Monday, 29 September 2014

BBC News/ Banks shut branches over Hong Kong protests

Hong Kong protestors rest after clashing the previous night with policeStandard Chartered and several other banks have suspended some of their operations in central Hong Kong following mass pro-democracy protests.
Bank branches that offer over-the-counter services have been closed, as well as ATMs and cash deposit machines in affected areas.
Some firms have also advised their staff to work from home or go to secondary offices.
Thousands of demonstrators clashed with police, who fired tear gas, on Sunday.
In a statement, British bank Standard Chartered said it had activated contingency plans to ensure continuous services to customers.
Bank of China said it had suspended operations at some branches because of the "unusual situation" in parts of Hong Kong.
Singapore's biggest bank, DBS, also temporarily shuttered its branch in the Admiralty neighbourhood.
Hong Kong pro-democracy protestorMany Hong Kong pro-democracy protestors slept in the streets despite clashes with riot police
Hong Kong's de-facto central bank said 29 bank branches, offices or ATMs of 17 banks in the territory will be temporarily closed because of the protests.
The Hong Kong Monetary Authority (HKMA) said "affected banks have activated their business continuity plans this morning to maintain the normal operations of the core functions of the banking system".
"The HKMA will also inject liquidity into the banking system as and when necessary under the established mechanism," it added in a statement.
Fitch Ratings head of Asia-Pacific Sovereigns Andrew Colquhoun said the protests are unlikely to impact Hong Kong's creditworthiness "in the short term".
"It would be negative if the protests are on a wide enough scale and last long enough to have a material effect on the economy or financial stability, but we don't currently see this as very likely," he said.
Political unrest
Over the weekend, thousands of protestors blocked large parts of the city to pressure the Chinese government into granting full democratic powers to the former British colony.
The demonstrators were spread across three of Hong Kong's most important commercial neighbourhoods and in front of government buildings.
Police fired several rounds of tear gas at the crowds, but the protestors continued to rally, with many staying on and sleeping in the streets.
Many of the protestors are university students who have boycotted classes since last week to hold pro-democracy rallies.
The political unrest in Hong Kong is the worst the city has seen since China took back control of the territory from the British in 1997.

Wednesday, 17 September 2014

BBC News- UK

City of London skyline_The boss of one of the world's biggest banks last week described the UK to me as the world's "biggest, most developed tax haven".
Which rather jars with the splash in this morning's Telegraph, whose headline is "high taxes 'stifle UK entrepreneurs'".
So what is going on?
Well my banker was talking about the declining and low rate of UK corporation tax, which will be a uniform rate of 20% for big and small companies from next year, and reforms by this government which mean UK-based multinationals pay no UK tax on dividends they receive from their overseas operations.
If this system was designed by the Treasury to attract more huge global companies to take up residency here, it seems to be working: this morning America's Pfizer said that if it succeeds in buying the UK's AstraZeneca, the new pharmaceutical monster's holding company would be incorporated in the UK.
Also if Omnicom of the US and Publicis of France ever make it down the aisle to create the world's biggest advertising company, it would be tax-resident in the UK (though apparently HMRC is a bit embarrassed at being seen to be aiding and abetting what some would described as tax avoidance, and is dragging its feet on approving the tax status of the merged beast).
So the days when multinationals feel the irresistible pull of Dublin's ultra low tax rates seem to be over - and in spite of the regular spankings administered by Margaret Hodge and the Public Accounts Committee to the digital multinationals, Google, Amazon et al, for contributing little in the way of corporation tax to the UK Exchequer in spite of apparently being rather successful here.
Which for George Osborne, David Cameron and Treasury mandarins would be regarded as good news - because when multinationals are resident here, certain numbers of highly paid jobs are also located here, and they also tend to buy high-value services from the City.
This is how one Treasury official put it to me the other day: "London is now the unchallenged capital of the world; it is wonderful."
Which is all very well, if London's status as the home of choice for the richest and most successful generates work and prosperity for the UK as a whole - and some would say that is moot - but not everyone is thrilled by the associated creation within London of ghettos of properties affordable only by the super-rich.
But back to the apparent contradiction between London as putative tax haven and the UK as alleged high-tax strangler of entrepreneurs.
The high taxes in question, according to a report by the Centre for Policy Studies quoted by the Telegraph, are the 45 pence top rate of income tax and the 28 pence rate of capital gains tax.
These are supposedly a reason why the UK spawns fewer home grown billionaire entrepreneurs per million citizens than Hong Kong, Israel and the US (in that order).
Did I hear you say "so bleedin' what? What have billionaires ever done for us?"
Well there are billionaires who make their dosh creating huge numbers of jobs and revolutionising industries and even economies: Google, Microsoft, Facebook and Amazon spring to mind, as do vast numbers of entrepreneurs in Korea, China, India, Africa and South America, but not so many in Europe.
And then there are others who are brilliant at borrowing cheaply to buy undervalued assets - the private equity and hedge fund titans, inter alia - whose wealth creation typically benefits rather few people.
Role of the state
But even if there are billionaire entrepreneurs whose activities are a net benefit to us all, there is a lively debate about whether societies are becoming less happy, as inequalities become more pronounced.
Also there is by no means a consensus about the institutional and economic structures that best promote industrial innovation and sustainable wealth creation.
There are some, such as Mariana Mazzucato, who argue that the role of the state in the biggest industrial breakthroughs of our time is desperately undervalued these days.
There are others, such as the consulting firm McKinsey, who say that vast multinationals are the best at commercial research.
As for billionaires, the UK does of course have a legion of them. But they tend to be Russian, or Saudi, or Chinese - with most of their industrial activities outside the UK, but a large chunk of their often tax-avoiding nest eggs here.