.

President of the
Association, Joe Daudu said in Abuja yesterday said “In the past three
days, hundreds of innocent Nigerians have been brutally and savagely
killed, churches in Katsina, Kano, Kaduna, Bauchi, Yobe etc have been
torched/burnt down. Shops and other businesses of Nigerians referred to
as strangers in their own country have been looted. The highways are no
longer passable as Christians and other identifiable non indigenes are
pulled out of vehicles and slaughtered,” he said.

“Part of the
objective of the masterminds of this purge is to intimidate
non-indigenes for the last election as well as punish them for daring
to vote according to their choice and conscience. It will be a travesty
of the electoral process if the remaining election is conducted under
this very ominous cloud in the affected states,” he said.

Demand for justice

Mr Daudu also
described the security approach to the crisis as deplorable and advised
that the episode must not be swept under the carpet.

“The cold-blooded
murderers must be brought to book and justice served to the memory of
all that untimely lost their lives in this crisis,” he said.

Furthermore, he
said if government omits to bring the culprits to justice, the
association shall be left with no option than to approach the
International Criminal Court of Justice for warrants to issue against
the leaders of organisations that gave platform for these crimes.

He said
government needs to constitute a high-powered commission of inquiry to
collate the extent of loss of lives and property and every opportunity
given to aggrieved or affected persons to speak out.

Mr Daudu also
said such commission should be empowered to pay compensation for lives
and property lost, with same to be deducted from the accounts of states
where the losses or deaths occurred.

He also called on
the National Assembly to consider enacting stiffer laws to protect the
lives, liberty and property of every Nigerian regardless of where he
resides in the country.

The NBA, however, said INEC must be congratulated for conducting a transparently credible election.

“It is on record
that this is the first general election where alarming reports of
disenfranchisement in the way of subserviced polling stations,
inability of registered voters to vote, violence at polling stations
and the hijacking of ballot boxes were recorded at the barest minimum,”
Mr Daudu said. “There is a consensus among all observers, local and
international and men of repute that covered the election so far that
the whole process was free and fair. The NBA has therefore been proved
right when we refused to join others in castigating INEC during the
botched election.”

Mr Daudu said NBA congratulates all those that won in the two elections, including President Goodluck Jonathan.

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Church celebrates 100th anniversary

Church celebrates 100th anniversary

The Ogori-Magongo
Diocese of the Church of Nigeria, Anglican Communion, in Lokoja, Kogi
State has lined up a series of activities to celebrate its 100 years
existence.

The Bishop of the
diocese, Odimtan Davis, said in a statement in Lokoja on Wednesday that
the celebration would start in May with vocational training/seminar and
crusade, outreach rally/carnival and lighting of centenary fire in
June.

The statement
signed by Emmanuel Boro, the Diocesan Communicator, said the
celebration will peak in July with the foundation laying ceremony of
the bishop’s court, centenary service/award and the launching of a N1
billion developments and endowment fund.

According to the release, the Ooni of Ife, Oba Okunade Sijuwade, will be the special guest at the grand finale.

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