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

Happiness, easier to get!

After facing hard times of economic downturn in the past few years, people seem to be happier with a smaller balance on their bank accounts. According to a British survey the price of happiness has been reduced during the financial crisis. The number of people having an increase of happiness after saving £ 5000,  has risen from 66 % six year ago, to a level of 82 % today! Another remarkable and maybe less favourable perception the study has revealed, is the fact that nowadays only a third of people could pay off their debts with an amount of £ 5000 or less. (Telegraph)

Jolien Nachtergaele

Scottish men are better in saving than women

It has been investigated by the bank of Scotland that the average Scottish male have improved a lot in saving money than the Scottish female. The results of the Scottish bank survey shows us that only 33% of the women have a savings account compared to 36% of men.

Furthermore, the survey has also neared down that current accounts are much more popular than the other accounts.  Being used by either the male and the female account holders  (as  92% of male and 89% of female). Moreover, some women are complaining that they don’t have the time to open a saving account and the other are saying that they lack the knowledge to open an account. 

Davit Melik

http://www.bankingtimes.co.uk/2010/10/06/scottish-men-are-better-savers-than-women/

People without web 'missing out' on finance deals

People have the best rates for financial products, if they use online banking accounts. A person who always use the online banking services gain an advantage till 37% a year by comparison with a non-online banker. Even if you take an online travel insurance, it's around four times cheaper than a deal in a store. But for some people the internet is too complicated or they aren't comfortable using the internet, giving those people support in the store could be a solution.( http://www.independent.co.uk/money/spend-save/people-without-web-missing-out-on-finance-deals-2090153.html)

Bram T'Hooft

How to push your students away?

Since tuition fees are getting higher and top degrees aren’t even guaranteeing a place at a UK university anymore, more and more students are seeking for universities abroad, and discovering they are often much cheaper. Studying at a UK university has never been this expensive, with an unwilling consequence that more students will go study abroad, leaving the very selective UK universities behind. Some overseas universities are even paying transport costs, and students often find themselves with less additional costs for example lower costs for food and living. Their first choice however will remain a UK university, due to their friends and family they want to stay close to, but social networks like Skype and Facebook are starting to resolve even this barrier. (The Guardian)

Corien Staels

Errors in switching accounts put off customers

Because off fear for errors, people are afraid to switch current account providers.

Three out of four bank costumers, who hadn't considered switching accounts, fear extra costs when errors occur, 44 per cent of the costumers who decide to switch accounts have experienced problems.

According to Sarah Brooks, the head of financial services at consumer focus, people have to start switching accounts to make sure banks improve their performance. To make sure this happens, switching current account has to be promoted. (The Independent)

Hannes Ryheul

China limits bank lending

The Chinese government has told the biggest banks to increase reserves by 0.5 percentage points to 17.5% of their deposits. The order applies for four major banks and two smaller ones. In total they own 55% of all China's bank deposits. The reason is that China wants to control and cool down the inflation and housing prices, so that the recovery from the global crisis wouldn't be derailed and get off track. The total amount banks will be allowed to lend will be 7.5 trillion yuan which is lower than last year's 9.6 trillion yuan record.

Simon Rosseel

http://www.cnbc.com/id/39625003

Tax-free children's savings account?

In the UK, the government is considering to make children's savings account tax-free. This initiative will have to encourage families in all layers of society to save more, not only for their children but even for themselves. The Treasury needs to have an advantage in this proposition as well, to reduce costs, they will stop giving vouchers when children reach their 7th birthday. By the beginning of next year, the new measurement could probably be introduced for all children, including those who already have an account.

Kevin Rokegem

Source: The guardian

Bonuses warning as speeches reveal cracks between Treasury and Bank

Lord Myners

Although much taxpayers’ money is used for refunding the financial crisis, investment banks keep distributing large bonuses to its CEOs .The City minister, Lord Myners, accuses the immoral big bonuses of the top executives of banks  in times of economical crises,  and announces severe government measures for this paradoxical  situation.  Myners suggests especially that all top salaries have to prove their competence, or SOS signals wouldn’t be accepted anymore in this climate. Moreover, banks must confess their guiltiness and must show society that they’re on the way back to roll the meager times. http://www.guardian.co.uk/

Julie Scheipers

Peter Diamond and other Nobel winners' solutions stumble in real world

                                           Peter Diamond

Peter Diamond, who won this year the Nobel Prize for Economics, his solution for making markets more efficient fails.

He says; to encourage people more to work by slashing in benefits, but this makes new problems.

When companies discharge benefits, by example housing benefits, it makes a lot of people cheerless and depressed.

Finally it leads to situations that aggravate the situation instead of improve and so you can say that it isn’t always smart to follow the ideas of a clever economist.guardian

Bob Schramme