London, United Kingdom (AHN) – The Bank of England will inject an additional $117.7 billion into the economy in an attempt to encourage commercial bank lending and stimulate sagging growth.

That decision was reached by the Bank of England’s Monetary Policy Committee when it met and voted on Thursday.

The move boosts the amount of the bank’s asset purchase program, financed by issuance of central bank reserves, to $431.7 billion, bank officials said.

Businesses in the United Kingdom welcomed the move.

In a statement, the bank’s Monetary Policy Committee explained why it acted.

“The pace of global expansion has slackened, especially in the United Kingdom’s main export markets. Vulnerabilities associated with the indebtedness of some euro-area sovereigns and banks have resulted in severe strains in bank funding markets and financial markets more generally. These tensions in the world economy threaten the UK recovery.”

“In the United Kingdom, the path of output has been affected by a number of temporary factors, but the available indicators suggest that the underlying rate of growth has also moderated. The squeeze on households’ real incomes and the fiscal consolidation are likely to continue to weigh on domestic spending, while the strains in bank funding markets may also inhibit the availability of credit to consumers and businesses.”

“While the stimulatory monetary stance and the present level of sterling should help to support demand, the weaker outlook for, and the increased downside risks to, output growth mean that the margin of slack in the economy is likely to be greater and more persistent than previously expected.

“CPI inflation rose to 4.5 percent in August. The present elevated rate of inflation primarily reflects the increase in the standard rate of VAT in January and the impact of higher energy and import prices. Inflation is likely to rise to above 5 percent in the next month or so, boosted by already announced increases in utility prices,” the committee added.

“But measures of domestically generated inflation remain contained and inflation is likely to fall back sharply next year as the influence of the factors temporarily raising inflation diminishes and downward pressure from unemployment and spare capacity persists,” the committee explained.

“The deterioration in the outlook has made it more likely that inflation will undershoot the 2 percent target in the medium term. In the light of that shift in the balance of risks, and in order to keep inflation on track to meet the target over the medium term, the Committee judged that it was necessary to inject further monetary stimulus into the economy.”

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Frankfurt, Germany (AHN) – The European Central Bank raised on Thursday key lending rates by a quarter point to 1.5 percent. The rate hike aims to curb inflation, said ECB President Jean-Claude Trichet.

He hinted of more benchmark rate increases in the future, despite weak economic growth in southern Europe and problems in the bond markets. Trichet made the rate hike announcement even if the ECB had been warned that the increase may be bad for the Spanish and Italian economies.

Trichet stressed that all eurozone nations are on the losing end if the regional central bank would fail to rein in price increases through the key lending rate increase. Inflation in the zone hit 2.6 percent in June due to pressure on fuel and food prices.

Following the rate hike announcement, yields on 10-year Italian bonds went up to a high of 5.21 percent, while the Spanish bonds yielded 5.71 percent, but settled down slightly on Thursday/

The ECB, however, waived collateral requirements on Portuguese bonds, which would allow the country’s banks to continue tapping the ECB’s liquidity window after Moody’s downgraded Portugal’s debt to junk. The bank had already waived the rules earlier for Greece.

Trichet cautioned eurozone governments against initiating measures that the credit ratings agency may consider a default, which would trigger billions of euro-worth of complex financial instruments such as credit default swaps, and destabilize the European banking sector.

Analysts said that the announcement would increase borrowing costs and make like harder for nationals of several eurozone economies such as Greece, Portugal, Ireland, Italy and Spain – which are all pushing for belt-tightening measures to reduce national budget deficits amid weak economic growth or recession.

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London, England, United Kingdom (AHN) – The international banking regulator, the Bank for International Settlements (BIS), urged over the weekend the Bank of England to raise the country’s record-low interest rates.

The regulator warned that financial stability of Britain is at risk unless the country’s central bank imposes tighter monetary policy.

Although the BIS, in its yearly report released on Sunday, made the same warning to central banks around the world, it singled out the Bank of England because Britain’s inflation rate had exceeded the BOE’s 2 percent target since December 2009.

The BIS pointed out that the United Kingdom’s consumer price index has reached 4.5 percent, while the country’s key lending rate continues to be at 0.5 percent since March 2009.

The BIS stressed that the BOE’s extremely accommodative policies threaten to embed high inflation in the system and damage prospects for long-term growth. It also places at risk financial stability because the very low rates encourage risk-taking in the financial sector.

The BIS said central banks must be prepared to hike key lending rates at a faster pace than previous monetary tightening episodes.

The BOE favors low rates because the recent rise in commodity prices was a one-time incident and there is enough slack in the economy to keep wage pressures down. But the BIS disagrees with the bank’s assumptions.

The BIS said there is still a threat of second-round effects because higher food prices could cause higher salaries in emerging markets, which in turn, could cause an increase if the global supply chain.

Despite inflation rate in England hitting 4.5 percent in April, and economists expectation of a key lending rate increase within the year, the Bank of England’s monetary policy committee has not yet indicated an interest rate hike is underway soon.

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New York, NY, United States (AHN) – Bank of America (BAC Fortune 500) announced it is partnering with two other entities to develop solar energy from rooftop installations.

The project will ultimately produce about 733 megawatts of solar energy, which is enough energy to power 100,000 homes and represents about 50 percent of the energy output of a nuclear powered electric plant.

A federal loan guarantee through the Department of Energy will help to fund the $2.6 billion project. It will be the world’s largest single effort to install solar energy panels on rooftops. The panels will be installed on the rooftops of industrial buildings in several states. DOE will guarantee 80 percent of the $1.4 billion debt financing. The rest of the money will come from private loan and funding sources.

Other partners in the project include real estate owner Prologis (PLD) and utility NRG Energy (NRG, Fortune 500).

In a press release, Tom Doyle, president of NRG Solar, NRG’s solar subsidiary, put the project into perspective.

“NRG believes rooftop solar is a smart choice for industrial, commercial and residential property owners in markets around the country, and this program provides the commercial scale that will bring the benefits of solar power to customers across the country,” Doyle said. “This program will nearly double the amount of grid-connected solar online in the United States today and make another positive contribution to cleaner air and a healthy environment.”

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Dhaka, Bangladesh (AHN) – Bangladesh’s apex court on Thursday apparently put an end to Nobel laureate Muhammad Yunus’ legal battle to regain the bank he founded.

The court rejected two petitions filed in connection with Yunus’ removal as managing director of the bank.

Pioneer of banking for the poor, Yunus had sought reversal of the apex court order on April 5 that dismissed his appeal against the higher court ruling upholding the Bangladesh Central Bank order removing him from the post.

A petition challenging the high court verdict was filed on April 3 by nine Grameen Bank directors.

The protracted legal battle put up by the embroiled pioneer of micro-credit had been backed by some of the most renowned lawyers of the country.

Chief counsel Dr. Kamal Hossain told bdnews24.com that the first Bangladeshi Nobel laureate was once again denied constitutional right by the apex court, as was done in the High Court judgment, writes news portal .

“Dr. Yunus’ constitutional right was infringed through the HC verdict. But the apex court also followed suit,” said Hussain, an author of the country’s first constitution framed in 1972.

Yunus, 71, began the legal battle in early March when the central bank dismissed him as Grameen Bank’s managing director, saying he has violated the organization’s retirement rules.

Hours after the court rejected the appeal, Grameen Bank staff threatened the government with protests if Yunus was not made restored as chairman in two weeks.

The threat was issued on Thursday by the Grameen Bank Employees’ Association’s former president Sagirur Rashid Chowdhury at a press briefing at its headquarters in Dhaka.

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Moscow, Russian Federation (AHN) – Strong inflationary pressure that threatened to derail Russia’s feeble economic recovery prompted the central bank to raise its key interest rate by 0.25 basis points to 8.25 percent.

The Russian Central Bank announced the increase in its refinancing rate on Friday and said it would take effect on Tuesday.

It marked the second time since February that the bank has raised its rate, before that the bank had not raised its main interest rate in two years.

Bank officials said their focus was to combat inflation. The inflation rate reached 9.6 percent on April 25.

In addition, the value of the ruble has risen against the dollar. The ruble is at its highest rate in currency trading against the dollar since December.

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New York, NY, United States (NewsBahn) – The founders of three of the largest Internet poker companies doing business in the United States are among 11 people accused Friday of bank fraud, money laundering, and illegal gambling offenses.

The charged were unveiled Friday when federal authorities unsealed a indictment in Manhattan.

The government also seeks at least $3 billion in civil money laundering penalties and forfeiture from the poker companies and the defendants. A federal district court has issued an order restraining approximately 76 bank accounts in 14 countries.

Five Internet domain names used by the poker companies also were seized.

Among those charged were Isai Scheinberg and Paul Tate of Poker Stars, Raymond Bitar and Nelson Burtnick of Full Tilt Poker and Scott Tom and Brent Buckley of Absolute Poker.

In a statement, Manhattan U.S. Attorney Preet Bhahara said: “As charged, these defendants concocted an elaborate criminal fraud scheme, alternately tricking some U.S. banks and effectively bribing others to assure the continued flow of billions in illegal gambling profits. Moreover, as we allege, in their zeal to circumvent the gambling laws, the defendants also engaged in massive money laundering and bank fraud. Foreign firms that choose to operate in the United States are not free to flout the laws they don’t like simply because they can’t bear to be parted from their profits.”

The statement said owners of the poker sites “arranged for the money received from U.S. gamblers to be disguised as payments to hundreds of non-existent online merchants purporting to sell merchandise such as jewelry and golf balls. Of the billions of dollars in payment transactions that the poker companies tricked U.S. banks into processing, approximately one-third or more of the funds went directly to the Poker Companies as revenue through the ‘rake’ charged to players on almost every poker hand played online.”

After U.S. banks refused to accept payments from the gambling sites, which would have in violation of federal law, federal authorities said the companies persuaded a few small local banks in financial trouble to process their payments “in return for multi-million-dollar investments in the banks.”

John Campos, vice chairman of the board of a small private bank, SunFirst Bank of Saint George, UT, was among those charged in the indictment.

Four other men – Ryan Lang, Ira Rubin, Bradley Franzen and Chad Elie – were accused of being “highly compensated ‘payment processors’” who “lied to banks about the nature of the financial transactions they were processing, and covered up those lies, by, among things, creating phony corporations and websites to disguise payments.”

The indictment notes that in a press release dated Oct. 16, 2006, Absolute Poker announced that the company would continue its U.S. operations because “the U.S. Congress has no control over” the company’s payment transactions.

Two of the men were arrested Friday: Campos in Utah and Elie in Las Vegas. A third defendant, Franzen, is expected to appear in New York on Tuesday for arraignment. Bitar, Scheinberg, Burtnick, Tate, Tom, Beckley and Rubin are believe to be outside the U.S. and have not yet been arrested.

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Dhaka, Dhaka, Bangladesh (AHN) – A senior United States official has once again warned that a bitter battle between Muhammad Yunus and Bangladesh authorities could dent diplomatic ties between the two countries.

U.S. Assistant Secretary of State for South and Central Asian Affairs Robert O Blake warned that failure to find a compromise that respects Dr Yunus’ global stature and maintains the integrity and effectiveness of Grameen Bank “could affect our bilateral relations.”

The Bangladesh apex court on Monday confirmed the High Court ruling that backed the sacking of the Nobel Peace laureate from Grameen Bank as its managing director.

Yunus was forced into an unceremonious exit from the bank he founded for having no legal authority to act as the micro-lender’s managing director, since its board had not obtained the Bangladesh Bank’s sanction to re-appoint him beyond the bank’s official retirement age of 60.

Blake made the remark on Tuesday in his testimony before the House Foreign Affairs Committee in Washington, reports private wire service United News of Bangladesh.

Secretary of State Hillary Clinton is a close friend of Yunus, who has won the two highest civilian honors of the U.S. — the Presidential Medal of Freedom and Congressional Gold Medal.

Last month in Dhaka, Blake issued a thinly-veiled threat that if a compromise was not reached on Yunus, the U.S.-Bangladesh relationship would get “impacted,” according to news agency bdnews24.com.

“Dr. James Wolfensohn and I pressed the government of Bangladesh to protect the integrity of civil society and the autonomy of the Grameen Bank, and I warned that a failure to find a compromise that respects Dr. Yunus’ global stature and maintains the integrity and effectiveness of Grameen could affect our bilateral relations,” Blake told the committee.

Finance Minister AMA Muhith last month said the government would be open to some compromise – such as to allow Yunus to remain an emeritus fellow at Grameen – but not, however, to his proposal that he should step aside as managing director and be made chairman instead.

As a democratic and moderate Sunni Muslim majority nation of 165 million people, the State Department official said Bangladesh is a country with which the United States has a vested interest in maintaining close relations.

Yunus is a pioneer of the concept of “microcredit” — providing small loans to tens of millions of Bangladeshis, especially women, who possess little or no collateral.

Despite success in economic growth and outmatched US trade with Bangladesh in recent years, Blake said the country still remains among the poorest countries in Asia.

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Dublin, Ireland, United Kingdom (AHN) – News that the Bank of Ireland would be able to meet its capital requirements and not need a government takeover caused an investor rally that saw shares rise by more than 36 percent.

Bank of Ireland’s share of increased capital requirements comes to $7.4 billion and means the government can keep its stake in the bank below 50 percent. The Irish Republic government currently owns a 36 percent stake in Bank of Ireland.

It also means that senior bondholders avoid taking any losses for now.

Bank of Ireland officials said they would seek the additional money through capital-management initiatives.

The jump in Bank of Ireland share prices came the day after stress tests on the Irish banking system revealed that the combined total of additional capital that all the nation’s banks needed was an extra $33.95 billion to survive the financial crisis.

However, shares of two other Irish banks tumbled.

Allied Irish Banks PLC dropped 15 percent while Irish Life and Permanent Group plunged 53 percent. Irish Life and Permanent needs to raise $5.66 billion in capital. While Allied Irish is already majority owned by the government, which is expected to further increase its stake.

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Manila, Metro Manila, Philippines (AHN) – The Philippine Central Bank on Sunday blamed bad loans for the closure of Banco Filipino. According to the central bank, more than 50 percent of the $92 million (PHP 4 billion) loans extended by the thrift bank were made to directors, officers, stockholders and related interests or companies with ties to Banco Filipino.

The central bank added that 91 percent of Banco Filipino’s outstanding loans as of September 2010 were past due.

The embattled bank also appears to have excessively spent its income on salaries, benefits and professional fees. From 2000 to 2009, the amount paid for these items averaged $13.7 million (PHP 597 million), while the bank’s gross income was just $5.6 million (PHP 242.5 million).

At the same time, Banco Filipino – which earlier blamed the central bank for its alleged failure to follow a court order to pay damages over the central bank’s forced closure of Banco Filipino 26 years ago – owed the central bank $101.2 million (PHP 4.4 billion) in past due loans.

Because of the second closure of Banco Filipino, Central Bank Governor Amando Tetangco Jr. urged Philippine thrift banks on Wednesday to be guided by good governance practices. In a speech before the convention of Chamber of Thrift Banks, Tetangco said that thrift banks should:

• Streamline their processes to achieve better efficiency
• Invest more to strengthen core competencies, and
• Improve their guidelines to protect depositors from potential abuse and malfeasance.

Aside from sticking to good governance practices, Tetangco asked the banks to help educate Filipinos on basic financial information to help them make better savings and investment decisions.

Banco Filipino Vice Chairman Perfecto Yasay Jr. opposed the central bank’s decision to place the thrift bank under receivership of the Philippine Deposit Insurance Corporation. Yasay claimed that Banco Filipino is not insolvent, even if the bank had to close branches in the middle of March because of heavy withdrawals.

The PDIC said it was speeding the processing of validating deposit accounts to pay the deposit insurance claims of account holders.

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