World important news by Candra

U.S. government eyes risk-sharing in housing bonds

Fri, 14 Oct 2011 12:46:47 -0400

Fannie Mae and Freddie Mac buy mortgages from lenders to free up cash for banks to make more loans. The two companies then repackage the loans for sale to investors as securities and charge fees to guarantee the debt.Under the private-sector risk-sharing idea, they would begin to issue some bonds without a federal guarantee.Investors in those securities would receive a higher return to compensate them for the greater risk of losses, according to the people familiar with the matter. The Wall Street Journal first reported on the possibility on Friday.The idea is just in the concept stage. The administration could consider a variety of ways to get investors to take on more credit risk, one source said.The administration and housing regulators are eyeing the possibility of using derivatives or relying on greater mortgage insurance coverage for the loans underlying the bonds to spur private-sector interest, according to the sources.Any final plan on investor risk sharing would require the approval of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac.The Obama administration would like to begin testing ideas to bring in greater private-sector involvement as early as next year, the sources said.The approach under consideration would reduce the long-term risk exposure of Fannie and Freddie. Together with the Federal Housing Administration, the companies now fund roughly 90 percent of all new U.S. mortgages.FHFA’s acting director, Edward DeMarco, said in a speech last month that his agency is considering various alternatives to attract private investors to the market through different types of risk-sharing structures.

UPDATE 2-Austerity pressure weighs on Irish government

Fri, 14 Oct 2011 11:19:28 -0400

* PM insists there is no division in government* C.bank warns banks on raising mortgage rates* Credit Unions have provisions shortfall of around 300 mln eurosBy Conor Humphries and Carmel CrimminsDUBLIN, Oct 14 (Reuters) - A fresh call for Ireland to ramp up its austerity drive heaped pressure on Prime Minister Enda Kenny’s coalition government on Friday as he brokered negotiations for his administration’s first budget under an EU-IMF bailout.Fissures have emerged in Kenny’s cabinet over whether Dublin needs to make adjustments above 3.6 billion euros ($4.9 billion) next year to get the deficit, currently the worst in the industrialised world, down to 8.6 percent of Gross Domestic Product (GDP) from an estimated 10 percent this year.Adding to the strain, the Paris-based Organisation for Economic Cooperation and Development (OECD) said Dublin should go beyond the 8.6 percent goal to help regain the credibility of investors spooked by a deepening euro zone debt crisis.”I don’t want us to go beyond the 3.6 billion cut we have committed to,” Energy Minister Pat Rabbitte told state broadcaster RTE before the OECD report was published.”It’s very easy to rhyme off figures and say we will go for more than planned,” said Rabbitte, a senior member of junior coalition partner, the Labour Party.”You sit around a table with figures in front of you in social welfare, in health, in education, in justice and see how difficult it is.”Unlike Athens, Dublin has won international praise for meeting its bailout goals and Kenny, who led his centre-right Fine Gael party to a historic victory in March, is determined to position Ireland as the first country to emerge from the currency bloc’s debt crisis.But a weakening growth outlook for next year means Ireland will likely have to beyond 3.6 billion euros in spending cuts and tax increases just to meet its existing target.The worsening crisis in Greece, meanwhile, is putting pressure on Dublin to do more to further distinguish itself from Athens in the minds of investors.”In terms of your international credibility it’s always better to overperform,” Bob Ford, a senior OECD official said at a news conference in Dublin.”But if growth gets weak, it may be difficult to perform, so to overperform might be too much to ask.”Kenny, who has been widely praised for his smooth working relationship with his more left-wing Labour colleagues, told state broadcaster RTE on Friday: “There isn’t any division or any split.”BREATHING DOWN THE BANKS’ NECKSUnlike fellow bailout candidates, Greece and Portugal, whose economic problems are rooted in structurally weak economies, Ireland’s financial crisis was triggered by reckless lending by its banks.A devastating property crash and subsequent recession has sent mortgage arrears soaring and the country’s central bank on Friday warned lenders they needed to tackle the problem of unsustainable debts quickly and fairly.The central bank’s deputy governor Matthew Elderfield summoned the heads of Bank of Ireland , Allied Irish Banks , permanent tsb and the EBS Building Society to a meeting this week to tell them he would be “breathing down their necks” over the arrears problem.Banks risk enforcement action if they are not dealing with arrears fairly, he said.”There is a core group where the financial circumstances are so dire they are going to lose ownership of their home and it is unfair to postpone dealing with that group because in some cases you are saddling them with more debt for the future,” Elderfield told state broadcaster RTE.He also said the central bank may acquire the power to cap mortgage rates if banks didn’t stop hiking variable mortgage rates, some of which are as high as six percent compared to an European Central Bank base rate of 1.5 percent.”It seems in many cases the banks are using variable rate increases as a way to compensate for a lack of profitability on their tracker books and that doesn’t make sense to me in terms of fairness, but also from a practical matter that it is making the arrears problem worse,” Elderfield said.”I am saying to the banks that they are courting a policy response to cap their rates if they persist in doing this.”After recapitalising its banks, Ireland’s government has said it will also recapitalise the credit union sector, community-based savings and lending clubs, by up to 1 billion euros.A government-commissioned report on Friday showed that the country’s 409 credit unions had a provisions shortfall of around 300 million euros after arrears nearly doubled in the space of two years.Professor Donal McKillop, who wrote the report, said the credit unions may need less than 1 billion euros in extra capital unless conditions worsened.

UPDATE 1-Sportingbet sells Turkish ops to GVC

Fri, 14 Oct 2011 04:02:05 -0400

* Increases company revenues from regulated territoriesLONDON, Oct 14 (Reuters) - British online gaming firm Sportingbet said it would dispose of its Turkish operations for at least 143 million euros ($196 million) in cash as it moves to exit activities in unregulated territories.Sportingbet’s website, which offers wagers to Turkish residents, will be bought alongside associated offshore assets by East Pioneer Corporation B.V., a company backed by European online gaming firm GVC .The proceeds from the sale would be used to grow its business in regulated markets or by fill-in acquisitions, Sportingbet said in a statement on Friday.”Following this disposal, Sportingbet will derive the large majority of its earnings from regulated territories,” Chief Executive Andrew McIver said.”We have clearly shown our strategic intent and look to the future with confidence,” he added.Ladbrokes, Britain’s biggest bookmaker, had entered into bid talks with Sportingbet in June but ended discussions on Monday owing to concerns surrounding the company’s operations in unregulated markets, particularly Turkey, where online gambling is banned.Sportingbet had put the business under review before the Ladbrokes approach as part of its strategy to increase revenues from regulated markets. It said on Friday that, following the disposal, around half its gaming revenues will now come from such markets, set to rise to 70 percent as laws change in a number of European countries.”The planned disposal of Turkey is a logical move and the potential price is better than we had expected,” said analyst Nick Batram at Peel Hunt, putting the stock price target and recommendation under review.

UPDATE 1-Italian bankers battle for top Milan bank job

Thu, 13 Oct 2011 15:31:26 -0400

* Shares end down 2.8 pct after volatile session (Adds comments, background, share activity)MILAN, Oct 13 (Reuters) - Two contenders for Banca Popolare di Milano (PMII.MI) stepped up their campaigns on Thursday to take charge of the Italian bank and curb the power of the bank’s employee-shareholders.One of the contenders, which is allied with the bank’s powerful Amici di Bipiemme association of employee shareholders, said the association favours keeping managing director Enzo Chiesa in the management of the bank.The Amici, or “friends of BPM,” hold about 4 percent of the cooperative bank’s capital, but BPM’s one-head-one-vote system in shareholder meetings gives the association strong influence over the bank’s top management and strategy.BPM is overhauling its governance at the behest of the Bank of Italy and creating a dual-board system with a supervisory board representing its owners and a management board with powers to run the bank’s operations.Ahead of a planned 800 million euro capital increase, two competing funds are vying to take control of BPM under the revamped governance and are campaigning in the bank’s branches across Italy to win over employee shareholders.On Thursday, one candidate for supervisory board chairman Filippo Annunziata gave details on the campaign waged by his slate of director nominees which is allied with the private equity fund InvestIndustrial.InvestIndustrial has a 2.7 percent stake in BPM. A source close to the matter has said it was considering going to 9.9 percent. [ID:nL5E7L40TO]In a conference call with reporters, Annunziata said he favoured InvestIndustrial chief Andrea Bonomi and his representatives joining the bank’s planned management board.”My slate has believed in singling out Chiesa as the person to be in charge of the future management of the bank,” Annunziata said, referring to BPM’s managing director.The second fund trying to win over support for a turnaround of BPM is Italian banker Matteo Arpe and his Sator fund.Arpe is known for his turnaround of the Rome bank Capitalia, which was subsequently taken over by Italy’s largest bank UniCredit (CRDI.MI).On Thursday, Arpe said on the sidelines of a presentation that neither he nor Sator has any shares in BPM.The presentation was of a list of candidates for the BPM supervisory board headed by Marcello Messori, which has support of the Fabi and Fiba/Cisl trade unions.BPM shares closed down 2.8 percent after rising by more than 4 percent during the session on the prospect of Arpe taking over the management.($1 = 0.730 Euros)

"Fight Back" phone app to protect women in India

Thu, 13 Oct 2011 06:01:00 -0400

One in every four rapes in India occurs in New Delhi, police say, with reports of women being bundled into moving cars and gang-raped before being dumped on roadsides, giving the city an unsavory reputation as the “rape capital” of the nation. There is one rape every 18 hours, according to police.The phone app “Fight Back” will be launched in November by a local charity and will function as an SOS alert device — sending out a text message with a GPS location to up to five people, including police, and as a post on Facebook and Twitter.”Safety for women has become such a huge issue here and we felt that citizens of Delhi, where possibly the problem exists the most, could use this type of technological intervention,” said Hindol Sengupta, co-founder of Whypoll, which created the application.”Women are harassed and molested everywhere on buses, at metro stations, in markets … we believe this is Asia’s first phone application aimed at making women safer.”In conservative and largely patriarchal India, women face a barrage of threats ranging from forced marriage and dowry murders to human trafficking, domestic violence, “honor killings” and abduction as well as sexual harassment and rape.Rape cases in India increased by 760.4 percent to 21,397 cases in 2009 from 2,487 in 1971, according to latest figures from the National Crime Records Bureau.But activists say this is a gross underestimation of the actual number of crimes, with most women afraid to go to police, fearing stigma and family dishonour.While male attitudes toward women have improved over the last two decades due to greater awareness, the dangers to women remain starkly evident — particularly in New Delhi.The “Fight Back” app will initially be available to download from the Whypoll website (www.whypoll.org) for a nominal fee and will be supported by a range of mobile devices such as Nokia and BlackBerry. SOS alerts will cost the same as an SMS.Sengupta said the app, which is part of the Whypoll’s “Safe in the City” campaign, will also map the SOS alerts to build an accurate database of where and what gender-related crimes occur.”We have created a platform where women can remain anonymous yet the incident will still be recorded and reflected on a map on our website — which will help us push for action in places where there appears to be increased risks to women,” he said.