Morning papers: HSBC in $62m Madoff hedge fund payout
The morning headlines brought to you by Investment Adviser: Wednesday, June 8, 2011.
HSBC has agreed to pay $62m to investors in a hedge fund that fed money to fraudulent money manager Bernard Madoff, becoming the first custodian bank to settle a class-action lawsuit connected to the scandal, reports the Financial Times.
The Thema fund settlement is equivalent to about 20 cents on the dollar for its $312m in real losses in the Ponzi scheme. HSBC, which served as custodian for the Irish-based fund, did not admit liability.
The deal involves only a small portion of HSBC’s total exposure in connection with Mr Madoff. At the time of his December 2008 arrest, HSBC served as custodian or administrator for a number of funds that incurred real losses of about $4.3bn. Thema represents less than one-tenth of the total.
IMF Candidates Trawl for Support
Mexican central banker Agustin Carstens brought his campaign to take over as head of the International Monetary Fund to Canada yesterday, saying his experience in managing economic turmoil and "fresh eyes" make him the ideal candidate, reports The Wall Street Journal.
Mr. Carstens met with Canadian Finance Minister Jim Flaherty and the country's central banker, Mark Carney, in an effort to win over Canada, a Group of Seven member and key Mexican trading partner through NAFTA.
He said he's convinced neither Canada nor the U.S. have made a final decision on who they will back for the job, which became vacant following the resignation last month of former chief Dominique Strauss-Kahn following his arrest in New York for alleged sexual assault of a hotel worker.
Oil price battle flares ahead of Opec showdown
An intense battle over the soaring oil price will come to a head today, amid growing political tensions between Saudi Arabia and other members of the Organisation of Petroleum Exporting Countries (Opec), reports The Daily Telegraph.
The twice-yearly meeting of Opec in Vienna is set to be the most dramatic in a decade, as the 12-member cartel must decide whether to raise output and dampen prices for the first time in four years.
Opec, whose key members include Saudi Arabia, Iran and Kuwait, has immense influence over the market because it supplies 40pc of the world's oil and agrees on how much it will release.
The group is under pressure from the International Energy Agency and Western governments to release more oil, with prices above $100 per barrel since unrest began in the Middle East late last year.
MPs want extra independents on Bank committee
A key parliamentary committee has demanded that the Bank of England add independent voices to a new body responsible for identifying and deflating economic bubbles, leaving it two members short less than a week before its first meeting, reports the Financial Times.
The Treasury select committee accepted the appointment of Alastair Clark, a Treasury adviser and former Bank official, to an interim financial policy committee, but said he was not sufficiently independent to qualify as an external member.