As protests against financial power sweep the world this week, science may have confirmed the protesters’ worst fears. An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy. The study’s assumptions have attracted some criticism, but complex systems analysts contacted by New Scientist say it is a unique effort to untangle control in the global economy. Pushing the analysis further, they say, could help to identify ways of making global capitalism more stable. The idea that a few bankers control a large chunk of the global economy might not seem like news to New York’s Occupy Wall Street movement and protesters elsewhere. But the study, by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich, is the first to go beyond ideology to empirically identify such a network of power. It combines the mathematics long used to model natural systems with comprehensive corporate data to map ownership among the world’s transnational corporations (TNCs).
Addressing the influential Treasury Select Committee, Gerald Corrigan, a Goldman Sachs managing director, accepted that the investment bank had “enabled politicians to mask borrowings” through a complex currency transaction in 2001. The so-called “swap” allowed Greece to conceal some of its debts and meet eurozone limits on government borrowing. Goldman made an estimated £192m in fees on the deal. “With the benefit of hindsight, it seems very clear that standards of transparency could have been and should have been higher,” Mr Corrigan said
Monetary Authority of Singapore Industry Consultation on Amendments to Section 29 of The Banking Act
Section 29(1)(a) of the Banking Act limits credit facilities2 granted by a bank to any one person, or group of persons under the control or influence of any one person, to 25% of its capital funds, while section 29(1)(b) limits substantial loans to 50% of total credit facilities. These sections seek to limit large risk concentrations, and hence the maximum possible loss arising from the failure of a single counterparty or group of related counterparties. However, the existing approach sets limits only on the amount of credit facilities granted by a bank. It does not capture all of a bank’s exposures to a counterparty that could lead to losses to the bank, e.g. from the diminution in value of equity investments, or from the cost of replacing off-balance sheet transactions, in the event that the counterparty fails.
U.S. taxpayers are “extremely unlikely” to earn any return on the $700 billion government program to invest in banks and other companies as the financial system teetered on the edge of collapse, a quarterly audit said. In a report to Congress, the Troubled Asset Relief Program watchdog Neil Barofsky said that recouping the billions of dollars given to insurer American International Group Inc. and automakers General Motors Co. and Chrysler LLC “is far from certain.”
The United States and the European Union (EU) economic relationship is the largest in the world—and it is growing. The modern U.S.-European economic relationship has evolved since World War II, broadening as the six-member European Community expanded into the present 27-member European Union. The ties have also become more complex and interdependent, covering
a growing number and type of trade and financial activities.
There is general agreement that the ongoing global financial crisis has produced a serious decline in the availability of trade credit along with increases in pricing. In order to better understand the current trade environment and develop actions to alleviate some of the problems associate with it, the International Monetary Fund (IMF) and the Bankers Association for Trade and Finance (BAFT) have commissioned Flometrix to conduct a survey among banks worldwide.
Recent positive developments suggest that Iraq has made important progress towards political and economic stabilization, although the situation remains fragile and reversible. Recent months have seen a sharp decline in incidents of violence, especially in the Baghdad area, and a corresponding decrease in the rate of internal displacement of the population.
G20 finance leaders on Saturday took aim at excessive bank pay and risk-taking at the root of the financial crisis and insisted trillions of dollars of emergency economic supports would be needed for some time. Although the global economy looks brighter than when the Group of 20 finance ministers and central bankers met in April, their closing statement said they would not remove economic stimulus until the recovery was well entrenched.
Uruguay is currently in the midst of a dual transition. First, there is an economic transition from the 2002 crisis towards a path of equitable and sustainable development, as the economy continues to recover strongly. Second, there is a political transition, as the victory of the Frente Amplio – Encuentro Progresista – Nueva Mayoría coalition in the October 2004 elections marked a new phase in the country’s political history.
Asset totals reflect internally run, single-manager hedge funds and separate accounts, including long-only funds that charge hedge-fund-style fees; they exclude funds of hedge funds, overlay accounts, funds managed by third parties, mutual funds and traditional long-only money, dynamic money market funds, assets in collateralized debt and bond obligations, private equity and venture capital.