Hungary’s chances of obtaining a bailout receded after lawmakers approved new central bank regulations Dec. 30 that prompted the International Monetary Fund and the European Union to break off talks last month.
Parliament in Budapest stripped central bank President Andras Simor of his right to name deputies, expanded the rate- setting Monetary Council and created a position for a third vice president.
A separate law also approved Dec. 30 makes it possible to demote the central bank president if the institution is combined with the financial regulator.
Hungary received its second sovereign credit downgrade to junk in a month when Standard and Poor’s followed Moody’s Investors Service in taking the country out of its investment grade category on Dec. 21.
The forint has fallen 15 percent against the euro since June 30, making it the world’s worst- performing currency in the period.
The new central bank regulations “seriously harm” the country’s national interests, allow for political intervention in monetary policy and threaten economic stability, the Magyar Nemzeti Bank said Dec. 30. The laws have led to the “indefinite postponement” of talks on a financial aid package, the central bank said in a statement posted on its website.
FSOC Proposes Dodd-Frank Rule on Assessments for Treasury
The Financial Stability Oversight Council, a group of regulators charged with preventing a financial crisis, approved a proposal Dec. 29 outlining how the U.S. Treasury’s assessment fee would be administered.
The proposal, which will be open for public comment for 60 days, determines which companies will be subject to an assessment fee, identifies the total expenses necessary to carry out the activities covered by the assessment and determines how the fee will be calculated.
The rule is part of the sweeping financial-regulation overhaul mandated by Dodd-Frank to prevent a repeat of the market tumult that followed the 2008 bankruptcy of Lehman Brothers Holdings Inc. (LEHMQ)
The fees will help replenish some operating expenses of the FSOC, the Office of Financial Research, the Financial Research Fund and some covered Federal Deposit Insurance Corp. expenses.
The companies subject to the assessment are U.S. bank holding companies with at least $50 billion in total consolidated assets, foreign banking organizations with at least $50 billion in total consolidated assets in U.S. operations and nonbank financial companies required to be supervised by the Federal Reserve Board.
The assessment rate will be announced June 2012 and companies will be billed in early July with the first payment due July 20.
Initial assessment amounts will depend on the president’s 2013 fiscal year budget.
Compliance Action
Liberty’s Malone Fined for Holding Stake in DirecTV Chile
Chile’s antitrust tribunal fined John C. Malone, the billionaire owner of Liberty Media Corp. (LINTA), $3.6 million for failing to abide by conditions imposed on the merger of his cable-television company with a competitor.
The tribunal, known as TDLC, said Malone would face additional sanctions if he doesn’t sell within six months his direct and indirect stakes in satellite-television provider DirecTV Chile SA, a rival of Liberty’s VTR Globalcom SA, according to a statement posted on the tribunal’s website.
Chile’s National Economic Prosecutor sued Malone in 2008, arguing that when VTR received approval to merge with cable TV operator Metropolis Intercom SA in 2004, it had agreed not to own stakes in other paid TV operators in the country.
Liberty acquired an interest in DirecTV (DTV) in 2008 from Rupert Murdoch’s News Corp.
“Mr. Malone was aware of the conditions imposed on the merger, and still maintains a stake in DirecTV Chile even after being warned by the National Economic Prosecutor,” the TDLC wrote in its ruling.
Courtnee Ulrich, a spokeswoman for Englewood, Colorado- based Liberty, didn’t respond to a request for comment.
S. Korean Regulator to Focus on Crisis Management in 2012
South Korea’s financial regulator told the country’s lenders to keep three months of foreign currency funding on hand again this year to guard against potential market unrest stemming from Europe’s debt woes and risks from North Korea after the death of dictator Kim Jong Il.
The Financial Services Commission expects volatility in international financial markets to increase next year as Europe’s crisis threatens global economic growth, the regulator said in a report on its 2012 plans Dec. 29.
The commission will encourage local lenders to have enough foreign-currency liquidity during times of emergency to avoid the massive capital inflows and outflows that exacerbated the country’s financial crisis in 2008.
The regulator will ask domestic banks to boost loan-loss reserves and refrain from paying dividends that are too high to ensure they have buffers for potential losses.
It will be “flexible” in operating capital flow measures such as the cap on banks’ holding on foreign-currency forwards contracts and foreign-currency liquidity ratio guidance, the government commission said Dec. 30, without elaborating.
GM Downplays China’s End of Policy to Attract Foreign Investment
General Motors Co. (GM), the biggest overseas automaker in China, downplayed the risks to its expansion plans in the world’s largest car market after the state ends a seven-year policy to attract foreign investments.
The Detroit-based company said in a statement Dec. 30 that it expects the new guidelines to “have minimal negative impact on GM’s future plans in China.” Dayna Hart, a Shanghai-based spokeswoman at GM, didn’t elaborate on the statement.
The Dec. 29 announcement, which came two weeks after China announced it would impose punitive tariffs on U.S.-made vehicles, means overseas carmakers will probably face difficulties getting state approval to build future plants in the country, according to research firm LMC Automotive.
Global automakers are counting on China and the U.S. to drive growth this year as Europe’s debt crisis hampers the region’s economy.
Officials at Volkswagen AG (VOW) and Ford Motor Co. (F) declined to comment on how the changes in government policy will affect their business in China and said current investments won’t be hurt.
Daimler AG (DAI) and Toyota Motor Corp. (7203) officials didn’t immediately respond to e-mails, while Akihiro Nakanishi, a Guangzhou-based spokesman for Nissan Motor (7201) Co., declined to comment.
The new rules will go into effect Jan. 30, China’s National Development and Reform Commission and the nation’s commerce ministry said in a statement Dec. 29.
The move, meant to allow for a “healthy development” of China’s auto industry, won’t apply to foreign investments in fuel-efficient vehicles, which will still be encouraged, they said.
bloomberg.com
Parliament in Budapest stripped central bank President Andras Simor of his right to name deputies, expanded the rate- setting Monetary Council and created a position for a third vice president.
A separate law also approved Dec. 30 makes it possible to demote the central bank president if the institution is combined with the financial regulator.
Hungary received its second sovereign credit downgrade to junk in a month when Standard and Poor’s followed Moody’s Investors Service in taking the country out of its investment grade category on Dec. 21.
The forint has fallen 15 percent against the euro since June 30, making it the world’s worst- performing currency in the period.
The new central bank regulations “seriously harm” the country’s national interests, allow for political intervention in monetary policy and threaten economic stability, the Magyar Nemzeti Bank said Dec. 30. The laws have led to the “indefinite postponement” of talks on a financial aid package, the central bank said in a statement posted on its website.
FSOC Proposes Dodd-Frank Rule on Assessments for Treasury
The Financial Stability Oversight Council, a group of regulators charged with preventing a financial crisis, approved a proposal Dec. 29 outlining how the U.S. Treasury’s assessment fee would be administered.
The proposal, which will be open for public comment for 60 days, determines which companies will be subject to an assessment fee, identifies the total expenses necessary to carry out the activities covered by the assessment and determines how the fee will be calculated.
The rule is part of the sweeping financial-regulation overhaul mandated by Dodd-Frank to prevent a repeat of the market tumult that followed the 2008 bankruptcy of Lehman Brothers Holdings Inc. (LEHMQ)
The fees will help replenish some operating expenses of the FSOC, the Office of Financial Research, the Financial Research Fund and some covered Federal Deposit Insurance Corp. expenses.
The companies subject to the assessment are U.S. bank holding companies with at least $50 billion in total consolidated assets, foreign banking organizations with at least $50 billion in total consolidated assets in U.S. operations and nonbank financial companies required to be supervised by the Federal Reserve Board.
The assessment rate will be announced June 2012 and companies will be billed in early July with the first payment due July 20.
Initial assessment amounts will depend on the president’s 2013 fiscal year budget.
Compliance Action
Liberty’s Malone Fined for Holding Stake in DirecTV Chile
Chile’s antitrust tribunal fined John C. Malone, the billionaire owner of Liberty Media Corp. (LINTA), $3.6 million for failing to abide by conditions imposed on the merger of his cable-television company with a competitor.
The tribunal, known as TDLC, said Malone would face additional sanctions if he doesn’t sell within six months his direct and indirect stakes in satellite-television provider DirecTV Chile SA, a rival of Liberty’s VTR Globalcom SA, according to a statement posted on the tribunal’s website.
Chile’s National Economic Prosecutor sued Malone in 2008, arguing that when VTR received approval to merge with cable TV operator Metropolis Intercom SA in 2004, it had agreed not to own stakes in other paid TV operators in the country.
Liberty acquired an interest in DirecTV (DTV) in 2008 from Rupert Murdoch’s News Corp.
“Mr. Malone was aware of the conditions imposed on the merger, and still maintains a stake in DirecTV Chile even after being warned by the National Economic Prosecutor,” the TDLC wrote in its ruling.
Courtnee Ulrich, a spokeswoman for Englewood, Colorado- based Liberty, didn’t respond to a request for comment.
S. Korean Regulator to Focus on Crisis Management in 2012
South Korea’s financial regulator told the country’s lenders to keep three months of foreign currency funding on hand again this year to guard against potential market unrest stemming from Europe’s debt woes and risks from North Korea after the death of dictator Kim Jong Il.
The Financial Services Commission expects volatility in international financial markets to increase next year as Europe’s crisis threatens global economic growth, the regulator said in a report on its 2012 plans Dec. 29.
The commission will encourage local lenders to have enough foreign-currency liquidity during times of emergency to avoid the massive capital inflows and outflows that exacerbated the country’s financial crisis in 2008.
The regulator will ask domestic banks to boost loan-loss reserves and refrain from paying dividends that are too high to ensure they have buffers for potential losses.
It will be “flexible” in operating capital flow measures such as the cap on banks’ holding on foreign-currency forwards contracts and foreign-currency liquidity ratio guidance, the government commission said Dec. 30, without elaborating.
GM Downplays China’s End of Policy to Attract Foreign Investment
General Motors Co. (GM), the biggest overseas automaker in China, downplayed the risks to its expansion plans in the world’s largest car market after the state ends a seven-year policy to attract foreign investments.
The Detroit-based company said in a statement Dec. 30 that it expects the new guidelines to “have minimal negative impact on GM’s future plans in China.” Dayna Hart, a Shanghai-based spokeswoman at GM, didn’t elaborate on the statement.
The Dec. 29 announcement, which came two weeks after China announced it would impose punitive tariffs on U.S.-made vehicles, means overseas carmakers will probably face difficulties getting state approval to build future plants in the country, according to research firm LMC Automotive.
Global automakers are counting on China and the U.S. to drive growth this year as Europe’s debt crisis hampers the region’s economy.
Officials at Volkswagen AG (VOW) and Ford Motor Co. (F) declined to comment on how the changes in government policy will affect their business in China and said current investments won’t be hurt.
Daimler AG (DAI) and Toyota Motor Corp. (7203) officials didn’t immediately respond to e-mails, while Akihiro Nakanishi, a Guangzhou-based spokesman for Nissan Motor (7201) Co., declined to comment.
The new rules will go into effect Jan. 30, China’s National Development and Reform Commission and the nation’s commerce ministry said in a statement Dec. 29.
The move, meant to allow for a “healthy development” of China’s auto industry, won’t apply to foreign investments in fuel-efficient vehicles, which will still be encouraged, they said.
bloomberg.com
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