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Get paid for face-time: launch of the ‘Uber’ for freelance professionals and tradesmen

9 May

Picture the scenario : you are stranded suddenly with a dinner party emergency, or your boiler has exploded, and you need to consult an expert right away. But although google has managed to put the entire world at our fingertips, tracking down a professional to give their reassuringly expert opinion, face-to-face, is a little more difficult and time-consuming.

Or maybe you want some face time with your therapist while they are on holiday; maybe you want to get some legal advice without paying the prohibitive rates charged by a corporate firm. Plenty of paralegals are fully equipped to give an initial legal consultation.

Hence, 121with, the video conferencing platform with a difference. Seekers of services can upload their card details, before browsing the listed profiles of professional service-providers by their chosen keywords. ‘Why, it’s little more than a skype call that you have to pay for,’ one invitee interjected at the launch event.

Well no, the founders patiently explained. On 121with, payment takes place automatically, almost immediately after the video call has finished. In a real-time payment system similar to Uber’s, the transfer goes through, via Stripe at a rate of T+4 (seconds), which is the UK standard. Moreover, there is a minimum charge of 50p per second, incentivising service-providers to make sure every second counts.

The advantages of the 121with system are obvious and manifold: stress, hassle-free payments, saving administrative costs on invoice issuing and bank transfers; no travel costs; and finally, the platform can act as a productivity boost to existing businesses, which may be “set in an hourly or half-hourly charge mindset”, exhorts Joint Managing Director Tom Stokely. “We think 121with is going to shake that up a bit.”

The site is live now, and 121with is looking for ‘affiliate’ partners for initial profile listing, as the platform’s pioneer professionals will be carefully screened for quality and value for money.

But it is hoped the system will become to an extent self-regulating through the organic growth of the market, as poor quality or overpriced offerings will attract negative customer reviews and fail to compete. There is also, naturally, an arbitration process offered between seeker and provider if a refund becomes necessary.

Before the Vote: What the Candidates are Proposing on the Subject of Immigration

21 Apr

translated from:

Right of asylum, immigration quotas, border controls.. a deep fracture has emerged between the candidates.

It’s a record in French history: France has recorded 85, 700 requests for asylum in 2016. Even if it’s small in relation to its neighbours Italy (121, 200) and Germany (722, 300), this influx of migrants, because of the war in Syria and historic conflicts or humanitarian situations (the Sudan, Afghanistan, Haiti), have forced the question of the welcome that France can or should reserve at the centre of the presidential campaign.

But if the questions about borders, integration or identity have gained an important place in the campaign, the responses that the candidates have raised in their programmes are sparse (a hundred proposals to more than three thousand in total) and very polarised. A France open or closed, here are the main promises of the 11 candidates for the presidential election.

Borders in and around Europe

According to the Schengen agreement, all citizens can move freely within the eponymous zone (26 states of which 22 are part of the European Union). And on the exterior, the agency Frontex tries to maintain surveillance faced with the influx of migrants.

The borders question is typically an embarrassing one for candidates, outside the extreme right, faced simultaneously with the humanitarian crisis of the migrants, but also by the high-stakes surveillance of terrorist movements.

On the extreme right, the positions have the merit of clarity: Nicolas Dupont-Aignan and Marine Le Pen think that control of immigration is no longer secured by Frontex and that they should exit Schengen to take back national borders, which would consequently be reinforced. They believe therefore six thousand customs posts should also be reinstated, according to the Front National candidate, which demands also the recall of the reservists.

Calling for a double layer of borders, Francois Fillon says he is in favour of staying in Schengen (and in tripling the budget of Frontex), but also to the “temporary reintroduction of controls on the interior borders” (an operation in reality already in place since the events of November 2015).

In opposition, there are those who think the actual borders of Schengen are already sufficient: Benoit Hamon, Emmanuel Macron and Jean-Luc Melenchon. But with certain nuances since Emmanuel Macron wanted to increase the powers of border guards and outposts in Europe, while Jean-Luc Melenchon wanted what he termed the “militarisation of the politics of controlling migration flows.”

The extreme left believes to want to abolish all borders, both on the interior and exterior of the European Union – say Nathalie Arthaud and Philippe Poutou, in a spirit which is “internationalist” and “in solidarity”.


The Right to Asylum

In the face of crowds of migrants, the practical application of the right to asylum, a principle enshrined in the preamble of the Constitution, is a question of debate among the political class. It is anyway on this question that ghost of the candidates’ previous promises looms largest: where Nathalie Arthaud and Philippe Poutou supported regularising all the sans-papiers, Marine Le Pen and Nicolas Dupon-Aignan want, in contrast, to make the conditions of asylum harder. The candidate from Debout la France is proposing a dozen measures to allocate a residence to asylum-seekers. The Front National candidate, le Pen, insists on the necessity of “making it impossible to regularise or naturalise foreigners in an illegal situation.”

Between these two opposing poles, two candidates declare they favour welcoming asylum-seekers, notably in instituting a humanitarian visa (Benoit Hamon) and in constructing welcome camps along international norms (Jean-Luc Melenchon). Three other candidates want to shorten the delay in the administrative response (Emmanuel Macron, Jacques Cheminade and Francois Fillon). It is therefore on the specific public services the refugees can access on which the majority of candidates have made promises.


On Quotas

In 2016, around 227 500 foreigners gained their first right to stay in France, an increase of 4.6% in relation to 2015. A rise which lies principally in admissions for humanitarian reasons. These permissions were not limited by quotas; France has never applied such a limitation, in contrast to the US for example. A majority of candidates are not in favour ( Nathalie Arthaud, Jacques Cheminade, Benoit Hamon, Emmanuel Macron, Jean-Luc Melenchon and Philippe Poutou).

Among them those who have no fixed position: Jean Lassalle and Francois Asselineau. This last is content to propose a referendum on the whole group of questions lying in various degrees in relation to the volumes of migrants – quotas, familial regroupment, right to own land…

Three candidates are in support of quotas. The most extreme position is, with no surprise, that of Marine Le Pen, who recommends “reducing legal immigration to an annual cap of 10 thousand (persons).” She is following on the platform of Francois Fillon, who wanted to inscribe it in the Constitution, and of Nicolas Dupont-Aignan, who wants “to vote annually in Parliament an immigration ceiling” related to the unemployment rate.

In 2006, Nicolas Sarkozy had already fostered support for establishing quotas, but this ambition faced opposition, risking the censure of the constitutional council, and was adjourned.


The Right of Soil

The right of earth consists of conferring French nationality on children born in France More precisely, a child born in France of foreign parents becomes automatically French on their 18th year, if they are in our country and have been more than five years; this has been true since 1515. Certain candidates propose to limit this opportunity (Nicolas Dupont-Aignan, Francois Fillon), or aim to remove it (Marine Le Pen).

For the Front National, this represents making a kind of “acquisition of French nationality (is) possible just through filiation or naturalisation, for which the conditions are elsewhere more demanding”… that which can in many more complex cases, looks impossible. Not only for the French whose ancestors came from abroad several generations ago, but also for a number of other cases – pieds-noirs, those from Alsace, whose families were German at the beginning of the last century…

On the other side, Jacques Cheminade, Emmanuel Macron and Jean-Luc Melenchon want to preserve the right of soil. Four candidates have no position on this prickly subject: Nathalie Arthaud, Benoit Hamon, Jean Lassale and Philippe Poutou.

LGC appoints Ryder to oversee high-rise in Newcastle’s new science hub – ‘Silicon Square’?

17 Mar

Legal and General Capital, which bought a £350million stake in Newcastle’s exciting new science and technology development hub in June 2016, has announced award-winning international firm Ryder Architecture to oversee the first of its grade A office buildings at Newcastle Science Central.

Newcastle Science Central is a site linked both geographically and academically with Newcastle University, which is situated on the 24-acre plot. Commercial space so far is restricted to the 30 businesses operating from the Core, which include among their number a nation-leading computer science institute. Businesses have been selected on the basis of their “positive impact economically, environmentally and socially.”

Also in the pipeline is Newcastle Laboratory, 76,000 sq ft of commercial lab space with supporting office accommodation for science-based companies, which is scheduled to open spring 2018. It will add to the ripe environment for invention fostered by Newcastle University centres such as the National Institute for Smart Data Innovation, and the National Innovation Centre for Ageing.

More vital office space will be provided through a development partnership between LGC, Newcastle City Council and Newcastle University, which aims to raise 100,000 sq ft of Grade A office space, then a second office adding another 100,000 sq ft to the site. A spokesperson envisioned it becoming the ‘gateway’ to the site, and the area enclosed by the three buildings will become a public square, providing a hub and meeting place for workers, residents and visitors to congregate.

Richard Wise, partner at Ryder, said: “Building A promises to deliver a high quality, timeless piece of architecture which will provide unique, much needed flexible office space on one of the most prominent gateway sites in Newcastle.  It will set the tone for the subsequent developments.  Ryder is delighted to have this opportunity to build upon the success enjoyed to date on Science Central.”

Ryder Architecture, alongside Aura, have together been appointed as the design team to deliver the Newcastle Laboratory on Newcastle Science Central. This state-of the art building will provide over 70,000 sq ft of specialist facilities for the flourishing life sciences and healthcare sector in the region, offering high quality, incubation and grow-on space to meet the needs of innovative businesses in this sector. Construction is due to start on site in Spring 2017 and the facility is due to open in Spring/Summer 2018.

Capital Markets Union – Breakdown of EU Roadmap (Part 2)

12 Apr

Share Offerings Will be Made Easier by Reducing Prospectus Requirements

As it stands, the threshold for share offers which must issue a prospectus stands at €5million; though the European regulation leaves leeway for individual states to legislate a lower threshold. The EU proposal is for a higher and universal threshold. This, it is hoped, would reduce onerous requirements for companies to shell out for a professional marketing sheen to give to their business plans and earnings forecasts.

The EC asks stakeholders if it would free smaller companies of some onerous obligations to remove the mandate for a prospectus for follow-on offerings. Instead it would allow them to point to existing info in the public domain, provided they were “released pursuant to the transparency and disclosure requirements to allow sufficient investor disclosure.”

A slightly less drastic solution would be to just raise the threshold required for follow-on prospectuses, from the existing level of 10%, to 20% of existing issued share capital.

Law firm Latham and Watkins makes the still more radical proposal that only “secondary offerings of, for example, up to 50 percent of the issued share capital of the company” would necessitate a prospectus being published.

This would not, however, require regulatory approval before permission was granted to list on Multilateral Trading Facilities (MTFs). As a mitigating measure, the firm posits that the threshold be raised for fully exempt offerings.

This last caveat links us on to the proposal that standard share prospectuses should be approved before trading on MTFs. There is some concern that these marketplaces do not provide the necessary due diligence on all of the securities listed, and an objective assessment is required by a regulator who, unlike the exchange operators, has no vested interest in securing transaction fees.

Some industry commentators, however, feel that increasing the barriers to listing new securities could check growth of the vibrant MTF market in Europe.

The Pan-European Corporate Private Placement Market Guide

This set of guidelines to the process of negotiating contract terms between borrowers and professional investors in large, unlisted bond and note issuances, has already been issued and should be starting to take effect.

Noteworthy considerations to observe from a legal perspective are, firstly, the possibility of a conflict of interests between private loan and note subscription, and trading in listed securities. The mandatory disclosures of non-public information, that full knowledge of the borrower’s debt burden requires, could leave the investor open to accusations of insider dealing, if they then trade in associated listed securities.

Institutional investors in unlisted debt placements should demand loans on equal terms with borrowers’ other debts, which is why disclosure of all information concerning the borrower’s existing debt is essential.

Details of, for example, the hierarchy of priority of repayment; actions in case of a breach in covenant or non-payment of an instalment; any assets that have already been pledged as securities; these are all necessary to ensure the comparability of loan contracts, and to ensure the borrower can meet any new obligations.

The guide provides four model documents by which best practice in this area can be followed:

As regards the ‘term sheet’, the list of terms each side agrees to include in the final contract, – subject to local law, – it is advised firstly that the borrower makes a ‘negative pledge’. This restricts the borrower’s ability to create security over its assets, and thereby enshrines the ranking of the new private placement.

It should also be requested that they disclose any restrictions on disposal of assets. Financial covenants with relevant ratios form another, obvious, clause. It might also be desirable to place restrictions on mergers and corporate restructuring and change of business.

In the event of a change in control, an option should be provided for early redemption or repayment, or even prepayment, of the interest and principal due on the loan. This measure is also advised to guard against a change in the borrower’s tax characteristics.

Finally, as insurance against the future, investors should consider a “more favourable terms” clause, such that if the Borrower grants more favourable financing terms to another creditor, it must also offer the same terms to the Investors.

Banks are tightening their belts on high-risk assets.

Banks are tightening their belts on high-risk assets.

Are Europe’s corporate debt and equity markets really in dire straits?

The ECB Statistics Bulletin for 2015 does show some cause for concern, in that holdings of debt securities issued by euro area residents (non-government securities), fell from €1,360.9 billion in 2013 to €1,275.9 billion in 2014. That is on the listed assets side. As regards liabilities, debt securities issued fell also, from €2,586.50 billion in 2013 to €2,476.3 billion in 2014.

Equity and non-money market investment fund shares fell too, partly as a result of, and due to anticipation of, the ECB’s €1.1trillion QE programme which substantially increased the demand for government securities. Between 2013 and 2014, equity holdings fell from €792.1 billion to €768.4 billion.

At the same time, banks and other financials’ deleveraging is very much in evidence, as the level of capital and reserves rose during the same period, from €2,340 billion in 2013 to €2,466.9 billion in 2014.

This is perhaps reflected in the downward trend in loans to non-financial corporations (seasonally adjusted), a metric which includes loans issued by non-MFIs (monetary financial institutions). The total value fell from 2013 to 2014, from €4,354.1 to €4,282.1billion, slightly recovering in the first two months of 2015 to an average of €2,177.5 billion. This pattern of recovery is mirrored when you break down the loan total into 1-5 year loans, and for loans over five years.

The only increase was in short-term loans (up to 1 year), showing some appetite for low-risk corporate debt.

Argos’ New Online CRM Tool Prevents Unnecessary Sales Approaches

26 Mar

Ever received an unsolicited offer of help while shopping online? A speech bubble pops up with a determined sales assistant who is set on selling you not only the product you were casually browsing, but all its trappings, garnishes and attachments.

While not quite on a par with being smarmed up by a sales assistant whose offer of ‘help’ is a covert accusation that she suspects you of shoplifting, it is still irritating and can act as a deterrent to purchasing the product in question. These unwanted approaches can also drag at ecommerce sales figures.

Pioneering new ecommerce techniques

Argos appears to have solved the problem with its [24]7 Predictive Sales solution, which analyses online behavioural metrics to determine which customers are actually in need of advice in making a purchase decision, or who are in danger of ‘deviating from the “golden” conversion journey’, explains Nick Mitchell, Managing Director, EMEA, [24]7. The success of the this Customer Relationship Management (CRM) tool could mean Argos’ technical methodology could be widely adopted.

Neil Tinegate, Head of Digital Innovation, Argos said: “Our primary concern here is to offer human assistance to customers who need it, at the right time in the shopping cycle for them. We have seen this work in digital stores where colleagues are on hand to help customers get what they want, and this is a natural extension of that. Customers tell us they appreciate the help, so we plan to continue to offer the experience.”

The platform is able to accurately identify customers who are perhaps comparing products but are struggling to make a decision; or perhaps those looking at finance or after-care products to add to their purchase, who don’t know which one to purchase. “Those customers are offered a contextually relevant offer of assistance based on their intent and then connected to an Argos advisor through sales chat to offer help,” explains an Argos spokesperson.

Nick Mitchell explained further: “We believe in encouraging more contextually relevant conversations with those customers who truly need assistance, accurately predicting when to offer assistance and using real-time cross-channel behaviour to know what to offer. Results from the programme show this is allowing Argos to have smarter interactions with its customers, which in turn is driving measureable increases in incremental revenue.”


Unanimous tribute to ‘Charlie Hebdo’: a ‘counter-sense’?

11 Jan

Translated from Le Monde (link to real article below)

On the day before the coordinated tributes to the victims of Charlie Hebdo, and as the French had already started to assemble throughout France, certain cartoonists and journalists of the weekly satirical expressed their surprised in the face of such a wave of emotion. Of demonstrations of support which can seem strange, towards a magazine which has always cultivated irreverence and the art of not doing the same as its friends.

“They sounded the bells of Notre-Dame for Charlie, I must be dreaming!” exclaimed on Friday Gérard Biard, editor in chief of Charlie Hebdo, to underline the irony of the situation for an anticlerical magazine to be universally celebrated, even in the most famous Parisian cathedral”.

A Magazine which has Suffered Criticism from all Quarters

Several members of the editorial team have received with a little bitterness these marks of solidarity towards a paper which in other days had little support. Among them, the writer/editor Zineb El Rhazoui, who explained to the Monde :

“I would have liked that those who died benefitted from so much support while they were living. And that was not at all the case. ‘Charlie Hebdo’ is a paper which has been criticised by almost everyone. And what has happened, you could have predicted. We received threats all the time and certain of us said that it was almost like we were looking for it…”

Others were bluntly not going to demonstrate, behind the image of Laurent Léger, investigative journalist at Charlie Hebdo:

“I am not going to the demonstration on Sunday but I think I am the only one on the team at ‘Charlie Hebdo’ to have made this choice. I do not like demonstrating in general, I think that ‘Charlie Hebdo’ could be absent from the procession where they would be all sorts of politics and on the subject of which there has been a controversy with the FN. However, I think that the wave of real support is formidable and I hope that there are lots of people at the Sunday demonstration.”

‘Charlie Hebdo’ has always remained apart. Now ‘Charlie Hebdo’ is becoming mainstream. We have become part of the establishment, for a week or two. It’s new. But this is a necessary transition, I am not against it. And I know that in a few weeks, a new story will drive out this one and we will be alone… We have been a bit superseded: it is for nothing more than ‘Charlie’ that people are marching for. That is clear.”


“We vomited on all these people who, suddenly, call themselves our friends”

Cartoonist Luz, survivor of the attack of the 7 January, told magazine ‘the Inrocks’ that he believed for his part that “the huge symbolic weight is all that Charlie has always worked against.” He added:

“It’s incredible that the people support us but it is in a counter-sense (contre-sens) to the drawings of ‘Charlie…. This unanimity is useful to Hollande to reunite the nation. It is useful to Marine Le Pen to demand the death penalty.

People speak of the memory of Charb, Tignous, Cabu, Honoré, Wolinski: they would have reflected this attitude.”

The Dutch cartoonist Willem, real name Bernard Holtrop, spoke the most condemnatory words to Le Point. Reacting to the support of the head of the Netherlands’ extreme right party, Geert Wilders, he exclaimed: “We vomited on all these people who, suddenly, call themselves our friends.”

And on the global support and sympathy for the paper:

“They had never read ‘Charlie Hebdo’. A few years ago, thousands of people descended into the streets of Pakistan to demonstrate against ‘Charlie Hebdo’. They didn’t know what it was.

Now, it’s the opposite, but if people are demonstrating to defend freedom of speech, obviously it’s a great thing.”


Runaway Online Success of ‘The Interview’ Prompts French Newspaper to Chronicle ‘Decline’ of US Box-office

30 Dec

Translation (link to original article)

The online showing of ‘The Interview’ returns $15million

Before the cyber attack and the threats it was subjected to, Sony Pictures intended to distribute its film ‘The Interview’ across 3,000 screens. After having cancelled its release, then going back on its decision and proposing its showing in just under 300 locations, the studio also placed it online from the 24 december. It was no surprise that early results of this simultaneous exploitation (exploitation simultanée), the “day and date” in the Hollywood jargon, were excellent.

Sony announced the statistic of $15million (€12,3million), sales and over-subscribed rentals, for the first four days. In all, the film – put forward at $14.99 (€12.30) to buy, and $5.99 (€4,90) to rent, both with high-definition versions, has been downloaded 2 million times. According to the authoritative site Deadline, more than half of the takings came from Google, where the film took the lead in sales from the day it was placed online. To add to that, $2.8million (€2,3million) of revenue came from screen showings.

>>Read the review of the film: We watched ‘The Interview’ and we were a bit disappointed<<

The declining ‘American box-office’

The online success of ‘The Interview’ could re-launch, in the US, the debate over the simultaneous release of films in cinemas and in Video On Demand (VOD) – a principle which is for the moment rejected by the big cinema franchises – while Hollywood assesses the year passed by. The ‘box-office’ lost 5% in relation to 2013, which represents the biggest annual fall in nine years, reveals the ‘Hollywood Reporter’. The statistic of $10.4 billion (€8,55 billion) is expected on the 31 december, compared to takings of $10.9billion in 2013.

The year saw some major success, with ‘The Guardians of the Galaxy’ and ‘Hunger Games: the revolt (la révolte), part 1, but also ‘The Big Lego Adventure’, ‘Captain America: the Winter Soldier’, ‘Gone Girl’, ‘Interstellar’, or even ‘The Hobbit 3: the Battle of Five Armies’ – films which have boosted a year marked by a very disappointing summer in terms of cinema attendance (down 15% compared to 2013).

With the release of a series of highly anticipated blockbusters, from ‘Star Wars: Episode VII – the Awakening of the Force’, to ‘Fifty Shades of Grey’, passing through ‘Fast and Furious 7’, ‘The Minions’, ‘Jurassic World’ or ‘Avengers: the Era of Ultron’, the studios expect in contrast a good year in 2015.

Tit for Tat Media Battle between Argentine Government and US Lobbyists

1 Aug

Tit for Tat Media Battle between Argentine Government and US Lobbyists

News Update


A proposal to settle the Argentina debt crisis collapsed after what the country’s economy minister Axel Kicillof described as the “vulture funds” – hedge funds to the rest of us – reportedly rejected it.

The offer entailed the Argentine banking association, backed by Citigroup, HSBC and JPMorgan, buying out the so-called ‘holdouts’ (those under US jurisdiction), offering a reduced $1.4billion for their $1.6billion claim on principal and interest accrued.

Despite a US Supreme Court order requiring it to honour its debt to the holdout investors, who took at civil lawsuit out to enforce their payments, Argentina seems to have effectively defaulted. It cannot pay the other bondholders who accepted a restructuring and reduced value package back in 2005, because the Rights Upon Future Offers (RUFO) clause in the contracts of the restructured bonds will not allow the government to make higher payments to other creditors.

When the Argentine government tried to make a separate payment to the restructured bondholders on July 30, it was barred by US judge Thomas Griesa. The RUFO clause expires at the end of 2014, when a settlement may become possible.

At the same time as fierce negotiations were taking place between financial stakeholders, the country’s administration paid for several high-profile ‘advertisements’ in the Financial Times, laying out its objections to the lawsuit brought by – the so-called ‘holdouts’.

The adverts’ message states that Argentina considers the judicial verdict enforcing its payment of full interest on the bonds to be disproportionate, and prejudicial to the interests of the majority bondholders who did accept restructuring. It also questions the limits of US jurisdiction on this matter.

In response, a US group, ‘American Task Force Argentina’, formed largely of farmers’ and agricultural associations, who I am too much of a diplomat to call ‘interfering hicks’, took out its own advert. It accused the Argentine administration of a campaign of misinformation; to prove its case, it has drawn on its own roster of slanders, half-truths and hearsay. The campaign even has its own dedicated website,, funded by the American Task Force Argentina.

Whose campaign of misinformation?

The American Task Force Argentina’s advert in the FT, just several pages across from Argentina’s latest dispatch, sets out three ‘myths’ the Argentine government is propagating. First is that ‘Holdout creditors and a judge in NY are forcing Argentina to default.’ To be exact, the initial Argentine advert claimed that paying the sum owed the holdouts – it said $15billion – would make it unable to pay the majority bondholders.

The second alleged ‘myth’ is this sum of $15billion, a figure which the Task Force claims has not been substantiated or broken down by the Argentine administration. It quotes CNN which quotes an emerging markets economist at Capital Economics, David Rees, who puts the sum at “about half what the government claims.” It does seem an exaggerated number, as Argentina has only been court ordered to pay the US-based holdouts; those residing in other jurisdictions would have to start their own costly legal proceedings to enforce their payments.

But the Task Force makes no attempt to calculate this figure for itself. Surely it would be a simple matter to work out the end value of the debated bonds, by looking at the price paid to acquire them: the projected present future value (PFV) of the instrument would be incorporated in the pricing model for its initial sale price. Interest payments on this, even if compounded, could easily be totalled and added to the principal returned when the bond matured.

What, do the Montana Cattlemen, Kansas Cattlemen’s Association and Nebraska Taxpayers for Freedom not have any among them who can do bond maths? I am not hugely surprised, though there are some heavyweights within the American Task Force Argentina, like the National Taxpayers’ Union and the National Black chamber of Commerce which mean you have to take their campaign seriously. Though what the taxpayers’ union see as support-worthy in spending taxpayers’ dollars on a chain of repeated verdicts as the case moved up the legal hierarchy to the Supreme Court, I don’t know.

Tit for Tat

Admittedly, Argentina’s refusal to negotiate an extension – which the Task Force quotes Reuters as saying the ‘Argentine holdouts say they would discuss… in good faith’ – makes it look intransigent, even stubborn. Ostensibly this is because it maintains that US legal verdicts cannot extend to financial instruments issued and governed by Argentine, and in the case of the Euro bondholders, of English and Welsh law. Reportedly the minority bondholders are prepared to accept a combination of cash and, you guessed it, more bonds.

This seems like a solution. The question is, who would determine the interest rate, benchmark and the maturity of these newly issued instruments? Surely they would be subject to a similarly vicious haggling process? The holdouts have shown themselves unable to accept a 20% reduction in their assets’ value. Do they have an alternative proposal?

Passing the Baton

The Argentine government’s payments on bonds to all its US bondholders is carried out by BNY Mellon which acts as trustee for the Argentine government for these specific instruments. In its own announcement, Argentina effectively delegates responsibility for payment of all the bonds to BNY Mellon. Unfortunately the American bank is not able to ignore a US court order in the way the Latin American government can…

Argentina states that it has paid interest due on the 2005 and 2010 sovereign exchange offers “as required under Argentine law and the laws of England and Wales,” into its trustee’s account and that if it does not distribute them as required, then the government is not responsible. This is what is popularly known as ‘passing the baton.’

It’s difficult not to compare these events to the case of the Greek and Portugese default, where the European Central Bank unilaterally forced sovereign debt-holders to accept a 50% write-down on the value of their securities, with no chance of receiving further payments long-term. There the interests of the ordinary people, who rely on the government to fund the services they pay tax to be entitled to, took priority and wealthy investors had to subjugate their demands. The current payment verdict has a similarly asymmetric bias imposed by an overarching institution, but in favour of the financial elite who were funding the legal process.

There is a silver lining for both Argentina and the US finance community, as reportedly some hedge funds have been moving in to buy up Argentine stocks, in the expectation that a default on payments will do nothing to hold back its economy; and that after a downgrade by ratings agencies, many of the country’s assets are undervalued. Guess it shows that no grudge can getin the way of the prospect of a healthy profit.

New secure smartphone payment solution – magnets?

14 Jul

Coded messages sent by magnet. By today’s giga-speed standard of telecoms technology, it seems a little… last century. But it stands to make close-range payment systems much safer, whether by terminal or using digital barcodes on the item itself.electromagnet

This novel way of making small data transfers utilises a smartphone’s magnetic field sensor, traditionally used in its compass app, to receive coded pulses from a nearby electromagnet.

The recalibrated smartphones, in the study by researchers at the University of Oulu in Finland, were able to translate the pulses into music tracks and website urls, for example.

Aptly named ‘Pulse’, the invention has some way to go before it equals the transmission speed of radio waves; the transmission rate is slow, and only works over a tiny distance, of 2 centimetres. Short of building a ten-storey electromagnet to increase the signal’s range, it makes sense to keep things small-scale.

But the localised nature of the connection means that Pulse is ideal as a substitute for near-field communication (NFC) payment systems, like an interactive street poster or bus stop advert.

NFC payments are those where a smartphone owner makes a purchase by tapping their phone on a terminal. But, says University of Oulu’s Vassillis Kostakos, the system “can be hacked by people nearby. Pulse could send a secure code over a short range to activate the regular NFC app.”



EBA releases stress test results; to review comparability of risk-weighted assets

7 May
risk-weighted assets

Unsure if gold should be ‘risk-free’ if it’s no longer a currency peg, but…


The European Banking Association released the results of its capital and balance sheet stress test on Tuesday. Most findings about the integrity of the sampled banks’ holdings were positive, and indicated a move away from risk-weighted assets (RWAs), particularly credit risk.

The 2014 Q1 dashboard reports that banks with a coverage ratio of over 50% now hold almost 49% of total assets in the sample, relatively unchanged from earlier assessments; banks with a poor coverage ratio (under 25%) still account for roughly 13% of total assets reviewed.

Useful tools included in the reports were a heat map of Key Risk Indicators, and a summary of the directional trends in areas such as credit risk, market risk, operational risk, concentration risk, reputational and legal, and profitability. Margins were found to have suffered, partly due to legal and redress costs and smaller gains from lower interest rates. It cited heightened geopolitical tensions in Russia and Ukraine as contributing to heightened volatility, in addition to speculation over extra-European nations’ Central Bank policy, particularly that of the US Federal Reserve.

The integrity of banks’ loan portfolios continued to decline: the ratio of impaired loans and past due (over 90 days) loans to total loans peaked to 6.8%. However, the weighted average of delinquent loans was up by just 0.2 percentage points, so the EBA concluded “this trend is mainly driven by the decrease of the denominator since the amount of impaired loans and past due… loans has remained fairly stable over the last quarters.”

Overall, the weighted average of debt-to-equity ratio has sagged from 17 to 16.5, the lowest level in the last four years. Customer deposits now comprise around 48% of total liabilities, while holdings of credit and other liabilities with a greater risk profile have tapered.

The EBA has announced it will launch a review into the comparability of RWAs, prompted by the wide distribution of estimates as to the risk profile. This is assessed predominantly through an internal ratings-based IRB approach: a study into asset distribution, released December 2013, showed an IRB was used to assess 71% of risk-weighted assets, compared to 29% which used a Standardised Approach.

Each bank’s individual IRB approach involves its unilaterally calculating three input risk parameters: the probability of default (PD), the loss given default (LGD) and the exposure at default (EAD).

The regulator explained: “While differences in risk parameters and capital requirements between banks are not a sign of inconsistency per se, a substantial divergence may signal that the methodologies used for estimating risk parameters require, in some cases, further analysis.”

In its summary of the components of Pillar 1 bank risk, the EBA stated that asset quality would remain an issue of concern, but that “Upcoming review of assets should boost clarity on problem loans and level of impairments/provisions.”

It has not yet gone so far as to state the Committee of European Banking Supervisors (CEBS) EBA Guidelines might need updating.