Manchester United reports pre-tax loss of £80m

Ken Merckaert
Source: BBC News

 

Manchester United reports pre-tax loss of £80m

Slowly but surely, the financial crisis is killing us all, even Manchester United, which is struck by a loss of 80 million pounds this year, will remember the ‘predator’.  Although the English giants made a large profit last year with the transfer of Cristiano Ronaldo, the football club suffers from financial problems, caused by debts repayments, interest payments and low profits from the sale of players. Banks have imposed financial conditions like one-off finance charges, which are associated with their bonds. Manchester United, owned by the Glazer family, pretends there is no reason to sell one of their football stars or to put ‘The Red Devils on the market for sale.

Return of Illicit Assets Act

The Swiss parliament has finally passed the “Return of Illicit Assets Act” (R.I.A.A.): a law made for those of real hard cases where money in Swiss bank accounts is known to be acquired in a wrong way(corruption). The R.I.A.A. targets those countries where normal regulation has no impact anymore due to corruption and instability, which makes it even harder  to prepare, run and win a trial against presidents and ministers of those corrupt governments.

In fact this is not the first strike towards this kind of criminality : over the past 20 years, 1.5 billion dollars have been returned thanks to Swiss efforts to the rightful governments. This money came from some of the most notorious presidents known as corrupted  such as Sani Abacha (Nigeria), Ferdinand Marcos (Philippines) and Carlos Salinas (Mexico). Presently, the Swiss parliament is focusing on the Duvaliers family: Jean-Claude Duvalier (Baby Doc) “inherited” the presidency from his father and continued stealing millions of governmental funds and aid money until he had to flee his country.

Thomas Pav

New York Times

http://www.nytimes.com/2010/10/04/opinion/04iht-edvlasic.html

Switzerland gets extra tough with its banks.

Even the well reputated Swiss banks suffered hard from the economic crisis, to reassure their clients and keeping them from fleeing the Swiss banks, a governmentcreated committee of experts recommended measures for the two biggest banks in Switzerland, UBS and Credit Suisse.
The measures require the banks to keep core capital of 10%  of risk-adjusted assets and 9% of contingent-capital, the past has shown us that this high buffer is necessary. The banks now have to see if it is possible to fulfill the requirements with their small corporate-bond market, but the Swiss firms appear confident.The article suggests that other large global firms will follow their lead and augment their core capital so that they are stronger in a crisis.

Liesanne Miclotte

http://www.economist.com/node/17202233

Ukrainian bank sector fell abruptly into a deep freeze

Roman Olearchyk says that Ukrainian is a country with too many inefficient banks (+/- 150 banks). The past 17 years there where 20-25 foreign banks who invested a large proportion of their capital to have a market share from 40 per cent. Before the global crisis hit, loaning money was almost free and off course the foreign banks thought they could profit from the situation. When the crisis started, the currency dropper by some 50 percent and loan levels reached 10-30 percent, fortunately a financial meltdown was avoided thanks too the intervention from the IMF. The banking landscape will be changed forever.  

Michaël Meirlaen

http://media.ft.com/cms/035c0236-5e24-11df-8153-00144feab49a.pdf

Cash for kids

Nowadays a lot of people open a savings account for their children at a local bank or a building society in order to learn them how to manage money and save for the future. At the minimum age of 7, children can open a savings account themselves, with as little as £5 or some banks even allow children to set up an account with only £1. Even if the savings accounts contain small sums of money, the banks and building societies try to attract young costumers, who tend to stay loyal for several years, by offering them competitive rates. That is why it is highly recommended to compare the offers of several banks as to their different rates and restrictions, which may either consist of limiting the competitive rates to the first year of savings or restricting the withdrawal from the account to one per year.

http://www.guardian.co.uk/

Ann-Sophie Martens

Trio share economics prize

The nobelprize of economics goes this year to three professors who explain why unemployment remains high in the US. Their research is based on the difficulties that employers and workers encounter when searching for each other on the job-market. The work is about friction-unemployment as well as unemployment insurance. The latter deals with generous benefits given to workers, who can then afford to spend more time searching for another job, which is in fact good for the economy because these workers will get more suitable jobs. A third reason of high unemployment in the US could be that people`s skills have degraded so much that it is difficult to find another job ,which was a concern of european governments during the `80 and `90.

http://www.huffingtonpost.com/news/economy

Romanian Banks Reasses Credit Risks

In Romania, one of the poorest countries of Central and Eastern Europe, financial institutions are still struggling after a deep and painful recession; as for the rest of Central and Eastern Europe, financial institutions appear to be on the mend. Romania had a few years of 'bumper growth' due to cheap credit, but this came to an end after a real estate bubble burst last year, resulting the Romanian economy decreased by 7.1%. Romanian bankers say the real problem area are small and medium-sized businesses, whose struggle to repay their debts has been exacerbated by the public sector, failing to pay its bills on time. Luckily, Robert Rekkers (chief executive of 'Banca Transilvania', the largest Romanian bank) stays optimistic, he said it's a tough time, but the Romanian banking system is in a good position to weather the storm!

The Financial Times

Nicolas Pollet