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The Bank of Spain has promised to cover up to 20 billion euros ($27 billion) in losses at Caja Mediterraneo as it seeks to offload the troubled savings bank, a newspaper said Monday. The Bank of Spain took control of the bank in July and is now trying to sell it off. According to the daily El Mundo, the central bank let investors know it would cover up to 20 billion euros of losses, the estimated amount of property-related assets at risk in Caja Mediterraneo (CAM), if necessary. If confirmed, the central bank intervention would be "the costliest for the public treasury in Spanish financial sector history," the newspaper said, without identifying its source. The price tag could unnerve financial markets -- it is equal to a government estimate of the maximum cost of recapitalising Spain's entire banking sector. Contacted by AFP, Bank of Spain officials were unable to respond immediately to the report. The Bank of Spain injected 2.8 billion euros and opened a three-billion-euro line of credit for the CAM when it took control of the institution in July. But in early September CAM revealed a first-half loss of 1.136 billion euros and a high 19-percent ratio of bad loans, mostly property-related credits whose recovery was doubtful. The average bad loan ratio for the Spanish banking sector was 6.416 percent in June. According to El Mundo, the Bank of Spain is trying to complete the sale before general elections set for November 20. It said rival banks Santander, BBVA and CaixaBank, as well as a union of three Basque banks, were among candidates to buy the CAM, with Santander the favourite.
Swiss bank UBS on Sunday increased the amount it said it had lost on rogue equity trades to $2.3 billion and alleged a trader concealed his risky deals by creating fictitious hedging positions in internal systems. UBS stunned markets on Thursday when it announced unauthorised trades had lost it some $2 billion. London trader Kweku Adoboli was charged on Friday with fraud and false accounting dating back to 2008. "The loss resulted from unauthorised speculative trading in various S&P 500, DAX, and EuroStoxx index futures over the last three months," UBS said in a brief statement. "The loss arising from this matter is $2.3 billion. As previously stated, no client positions were affected." Global stock markets have been extremely volatile in recent months, plunging on concerns over euro zone and U.S. debt crises and then rebounding on hopes for their resolution. The loss is a disaster for the reputation of Switzerland's biggest bank, which had just started to recover after it almost collapsed during the financial crisis and faced a damaging U.S. investigation into aiding wealthy Americans to dodge taxes. "Loss even more. Reads like they're making excuses," said Helvea analyst Peter Thorne of the UBS statement. The new scandal has prompted calls for its top managers to step down and for its investment bank to be split into a separate unit from its core wealth management business. Chief Executive Oswald Gruebel, who was brought out of retirement in 2009 to turn the bank around, was quoted in a newspaper on Sunday as saying he is not considering quitting over the crisis, but said it was up to the board to decide. In a memo to staff on Sunday, he said: "Ultimately, the buck stops with me. I and the rest of senior management are responsible for dealing with wrongdoing." Swiss newspapers quoted unnamed insiders as saying the UBS board and important shareholders such as the Singapore sovereign wealth fund were still backing Gruebel, with immediate changes at the top the last thing the bank needed. Gruebel is widely expected to present plans to drastically cut back the investment bank at an investor day in November. INDEPENDENT INVESTIGATION The bank, whose three keys logo symbolise "confidence, security, discretion," has pulled its "We will not rest" global advertising campaign for now, that was designed by advertising agency Publicis to try to rebuild its image. Meanwhile, UBS client advisers have been writing to customers to reassure them of the underlying financial strength of the bank despite the trading loss, a spokesman said. "That we now suffer this setback at this point in our efforts to improve our reputation is very disappointing. This incident also sets us back somewhat in our capital-building efforts," Gruebel said in his memo. "However, I wish to remind you that our fundamental strengths as a firm remain intact... we remain one of the best capitalized banks in the industry. UBS said its board of directors had set up a committee chaired by independent director David Sidwell, former chief financial officer at Morgan Stanley, to conduct an independent investigation into the trades and the bank's control systems. The bank said it had covered the risk resulting from the unauthorised trades, and its equities business was again operating normally within previously defined risk limits. It said the trader had allegedly concealed the fact his trades violated UBS risk limits by executing fake exchange-traded fund (ETFs) positions. "Following inquiries directed to him by UBS control functions that were reviewing his positions, the trader revealed his unauthorised activity," the bank said. "The positions taken were within the normal business flow of a large global equity trading house as part of a properly hedged portfolio," UBS said. "However, the true magnitude of the risk exposure was distorted because the positions had been offset in our systems with fictitious, forward-settling, cash ETF positions." The Sunday Times cited unnamed insiders saying the trader placed bets worth $10 billion before his losses were detected. ETFs are index funds listed on an exchange and can be traded just like regular stocks. They try to replicate index performances and offer lower costs than actively managed funds, but regulators have warned about risks from some complex ETFs. In the past three months, DAX futures have fallen 22 percent, Eurostoxx 50 futures have dropped 20 percent and S&P 500 futures have dipped 4 percent. The instruments involved in the UBS case are similar to those that Jerome Kerviel, the rogue trader at Societe Generale, traded when he racked up a $6.7 billion loss in unauthorised deals in 2008. Christoph Blocher, vice-president of the right-wing Swiss People's Party (SVP) -- the country's biggest -- renewed his calls for a splitting off of the investment bank. "One has to seriously examine a ban on investment banking for commercial banks," he told the SonntagsZeitung, adding his party might team up with the center-left Social Democrats to push for such a move.
Lawyers for a woman who alleges she was sexually assaulted by Prince Alwaleed bin Talal of Saudi Arabia say the case has not been properly handled by Spain's criminal justice system. The woman, known only as "Soraya", says she was assaulted on a yacht moored off the island of Ibiza in 2008. A spokeswoman for the prince denied the allegation and said he had not been to Ibiza for more than a decade. The case was shelved by an island court but has now been reopened. This followed a successful appeal by Soraya's lawyers. The judge is preparing a second official request to the Saudi authorities for assistance in formally questioning the prince. The nephew of Saudi King Abdullah, Prince Alwaleed bin Talal is a multi-billionaire with major investments in both Citigroup and NewsCorp. 'Something in my drink' "In our opinion, the Court of Instruction No 3 in Ibiza and the police did not follow full procedure in cases of alleged sexual abuse," the lawyers from Madrid-based firm Turiel and Beloqui told the BBC. "There are things that should have been investigated that were not - like questioning staff on the yacht and the guests, an analysis of the victim's clothes and so on," the lawyers wrote, describing the fact these steps were not taken as "very unusual". The claim that the case was not being pursued with proper rigour was dismissed by the Ibiza court in 2010, saying that the identity of the accused in no way affected its decision to drop the case that year. The court ruling cites insufficient evidence to proceed. Continue reading the main story “ Start Quote My daughter was in a terrible state, [...] scared to death, crying, awful” Mother of 'Soraya' Soraya, a Spanish-German model, was 20 at the time of the alleged attack on 13 August 2008 on board the 117-metre luxury yacht Turama. She told police she had begun to feel nauseous in the VIP zone of a local night club, where she believes something was slipped into her drink. She had been taken there by a man claiming to be a chauffeur for "an Arab prince" who was visiting the island. According to court documents seen by the BBC, Soraya sent the chauffeur an SMS text message at 05:12, saying: "I haven't drunk much but I think there was something in my drink." The model says she came round some hours later on board the Turama to find a man on top of her. She later identified the man as Prince Alwaleed bin Talal using images taken from YouTube. Forensic reports from a medical examination the following day revealed traces of a sedative and semen, but no physical injuries. A woman identifying herself as the mother of Soraya told the BBC her daughter had called on the morning of the alleged attack asking her to come and collect her from the island. "My daughter was in a terrible state, [...] scared to death, crying, awful," the woman said, responding to questions sent by email. "The Spanish justice system has treated this case very badly. In my view they did not want to get too involved because of who the accused was." A 2010 prosecutor's report says three men who were questioned by police during the investigation were unable to corroborate the model's version of events "in any way". The Saudi foreign ministry rejected an initial request from the Ibizan court to investigate, citing "an inability to identify the accused and a lack of solid evidence". This week, a spokeswoman for Prince Alwaleed's Kingdom Holding Company said the prince had never been informed of the 2008 court case, or that it was eventually shelved. In a statement, she also said the billionaire's travel records confirm he was with dozens of friends and family at the time of the alleged attack, nowhere near Ibiza. "There have been many examples of people impersonating Prince Alwaleed over the internet and elsewhere for their own purposes," Heba Fatani said in a statement. She called the allegations against him "salacious" and "completely and utterly false". The Audencia Provincial court in Mallorca - which has jurisdiction over Ibiza - has ordered the case to be reopened in order to ensure the prince can be questioned in accordance with Spanish law. Soraya's lawyers have urged him to provide a DNA sample to rule himself out of the inquiry.
Spain today became the latest European country to hike taxes on the wealthy, with a new asset-based tax targeting the country's richest people. Spain's socialist government hopes that the new wealth tax will raise up to €1bn in a country where growth is grinding to a halt and this year's 6% deficit target looks increasingly tough to meet. The move represents a U-turn for prime minister José Luis Rodríguez Zapatero, who abolished a similar wealth tax in 2008 — just before the country plunged towards recession. "The economic crisis makes it necessary to bring this tax back, applying principles of fairness so that those with bigger assets can be taxed and so those who have greater wealth can contribute more to getting the country out of the crisis," a finance ministry statement said. Spaniards with €700,000 of assets in real estate – excluding their main home – as well as in stocks and bank deposit will have to pay the new tax. "It excludes the middle classes, who were the ones who had been largely affected by it when it was eliminated in 2008," the statement said. "We estimate the number of people who will contribute at around 160,000, with annual payments of about €1.08bn if it is applied evenly across Spain," it added. The wealth tax will go to Spain's cash-strapped regional governments, though some of them are opposed to it. Only one of the eleven regions currently governed by the right-wing opposition People's Party (PP) has so far indicated that it will apply the tax. It remained unclear how many others, including the wealthy Madrid region, would join the PP-administered region of Extremadura. But with fierce austerity measures in place, PP regional governments will come under intense pressure to use the tax. "In moments of hardship it is fair that those who have more should give more, just as some of the wealthiest people in Germany and France have offered to do, especially as they are less affected by measures that have been applied to pensions, salaries, lay-offs and income tax or VAT hikes," said José María Mollinedo, head of the tax inspectors' union. Spain's wealthy largely avoid income tax, with only some 7,000 people declaring annual taxable income above €600,000. Emilio Botín, head of the Santander banking group and Spain's tenth wealthiest individual, said that he disagreed with the move. "I think it's bad," he told journalists
What can the Rolling Stones, Eurythmics and the blockbuster Slumdog Millionaire possibly have in common? More than you think -- at least that's the bet behind Super Heavy, a five-strong supergroup fronted by Mick Jagger whose new album comes out Monday. Five stars from the worlds of rock, soul, pop, reggae and world music -- Jagger, Eurythmics' Dave Stewart, soulwoman Joss Stone, Bob Marley's youngest son Damian and AR Rahman who scored the "Slumdog" soundtrack -- have brought their eclectic styles together for the occasion. The motley make-up of Jagger's new supergroup, the term used when musicians team up on the model of Cream in the 1960s or Damon Albarn's Gorillaz, has raised some eyebrows in music circles. But Jagger insists the resulting album -- titled simply Super Heavy -- is "not all weird". Super Heavy was the brainchild of Dave Stewart, who said he was inspired by the mish mash of sounds he heard wafting through the window of his home above Saint Ann's Bay in Jamaica. "It's kind of the jungle, and sometimes I'd hear three sound systems all playing different things. I always love that, along with Indian orchestras," Stewart told Rolling Stone magazine earlier this year. "I said to Mick, ?How could we make a fusion?'" A few phone calls later and plans for the troupe -- who together claim 11 Grammy Awards -- were in the works, with a first jam session held in Los Angeles six months on, in early 2010. "We didn't know what the hell we were doing," said the Eurythmics founder and co-writer of such 1980s hits as "Sweet Dreams" and "Talking to an Angel". "We were just jamming and making a noise. It was like when a band first starts up in your garage. We might have a 22 minute jam, and it would become a six minute song." Jagger -- who plays the guitar and harmonica as well as singing on the album -- has warned it is "a different kind of record than what people would expect." "It's not all weird and strange though," he told Rolling Stone of the result, a concentrate of musical styles drawn from around the planet. The rhythms and vocals of Damian Marley, who has worked with some of the top names in US hip-hop, leave a strong mark, along with AR Rahman's Bollywood-tinged melodies, some of them sung in Urdu. Joss Stone's deep voice adds a touch of glamour and emotion, while Mick's own performance is Jagger to the hilt. The first single off the album, "Miracle Worker," went on sale online on July 7 and the AZ record label, part of the Universal music group, releases the full album worldwide on Monday. The idea of a supergroup stems back to the 1960s when Cream brought together Eric Clapton of the Yardbirds, Ginger Baker and Jack Bruce of the Graham Bond Organisation in 1966 -- becoming a rock monument in its own right. Two years on, David Crosby of The Byrds, Buffalo Springfield's Stephen Stills and Graham Nash of The Hollies split from their bands and reformed as Crosby, Stills and Nash, producing its now-classic vocal harmonies and folk guitar, sometimes with Neil Young. Less of a hit despite an A-list cast, the Traveling Wilburys was set up in 1988 by Bob Dylan, George Harrison, US rockers Roy Orbison and Tom Petty, and Jeff Lynne of the Electric Light Orchestra. The supergroup trend has resurfaced in recent years, spurred in part by the globe-trotting tastes of Blur frontman Damon Albarn, the creative mind behind both the Gorillaz music project and the 2007 supergroup album "The Good the bad and the Queen." Jack White of The White Stripes also helped found two supergroups in the past decade, The Raconteurs and The Dead Weather. And in 2009, Them Crooked Vultures brought together rock legend Dave Grohl of Nirvana and the Foo Fighters, with Josh Homme of Queens of the Stone Age and the multi-instrumentalist John Paul Jones, of Led Zeppelin fame.
Back in early September, the recruitment committee of the Council of Saudi Chambers of Commerce and Industry announced that recruitment companies would be established and will be licensed to bring in housemaids from Morocco, East Asia and South Africa. The move has caused outrage in unusual places. The reason for this recruitment move, according to a Saudi chamber official, was that they were turning to Morocco and other countries to get its domestic workers following a dispute with the Philippines and Indonesia, the largest suppliers of housemaids to the Gulf countries. The dispute has centered on pay and conditions, but Indonesia had earlier this year also criticized the Saudi government for beheading an Indonesian maid. Of the 1.2 million Indonesians working in Saudi Arabia, over 70% are domestic helpers. The ban on maids from Indonesia and the Philippines hit Saudi households hard, causing many to resort to hiring illegal maids over Ramadan. The Saudis are reliant on foreign workers to perform their household tasks for them and very few Saudi women will work in such menial positions despite high unemployment, as they would be looked down on by other Saudis. The ban came into effect following the two countries attempts to introduce regulations for the work conditions of their nationals. Trade Arabia said both countries demanded better working conditions for their employees. Saudi walked away from the negotiations abruptly and decided to look for domestic employees from countries such as Morocco who they perceive as not as concerned about imposing regulations to protect their workers. It also became clear that lower rates of pay could be offered to other nationals. Right from the beginning the scheme ran into problems in respect to recruiting maids from Morocco. The recruitment committee said that the immediate employment of Moroccan maids could prove an issue as there were no official recruitment offices in Morocco to process the papers of prospective domestic helps. It was suggested that there could be a way around the problem with Saudi citizens being given work visas to bring housemaids from Morocco on their own. The whole issue of Saudi maids has been at the centre of international protests for years, especially in regard to exploitation, sexual harassment and torturing of foreign housemaids. The notion that individual Saudi's could fly to Morocco and find a young woman and take her back to Saudi, is truly worrying and will, no doubt, offend our readers. The chairman of the Council of Saudi Chambers of Commerce and Industry, warned Saudi citizens against contacting any offices claiming to be able to send housemaids from Morocco to the Kingdom. "They are all fake. You should not heed the false claims of these fake offices." he warned prospective employers. The spokesman of the Labor Ministry, Hattab Al-Anzi, said the recruitment offices would grant citizens work visas for housemaids from Morocco. "It is now the responsibility of the citizen to look for authorized private recruitment offices to bring workers from Morocco," he said. Then, suddenly, the plan to import maids from Morocco ran into even more problems. Those fighting to stop the "maid-trade" got support from an unlikely source - Saudi women. They objected to the importing of Moroccan girls, not because they didn't think they would work hard, or that they were against the exploitation of young foreign women. No - it was because they thought the Moroccan women were too beautiful. At first it sounded like a sick joke, but the Saudi women were serious. "Many Saudi woman have objected to plans to import domestic workers from Morocco…they say the Moroccan women are beautiful and this will cause continuous anxiety and concern in Saudi families,” - 'Sharq' Daily It is a relatively rare for the voices of Saudi women to be raised in protest. This year there have been notable exceptions as some women protested for the right to drive, whilst others demanded the right to vote. Now they have another common cause - to ban female domestic maids from Morocco. It started slowly, but over a few days the protests grew to the point where the Saudi women inundated the government with complaints that Moroccan women are just too beautiful and may lure their husbands away. According to the website Emirates 24 the Shura Council was “deluged by demands from Saudi women” "Moroccan women are so attractive that their husbands could easily fall for them…others said Moroccans are good at magic and sorcery and that this could enable them to lure their husbands.” - 'Sharq' Daily If the women of Saudi Arabia fail to stop this "maid-trade" then it is imperative that the Moroccan government scrutinize the contracts and conditions of every maid taken to Saudi. They should also take steps to educate Saudi women to understand that while Moroccan women may be beautiful, they are not dangerous.
