'Suisse Secrets' puts Swiss banking back in spotlight

ZURICH, Switzerland - The "Suisse Secrets" data leak claiming to reveal how Credit Suisse handled billions of dollars in dirty money has renewed pressure on Switzerland's financial sector, which has spent years trying to clean up its image.

Switzerland's second largest bank was rocked Sunday by a vast investigation by dozens of media organizations into leaked data they said showed Credit Suisse held more than $8 billion in accounts of criminals, dictators and rights abusers.

The bank flatly rejected the "allegations and insinuations" in the investigation, coordinated by the non-profit journalism group the Organized Crime and Corruption Reporting Project (OCCRP).

It stressed in a statement that many of the issues raised in the probe were historical, some dating back more than 70 years, and that 90 percent of the accounts in question had been closed.

The allegations, it said, "appear to be a concerted effort to discredit not only the bank but the Swiss financial marketplace as a whole."

The investigation was only the latest blow to the scandal-plagued bank, which was rocked last year by the implosions of financial firms Greensill and Archegos.

Last month saw its chairman resign for having breached Covid quarantine rules.

But it could also hit Switzerland's powerful financial sector as a whole, which for years has strived to improve its image on the international stage.

Switzerland 'high risk'? 

Following the Suisse Secrets investigation, the European People's Party (EPP) -- the largest political group in the European Parliament -- said the findings "point to massive shortcomings of Swiss banks when it comes to the prevention of money laundering.

"When the list of high-risk third countries in the area of money laundering is up for the revision the next time, the European Commission needs to consider adding Switzerland to that list," Markus Ferber, the EPP group's spokesman in the EU parliament's economic and monetary affairs committee, said in a statement.

Switzerland buckled to international pressure nearly a decade ago to begin weaning its powerful financial sector off the banking secrecy laws that had made it so attractive to the ultra wealthy around the world.

Switzerland signed a deal with the United States in 2014 and another with the European Union a year later on exchanging bank data, making it easier to uncover ill-begotten fortunes and crack down on tax cheats.

"Efforts in the battle against money laundering have been continuously boosted and strengthened in recent years," the Swiss Bankers Association told AFP in an email.

"Dubious money is not of interest to the Swiss financial sector, which sees its reputation and integrity as key."

'Judicial risk' 

While acknowledging the role banking secrecy once played in creating the Swiss banking powerhouse, Swiss daily NZZ stressed that a number of the cases revealed by Suisse Secrets "would no longer be possible" under today's legislation.

A report published last October by the Swiss finance ministry found that banks had reported four times more suspected cases of money laundering to authorities between 2015 and 2019 than during the preceding decade.

Its authors suggested that banks were keeping a far closer eye on their clients and were quicker to report irregularities, after having witnessed the fallout from large-scale financial data leaks such as the Panama Papers and Paradise Papers.

But while Switzerland's secrecy laws have largely been dismantled for the banks, they have been tightened for the media, making it an offence to reveal leaked banking information. 

Experts say the laws effectively silence insiders or journalists who may want to expose wrongdoing within a Swiss bank.

So while 48 media companies from around the world participated in the Suisse Secrets investigation, no Swiss news media took part due to the risk of criminal prosecution.

"The judicial risk is simply too big," acknowledged the Tamedia media group, which has taken part in previous international data leak investigations. 

Agence France-Presse

China cuts rates on policy loans, analysts point to more easing ahead

SHANGHAI, China - China's central bank on Monday unexpectedly cut the borrowing costs of its medium-term loans for the first time since April 2020, while some market analysts expect more policy easing this year to cushion an economic slowdown.

The People's Bank of China (PBOC) said it was lowering the interest rate on 700 billion yuan ($110.19 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions by 10 basis points to 2.85 percent from 2.95 percent in previous operations.

Thirty-four out of the 48 traders and analysts, or 70 percent of all participants, polled by Reuters last week predicted no change to the MLF rates in January, with the rest betting on a rate cut.

The world's second-largest economy has shown signs of slowing after a rapid rebound from the COVID-19 slump, with concerns about the financial health of property developers and the rapid spread of the Omicron coronavirus variant clouding the outlook.

"The PBOC's decision to ease early in January suggested that economic downward pressure intensified at end-2021 and room for improvements in the first quarter of this year is not huge," said Ken Cheung, chief Asian FX strategist at Mizuho Bank.

Cheung expects that the PBOC could deliver more easing measures this year than previously expected by market analysts.

Such expectations were also reflected in the bond market, with China's 10-year treasury futures rising to their highest level since June 2020 and the yield on China's benchmark 10-year government bonds falling more than 2 basis points in early trade.

Market analysts said the size of the rate cut and the timing were a big surprise, and they believe further monetary stimulus could follow.

"The 1Y LPR signaled that another rate cut was coming," said Carlos Casanova, senior Asia economist at Union Bancaire Privee in Hong Kong.

"However, the 10 bps cut was larger than expected, suggesting that the authorities have become more preoccupied about weakness in the economy," he said, adding he also expects an additional 100 bps reduction to banks' reserve requirement ratio (RRR) this year.

With 500 billion yuan worth of MLF loans maturing on Monday, the operation resulted in a net injection of 200 billion yuans into the banking system.

The central bank also lowered the borrowing costs of seven-day reverse repurchase agreements, or repos, by the same margin to 2.10 percent from 2.20 percent, when it offered another 100 billion yuan worth of reverse repos into the banking system.

-reuters

Asian equities mostly up after US, China tariff moves

HONG KONG, China — Asian investors on Thursday cheered Donald Trump's decision to delay a hike in tariffs on Chinese goods and Beijing's announcement that it would remove a range of US products from its own planned levies.

The moves signal an easing of tensions between the two economic superpowers ahead of a much-anticipated meeting of top-level negotiators next month.

They also provided an extra shot in the arm for investors as they await key announcements from the US and European central banks that are expected to see a further easing of monetary policy.


In a tweet on Wednesday night, Trump said: "We have agreed, as a gesture of good will, to move the increased Tariffs on 250 Billion Dollars worth of goods (25% to 30%), from October 1st to October 15th."

He added that the delay was requested by "Vice Premier of China, Liu He, and due to the fact that the People's Republic of China will be celebrating their 70th Anniversary", on October 1.

Earlier in the day, China said it would temporarily exempt 16 categories of US exports from tariff increases in an olive branch to Washington before the talks take place and which Trump described as "a big move".

The more conciliatory tone from both sides -- after months of rancour -- fuelled hopes they can edge towards a solution to their long-running trade war, which has jolted the global economy and stock markets.

The delay "shows Trump doesn't want to increase tariffs before the trade talks in early October and it creates good conditions", said Tommy Xie, an economist at Oversea-Chinese Banking Corp. "It adds to the hope that there'll be good news from the October meeting, and markets will wait and see."

Wednesday's developments were broadly welcomed though Asian markets struggled to hold on to initial rallies owing to profit-taking from a healthy run-up this week.

Central banks in focus

Tokyo ended the morning 0.8 percent higher and Shanghai added 0.2 percent while Sydney climbed 0.5 percent. Wellington and Taipei also rose, as did Jakarta, but Hong Kong dipped 0.2 percent.

Jun Inoue, a senior economist at Mizuho Research Institute, said Trump's move indicates he "can be flexible to get concessions from China and that he’s not trying to punish Beijing at any cost".

The apparent easing of trade tensions boosted oil prices as the prospect of an end to the row revived hopes for demand.

However, the gains followed a sharp drop for both main contracts as traders bet on a possible return of Iranian crude to the market after the firing of Trump's hawkish national security adviser John Bolton eased fears of a conflagration in the Middle East.

Traders are now turning their attention to Frankfurt, where the European Central Bank is expected to unveil economy-boosting stimulus. While the exact measures are unknown observers say it could cut interest rates deeper into negative territory or a new mass bond-buying drive, among other things.

Then, next week the Federal Reserve meets, with speculation rife that it will lower borrowing costs again, which would please Trump, who in a Twitter outburst on Wednesday said they should "BE BROUGHT WAY DOWN".

In share trading, Hong Kong Exchanges and Clearing sank more than three percent after its shock bid of almost US$40 billion for the London Stock Exchange Group on Wednesday.

Reports said the proposal is likely to fail, however, as it is dependent on the LSEG scrapping a planned $27 billion takeover of US financial data provider Refinitiv, which the three-centuries-old exchange said it "remains committed" to buying.

There are also concerns about ongoing unrest in Hong Kong and the influence of China in the group, the Financial Times reported.

source: philstar.com

After roads and railways, China’s Silk Road dealmakers eye financial firms

HONG KONG – After ports and industrial parks, the dealmakers leading China’s trillion-dollar push to build a modern Silk Road are turning to the financial sector, targeting Europe’s banks, insurers and asset managers to tap funds and expertise.

Last week, sources familiar with the matter said two of China’s most acquisitive conglomerates, HNA Group and Anbang Insurance Group, had separately considered bidding for the German insurer Allianz SE.

Neither of the two made an offer, but the talks marked a new level of ambition for China: Allianz is a German stalwart, a pillar for local pensions and a global powerhouse with 1.9 trillion euros ($2.3 trillion) of assets under management.

HNA already owns a stake of just under 10 percent in Deutsche Bank.

Bankers, lawyers and company executives say more financial deals will come, led by state behemoths such as China Life and China Everbright, as well as private firms including Legend Holdings and China Minsheng Financial.

“The message from the regulators is clear – they want these companies to go out and get access to large amount of funds and expertise,” said a financial M&A adviser at a global bank, who works with Chinese regulators and companies.

“They would look very favorably at transactions that have some links to the Belt and Road program, because the country needs to boost its financial muscle,” the banker said. But Beijing “will ensure the excesses of the past couple of years do not happen again.”

The banker, who declined to be named as he was not allowed to speak to the media, said his firm was currently working on several “mid-sized to large” foreign financial takeover deals.

After a deal spree that saw Chinese conglomerates spend billions on everything from landmark property to soccer clubs in a debt-fuelled M&A drive over the past two years, Beijing has sought to rein in some of the excesses.

But Belt and Road deals have been an exception in the crackdown this year – including, most recently, financial deals.China’s outbound M&A volume targeting financials has reached nearly $9 billion as of last week this year, not far from $12 billion in all of 2016, according to Thomson Reuters data. If exceeded, it would be the second best year for such deals since at least the global financial crisis in 2008.

The share of financial transactions in overall outbound deal volume has also risen to 8.2 percent this year, higher than 5.7 percent in the same period last year, while industrial deals, typically the biggest sector for outbound M&A, fell by a third.

EXPANDING FOOTPRINT

Earlier this month, Legend – the top shareholder in the computer maker Lenovo – agreed to buy a 90 percent stake in Banque Internationale a Luxembourg (BIL) for $1.8 billion.

The deal, Legend said, was linked to the Belt and Road initiative, President Xi Jinping’s policy of building a modern Silk Road to expand global trade and influence.

“Our overseas investments will continue to focus on the opportunities that are provided by the Belt and Road national policy,” the company said, in a statement to Reuters, adding it would “actively invest” in other areas of financial services, including insurance, securities and financial technology.

It gave no details, but bankers said Legend has been eyeing banks and insurers in Southeast Asia, Europe and Hong Kong, using its healthy balance sheet and the halo effect of Belt and Road-linked initiatives.

Better financial expertise and depth will help China secure contract guarantees, financing and better insurance.

“We need those overseas financing institutions – buying them can expand our bank assets and boost foreign firms’ participation in our projects abroad,” said Huo Jianguo, vice-chairman of the China Society for WTO Studies, under the Ministry of Commerce.

“China is having a hard time attracting international institutions to get involved” in Belt and Road projects, Huo said. “If that persists it will become an one-man show, which is not sustainable.”

Besides Legend, others eyeing the sector include the insurer China Life, China Minsheng Financial, China Everbright Ltd,part of the state-owned China Everbright Group, and Haitong International Securities.

They are mainly scouting for investment and acquisition targets in Europe and Asia, said bankers and lawyers.

WATCHDOGS

Chinese companies will not be expanding into the financial services sector at will, of course. Acquisitions of stakes in foreign banks – never mind full ownership – are already closely monitored by overseas regulators.

But while banks may be tough targets, bankers and executives say Chinese institutions and conglomerates could instead target asset management, insurance or wealth managers.

China Everbright plans to allocate $1.5 billion of its 2017 spending to the purchase of a fund manager, private bank or insurer overseas to help it raise cash more easily and extend its presence abroad.

China Merchants Bank has been “actively looking” for wealth management firms in Europe, said one person familiar with the matter, adding that not all financial acquisitions in the near term may have clear Belt and Road links.

China Minsheng Financial declined to comment on its plans, while Haitong International said it does not “have any plans at the moment”. China Life, Legend and China Merchants Bank did not respond to requests for comment.

“Finance is definitely an encouraged sector under the recent Chinese outbound investment guideline,” said Christina Lee, a partner at the law firm Baker McKenzie’s capital markets practice in Hong Kong.

“PRC financial institutions are mostly domestically focused,” Lee said. “M&A is a fast way to gain exposure and expertise in the international finance scene.”

source: interaksyon.com

Senators question Goldman Sachs on its role in Trump banking policy

WASHINGTON - Two US senators are seeking details from Goldman Sachs Group Inc's (GS.N) chief executive on the extent to which the bank's employees were involved in drafting of the recent executive orders on banking and fiduciary regulations.

In a letter to CEO Lloyd Blankfein dated Feb. 9 and made public on Friday, Democratic Senators Elizabeth Warren and Tammy Baldwin asked for details on "lobbying" activities in the bank related to review of the Dodd-Frank Act and the Obama-era fiduciary rule on financial advice.

Blankfein was also asked to detail the profits Goldman would make if these reforms came into effect.

"We've had no involvement in the drafting of any executive orders," a Goldman spokesman said on Friday.

In December, Trump appointed Gary Cohn, former Goldman president and chief operating officer, to head the White House National Economic Council, a group that coordinates economic policy across agencies.

Trump last week ordered reviews of major banking rules that were put in place after the 2008 financial crisis, drawing fire from Democrats who said his order lacked substance and squarely aligned him with Wall Street bankers.

"The executive orders released by President Trump on Friday last week raise our concerns about the degree to which Cohn's advice to Trump is good for Wall Street, but bad for Americans," the senators wrote on Thursday.

"Goldman Sachs would be a major beneficiary of these efforts to deregulate the financial industry," they added in the letter.

Trump also named former Goldman partner Steven Mnuchin as his pick for Treasury secretary in December.

The senators have asked for any communication between the bank's employees and Cohn, Mnuchin, nominee for the SEC chair Jay Clayton and chief strategist Steve Bannon.

source: interaksyon.com

Malaysia, Indonesia markets roiled as investors scramble for hedge on Trump

JAKARTA -- Emerging markets in Southeast Asia were slammed on Friday as the stunning upset of Donald Trump's presidential win in the United States reverberated around the world, with Malaysia and Indonesian central banks intervening to try to stem the flow of money out of stocks and bonds.

The latest selloff was triggered by markets recalibrating their expectations of a Trump presidency on broad economic policy, with a growing consensus that his policies will be inflationary and push US rates up driving investors out of emerging markets and into dollar-based assets.

Yields on benchmark 10-year Treasuries have spiked 41 basis points in the past two days as investors scrambled to readjust their positions.

Emerging markets in Asia are particularly vulnerable to hot money outflows, and deep uncertainty over how broad US and international policy will ultimately play out under Trump has unsettled investors.

On Friday's Asian session, the differential between the onshore spot rate in the Malaysian ringgit and the offshore NDF rate spread hit its widest since 2009.

Ringgit one-month non-deliverable forwards plunged to 4.5280 per dollar, while spot ringgit stood at 4.2670. As a result, the dollar/ringgit's NDFs premium over the dollar/ringgit spot widened to 0.2610, the widest since at least April 2008, according to Reuters data.

The subdued spot rate belied the drama because Bank Negara Malaysia was acting to stem any panic, traders said.

Malaysia's central bank governor Muhammad Ibrahim told reporters on Friday the ringgit should not be priced out of sync with fundamentals, and that it has a responsibility to tell banks to take temporary measures to calm the market

"We don't want to be dictated by factors that have nothing to do with the country's fundamentals," Ibrahim said.

Traders in Kuala Lumpur said the central bank had told them not to quote offshore rates and was approving large ringgits sell orders on a one-off basis in a bid to keep a lid on things. The tactic seemed to work with onshore trade reportedly very thin.

Hot money headache

However, yields on Malaysian government bonds told another story. Yields on 10-years have widened 22 basis points since Wednesday, while those on 20-year and 30 year bonds have widened 21 basis points and 10 basis points respectively over the same period.

Almost 40 percent of Malaysian government bonds are in foreign hands.

Malaysian stocks were down almost one percent.

Indonesian markets also dived in early trade. Indonesia has enjoyed relatively high inflows into stocks and bonds markets in the past few months, making it vulnerable to hot money outflows at times of uncertainty.

The rupiah  fell as much as 2.7 percent, while Jakarta Composite Index fell as much as 3.2 percent to its lowest since Sept 16.

Bank Indonesia sold dollars to stabilize the currency, traders said, but it still fell to a four-month low.

Nanang Hendarsah, an official at BI, said the rupiah's sharp drop was caused by sudden hedging activity in the NDF market, but noted outflows from Indonesian markets were contained so far.

Yield of Indonesia's 10-year government bonds jumped on Friday to 7.462 percent from 7.417 percent. Foreigners own 38.4 percent of outstanding Indonesian government bonds.

Philippine stocks were also caught in the selloff with the main index tumbling more than 2.5 percent. The Philippines peso, however, was steady at 48.99.

The short term might prove a head-spinning affair for investors, especially for those in emerging markets.

"With the market now pricing in low expectations of further US Federal Reserve rate hikes beyond the one expected in December, Mr. Trump’s economic policies present an upside risk to rates," said Khoon Goh, head of Asia research at ANZ.

"This, coupled with the depreciation pressure on Asian currencies, has put serious pressure on Asia’s carry trades."

source: interaksyon.com

How to Reduce Your Credit Card Interest Rate

One of the most depressing things about having credit card debt is the fact that the high interest rate can mean that most of your monthly payment (if you carry a balance) goes to paying interest, rather than reducing your principal. This can mean a long, slow slog as you try to pay off debt.

However, you might not have to keep paying that interest rate. In some cases it’s possible for you to reduce your credit card interest rate… just by asking.

Steps to Reduce Your Credit Card Interest Rate

Is your credit card interest rate 18% or higher? Call the number on the back of your card, tell them you have seen lower rates and chances are that you can get them to lower it. It’s not always that simple, of course, but it’s a start.

Call and ask to speak to someone about your interest rate. In some cases, representatives are allowed to drop your interest rate by as much as 3% in order to retain you as a customer. If the first representative can’t help you, ask for someone who can help you lower your interest rate.

Your best leverage during the is if you have a recent offer in the mail with a low introductory rate of 0%-10%. Many credit card issuers are willing to drop your rate if there is the chance that you will take all of your money elsewhere. They’d rather have you pay some interest than ditch them and pay no interest at all.


If you don’t have a recent offer, check out the best current offers on low interest credit cards and balance transfer credit cards. Anytime you can offer a concrete possibility for switching to someone else, you have a bit of leverage during the phone call.

If you have been paying your minimum payment on time and they consider you a good customer, they will likely be willing to work with you to negotiate a lower rate. If, even after you have mentioned that you will switch your business, and they still refuse to lower your rate, remain polite and make ready to transfer your balance.

Tips for Speaking with Representatives on the Phone

If you want to reduce your credit card interest rate, you will need to make sure that you have it together on the phone. Here are some tips for speaking with credit card companies:

• Be polite: Don’t get rude. Remain polite and calm throughout.
• Ask for what you want: Be straightforward about how you want a rate reduction. Be clear that is what you want, and ask the representative to connect you with someone who has the authority to make it happen.
• Be prepared: You can create a script, or jot down some talking points. Also, be prepared to carry through on your threat to transfer your balance elsewhere.

If you phone your credit card company and get your rate lowered, please leave a comment and let us know what your rate was and what it’s at now!

source: canadianfinanceblog.com

In Ecuador cyber heist, thieves moved $9 million to 23 Hong Kong firms

HONG KONG/CHICAGO  - Cyber thieves who stole $12 million from an Ecuadorian bank in 2015 routed the funds through 23 companies registered in Hong Kong, some of them with no clear business activity, according to previously unreported court filings and judicial rulings.

The court papers offer a first glimpse into where some of the money was moved after it reached accounts in Hong Kong.

The filings stem from a lawsuit filed in early 2015 by Ecuador's Banco del Austro (BDA) in Hong Kong against the web of companies that received or handled more than $9 million in stolen funds, bank records submitted to the territory's Court of First Instance show. The BDA lawsuit alleged the companies had been "unjustly enriched" and sought recovery of the money.

The remaining $3 million was routed to entities in Dubai and elsewhere, according to separate court filings in the U.S. Those transfers are not the subject of litigation in Hong Kong.

The cyber thieves allegedly used the SWIFT global messaging system to move the funds. SWIFT, a conduit for bank money transfers worldwide, also was the network used to move $81 million out of Bangladesh Bank in February.

According to the Hong Kong court filings, BDA submitted criminal reports to police in both Hong Kong and Ecuador about the transfers. The content of those reports was not part of the court record reviewed by Reuters. The attacks have caught the attention of global investigative agencies. The U.S. Federal Bureau of Investigation and Bangladesh authorities are leading a search for criminals behind the February heist, which ranks among the largest ever.

In the Ecuadorian heist, the money was transferred by Wells Fargo based on authenticated SWIFT messages, and both BDA and the U.S. bank now believe those funds were stolen by unidentified hackers, according to documents in a BDA lawsuit filed against Wells Fargo in New York this year.

It was not clear whether the Hong Kong Police have launched an official probe. A spokesman for the agency declined to confirm or deny the existence of an investigation.

The Ecuador attorney general’s office did not respond to a request for comment. The FBI and BDA also declined comment.

Initially, cyber thieves moved $9.139 million of the more than $12 million they stole from BDA into the Hong Kong accounts of four companies at HSBC and Hang Seng Bank.

At least $3.1 million of the funds were then routed from those four companies to 19 "second layer" bank accounts, meaning the funds made a second hop to another set of Hong-Kong registered companies, the papers show.

Not tied to real businesses

Hang Seng did not immediately respond to a request for comment. HSBC declined to comment on the details of the case but a spokesman said in an e-mail that the bank actively co-operates with law enforcement and has controls in place to know its customers and deter crime.

SWIFT, an acronym for the Society for Worldwide Interbank Financial Telecommunication, has said its core messaging system has never been breached.

A BDA lawyer said in the filings that the Ecuador bank knew none of the firms or people behind the four companies that initially received the funds. Most of the "second layer" accounts appeared not to be tied to real businesses, the lawyer added.

Hong Kong Deputy High Court Judge Conrad Seagroatt said in a December ruling in the case that the four initial recipients showed no prior history of business activity. "They all appear to be otherwise inactive corporate vehicles controlled by citizens of the People's Republic of China," Seagroatt wrote.

In March last year, BDA secured an order from the court to freeze the accounts of the four companies that intially received the funds, although it later settled with the recipient of the smallest transfer of $95,731.18 and withdrew its claim against that firm, the court record shows.

As of last month, complaints against five of the 23 defendants had been withdrawn or dismissed, and settlements with some defendants have taken place, court papers reviewed by Reuters indicate.

BDA has declined to speak with Reuters about the Hong Kong case or the related litigation in the United States against Wells Fargo.

source: interaksyon.com

Wells Fargo admits deception in $1.2 billion US mortgage accord

Wells Fargo & Co (WFC.N) admitted to deceiving the U.S. government into insuring thousands of risky mortgages, as it formally reached a record $1.2 billion settlement of a U.S. Department of Justice lawsuit.

The settlement with Wells Fargo, the largest U.S. mortgage lender and third-largest U.S. bank by assets, was filed on Friday in Manhattan federal court. It also resolves claims against Kurt Lofrano, a former Wells Fargo vice president.

According to the settlement, Wells Fargo "admits, acknowledges, and accepts responsibility" for having from 2001 to 2008 falsely certified that many of its home loans qualified for Federal Housing Administration insurance.

The San Francisco-based lender also admitted to having from 2002 to 2010 failed to file timely reports on several thousand loans that had material defects or were badly underwritten, a process that Lofrano was responsible for supervising.

According to the Justice Department, the shortfalls led to substantial losses for taxpayers when the FHA was forced to pay insurance claims as defective loans soured.

Several lenders, including Bank of America Corp (BAC.N), Citigroup Inc (C.N), Deutsche Bank AG (DBKGn.DE) and JPMorgan Chase & Co (JPM.N), previously settled similar federal lawsuits.

But Wells Fargo held out, and its payment is the largest in FHA history over loan origination violations.
Friday's settlement is a reproach for "years of reckless underwriting" at Wells Fargo, U.S. Attorney Preet Bharara in Manhattan said in a statement.

"While Wells Fargo enjoyed huge profits from its FHA loan business, the government was left holding the bag when the bad loans went bust," Bharara added.

The accord also resolved a probe by federal prosecutors in California of alleged false loan certifications by American Mortgage Network LLC, which Wells Fargo bought in 2009.

No one has been criminally charged in the probes, and the Justice Department reserved the right to pursue criminal charges if it wishes, according to the settlement.

Franklin Codel, president of Wells Fargo Home Lending, in a statement said the settlement "allows us to put the legal process behind us, and to focus our resources and energy on what we do best -- serving the needs of the nation's homeowners."

Lewis Liman, a lawyer for Lofrano, did not immediately respond to requests for comment.

Wells Fargo on Feb. 3 said the settlement would reduce its previously reported 2015 profit by $134 million, to account for extra legal expenses.

source: interaksyon.com

The Best Student Credit Cards of 2016

These days, if you want to be able to buy a house later or get a good deal on your insurance rates, you need good credit. One of the easiest ways to build good credit is with the help of a credit card. If you are responsible in your use of credit, making occasional purchases and paying them in full before you are charged interest, you can build a good credit history.

The best student credit cards in Canada help those who have little to no credit established themselves. You can start building a financial reputation with the right credit card. Below are the best credit cards for students.


Scotiabank SCENE VISA Card – You can build your credit and earn cool movie rewards with the SCENE VISA card. Earn one point for each dollar you spend anywhere, and redeem those points for movie admissions and concessions. You can earn extra points (five for each dollar spent) at participating Cineplex locations.

There is no annual fee with this student credit card, and you get 2,000 bonus points with your first SCENE VISA card purchase. That’s enough for up to two free movies. Buy what you normally would, pay off the balance, and then get your entertainment for free. (Full Review)


MBNA Rewards Student Awards Card – This is a very straightforward credit card that can be used to build your credit history while earning rewards. You receive one point for each dollar that you spend. The MBNA Rewards Student Awards card also provides you with 1,000 points after your first purchase, and you get 1,000 bonus points each year on your cardmember anniversary. Points are flexible, and can be redeemed for merchandise, travel, cash back, and even charitable donations.

This card comes with no annual fee. You are also not capped on how many rewards points you can earn. The interest rate is 19.99% for all transactions from purchases to balance transfers to cash advances.


Scotiabank L’earn VISA Card – Earn up to 1% back every year with the L’earn VISA Card from Scotiabank. There is a tiered rewards system, starting at 0.25% cash back and working up to 1%. If you use your card wisely, though, paying for things you would buy anyway, it’s possible for you to earn rewards quickly and get that cash back faster.

There is no annual fee with this credit card, which means that you don’t have to worry about extra costs. The interest rate is 19.99% on purchases and 21.99% on cash advances and balance transfers. You can also get special discounts with various partners. Scotia bank also offers student credit tips for free so that you can learn how to best manage your credit card. You need to apply for this card at a branch, or by calling 1-888-882-8958.

source: canadianfinanceblog.com

Sweden limits mortgage loans to...105 years

STOCKHOLM, Sweden - Swedish lawmakers adopted Wednesday a law limiting mortgage loans to 105 years as the Scandinavian nation seeks to come to grips with high property prices and debt levels.

There had previously been no legal limit on the duration of mortgages, and in fact many Swedish homeowners have been taking loans which only their grandchildren would have a chance to pay off.

The practice developed as a strategy to cope with high property prices as a longer term means monthly payments are lower. But inheritors are left with repaying the balance of the mortgage, often by selling the home.

Swedish regulators calculated in 2013 that the average mortgage term was around 140 years.

Nearly one-third of mortgages issued in 2014 allowed borrowers to repay only interest.

New mortgages will have a 105-year repayment limit as borrowers will be required to reimburse a minimum amount of the loan capital each year, after a five-year grace period on loans for new homes.

"It is important that we have a solid culture" of repayment, the chairman of the parliament's finance committee, Social-Democrat Fredrik Olovsson, was quoted as saying by the Aftonbladet newspaper.

Swedish banks opposed the law.

"It isn't good for the finances of households as it will make mortgages more expensive and the terms not as good. And it isn't good for financial stability," the head of Swedish Bankers' Association, Hans Lindberg, told the financial daily Dagens Industri.

Housing price inflation has resulted in Swedish households being among the most indebted in Europe. Mortgage holders on average have a debt that is 366 percent their annual income.

source: interaksyon.com

Asian stocks extend global rout as traders flee to safety

TOKYO, Japan -- Tokyo stocks led a rout across Asian markets Tuesday, while Japanese government bond yields turned negative, the dollar dived against the yen and gold jumped as fears about the global economy sent investors scrambling to safety.

While most of the region is closed for the Chinese New Year holiday, trading remained thin but dealers took their lead from New York and Europe where banking shares were battered.

The sell-off is the latest this year, which has seen trading screens from Asia to the Americas awash with red.

The latest round of blood-letting came on the back of worries about the financial sector as the global economy slows down, without the support of the Federal Reserve's easy monetary policies.

London, Paris and Frankfurt all finished down more than 2.5 percent, with the German DAX ending below 9,000 for the first time since October 2014. And Wall Street's three main indexes all lost more than one percent.

Financials were in focus as a slowdown in the world economy raises the prospect of loan defaults and lower interest rates, which eat into their bottom lines.

Banking stocks sagged in New York and Europe, with US titan Bank of America, Germany's Deutsche Bank and France's Societe Generale all tanking.

In Asian trade Tokyo slumped 5.3 percent in the afternoon, putting the market back into bear territory, a 20 percent fall from its recent highs.

Financial giant Mitsubishi UFJ plunging almost eight percent and rival Sumitomo Mitsui Financial Group tumbling 7.3 percent. Major brokerage Nomura tanked nearly 11 percent.

Exporters such as Toyota and Uniqlo operator Fast Retailing each down around five percent as they were hit by the strong yen.

The dollar sank to 114.50 yen, having sat above 120 yen just a week ago. The unit is considered a safe haven in times of uncertainty.

'Bucketload of concern'

The flight to safety also saw Japanese government bond yields dive below zero, extending a downtrend sparked by the Bank of Japan's surprise move last month to slap a negative interest rate on some commercial lenders' deposits.

And gold, another commodity considered low risk, climbed 1.5 percent Tuesday to $1,193.50.

Sydney shed 2.7 percent, Wellington was 1.4 percent off, Manila dived 1.5 percent and Jakarta was down 0.6 percent.

Shanghai, Hong Kong and Seoul, among others, were closed.

"Those off celebrating Lunar New Year will be happy their markets are closed," Chris Weston, chief markets strategist in Melbourne at IG Ltd., said in an email to clients.

"These markets need a strong shake up and sharp downside move, followed by a wave of buying to settle things down," he said, according to Bloomberg News.

"But until that comes there will be no clarity, absolutely no confidence and a bucketload of concern. It almost feels as though the markets are pushing central banks into some kind of action, but they don't know exactly what it is they want."

However, while regional equities were being scythed, crude prices staged a rebound after US benchmark West Texas Intermediate fell back below $30 a barrel on Monday.

WTI was up 1.4 percent at $30.10 and Brent added 0.7 percent to $33.12.

Both contracts lost more than 3.5 percent Monday after weekend talks between OPEC kingpin Saudi Arabia and Venezuela dashed hopes for a reduction in production, with Riyadh unwilling to move from its position.

Key figures around 0400 GMT

Tokyo - Nikkei 225: DOWN 5.3 percent at 16,107.26

Sydney - S&P/ASX 200: DOWN 2.9 percent at 4,829.30

Euro/dollar: UP at $1.1212 from $1.1193 on Monday

Dollar/yen: DOWN at 114.50 yen from 115.84 yen

New York - Dow: DOWN 1.1 percent at 16,027.05 (close)

London - FTSE 100: DOWN 2.7 percent at 5,689.36 points (close)

source: interaksyon.com

China forex reserves fall almost $100B in January

BEIJING, China -- China’s foreign exchange reserves have fallen to their lowest level in more than three years, the central bank said Sunday, as Beijing sells dollars to stop the yuan from depreciating further.

The world’s largest currency hoard shrank by $99.5 billion in January to some $3.2 trillion, the People’s Bank of China said on its website, the lowest since May 2012.

Worries about China's economy have pushed the yuan to a five-year low. The country saw its first-ever annual decline in foreign exchange reserves last year as Beijing tried to prevent a more drastic devaluation.

The PBoC is selling dollars to buy yuan amid a capital flight spurred by the slowing growth in the world's second largest economy.

But some analysts predict a more drastic weakening of the yuan this year and question China's ability to continue rapidly shedding the reserves.

"While the remaining reserves represent a substantial war chest, the rapid pace of depletion in recent months is simply unsustainable," IHS Global Insight economist Rajiv Biswas told Bloomberg News.

Outflows increased "as expectations mount that the PBoC will eventually be forced to capitulate once its reserves are sufficiently depleted," he added.

George Magnus, economic commentator and associate at Oxford University's China Centre, wrote on Twitter: "China's fx reserves fell another $100bn ... clearly this can't go on for long."

The pace of decline in the reserves in January was slower than December, which at some $108 billion was the largest monthly drop on record.

China has also tightened some capital controls to try to curb outflows.

"The smaller decline in the reserves suggests that some capital outflow restrictions imposed in January worked," Shen Jianguang, chief Asia economist at Mizuho Securities, wrote in a note.

The drop in February will be much smaller, he added.

China has set its growth target for this year at between 6.5-7 percent, the top economic planner said Wednesday, an acknowledgement that expansion -- already at its slowest pace in 25 years -- will continue to weaken.

Global investors are closely watching the slowdown in the world's second largest economy, which has created turbulence in world markets.

source: interaksyon.com

Apple digital wallet heads to China

SAN FRANCSICO, California — Apple announced a major partnership with China UnionPay on Thursday to put is digital wallet to work in the world’s most populous country.

China UnionPay customers will be able to add their bank cards to Apple Pay on iPhones, iPads, or Apple Watch wearables, the companies said in a joint statement.

“China is an extremely important market for Apple and with China UnionPay and support from 15 of China’s leading banks, users will soon have a convenient, private and secure payment experience,” said Apple senior vice president of software and services Eddy Cue.


The service could be available early next year, pending approval of Chinese regulators.

Apple touts its digital wallet as letting people make purchases easily and securely, encrypting and hiding away personal data to thwart thieves.

UnionPay operates China’s national inter-bank clearing and settlement system and reported having issued more than five billion cards to date.

Apple launched its digital wallet last year in a move capitalizing on the popularity of its mobile devices and taking on rivals such as Google and PayPal, which are also competing in the market.

source: interaksyon.com

Key bank warns against 'uneasy calm' in global markets

ZURICH - The Bank for International Settlements (BIS) issued a warning Sunday over an "uneasy calm" within financial markets, noting that the global economy remains vulnerable to serious disruptions.

The BIS - known as the central bank of central banks - made the call in its quarterly report which is closely watched by investors.

In August and September, markets were shaken after serious concerns emerged about the health of leading emerging economies, especially China.

Interventions from monetary authorities succeeded in stabilizing markets to a degree, but the head of the monetary and economic division at the BIS, Claudio Borio, cautioned against being lulled into a false sense of security.

"The present calm is fragile," Borio said.

He pointed specifically to slowing capital flows and persistent signs of trouble in Brazil and Russia, even if China appears to have stabilized in part.

"In this context, it's hard to see the current calm as anything other than uneasy," Borio said.

Emphasizing the uncertainty that continues to affect financial markets, Borio noted that investors still remain extremely sensitive to even the slightest surprise in actions from central bankers.

A case in point is the reaction this week to European Central Bank chief Mario Draghi's latest stimulus package, which sparked a broad sell-off from disappointed investors who said the measures did not go far enough.

Senior ECB officials blamed the disappointment on investors who they say misjudged the ECB's expected actions.

source: interaksyon.com

Prepaid cards: Help for financially excluded or finance for terrorists?

PARIS - Prepaid payment cards were seen as a positive development, helping those excluded from the banking system and providing a convenient financial tool, but their use in the Paris terror attacks has revealed a troubling dark side.

The attackers used an anonymous prepaid card to rent hotel rooms outside Paris the night before the November 13 strikes that killed 130 people, according to Tracfin, the French body tasked with combating money laundering and the financing of terrorism.

It was a way to avoid being detected by intelligence agencies.

Prepaid cards have been one of the fastest growing segments of non-cash payments in recent years, and now authorities are concerned they may have become a tool that criminals use to keep their activities hidden and launder their funds.

Stamped with the Visa or MasterCard logo and protected with a PIN code, the cards allow users to withdraw funds at ATMs, as well as make purchases in stores and online.

However, unlike traditional debit cards, they must be charged in advance with funds.
They also don't bear a person's name, and if the amounts are not too large, no name is ever linked with the card.

In Europe it is currently possible to use without showing identification non-rechargeable cards for payments of up to 250 euros ($265) or up to 2,500 euros per year for rechargeable cards.

Benefits, gifts, wages

With online bill payments becoming more the norm, as well as the surge in online shopping, access to a payment card of some sort has become crucial in many countries. 

In the United States, they have become ubiquitous as many government benefits are now disbursed to prepaid cards. Some $148 billion was paid out that way last year according to the US Federal Reserve, although cards have to be registered to receive benefit payments.

And more and more US companies have begun issuing their employees prepaid cards to pay wages, thus cutting expenses related to using cheques and avoiding problems with workers who don't have a bank account.

Non-rechargeable cards have gained popularity as gift certificates, with companies also using them to entice or reward clients.

Volkswagen, for example, is offering US owners of its cars caught up in its emission cheating scandal a $500 prepaid Visa card.

In France, prepaid cards have found a niche with parents, as even minors can use them for payments.

"This allows parents to control the finances of their children," says France's Banque Postale, which has offered the cards since 2008.

A survey by the Pew Charitable Trusts found that a majority of low-income US users of prepaid cards also saw them as a means to control their spending, and avoid stiff overdraft fees that banks charge on traditional cards.

It is hard to say just how popular the cards have become in Europe as authorities don't break out payments by debit or prepaid cards.

However, a 2014 survey by the Bank of Italy found that nearly 17 percent of households had used prepaid cards, or about one in four that used payment cards.

Consulting firm CapGemini, in its latest publicly available report on the sector, estimated that prepaid cards accounted for 11.4 billion transactions worldwide in 2012, or nearly 4 percent of the total.

Untraceable

When issued by banks in Europe, the prepaid cards are usually linked to a bank account, thus making recharging convenient and ensuring transactions are traceable.

But EU directives aiming to boost competition opened up the sector to firms outside the banking sector, and 48 were registered, for instance, at the end of 2014 in France.

These companies have been behind the mushrooming of prepaid cards for sale in supermarkets and newsagents.

Available to anyone at least 18 years of age, some of these cards can be recharged with cash at newsagents and used to make transfers abroad.

And all that without having to show an ID.

That is why Bruno Dalles, the head of Tracfin, the French body tasked with combating money laundering and the financing of terrorism, said this past week he would seek to have prepaid card transactions "appear on our radar".

Anonymous prepaid cards "are used in the underground economy, in organised crime," said Dalles. "It is a tool which replaces cash, which is very discrete, untraceable. That is something we need to change."

French authorities have said they plan to reduce the amounts that cards may be charged with before identification becomes mandatory by decree early in 2016.

But if authorities want to fully eliminate the risk of their use by extremist groups,  "...identification should be needed from the first euro", said Frederic Jeannin, chief executive of Ticket Surf, a firm which provides online payment services.

He believes that part of the problem is that firms operating throughout Europe are only monitored in their home base.

Another is that prepaid card issuers also have no idea what the card is used for. When a charge comes through, the issuer sees only the merchant's bank.

Ticket Surf works directly with websites, which means they can monitor payments and shut off sites they suspect to be laundering money.

"It is important to have financial regulations but it is also important that financial institutions pay attention," said Jeannin.

source: interaksyon.com

Weak Chinese trade, US rate hike fears sink global stocks

NEW YORK - Another contraction in Chinese trade and rising expectations of a US interest rate hike in December sent most global markets tumbling Monday.

China's 18.8-percent fall in imports from a year ago, and a 6.9 percent drop in exports, spelled more sluggishness in the world's second-largest economy and in global growth more generally, hitting commodity prices as well as the shares of companies like Caterpillar which depend on them.

Supporting that view, the Organisation for Economic Co-operation and Development on Monday cut its forecast for global growth to 2.9 percent this year and 3.3 percent in 2016, calling the stagnation in global trade "deeply concerning".

On top of that was the strong US jobs data on Friday that gave more support for the US Federal Reserve hiking interest rates for the first time in nine years, which would raise the borrowing costs of governments and companies around the world.

Wall Street's key indices all tumbled 1.0 percent with little to spur buying after six straight weekly gains.

Mace Blicksilver of Marblehead Asset Management said US investors have a number of concerns, and that the market was "probably stronger than it should have been" last week.

"A little weak China data didn't help," he added.

European markets fell as brokers pondered the impact of higher US rates and slower global growth. London's FTSE dipped 0.9 percent, Frankfurt's DAX 30 lost 1.6 percent and Paris' CAC 40 dropped 1.5 percent.

Friday's strong US jobs report "pretty much made it a given that a US rate hike will take place after all in 2015," said Markus Huber, senior analyst at broker Peregrine & Black.

Ironically Chinese shares pushed higher, buoyed by news that the government was lifting a four-month ban on IPOs.

Chen Jiahe of Cinda Securities said regulators were more comfortable "after leveraged funding through outside channels was cleared and investor confidence recovered."

The dollar stabilized after last week's surge on the rate expectations, trading at 123.18 yen and $1.0749 per euro in late deals.

Still, said Joe Manimbo of Western Union Business Solutions, "market focus on monetary policies that are expected to loosen in Europe and tighten in the US suggests more open road for the dollar to run over the foreseeable future."

The key figures around 2200 GMT

New York - Dow:            DOWN 1.0 percent at 17,730.48 (close)

New York - S&P 500:     DOWN 1.0 percent at 2,078.58 (close)

New York - Nasdaq Composite:    DOWN 1.0 percent at 5,095.30 (close)

London - FTSE 100:       DOWN 0.9 percent at 6,295.16 (close)

Frankfurt - DAX 30:        DOWN 1.6 percent at 10,993.241 (close)

Paris- CAC 40:               DOWN 1.5 percent at 4,911.17 (close)

EURO STOXX 50:           DOWN 1.4 percent at 3,418.36 (close)   

Tokyo - Nikkei 225:      UP 2.0 percent at 19,642.74  (close)

Euro/dollar:                    UP to $1.0748 from $1.0742 late Friday

Dollar/yen:                     UP to 123.19 yen from 123.16 yen late Friday

source: interaksyon.com

Standard Chartered axes 15,000 jobs, announces $5.1B capital raise

Hong Kong, China - Asia-focused British bank Standard Chartered said Tuesday it would axe 15,000 jobs and raise $5.1 billion in capital after posting a "disappointing" third-quarter loss as it struggles to return to growth.

The job losses are part of a major restructuring that will cost around $3 billion, the bank said.

A Standard Chartered spokeswoman said she could not give any further details of the job cuts.

More than half of the restructuring costs would come from potential losses on liquidating assets and businesses, the bank said in a statement.

The remaining charges would be from "potential redundancy costs" of a planned headcount reduction of 15,000, as well as goodwill write-downs, it added.

The bank reported an unexpected pre-tax quarterly loss of $139 million compared with a $1.53 billion profit a year earlier, in a performance described as "disappointing" by group chief executive Bill Winters.

Revenue was down 18.4 percent to $3.68 billion and impairment losses increased from $536 million to $1.23 billion for the quarter.

Shares in the bank plunged as much as 6.2 percent on the Hong Kong stock exchange in the wake of the results – its stock value has fallen 32 percent in the past year.

"I know a lot of people losing their jobs is not good, (but) from a business point of view, that's what they have to do," Hong Kong-based financial analyst Jackson Wong told AFP.

Wong said loan losses were the main reason the bank swung to a pre-tax loss, adding that it needed to "control costs and try to remodel (its) business".

source: interaksyon.com

Remember Lehman Brothers and 2008 crisis? It's back in deal that led to First Data IPO

WILMINGTON, Delaware - First Data Corp's Chief Executive Officer Frank Bisignano hailed a $3.5 billion fund-raising in July 2014 for drawing a "who's who in equity investing" and paving the way for the payment processor's huge IPO last week.

The 2014 deal included one unusual investor: Lehman Brothers, the bank that collapsed in 2008 at the height of the financial crisis.

Lehman may be long gone from Wall Street, but its bankruptcy estate still manages a portfolio of more than $10 billion in assets, exceeding the market capitalization of fashion house Ralph Lauren Corp. or property investment firm Kimco Realty Corp.

From an office in Manhattan, Lehman's staff manage piles of cash and securities, interests in real estate and private equity investments, including a stake in Formula One motor racing.

While bankruptcy estates focus on liquidating assets for the benefit of creditors, Lehman dusted off its investing expertise last year and spent $151 million on private placement of stock in First Data.

According to a court filing, the money was spent on a "pro-rata" share of the private placement, indicating Lehman had a previous relationship with First Data. Lehman provided financing in 2007 for the buyout of First Data, which was led by KKR & Co.

"When you get a $3.5 billion vote of confidence by some fabulous investors," Bisignano told an analysts call in July 2014, "the who's who in equity investing in it gives your customers great confidence in your ability."

The private placement of stock was credited by Bisignano for providing cash to pay down First Data's debt and returning the company to profit after years of losses.

Lehman's management can make investments if they determine it will likely benefit creditors.

Lehman and First Data declined to comment on the Lehman stake.

Lehman did not disclose how the First Data investment performed.

KKR, which was the lead investor in the 2014 private placement, has estimated in securities filings the value of its investment in First Data rose about 13 percent from the private placement through June 30. However, those gains may have been offset after First Data cut the IPO price by 20 percent from the top of its target range.

Shares in First Data were little changed at $15.36 on Thursday, below the $16 IPO price.

Complex cases

Lehman emerged from bankruptcy in 2012 with a new board selected by creditors, overseen by Chairman David Pauker, formerly the executive managing director of Goldin Associates, a financial consultancy. Christopher O'Meara, a former chief financial officer of Lehman, is the chief executive.

"I do think it's remarkable both how significant Lehman's assets have turned out to be and how much they still have," said David Skeel, a professor at University of Pennsylvania Law School.

The First Data deal is not even the largest investment by the bankrupt firm. In 2012, it ponied up about $3 billion to buy two minority positions held by other banks in Archstone, an owner of apartment complexes, giving it full ownership. It later sold Archstone for $6.5 billion.

Lehman had teamed up with Tishman Speyer to acquire Archstone for $22.2 billion, including debt, in 2007.

In total, Lehman's bankruptcy estate has distributed $105.4 billion to creditors. Of that, $77.2 billion was paid to third-party claims, with the rest paid to other Lehman affiliates. While more than $1 trillion of claims were filed, the estate will recognize about $330 billion, according to court documents.

Jonathan Lipson, a professor at Temple University School of Law, said the case could still require years of work as the estate pursues lingering litigation and awaits overseas affiliates to complete their liquidations.

"Enron's estate lasted forever and ever," Lipson said, referring to the power company that filed in 2001 and closed its bankruptcy case only last year. "That's what happens with really complex cases."

source: interaksyon.com

Wall St. drops as China data rattles investors

NEW YORK - US stocks fell sharply in afternoon trading on Monday and were set for their worst third-quarter performance in four years as investors worried about the health of China's economy and its potential impact on the timing of a U.S. interest rate increase.

The Nasdaq composite and S&P 500 both dropped more than 2 percent.

Much of the damage came from pharmaceutical and biotech stocks, including Allergan and Gilead Sciences, with the sector still bleeding a week after Democratic presidential candidate Hillary Clinton criticized drug pricing.

The Nasdaq biotechnology index fell 6 percent following its worst week in seven years. Among the S&P sectors, the health care index was the deepest decliner, down 3.66 percent.

"The broad healthcare sector and China are hurting the market. It's time for risk-off and there's no place to hide," said Richard Weeks, managing director at HighTower Advisors in Vienna, Virginia.

Profits at Chinese industrial companies fell 8.8 percent, fresh data showed, pushing down shares of raw material producers and energy companies. Oil prices fell more than 2 percent.

U.S. consumer spending rose more than expected in August, data showed on Monday, appearing to add to the case for an interest rate increase this year.

However, contracts to buy previously owned U.S. homes decreased, indicating the robust housing market could be losing some steam.

The Federal Reserve held off from raising rates at its September meeting, citing concerns about the global economy, notably China, among other factors.

New York Federal Reserve President William Dudley on Monday added to expectations for a rate increase, suggesting the central bank could pull the trigger as soon as October.

Several other Fed officials are scheduled to speak during the week, including Chair Janet Yellen on Wednesday.

Investors will also scrutinize September non-farm payrolls data set for release on Friday.

At 2:41 pm, the Dow Jones industrial average was down 1.65 percent at 16,045.25. The S&P 500 lost 2.23 percent, to 1,888.26 and the Nasdaq Composite dropped 2.72 percent to 4,559.05.

Billionaire investor Carl Icahn said the U.S. Federal Reserve's low interest rates are creating bubbles in markets for art, property and high-yield "junk" bonds, in a video to be released on Tuesday.

The CBOE Volatility index, known as Wall Street's "fear gauge", jumped 16 percent to 27.37, well above its long-term average of 20.

Alcoa's shares jumped 2.70 percent after the aluminum producer said it would split into two publicly-traded companies.

Apple fell 1.53 percent despite reporting that it sold a record number of its new iPhones in their first weekend.

Declining issues outnumbered advancing ones on the NYSE by 2,744 to 337. On the Nasdaq, 2,323 issues fell and 509 advanced.

source: interaksyon.com