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EU fines banks including Barclays, NatWest and HSBC £293m for currency ‘cartel’

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The EU has fined banks, including Barclays, NatWest and HSBC, a total of €344m (£293m) for roles in an alleged foreign exchange spot trading cartel.

The European Commission said the UK-based banks agreed to settle the case, alongside UBS which avoided a penalty because it had blown the whistle on the activity.

HSBC’s fine was the largest at €174.3m (£148m) while its Canary Wharf-headquartered neighbour Barclays was to pay €54.3m (£46m).

NatWest – which was known by its former RBS Group name at the time – faces a €32.5m (£28m) bill.

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Image:Both HSBC and Barclays have their headquarters at London’s Canary Wharf

Credit Suisse was the other bank to be handed a fine – of €83m (£71m).Advertisement

The EU’s competition regulator said the cartel had focused on forex spot trading of G10 currencies, which include the US dollar, euro and UK pound.

The Commission’s competition chief, Margrethe Vestager, said: “Today we complete our sixth cartel investigation in the financial sector since 2013 and conclude the third leg of our investigation into the foreign exchange spot trading market.

“Our cartel decisions to fine UBS, Barclays, RBS, HSBC and Credit Suisse send a clear message that the Commission remains committed to ensure a sound and competitive financial sector that is essential for investment and growth.

“Foreign exchange spot trading activities are one of the largest financial markets in the world. The collusive behaviour of the five banks undermined the integrity of the financial sector at the expense of the European economy and consumers”.

The fines are the latest to hit banks, which have received billions of pounds worth of penalties worldwide since the financial crisis of 2008 for the rigging of benchmarks used in many day-to-day financial transactions.

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Ghana on course to becoming aviation hub – Ex-GACL boss

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A former Managing Director of the Ghana Airport Company Limited, Charles Asare says Ghana is on course to becoming a preferred aviation hub and a leader in air-travel business in West Africa with the commencement of commercial flights to Ho and Wa airports from Accra.

Mr Asare noted that “by developing a world-class terminal (terminal 3) at the Kotoka International Airpot, a rehabilitation of the Tamale and Kumasi airports and the introduction of new regional airports in Ho and Wa coupled with a continues improvement safety and service delivery, there is no doubt that Ghana will become a preferred aviation hub in the subregion”.

The former GACL boss’ comment comes on the back of the announcement of the local carrier, Passion Air, to begin commercial flights through Ho and Wa beginning Saturday, December 4, 2021.

This will be the first time an airline will fly the route commercially after the Ho Airport was completed in 2018.

The $25 million project, which was scheduled for completion in September 2016, actually concluded in 2018 with a 1,900-metre runway, a traffic control tower, a 1,150-capacity passenger waiting area, an ultramodern airbus terminal, and an automatic fire detection and control system.

Another local carrier, Africa World Airline, conducted test flights to Ho in mid-2021 with a promise to begin commercial travel on the route in June 2021, but that did not hold.

Passion Air’s operation of the route will cut travel time of about 5 hours (traffic inclusive) from Accra to Ho by road to about 20 to 30 minutes by air.

Coupled with the bad nature of the roads leading to the Volta Region, which is an acclaimed tourist destination, it is expected that the route will see maximum patronage from locals resident in Accra who will visit home regularly and tourists who have stayed away from the area due to the nature of the roads.

Mr. Asare, speaking during an inaugural flight to Ho on Wednesday, December 1, 2021, urged Passion Air to develop more routes from Ho to other regional capitals and even to neighbouring countries.

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President woos Norwegian investors to back Ghana’s railway sector

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President Akufo-Addo has urged investors from Norway to consider partnering government to develop a modern railway network in the country.

This follows recent comments by the Minister for Railway Development, John Peter Amewu, to the effect that the government would not be able to construct any sky train in the country in the near future.

The Minister noted that funding for the construction of some of the already started projects is becoming problematic for the government.

But in an address at the Ghana-Norway business and investment forum in Accra, President Akufo-Addo noted that his government is embarking on an aggressive program to attract the needed investment to develop the railway and road infrastructure needed in the country.

“We are hopeful that with solid private sector participation, we can develop a modern railway network with strong production centre linkages and with a potential to connect us with our neighbours.”

“Members of the Norwegian business community, you can choose to invest in Ghana through the GIPC or set up as a free zones enterprise, regardless of where the investment is, the government has instituted a number of fiscal incentives for the investor depending on the nature of the activity or the location of the investment. I want us to build a stronger Ghana-Norway relationship for the benefit of our respective shareholders,” he added.

‘There won’t be any sky train in Ghana, it’s not possible’ – Amewu

The Minister for Railway Development, John Peter Amewu, has said the government would not be able to construct any sky train in the country.

According to him, it is not possible to do so.

In November 2019, the government through the then Minister for the sector, Joe Ghartey, signed an agreement for the construction of the Accra SkyTrain Project on the sidelines of the African Investment Forum in South Africa.

The proposed initiative in Accra provides for the development of five routes, four of which are comprised of radial routes that originate at the proposed SkyTrain Terminal, at the heart of Accra, at the Kwame Nkrumah Circle, and one route that provides an intra-city commuter loop distribution service, also emanating from Circle.

The project envisaged a total track length across all routes of 194 kilometres.

Subsequently, the management of the Ghana Railway Development Authority disclosed that feasibility studies on the proposed sky-train project in Accra had been completed.

The Chief Executive Officer (CEO) of the Authority, Richard Diedong Dombo assured that government will begin implementation of the project after scrutinizing the report it has received.

“The sky trains are on an elevator platform rather than underground. They will be running on platforms over the city of Accra. It will be a community train and not an intercity one. At the moment, the feasibility studies have been completed and it is being studied before the contract is signed,” he said.

However, speaking on Citi TV’s Face to Face programme on Tuesday, November 23, 2021, the current sector minister, John Peter Amewu said the government would not go ahead with the sky train project.

According to him, the government cannot fund the project because it is capital intensive.

“The sky train that we are talking about is the one that is going to run on columns in the sky like the ones you see in Dubai but no agreement has been signed.”

“It is not possible to be done now. I don’t see any sky train being done in the next 3-4 years. There is not going to be any Sky train in the country. It is not possible.”

He also added that funding for the construction of some of the already started projects is becoming problematic for the government.

“Rail construction takes a lot of time and it is also capital intensive. A kilometre of a railway line is about four to five times the cost of building a concrete infrastructure in terms of building an asphaltic road.”

“So considering the fiscal space that we have in the country, facilities to absorb it is becoming problematic for the government and you know our current debt to GDP which is in excess of 70%.”

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Government urged to build and protect crude palm oil industry

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Chief Commercial Officer of the Ghana Oil Palm Development Company, Gangadhar Shetty, has urged government to come up with policies that will build the local crude palm oil industry’s capacity, as doing so will make the country become self-sufficient and an exporter of refined palm oil products.

He said the industry is happy government has reversed the 50 percent benchmark policy that brought it to near-collapse. However, he said, the discussion should now be focused on policies which will make the industry robust enough to produce sufficient amounts to satisfy local demand and export the excess, as this will end imports of refined palm oil products.

“We need to understand that the benchmark policy is not good for the manufacturing industry. The same way the refineries are looking at benchmark values as a threat to them, they are also a threat to crude palm oil manufacturers.

“So I would say the attention should be given more to crude palm oil production, because at this moment Ghana has a shortage of crude palm oil but we have adequate installed capacity for refineries. The main focus should be how to build and improve capacity of local crude palm oil manufacturers to become more productive.

“If we increase crude palm oil production we will not need to import refined oil, because it is from the crude oil that we get refined oil,” he said in an interview with the B&FT.

Mr. Shetty further stated that focusing on building the crude oil palm industry’s capacity will also create massive employment opportunities and make the currency stable; adding that if such help is not given to the sector, local refineries cannot produce to their maximum – and this will encourage imports of refined vegetable oils, thereby creating unfavourable competition and weakening the local currency.

“Refineries can be put up in just six months and will be ready for production. But if you want to produce 450,000 tonnes of crude oil you need 120,000 to 150,000 hectares of plantation, and that size of plantation can create direct and indirect employment for more than 600,000 people.

“If you look at the international price of crude palm oil, there is just about a US$70 to US$80 difference between the refined oil. So if you are producing the crude, you only need to add small value and you will stop imports of refined oil. It has the advantage of import substitution, and will save us a lot of FX while creating employment – especially for the rural folk,” he said.

He added that government must emulate the example of Nigeria, where its government has put in deliberate policies to protect and grow the oil palm industry by supporting manufacturers with soft-loans and slapping high duties on imported crude palm oil.

“Let’s try to compare ourselves to Nigeria. Nigeria is trying to give single-digit interest loans to the oil palm sector. Aside from that, Nigeria regulates the crude palm oil sector. You cannot just import crude palm oil; you need approval of the central bank of Nigeria, and they will not have access to forex from the central bank. They have to get it from the open market. So this means government is trying to give some level of protection to the sector.

“And if you look at duty on imported crude palm oil in Nigeria, it is 35 percent; but here in Ghana, it is 5 percent duty. So, it is important that the benchmark be removed and duty on imported crude increased,” he said.

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