Potential for promoters and brands in co branded Credit cards Part.I

After issuing co-branding interest on credit cards for many retailers (supermarkets, car, tour operators, telecom ...). The increase in sales, the new potential of loyalty or the innovative images of the brand are often cited as advantages of the device. However, this new model card is it so attractive it is understood, particularly for carriers that have already greatly expanded an offer for "credit card"?

The provision of means of payment through non-bank is not new. Credit cards say "private", which bear the logo and colors of the sign that the commercial offer, are already widespread (one person in four has at least one store card in Europe). These allow the wearer to pay for purchases in stores of the brand or brands in a community of partners (equipped with specific payment terminals capable of reading the map). End of period, the balance of expenditure is deducted from the customer's bank account specified in the subscription card.

For the wearer, the main advantage of these cards is access to credit facilities in the form of consumer credit. For the merchant, this device allows to increase sales through financing provided to customers. That is why they are often offered free of charge and available direct in store.

These systems of credit cards are designed and managed by the players specialized in consumer credit. Largely in competition in this market segment, they offer innovative and customized services to retailers. Thus, these payment methods usually offer several additional features:

* Choose from several formulas settlement at the time of checkout: cash payment, use of the reserve revolving unique to the card, credit depreciable independent promotional rates (especially during Christmas or birthday of the brand ...)
* Advantages of a traditional loyalty card: accumulation of points, good management and specific reductions, access to targeted campaigns (type balances private ...)
* Insurance and other additional services

In addition, this system is transparent to the user, since these cards are promoted and distributed by the sign at the point of sale.

Micro Insurance and Micro Credit Part.III

In Model "producer-distributor coach," the producer performs all product development activities and sometimes after-sales service, while the distributor is responsible for the act of selling the product that was previously recommended by the attendant.
Networks to aid the economic initiative are well equipped to play the role of accompanist, using the leverage of their existing networks and building on already established relationships of trust with the micro entrepreneurs during assembly files microcredit. The staff of these networks still needs to be trained in insurance products to be able to perform its consulting business.
The coach may also carry out the deed, but more often it is the producer or a third actor playing the role of distributor. Contractors in the supply of the city, networks of support are not selling, they are responsible to the requirements and redirect to the creators of the City Contractors who takes care of distributing (without commission) micro-insurance products through its association and support the service remaining the sole representative of the member. The combination takes advantage of this special role to provide support (including legal) in the Proceedings of the insured.
Conversely, insurance products are better developed, based on specifications developed based on needs and financial capacities of micro entrepreneurs by insurers who have the expertise and capital required.

It is clear that the design of both products presented above are based on models of classic products insurance (liability, property and casualty business,) well understood by insurers and distribution models have proven otherwise. The innovation of this type of product then essentially comes from the mix design "optimized" (an insurance policy and a simplified marketing price equal to the cost of production) and distribution "local" (accompanied by networks of initiative Economic and associations).

The need for micro-entrepreneurs in terms of insurance is not new and it is questionable why such offers micro-insurance have not been developed earlier. According to Mr. Schinzler, Chairman of the Supervisory Board of Munich Re, "the premium income is low administrative costs are relatively high and the infrastructure is lacking, as many arguments as to why the lack of interests of insurers in this market professionals. "
Micro insurance, such as microfinance in general, should not be seen as a vast market of the future with enormous future profits (insurers partners do not profit margin on products and distribution fees are zero). Today, it should rather be seen as an activity to meet the challenges of sustainable development in Financial Services, a theme which is too often accused the professionals of this sector of disinterest. The many recent initiatives in this area indicate the contrary a real desire...

Micro Insurance and Micro Credit Part.II

While microcredit is now well accepted in Europe among the types of funding, micro insurance is currently not among the first its risk management solutions. Yet it is a natural extension of microcredit to secure and sustain the long term activity initiated by the micro-entrepreneur.
The first offer micro insurance launched in Europe by Contractors of the City in December 2006. This "First Insurance Package" provides a standard insurance policy covering the three major types of risks faced by micro entrepreneurs and comprehensive coverage including professional liability, Welfare and Health. This is compounded by a range of options such as auto insurance products or comprehensive home. On a maximum of 4 years duration required for proper insertion into the economic fabric, it is available for less than € 1 per day.
The second offer was launched by AXA and Macif in partnership with the ADIE in May 2007. In part similar to the basic coverage, duration and price, it differs from the previous bid by the additional guarantees specific to the type of activity. Note, for example, guarantees for construction activities (from 1000 € / year) that are legally binding assurances.



It is interesting to note that these offers are based on micro-insurance business model "producer-distributor-coach." To understand this model, return on insurance mechanisms. In an offer of insurance, there are three groups of activities involved: product design, sales and service. The design is related to both the development and pricing to risk management of insurance portfolio and the investment of reserves and annual premiums. The sale includes all activities related to marketing, promotion and sale of the product. The service includes the collection, continuous premiums of the insured and the settlement of their compensation.

International cell phone rental

All of us will generally have a dream to for ever and a day keeps up a correspondence among our friends also with relations who stay at a distant land. On the other hand, in the US there are merely some folks who can pay for a telecommunication gadget which can lend a hand to put together to get in touch with with their beloved ones. Understanding this reality actually happens in their surroundings, a few compassionate folks met to form a step forward. By means of the aid of technology growth, they accomplish something in building their formation and in conclusion and named it as JOJOTALK. The Jojotalk is an innovative corporation whose idea is to provide support meant for people around the globe who long to commune simpler. To say in other words, this corporation offers an International cell phone rental service. In this challenging age, the majority people be acquainted with that it is not reasonable for them to purchase a cell phone of a superior value and to pay out few of their earnings meant for the standard balance. As a result, the subsistence of Jojotalk conveys a bunch of rewards for people, in particular those who reside in the United States. The service from this corporation, the people can save their money more for the reason that it would merely cost them $0.25 cents for each minute. If you are in concerned in this service, do not ever fail to see it! For more information, just log on to their site. Thanks!

Micro Insurance and Micro Credit Part.I

After demonstrating his interest in developing countries, micro-insurance - like micro-credit - investing developed countries. As proof, two offers micro insurance bound for micro entrepreneurs were launched in Europe in the last 10 months. Decryption ...

The importance of micro and vulnerability

Little media coverage, the world of micro, Nonetheless exciting. A study of DCASPL, 1 January 2004 there were in Europe 2,390,000 microenterprises, more than 95% of European  companies. All of these micro-employed 5,798,700 people, that is to say 1/4 of wage employment, and generated the same year more than 8% of  exports. In other words, micro enterprises are businesses that have real economic significance, and more, social.

Interesting phenomenon, according to INSEE figures for 2004, more than 220,000 micro-enterprises were created. And nearly a third of the creators were unemployed (half for more than a year). That is to say that much of the newly created small organizations, which are inherently fragile, are supported by people who are particularly vulnerable.

To address this vulnerability, micro entrepreneurs may find support from actors to promote economic initiatives such as PACE, ADIE  or active Europe. In addition to expert advice, these players offer solutions to meet the needs of the two main creators finance their project and manage risk.

Broadly, there are three main types of risks faced by micro entrepreneurs:

* The damage that the company could suffer in case of disaster;
* The damage that could cause the company to third parties;
* Risks that relate to people (health, disability ...).

Oil prices boosted by hopes for the G20 summit

Oil prices never ceases to oscillate at the mercy of wind, carried by the waves that hit pessimistic or optimistic current market ... unless these are not swing the tree hiding the forest of speculation ....  The price per barrel has closed up Friday in New York, spruced this time by the optimism associated with expectations of investors about the positive outcome of the meeting of G20 finance ministers held Friday and Saturday. They hope such a recapitalization of the European banking sector to take place.
Caution is however set as the market speculates on a possible continuation of U.S. demand, while consumer confidence is reduced day by day. The index of consumer confidence, released Friday, has in fact eroded again after showing a slight improvement in September. It now approaches its value in August, when he had touched its highest level since November 2008. Worrying figures that even the strong growth in retail sales in September in the United States could not control.  Yet, according to the Commerce Department, the increase was significant and that the increase was 1.1% compared to last month, well above the value of analysts' projections.
Finally, Friday, a barrel of light sweet crude for November delivery gained 2.57 dollars from Thursday's close, trading at 86.80 dollars on the New York Mercantile Exchange (Nymex).

The Industry Compliance and Risk Management in Banking Part. III

Small companies portfolio management, often without record keeping function or UCITS depositary, are less likely than large private banks in the image of SG Private Banking and BNP Paribas Private Banking in France. The second, also known as reputation risk, is the potential risk of impairment of the company following the completion of an operational risk and is currently a major concern of private banks. Indeed, rather than retail banking, private banking built its success on its relationship with its customers and their perception of the bank whose image can be up to 80% of the value.

However, as evidenced by the reputational risk, difficult to materialize, quantify the value added of industry compliance is complex. As new operational risks ahead, the error would be to relegate to second place on the grounds that the instances of existing controls (risk, legal, internal control) are enough to support them. Most private banks have assimilated with seven out of ten organizations consider that the function is used to reduce or eliminate the costs of non-compliance [2]. The integration at the heart of the relationship with third party may even allow them to be a strategic advantage. On the one hand, customers are demanding their private bank integrity and accountability increased, the values defended by the industry compliance. Moreover, by making visible the intervention of the department compliance, managers can strengthen their relationship of trust with the customer and demonstrate that it has confidence of stakeholders in case of dispute. Of course, this procedure will remain balanced in order not to go against the productivity of managers.

Who says balanced does not mean limited. On the contrary, it is perfectly conceivable that in the future, the scope of intervention of the function widens, in private banking as in other areas of banking (investment banking, retail banking, and asset management). This could exceed the regulatory and ethics to include ethical and social values, thus meeting the new requirements of customers and shareholders, among others...

The Industry Compliance and Risk Management in Banking Part. II

By its nature, the private banking business is subject to strong ethical obligations in a restrictive regulatory environment. Private Banks were able to adapt their organizations accordingly by developing a "sector compliance" deployed across their different levels and geographic features. Compliance is also declines in their information system. The tools available to the front office are now configured so as to detect transactions revealed a risk of non-compliance. Still, the legislation varies from one country to another, even within Europe, and in fact complicates the adaptation of the SI in a pooling system.

In this way, private banks have managed to build a culture committed to compliance throughout their organization, regardless of the level of responsibility and activity of its players, with supporting concrete ways (eg dissemination of "best practices "developed in-house or in collaboration with other banks to better support the fight against money laundering, etc.). in addition to the rules dictated by the ethics implicit in the strict sense. Daily collaboration between asset managers and compliance officers or the training focused on the regulation is widely involved in the dissemination of such a culture. All this should help avoid service failures often related to communication problems on compliance.



Thus, the various stakeholders of a private bank involved in the efficiency of the public and particularly to locking the risks of business and reputation. The first stems from the use of instruments with increasingly complex and specific risks (hedge funds, credit derivatives, etc.)..

The Industry Compliance and Risk Management in Banking Part.I

In 2004, the Parmalat scandal has revealed a huge hole in the accounts of the group of food while a considerable amount of money was diverted to tax havens, splashing in passing several private banks. A

Like Enron in 2001, these scandals have led to a stricter financial regulation, arguing in particular for greater transparency and increased customer knowledge, like the last part of the Directive for the anti-money laundering entry into force in 2005.

Against a background of risk management, the recent regulations (Basel II ...) were, in general, translated contextually in the legal departments of banks declined by their directions operationally risk, internal control, checking the correct application. Beyond these functions, the consideration of operational risk under Basel regulation and more generally the risk of non-compliance requires a related but separate governance, namely the "compliance". Commonly translated by the term "compliance", it transcends and includes the current notion of "ethics", focusing on compliance with the rules of conduct within the organization and vis-à-vis third bank, and especially under legal limits. Specifically, the compliance ensures that the bank acts in accordance with its rules, the law, the Code of Conduct, as well as best practices to avoid irregularities in the functioning of the Institution, its organs and its staff [1]. Therefore, in an environment where ethics is rooted in the everyday life of private banks for decades, compliance developed in parallel or even supplants to occupy an ever more important.

Operational Efficiency Part.III

The combination of the two services is essential to ensure consistency in the development and daily management. Service levels associated with these two activities should be adapted to customer needs.
The provision of all services must be guaranteed by service agreements, reviewed regularly with key users. This will regulate the relationship with users and a corresponding reduction in the cost of the relationship.

Governance and management:
To ensure consistency of objectives from day to day developments, it is necessary to establish a unique control of the whole area of work operationally and in terms of its development (projects). The cells respond directly support the daily needs of internal customers will be directly connected to the same manager as the study of cell changes (service projects) and project management.
In addition to coordination facilitated the centralization of information on operational activity will also have indicators for monitoring the activity and complete advanced.
The establishment of centers contributing to the development of operational effectiveness of the organization

The division of operational efficiency can significantly increase the operational efficiency of any Bank by reducing the complexity of the process, facilitating the evolution of organizations, reducing the overall cost of the activity level of service or greater .
This structure also facilitates the response to the need for continuous development, ensuring consistency in its scope, and contributing directly to facilitate the work of projects and developments of its clients through its dedicated service and expertise.

For the pole reaches these goals, it will first identify the activities conducive to centralization of assets to add value and define the services 'operational' and 'projects' to enlist the broader scope of users. The identification, definition, implementation and establishing the trajectory of evolution of the cluster operational efficiency will require using an approach to take into account all the dimensions (budget, governance, expertise, information, human resources, IT ...).

Operational Efficiency Part.II

To effectively perform its duties, the division of operational efficiency will:

* Relate to activities for which it is possible to concentrate really three types of assets: the expertise, resources and information,
* Be resolutely turned towards the customers either returning customers or projects of development,
* Be provided with a governance and management processes adapted.

The assets of the division of operational efficiency:
The division of operational efficiency based on concentration of the three assets that are the information, expertise and resources. Only the structures to achieve the concentration of these three assets are likely to constitute the poles of operational efficiency in its own right.
Vis-à-vis the information, the cluster will have a role as manager, owner or centralized (broker). It will therefore have a good command of a large set of information and / or complex, which will provide added value to share with its customers.
Expertise is a real knowledge of the scope of activity, the scope of use of services by clients, information and resources. The center will draw a capacity to formulate policies and methods. The expertise is not limited to a number of FTEs, but is the understanding of complex issues and ability to assist clients on these issues.
Means include other material, application or human (ie production capacity). The division of operational efficiency in the service of internal customers: With the exception of centers dedicated to specific clients of the company (call center, help desk ...), customers of a center of operational effectiveness of internal customers: other branches and departments, subsidiaries ... In particular, the implementation in place of a center of operational efficiency can send new customers such as small entities who could not afford these services before.
The division makes sense in the long term added value to its customers. To achieve this goal, the division must identify:

* The services 'operational' to make available the various entities on a recurring basis,
* Services projects or support services for the integration of services (eg setting up new tables referential or new releases for the cluster reference, definition and implementation of accounting controls of a project up or disseminating data for the accounting ... pole).

Operational Efficiency Part.I

A center operational efficiency is an organizational structure in place to deliver a set of specialized services. These services are focused exclusively on a set of functions similar (same functional area) and common entire enterprise or multiple directions. The division of operational efficiency is also involved in coordinating and facilitating changes in the scope of activity which he is responsible.

The tasks incumbent upon it are of two kinds:

* Operational mission: delivering in-house or external services
o Shared: used by all clients (which requires a sufficient level of both standardization and adaptability to customer needs)
o Quality: ensuring a high level of service,
o Integrated: consistent with the possible developments and other services (same principles or standards, consistency of information ...).
* Strategic Missions: alignment with corporate goals
o In terms of scope of activity: operational manager for both the service and project management in the strategic field, defining the principles and standards of practice and evolution,
o In terms of process users of these services: the service of development projects for the integration of services,
o Financial issues: cost reduction in service level or above.

The establishment of centers of operational efficiency should facilitate the changes by developing flexibility in the organization. This distinguishes them from the pooling of services that do not necessarily generate earnings above the centralization of resources.
In terms of implementation, the creation of a center of operational effectiveness is not in the sharing of existing services but rather to develop an internal provider with a service offering clean.
Key features of the poles of operational efficiency

Discovery of Gas Deposit in Sri Lanka

The group Cairn India announced Sunday the discovery of offshore natural gas field off the west coast of Sri Lanka, something that had never seen in this country energy supply mainly depends on imports.
Recall that in August, Cairn India, the Indian subsidiary of Scottish Cairn Energy, has initiated exploration in the Mannar Basin, seismic studies have previously indicated to the presence of gas and oil.

Cairn has also indicated that further drilling will be conducted to measure the commercial interest of the discovery, noting also that the deposit was drilled 4.3 kilometers deep. This is an event that could significantly change the economic situation of Sri Lanka.  While drilling undertaken in early 1970 by Russian companies had failed to demonstrate significant reserves. It should be noted also that Cairn has sold its Indian subsidiary in mining giant Vedanta Resources, a group listed in London, controlled by billionaire Anil Agarwal of Indian origin.

Energy demand in Sri Lanka has risen sharply with the economic takeoff that followed the end of armed conflict in May 2009. If the current pace of its evolution continues, demand will double by 2018. It is in this context that the Government has already started negotiations with Russia to provide fuel and nuclear waste to Moscow. The country is also in contact with the International Atomic Energy Agency and countries with reactors for training and technical expertise.

Moreover, according to Sri Lanka, solar and wind powers are not suitable for consumption pattern in Sri Lanka. Country is indeed the point of electricity consumption at night, during which energies of this type are not available, but cannot be easily stored.

The Sugar Prices Boosted By The Financial Markets

 The sugar prices have benefited greatly from this week's wave of optimism that has reached the financial markets, this raw material is structurally more susceptible to fluctuations. The concerns weighing on investors again before the weekend, however, have reduced the rise. The latest figures from the Brazilian federation Unica, reports of a further slowdown in September of sugar production in Brazil, world's largest producer, have also allowed the prices to show an upward trend.

However, this weekend, the market's limited gains, concerns about the debt crisis in the European Union take precedence over other rights. Good crop prospects in India and Thailand are also specialists fear that the request is well below the offer. Analysts estimate that in fact the next harvest from these countries and Russia should rapidly offset by volume weakness in Brazilian production. Investors also expect a revival production of sugar beets in the European Union.

According to the International Sugar Organization (ISO), the excess production is forecast at 4.2 million tones during the period from October 2011 to September 2012.  Finally, on Friday at the lunch break, a tone of white sugar for December delivery was worth 657 pounds on the Liffe in London, against 623.30 pounds the previous week about the same time.  On the NYBOT-ICE U.S. per pound of raw sugar for March delivery traded at 25.19 cents against 24.30 cents a week earlier.

The implementation of Basel II in emerging World Part.III

In Morocco for example, credit risk, what methods are "standards" that are applied in the first place, methods "advanced" being planned in a few years. This allows the market to have time to prepare for and adapt to new standards and above all to promote aspects of governance and transparency (Pillar 2 and 3) as opposed to the race for the sophisticated methods that can lead advanced.

In addition to these legislative aspects and context, the gradual implementation of the standards also allows emerging in time to cushion the financial and human investments induced by the introduction of the device (see article in Financial Services Strategies on the topic: decryption and impact of Basel / IAS in Morocco). These investments are mainly of two kinds: information systems and organizational. Indeed, the Basel standards require a quasi-systematic evolution of strong information systems and the integration of a computing device and archiving of data and specific parameters. This results in high costs, even in many cases, a software market, whose development costs were shared.
For banks, Basel II is also an opportunity to renovate related functions, such as ALM, the practices of lending and risk treatment (recovery), the mechanisms of funding or administration of reference ( especially the third).

The implementation of Basel II also leads to organizational and human costs. Indeed, banks are obliged to proceed with the scalability, and in some cases, the formation of teams in charge of the management, control and risk modeling. In addition, to be fully effective, reform requires awareness (through training) of all stakeholders, including the Directorate General (requirement of Pillar 2), in the process of the bank of grant reporting regulations.

The adoption of Basel II prudential standards, therefore, a virtuous cycle leads to multiple benefits for countries implementing them: this process can be slow in some areas, but it is inexorable to comply with international standards.

The implementation of Basel II in emerging World Part.II

Implementation is necessary for local regulators to enable them:

* To learn from established and that have taken place earlier in other countries.
Indeed, in order to receive feedback from the actors in countries that have already adopted the reform, the emerging countries have established processes for discussion and exchange that lasted several years for some of them ( for example, the Moroccan regulator has consulted for 3 years before the French players to transpose the Basel standards in its regulation).
* To prepare their local regulations to the requirements of the new standards.
To be effective Basel standards require an adequate regulatory environment and thus prepared. The legislature must provide for such an expansion of the prerogatives of local regulatory authorities through the adoption of a number of laws to modernize bank.
* Adapt the Basel standards to the country context, particularly in terms of two parameters: the diversity of financial activity in this country and the level of detail and sophistication of available information.
On adaptation to local conditions, for example it is useless to try to apply the same level of sophistication of the Basel requirements for market risk (modeling) in a country where 99% of the activity is commercial banking (loans, current accounts ....).
Also, try to impose a strict segmentation of customers through the turnover (which is required in the regulations) is not always possible in some emerging markets given the low quality of available information or thresholds turnover that does not correspond to G10.

The implementation of Basel II in emerging World Part.I

The Basel II, whose implementation has been effective in all European countries or those of G10, The monetary and financial system is international and globalized; the new Basel Accord applies to countries emerging.

A necessity to stay in the international race is the reasons prompting the emerging countries to implement Basel II are due to both regulators and local financial institutions.

For local regulators, the standards required by Basel II first appear as a necessity to show the dynamics of the country and its integration into international standards. Indeed, by its demands for governance and transparency (Pillars 2 and 3 of the reform), coupled with a sophisticated risk management practices and in terms of calculations, the Basel II provides a real upgrade financial system. This new framework of risk is often seen as a catalyst that would clearly enhance the country's economic development.

For financial institutions, their membership is more common with banks based in countries where standards are in force, the implementation of Basel II is often a constraint group. Indeed, the parent companies which are subject to Basel II must deploy this device in all of their subsidiaries, in order to have a consistent view of risk borne. For local branches, Basel II will increase their competitiveness in the long term by generating an adjustment of product pricing based on risk and improving the general policy of granting credit.


In most emerging countries, the implementation of Basel II is graduated in time and specific to reflect the particularities of each country.

Outsourcing and internal control in Banking Part.II

In this context, the establishment of collective audit providers could help save time and productivity for each establishment.
This optimization of the audit activities outsourced more and more interested in the Inspection Branch of the big banks. And working groups were formed in a pooled between several banks in order to define the terms of planning, implementation and monitoring of audits of providers. The working group is considering the establishment of a governance structure, a plan of joint audit and risk mapping for the shared use of audits should be part of common control risks of each institution without failing to respect the privacy principles of each Bank.

However, to date, nothing has yet been clearly defined and different approaches are envisaged for the implementation of shared audits:

* Audits carried out by joint team delegations
* Audits shared between delegations (each delegating the responsibility of an audit)
* Audits by authorized third parties

what could be the conclusions of this working group?
The operational implementation of a system audit activities outsourced based on audits shared between the delegating or on a joint team delegations, would seem the most logical and easiest to implement. But that solution presents risks to lead to potential conflicts of interest on the conduct of audits, the findings and the implementation of action plans. Thus, differences between schools could undermine the legitimate operation of the audits. The conduct of audits by authorized third parties, outside each bank, would then appear as the preferred solution as long as you specify the responsibility of each institution's contractual terms.
But should we in this case provide auditing services of third parties mandated?
Indeed, in the case of annual monitoring of outsourced activities, external auditors could be considered as service providers intellectual Internal Control. The control activity is necessarily "essential" it therefore falls within the scope of activities to be audited!

Under these conditions, the task of the Working Group seems difficult to reach consensus on a pragmatic and operative in order not to deport the weight of outsourced activities on control functions.

Outsourcing and internal control in Banking Part.I

The use of outsourcing is a growing phenomenon that is a strategic choice for enterprises, generally guided by the objective of streamlining production costs and improve profitability. Did not escape this trend, banks are also appeal to external structures in order to give them in exchange for remuneration of non-strategic or unprofitable. For example, check processing is an activity often outsourced by the banks because it creates a significant load input and low added value.

But beware; the outsourcing of an activity does not prevent its control.
Indeed, 2007 orders involve clarifying the controls to be installed on the outsourced activities "essential." These changes are intended to ensure the principle of "no transfer of responsibility" of the Bank's external service provider. In this context, banks should review their internal control systems with a view to measuring, monitoring and control of risks related to outsourced activities. The controls must include details of:

* A guarantee of quality for normal service.
* The establishment of a plan for continuity of service by the service (commitment of recovery time).
* The protection of confidential information.

De facto, the outsourcing should result in a written contract between the provider and establishing external client. The contract shall contain a clause giving the right to regular audits and a statement of the steps taken by the continuous monitoring and periodic monitoring of outsourced activities. In view of these regulations, what are the good practices observed in the square as part of outsourced providers to common? Given the fairly concentrated market providers, banks often resort to common providers. For example include BRINKS Evolution for transporting money or Experiance to check processing draining a very large market share on their respective activities.

Banks will have to regain trust

The current financial crisis through the financial markets due to subprime write-downs but also with the announcement of an unprecedented fraud at Society General structurally alter the banking landscape and challenges acquired banks to the market, investors as well as their clients: the confidence of financial institutions.

Through the efforts of transparency, better management of their operational costs and optimizing their capital, banks have to adapt to a financial cycle that will require them to demonstrate their ability to innovate both in terms of respect new regulatory ratios in terms of cost reduction and business development. The impact of this crisis of confidence and the levers available to financial institutions to restore calm and confidence in the system should be done at the earliest.

China investors shunning banks

You could fear that may happen in Europe, but in China it is happening. According to the official press, the four largest commercial banks are Chinese investors look to other alternatives - such as individuals and private companies - to deposit their money, it pushed by high inflation and low interest rates.

According to the Zhongguo Zhengjuan Bao (Journal of China securities), deposits of the Industrial and Commercial Bank of China (ICBC), China Construction Bank (CCB), Bank of China and Agricultural Bank of China (ABC) fell by 420 billion Yuan (48.6 billion Euros) during the first 15 days of September.

The business daily also argues that much of the funds were placed on a parallel credit market. If individuals and companies are certainly not having status to bank, they nevertheless offer pay about ten times higher than bank deposits. Recall that the rise in consumer prices was 6.2% in August, while the deposit rates at one year is only 3.5%. In the end, so investors lose purchasing power by placing their money in the bank.

It should be noted also that in early September, the rating agency Fitch said it may lower the sovereign rating of China in the next two years. Reasons: the heavy debt the Chinese banking sector, the latter having provided massive loans in recent months.

Fitch confirms the highest score to Germany

The rating agency Fitch on Tuesday reaffirmed the "AAA" rating to Germany, and now it is the best position. The outlook remains stable on the other hand. A good report that offers the very interesting German debt investment safe haven status in these troubled times.

Speaking in a statement, Fitch highlights the following: a German economy "robust and diversified", "health" of the labor market, a macroeconomic management "prudent" investments and "vigorous". According to the agency, the prevailing market rate for the German debt if need be shown the safe haven status associated with it. However, that "the resolution of the crisis in the euro zone remains a determining factor for the stability of the German economy" notes Fitch.

"With a 40% share of German exports, 2% of GDP spent on existing support plans, and exposure of its banking sector to peripheral economies in the euro area, the risk of contagion from the crisis in Germany public debt remains high, "said Fitch, as well.

A position that echoes that of the IMF, the IMF saw as a likely scenario now possible spread of the debt crisis of the euro area financial system. "The banks' exposure to the fragile economies of the euro area is a fraction of the total, but is concentrated on a small number of institutions," said the agency also. The Landesbanken, regional public banks also remain a weak point of the German economy, Fitch believes that "an additional restructuring and consolidation is needed in this sector."

Recall that the Basel Committee refuses to recognize the present German peculiarity consists in that a large part of bank capital is composed of public hybrid capital which banks must pay interest to shareholders. Local authorities could be forced to run vast operations re-capitalization, the amount could be just "confessed" politically speaking.

For many years, observers indicate persistently that only two or three Landesbanken sufficient in Germany, instead of the seven schools being independent. But, of course, local politicians are hesitant to say the least to give up some of the prestige and economic power associated with these regional facilities.

New measures to support the American economy

The U.S. Federal Reserve, Central Bank of the United States (EDF) announced Wednesday that it would take further measures to support the U.S. economy, saying the resumption of the latter remained "slow". Among the measures: the sale by the end of June 2012 the equivalent of $ 400 billion in Treasury bills.


Subsequently, the Fed plans to buy an equivalent amount with a longer maturity in an attempt to lower interest rates and long-term power purchase real estate securities without increasing the size of its portfolio, the objective to support the mortgage market. The Fed also said it would keep its key interest rate near zero until mid-2013 if necessary.

On Tuesday, investors had taken for granted that the U.S. Federal Reserve (Fed) announced shortly measures to resume, background likely to increase demand for raw materials. While opening the meeting of the Monetary Policy Committee of the Fed, investors are already betting on a new "Operation Twist", which is to lower interest rates in the long term to boost the activity without act on interest rates in the short term.

In fact, such an operation is to extend the maturity of securities held in the balance sheet, ten years and over, to reduce rates, evidence to boost business investment and household on the housing market. Such a measure Devit also have an immediate impact on prices by devaluing the dollar and increasing demand in emerging markets.

Sharp rise in bad loans of banks in Spain

Decidedly, things keep getting worse in Spain, while the Madrid Stock Exchange barely see the green, data published Monday by the Bank of Spain indicate that bad debts are Spanish banks amounted to 3.1 billion euros in July, reaching a total of 124.7 billion euros. Note also that the ratio of NPLs to total loans granted by the Spanish financial sector amounted to 6.94% in July, corresponding to a level not seen since February 1995. Induced by such a situation of rising unemployment and increasing household debt.

Recall in this connection that the mortgage-up over 70% of household debt. However, this often forgotten by the media to tell you is that almost 85% of Spanish mortgages in 2001 consisted of floating rate loans. Note that in other countries such as France and Germany, less than 20% of loans to the same period are of this type. A context that makes the Spanish market particularly sensitive to changes in interest rates from the European Central Bank ....

Let us recall that in Spain, the Euribor ((interbank lending rate in the euro area) in one year is the index most used to index the interest rate. Finally, 93.2% of families in debt for real estate purchases on the other side of the Pyrenees are at variable rates.

The price of gold a victim of profit-taking

Once is not custom, gold has not benefited Monday from its role as a safe haven. Investors seem to have the contrary "relieved" of their investment in the precious metal to cover losses in other markets. By mid afternoon, the price of an ounce of gold was trading around 1820 dollars, while prices went up Friday to 1885.90 dollars.

On Tuesday, gold had even reached a record high of 1921.15 dollars. A surge that has allowed some to reap serious benefits and allowing them to absorb the consequences of their unfortunate investments.
Let us recall that an ounce of gold was still up 15% in a month. The surge in gold is also hampered the last few hours by the renewed strength of the dollar, the greenback Monday reaching its highest level in six months against the Euro. A situation that makes it less attractive raw material purchases denominated in U.S. currency.

Still, the phenomenon could be a passenger, uncertainties regarding the euro area accentuated a little more each day. It should be noted as well as the largest gold funds listed globally, SPDR Gold Trust, saw the level of its holdings increase by 10.5 tons during the single day of Friday to reach 1,241 tons now.

Oil prices on the increase

Oil-barrel prices rose sharply Wednesday in New York, boosted by the weather and a report from the Fed to say the least optimistic about U.S. growth. The recovery of strength in the stock markets will do the rest. On the New York Mercantile Exchange, a barrel of light sweet crude for October delivery had soared to well over 3.32 dollars Tuesday, up to now the value of 89.34 dollars. Meanwhile in London, the price of Brent North Sea for the same period was trading at 115.80 dollars on the Intercontinental Exchange, rising 2.91 dollars so.

The price of crude rose sharply at the opening as markets react strongly to climatic conditions observed in the Gulf of Mexico, a region where most of the platforms provide a quarter of the oil consumed in the country. Investors have largely responded to the report published by the Office of Management and regulation of ocean energy resources (http://www.cmegroup.com/company/nymex.htmlBOEMRE), the latter indicating that, indeed, if Tropical Storm Lee, who reached Sunday Louisiana had inflicted no major damage, the fact remained that 37% of oil extraction and 18% of gas extraction in the area remained suspended Wednesday.

Although significantly a lower percentages of the values observed the previous day but at a level totally unexpected. Note also a possible disruption of production in Mexico, second largest exporter of crude to the United States while the National Hurricane Center reports that a tropical cyclone could pass within 48 hours, with a probability of 70%.

The price per barrel will also be benefited with the surge in global stock markets observed Wednesday, London and Paris rising more than 3%, while Frankfurt soared more than 4%. Another positive: the report of conditions contained in the Beige Book Federal Reserve (Fed), economic activity in the United States continued to grow at a moderate pace. An ad that has the merit of ending the cycle of bad news experienced in recent times.

Fitch could degrade China because of the banking sector

While the European Union and the United States is buffeted by a debt crisis without precedent, Thursday, rating agency Fitch said it may lower the sovereign rating of China in the next two years. Reasons: the heavy debt the Chinese banking sector, the latter having provided massive loans in recent months.

In an interview with Reuters, Andrew Colquhoun, head of Asia Pacific ratings at Fitch, has considered possible a downgrade in China from 12 to 24 months. "We anticipate a material deterioration in the quality of bank assets. If the problems of the sector are changing as we anticipate, or even worse, the next 12 to 24 months, this would lead us to lower the note," he warned.

Last April, already, Fitch lowered its rating outlook on China's "stable" to "negative", citing concerns that date on the financial stability of the country following the decision in Beijing to increase bank credit to maintain China's economic growth. Currently, Fitch assigns the note to China 'AA-', corresponding to the fourth highest level of its scale, position equivalent to that of Italy and a notch below that of Spain.

In early July, the rating agency Moody's had indicated that for its public debt to China stood at 36% of its Gross Domestic Product (GDP), taking into account the share of the debts of local governments for which Beijing assume direct responsibility. A few days earlier, the National Audit Office had indicated that the debts of the provinces, municipalities and districts Chinese rose late 2010 to 27% of Chinese GDP, representing a total of 1.163 trillion Euros.

The same office had, however, insisted that 63% of this debt would be repaid through revenue budget.

Now where the rub is; that they have borrowed huge amounts from the global financial crisis, via means of ad hoc structures called "platforms financing" or PFL.
Objective: To finance infrastructure and housing projects not always profitable.

But according to the National Audit Office; the "ability to pay is low and faces potential risks in certain areas and certain industries." Indeed, in a snowball effect, some local governments had to make new loans ... to repay the debts already contracted, also heavily dependent on land sales to meet their deadlines.

According to the auditors of governments of China, 108.3 billion yuan (11.8 billion) of loans were made or used fraudulently, the money ends up in banks or stock markets real estate.

Indeed, point out that as a guarantee, the PFL received capital that comes from land assets transferred by the community investment fund and ... fraud, bank lending in the short term what notionally provide a PFL time he gets a larger credit. All of which leads ultimately to the National Audit Office that the platforms of local funding must be "cleaned and regulated."

A bit worried, Moody's said that Chinese banks have lent billions of 8500 yuan (905 billion) out of 10'700 billion yuan (1.163 trillion euros) to local governments ... a situation that causes a high risk exposure.

"The debts existed before the global financial crisis, but they quickly accumulated in the last two years while investment by local governments has been used as a key tool" to boost the economy, adds Moody's.

Copper prices on rise!!!

The price of copper rose on Wednesday at 9304 dollars a tonne, its highest level since early August.Prices remain supported by strong concerns over the production of Chile. The country's largest exporter worldwide, is greatly affected recently by strikes in the mining sector.

Analysts at MF Global, official figures this week reported a fall of 18% of Chile's copper supply in July.A context that would fuel tensions in the market, while new social movements may emerge in the giant Grasberg mine in Indonesia, which represents 4% of world production of copper.

Finally, early Friday afternoon, a tonne of copper for delivery in three months traded at the LME 9025 dollars, 9006 dollars per tonne against the previous Friday.

Oil prices weighed down by Employment in US

The price of oil fell sharply Friday in New York, weighed down by strong employment figures sobering.
Stopping a part of the oil production in the Gulf of Mexico will not even possible to change that. A barrel of light sweet crude for October delivery has thus concluded the day at 86.45 dollars on the New York Mercantile Exchange (Nymex), down 2.48 dollars compared to the previous day. The course was even on the verge of reaching the threshold of 85 dollars, then limit its losses by closing.

You will note in passing that the current price fluctuations are far to affect the price of gasoline. Meanwhile in London, the Intercontinental Exchange, a barrel of Brent North Sea crude for October delivery closed at 112.33 dollars, dropping 1.96 dollars.

The courses were largely impacted by the monthly report on employment. However, while a positive balance of recruitment had been found for ten consecutive months and in contrast to analysts' projections, the American economy has not created any jobs in August. However, some analysts had estimated in early trading as climatic conditions in the Gulf of Mexico could reverse the trend, Tropical Storm Lee threatened oil installations producing a quarter of U.S. crude.

However, while almost 48% of oil production in the area was arrested, corresponding to 666,321 barrels per day, and 33% of offshore gas extraction, prices could rise. Another disturbing fact: according to forecasts from Barclays Capital, gasoline consumption in the United States fell by 4.1% in annual slippery during the summer period, however, conducive to the mobility of Americans.

Fight Against Money Laundering -3

The directive strengthens the other hand the obligation to share information. The Financial Security Act of 2001 introduced the need for coordination among banking groups the fight against money laundering. This involves organizing the different entities of the group exchange of information necessary for monitoring the customer on a consolidated basis. With the third directive, banks will now have the opportunity to share information between groups and banking networks, institutions and even between non-group members, since they are subject to equivalent obligations.

Beyond measures of intra and intergroup, banks must comply with in 2008 a major European regulations, European harmonization of retail payments (SEPA - Single European Payment Area [6]). "Europeanization" of cash flows increases the need for more secure against the practices of money laundering or terrorist financing. In addition to a larger volume, banks will soon face severe regulatory constraints on compliance, security and traceability of financial flows.

The banks have already set up systems for monitoring and tracking capabilities including data collection (to detect and select unusual or suspicious transactions), but also reporting and archiving of tests conducted. Examination of the flow from the source of transactions, to verify the source of funds, is based on two main areas:

* Filtering: detecting the presence or absence in the black lists published by national and supranational regulation;
* And behavioral analysis: analysis of accounts and transactions in connection with the risk profiles to detect unusual transactions and suspicious behavior.

However, with the increasing internationalization of flows and extensive monitoring obligations to the beneficial owner of the transaction, major efforts are still needed to harmonize procedures for risk prevention (warning indicators adapted from the Know Your Customer rules, ... ) internationally. According to a KPMG study [7], although the expenses of banks in combating money laundering and terrorist financing have increased on average by 58% over the past three years, only 24% of international banks have at the moment of an effective system for monitoring transactions and accounts of the same customer across different countries ...

In conclusion, the successful implementation of the Directive is closely linked to be the ability of banks to develop a coordinated approach and a risk, for realism and efficiency.

Fight Against Money Laundering -2

The scope of due diligence, previously limited to the financial sector now includes notaries, lawyers, accountants, auditors, tax advisers, estate agents, casinos, service companies and trusts, and insurance intermediaries . Monitoring the client is also extended to (s) recipient (s) number (s) [5] of the transaction: this additional requirement of identification, which seems difficult to implement, more complex work of banks.


The duty of care is now adjusted according to the risk that the client is. Each institution will define the level and nature of audit to be implemented towards the customer (identification and verification of identity on the basis of documentary evidence, gathering information on the purpose and nature of the relationship of business, followed by the business relationship ...) depending on the nature of its clientele, operation and services. The approach could also requires banks to be able to justify the adjustment of the audit.


To avoid duplication of identification procedures, the third directive sets up the principle of mutual recognition and acceptance of measurement results to identify clients: it allows the presentation of clients whose identification measures were carried out by banks and financial institutions located in the European Union. The ultimate responsibility then rests on the establishment to which the customer is introduced, that is to say the one who resorts to colleagues.


Banks have gradually established since the 1990s services fight against money laundering. They now emphasize the need for a group.

The first challenge for financial institutions is to continuously develop the culture of anti-money laundering with the group, and the training of employees by raising awareness (transmission of procedures and corresponding obligations, formation of the entire profession with warning indicators, lead to detect suspected cases ...). FBF offers on this since 2003, with the participation of Tracfin, a training evolution available to the entire profession, and consists of an awareness module and several modules specialized on specific issues.