The global financial crisis has prompted a wholesale re-evaluation of risk management. But while companies admit that major change is needed, a significant proportion is unwilling, or unable, to make the necessary enhancements.
A report published today: "Beyond Box-ticking: A new era for risk governance," written by the Economist Intelligence Unit and sponsored by ACE and KPMG, finds that a lack of financial resources will be the biggest barrier to effective risk management in the year ahead.
Companies everywhere are conserving cash, cutting headcount and reining in expenditure. The report finds that risk functions are no exception, with the result that important improvements to risk management are pushed to the sideline.
Asked about the biggest barriers to effective risk management in their organisations, the 364 risk professionals from around the world questioned for this study point to poor data quality, inadequate technology and a lack of expertise. But rather than tackling these issues, risk professionals say they are more likely to concentrate on process improvements and training.
This suggests that, rather than addressing the key risk management issues, which also carry the biggest price tag, companies are instead opting for some quick wins, and trying to do more with less. While this will have some limited impact the underlying problems with risk management are likely to remain.
"Companies are facing a difficult dilemma in the current environment," says Rob Mitchell, editor of the report. "On the one hand, they recognise the need to allocate greater time and resources to risk management so that serious short-comings with their current approach can be addressed. But, on the other hand, they are facing huge pressures to keep costs under control.
Satisfying these competing objectives poses something of a conundrum, and this could prevent necessary fixes to risk management from being made."
Oliver Engels, head of enterprise risk management Europe for KPMG, said that linking risk management to decision-making in the boardroom will be vital for further success.
"This will require more knowledge of the risk appetite, the risk profile and the control environment compared with the past," he says.
Andrew Kendrick, chairman and CEO of ACE European Group, adds that the survey reveals the potential disconnect between business strategy and risk management.
"Senior management from board level down must place a greater emphasis on establishing a pervasive and robust risk culture or face the impact and consequences at every level of the organisation," he says.
Other key findings from the research include the following:
A lack of risk expertise at the top of companies is making it difficult to build a strong risk culture. More than half of respondents say they have no plans to recruit a chief risk officer, and slightly fewer than half say they do not intend to recruit a borad-level executive with overall responsibility for risk management.
With a high proportion of respondents saying that a "risk culture" depends on strong direction from the top of the organisation, an absence of expertise at board level suggests that many companies will find it difficult to embed a greater awareness and understanding of risk in their business.
Compliance, controls and monitoring are consuming a disproportionate amount of time and resources.
Respondents point to the identification of new risks as the most important role and responsibility of risk management. But, asked how they allocate their time, it is compliance, controls and monitoring that consume the lion's share of their resources.
With a disproportionate amount of time being spent on the more mechanical aspects of the role, risk managers may be neglecting the responsibilities they have identified as being most important.
More needs to be done to ensure that risk information is finding its audience.
Only around one-third of respondents think their organisation is effective at ensuring information about risk is reaching the right people.
There is also limited confidence in the quality of risk reporting: only 30 per cent think it provides information that is tailored to its audience.
Better risk reporting will depend on improved communication and understanding between risk functions and their intended audience. Only then can information be provided that is relevant, timely and pitched at an appropriate technical level.
There is a window of opportunity for chief risk officers to take on a more strategic role.
In the majority of companies questioined for the research, chief risk officers play on role in major strategic initiatives: just 44 per cent are actively involved in merger and acquisition (M&A) activity, for example, and just 36 per cent in product development.
Yet, at a time when risk is dominating boardroom agendas, there is a rare and valuable opportunity for senior risk professionals to take a seat at the top table, and to make themselves an indispensable part of any discussion about the future of the business.
Tuesday, September 22, 2009
FED MAY LEAVE RATE UNCHANGED
Federal Reserve policy-makers may formally acknowledge an economic recovery is underway but will make few changes to their vast stimulus effort until they see a sustainable expansion, analysts say.
A two-day meeting of the Federal Open Market Committee opening tomorrow is widely expected to leave unchanged the central bank's near-zero interest rate policy while making only minor changes to the array of liquidity programmes to keep credit flowing.
Fed chairman Ben Bernanke said last Tuesday the US recession "is very likely over" but that the economy remains weak due to the economy remains weak due to difficult credit conditions and high unemployment.
John Ryding, chief economist at RDQ Economics, said the Fed cannot even think about hiking rates with the current degree of economic slack and joblessness.
"With so much slack in the economy, the Fed is not going to be inclined to raise rates anytime soon," Ryding said. "At the same time [year-over-year] inflation rates are still in negative territory rates are still in negative territory. They can be relieved the recovery is more clearly here and acknowledge it but there is no reason for the Fed to do anything different."
With the federal funds are seemingly frozen at zero to 0.25 per ent, the central bank's only policy option revolves around its various liquidity programs implemented since last year's credit freeze.
The Fed last month indicated it would conclude its US$300-billion (Bt10 trillion) programme to purchase Treasury bonds, part of a programme to bring down interest rates which some call "Quantitative Easing".
It must decide, however, on whether to extend into 2010 a trilion-dollar programme to purchase mortgage securities, which is aimed at keeping credit flowing to the still-weak housing market.
Scott Brown, chief economist at Raymond James and Associates, said the Fed may make some modest changes in these special programmes at it positions itself for a strengthening economy.
"They are in no hurry to start raising short-term interest rates but they do have to keep an eye on the end game," he said.
The Fed has already indicated it has scaled back its commercial paper guarantee programme and currency swaps with other central banks because credit markets are operating more normally.
US gross domestic product (GDP), the broadest measure of the economy's activity, fell at an annualised rate of 1.0 per cent in the second quarter, after a 6.4-per-cent plunge in the January - March period.
But unemployment rose in August to a 26-year high of 9.7 per cent and there is a growing fear joblessness may hit 10 per cent before a full recovery takes root.
Dean Maki, economist at Barclays Capital, said the job of the Fed and other central banks will become more complicated as the recovery progresses. "Central banks around the world slashed interest rates and together with fiscal policy stimulus in many countries, these actions helped the global economy escape recession," he said.
"With this part of the mission accomplished, we think the focus of central banks will be shifting, but at different speeds."
Maki argues that the US recovery is gaining more steam than most analysts expect and now calls for a robust 5.0 per cent growth pace by the first quarter of 2010.
Based on historical date, Maki said that "the strength of a recovery has been proportional to the depth of the recession" and added: "By that standard, our peak quarter of 5.0 per cent growth can actually be thought of as conservative."
Maki said the Fed in the coming week will likely trim its debt purchases to acknowledge the normalisation of credit markets, but will maintain ultra-low rates to keep the recovery on track for another year.
"The Fed in the coming week "will likely trim its debt purchases to acknowledge the normalisation of credit markets, but will maintain ultra-low rates to keep the recovery on track for another year".
A two-day meeting of the Federal Open Market Committee opening tomorrow is widely expected to leave unchanged the central bank's near-zero interest rate policy while making only minor changes to the array of liquidity programmes to keep credit flowing.
Fed chairman Ben Bernanke said last Tuesday the US recession "is very likely over" but that the economy remains weak due to the economy remains weak due to difficult credit conditions and high unemployment.
John Ryding, chief economist at RDQ Economics, said the Fed cannot even think about hiking rates with the current degree of economic slack and joblessness.
"With so much slack in the economy, the Fed is not going to be inclined to raise rates anytime soon," Ryding said. "At the same time [year-over-year] inflation rates are still in negative territory rates are still in negative territory. They can be relieved the recovery is more clearly here and acknowledge it but there is no reason for the Fed to do anything different."
With the federal funds are seemingly frozen at zero to 0.25 per ent, the central bank's only policy option revolves around its various liquidity programs implemented since last year's credit freeze.
The Fed last month indicated it would conclude its US$300-billion (Bt10 trillion) programme to purchase Treasury bonds, part of a programme to bring down interest rates which some call "Quantitative Easing".
It must decide, however, on whether to extend into 2010 a trilion-dollar programme to purchase mortgage securities, which is aimed at keeping credit flowing to the still-weak housing market.
Scott Brown, chief economist at Raymond James and Associates, said the Fed may make some modest changes in these special programmes at it positions itself for a strengthening economy.
"They are in no hurry to start raising short-term interest rates but they do have to keep an eye on the end game," he said.
The Fed has already indicated it has scaled back its commercial paper guarantee programme and currency swaps with other central banks because credit markets are operating more normally.
US gross domestic product (GDP), the broadest measure of the economy's activity, fell at an annualised rate of 1.0 per cent in the second quarter, after a 6.4-per-cent plunge in the January - March period.
But unemployment rose in August to a 26-year high of 9.7 per cent and there is a growing fear joblessness may hit 10 per cent before a full recovery takes root.
Dean Maki, economist at Barclays Capital, said the job of the Fed and other central banks will become more complicated as the recovery progresses. "Central banks around the world slashed interest rates and together with fiscal policy stimulus in many countries, these actions helped the global economy escape recession," he said.
"With this part of the mission accomplished, we think the focus of central banks will be shifting, but at different speeds."
Maki argues that the US recovery is gaining more steam than most analysts expect and now calls for a robust 5.0 per cent growth pace by the first quarter of 2010.
Based on historical date, Maki said that "the strength of a recovery has been proportional to the depth of the recession" and added: "By that standard, our peak quarter of 5.0 per cent growth can actually be thought of as conservative."
Maki said the Fed in the coming week will likely trim its debt purchases to acknowledge the normalisation of credit markets, but will maintain ultra-low rates to keep the recovery on track for another year.
"The Fed in the coming week "will likely trim its debt purchases to acknowledge the normalisation of credit markets, but will maintain ultra-low rates to keep the recovery on track for another year".
GSB sets up unit for bad assets
The Government Savings Bank has set up a new unit to manage non-performing assets to help the state bank clear its asset portfolio and increase profits.
Lersuk Chuladesa, the GSB president and chief executive, said that even though the bank's non-performing assets (NPAs)were relatively small, the new unit would help more efficiently manage the disposal process to maximise returns.
The NPA portfolio currently includes 240 properties with a value of 85 million baht. So far this year, the bank has sold of 253 plots worth 144 million baht.
Asset quality at the GSB has actually improved over the past year despite the economic downturn,with non-performing loans of 20 billion baht, or just 3.07% of total outstanding loans.Around half of the loans represent property loans, of which 70% are currently in the foreclosure process with the bank seeking to seize pledged collateral.
Non-performing loans at the end of last year stood at 3.31%.
Before 2008, the bank typically focused on debt restructuring in dealing with delinquent clients, and as a result, took claim over relatively few assets pledged as collateral.
"This really is the first year that the GSB has begun managing nonperforming assets. This new strategy has been one factor in helping the bank reduce its non-performing loans," he said.
Mr Lersuk said the GSB was also prepared to accept the government's new policy to help refinance underground loans for people with heavy debt problems.
The Finance Ministry wants the GSB and the Bank for Agriculture and Agricultural Co-operatives to take a more proactive role in assisting the poor by refinancing debt owed to loan sharks and other informal sources.
"We will have to screen the borrowers of course, and set certain rules. If it is debt incurred from, say, gambling or illegal drug use, then we don't want any part of it," Mr Lersuk said.
"But for small entrepreneurs faced with difficulty, we are prepared to help,"he added.
Lersuk Chuladesa, the GSB president and chief executive, said that even though the bank's non-performing assets (NPAs)were relatively small, the new unit would help more efficiently manage the disposal process to maximise returns.
The NPA portfolio currently includes 240 properties with a value of 85 million baht. So far this year, the bank has sold of 253 plots worth 144 million baht.
Asset quality at the GSB has actually improved over the past year despite the economic downturn,with non-performing loans of 20 billion baht, or just 3.07% of total outstanding loans.Around half of the loans represent property loans, of which 70% are currently in the foreclosure process with the bank seeking to seize pledged collateral.
Non-performing loans at the end of last year stood at 3.31%.
Before 2008, the bank typically focused on debt restructuring in dealing with delinquent clients, and as a result, took claim over relatively few assets pledged as collateral.
"This really is the first year that the GSB has begun managing nonperforming assets. This new strategy has been one factor in helping the bank reduce its non-performing loans," he said.
Mr Lersuk said the GSB was also prepared to accept the government's new policy to help refinance underground loans for people with heavy debt problems.
The Finance Ministry wants the GSB and the Bank for Agriculture and Agricultural Co-operatives to take a more proactive role in assisting the poor by refinancing debt owed to loan sharks and other informal sources.
"We will have to screen the borrowers of course, and set certain rules. If it is debt incurred from, say, gambling or illegal drug use, then we don't want any part of it," Mr Lersuk said.
"But for small entrepreneurs faced with difficulty, we are prepared to help,"he added.
Sunday, September 20, 2009
HK INSIDER TRADER JAILED FOR SEVEN YEARS
A Hong Kong court on Friday sentenced a former senior banker at Morgan Stanley to seven years in jail-the heaviest punishment it can impose - in the city's largest insider dealing case.
Du Jun was convicted on 10 charges for buying 87 million Hong Kong dollars (Bt379 million)worth of shares in Citic Resources when he was advising the firm on oil-field acquisitions in Kazakhstan and northeastern China.
He made a profit of more than $30 million from selling some of the shares in 2007, after the announcement of the acquisitions sent the share value up.
In sentencing, District Court Judge Andrew Chan said: "The scale was unprecedented. This case is the biggest I have come across so far."
The judge said Du was motivated by "sheer greed" and had "seriously undermined the integrity of the financial markets."
He noted that the 41-year-old had been warned twice by his superior against trading the shares, but he refused to listen to the advice.
Judge Chan sentenced Du to seven years and three months and imposed a fine of $23.32 million.
But the prison term had to be reduced to seven years as it was the maximum penalty the District Court can impose.
The judge also ordered that Du be prevented from dealing in secutiries and taking up directorship positions in listed companies for a period of five years.
The Securities and Futures Commission (SFC), the city's financial regulator, hailed the outcome of the case as the biggest deterrent against market misconduct crimes.
"The sentence is the strongest possible message to anyone tempted to commit insider dealing offences in the future," Mark Steward, the regulator's head of enforcement, said outside court.
David Webb, a shareholders activist and a former non-executive director of the Hong Kong Stock Exchange, said he expected the SFC to bring forward more insider dealing prosecutions in the near future.
"To build an effective deterrent against insider dealing, you need a track record of successful prosecutions," he said.
The conviction was thenth secured by the SFC on insider dealing since July last year and the fourth that resulted in jail terms.
The judge said Du was motivated by sheer greed and had seriously undermined the integrity of the financial markets.
Du Jun was convicted on 10 charges for buying 87 million Hong Kong dollars (Bt379 million)worth of shares in Citic Resources when he was advising the firm on oil-field acquisitions in Kazakhstan and northeastern China.
He made a profit of more than $30 million from selling some of the shares in 2007, after the announcement of the acquisitions sent the share value up.
In sentencing, District Court Judge Andrew Chan said: "The scale was unprecedented. This case is the biggest I have come across so far."
The judge said Du was motivated by "sheer greed" and had "seriously undermined the integrity of the financial markets."
He noted that the 41-year-old had been warned twice by his superior against trading the shares, but he refused to listen to the advice.
Judge Chan sentenced Du to seven years and three months and imposed a fine of $23.32 million.
But the prison term had to be reduced to seven years as it was the maximum penalty the District Court can impose.
The judge also ordered that Du be prevented from dealing in secutiries and taking up directorship positions in listed companies for a period of five years.
The Securities and Futures Commission (SFC), the city's financial regulator, hailed the outcome of the case as the biggest deterrent against market misconduct crimes.
"The sentence is the strongest possible message to anyone tempted to commit insider dealing offences in the future," Mark Steward, the regulator's head of enforcement, said outside court.
David Webb, a shareholders activist and a former non-executive director of the Hong Kong Stock Exchange, said he expected the SFC to bring forward more insider dealing prosecutions in the near future.
"To build an effective deterrent against insider dealing, you need a track record of successful prosecutions," he said.
The conviction was thenth secured by the SFC on insider dealing since July last year and the fourth that resulted in jail terms.
The judge said Du was motivated by sheer greed and had seriously undermined the integrity of the financial markets.
FILMS,TV, PLAYS ABOUT MELTDOWN ON WALL STREET
Greed, hubris, vast fortunes erased at a stroke-tge financial crisis is dramatic gold dust for writers.
One of Britain's leading play-wrights, David Hare, is tackling the world of toxic securities and subprime mortgages in his new play at the National Theatre in London.
Author Sebastian Faulks has a new best-seller about a swashbuckling hedge fund trader.
The BBC has made a TV drama about the collapse of Lehman Brothers.
You may think stocks, derivatives and collateralised debt obligations are not the naturla stuff of drama.
Think again, says National Theatre artistic director Nicholas Hytner, who commissioned Hare's play, "The Power of Yes". "The people who suffer this recession will not be the people who caused it," Hytner said. "And there you have the beginnings of a play."
A year after Lehman Brothers' bankruptcy, artists on both sides of the Atlantic are grappling with the causes and effects of the worst financial crisis since the Great Depression.
Michael Moore stormed sthe Venice and Toronto film festivals with "Capitalism: A Love Story", a documentary screed against financial fat cats and corporate profiteers.
A central character of Faulks' novel "A Week in December" - riding high in British best-seller lists - is a hedge fund manager politting an audacious deal that will make him a fortune, and bring down a bank.
The BBC has hust aired "The Last Days of Lehman Brothers", a docu-drama that starred James Cromwell ("Babe") as then-US treasury secrevene as the venerable investment house imploded unde rthe weight of its huge debts.
In a touch of irony, the fictional account was filmed in Lehman Brothers' real - and now empty - high-rise offices in London's Canary Wharf.
It's fascinating, if unfamiliar, terrain for writers, who are seeking to use the arts where economists failed and answer the pressing question: How did we end up in this mess?
"You can bring a freshness to it if it's not your area of expertise," said Craig Warner, the US-born, UK-based writer of "The Last Days of Lehman Brothers."
"Before writing this I knew there was a subprime mortgage crisis, I knew they were giving mortgages to people with a bad credit history, but I didn't know why or what the connection was to Wall Street.
"As soo as I learned how those things were connected, I wanted that knowledge to be imparted to the world."
Evidence suggests the world is eager to know." Enron", a play at the Royal Court Theatre about the 2001 demise of the American energy giant, was sold out weeks before opening, and will move to a bigger West End playhouse this winter and to Broadway next April.
More broadly, the recession does not seem to have dulled the public's appetite for the arts.
London theatres had a record year, cinema takings were up in 2008 and book sales are booming.
Hytner said evidence from past downturns suggest arts and entertainment are "one of the very last things people stop payting for."
"When times are tough, it is a reassuring touchstone of people's common humanity to sit with 1,000 other people and have a common experience," he said.
In the story of how capitalism became unbalanced - "too much greed, not enough fear", in Hare's words - writers are finding humour, tragedy and irony.
Surprisingly, perhaps, there's more sorrow than anger in their accounts.
"The Power of Yes", which runs from September 29, looks at the way government subsidies were used to bail out the rich while ordinary people lost their jobs - a sort of socialism turned upside down.
But Hytner says "those looking merely for a caricatured banker-bash" will be disappointed.
The writers acknowledge the allure of corporate "masters of the universe" like Lehman Brothers' hubristic CEO Richard Fuld and Enron's Jeffrey Skilling.
"Enron" writer Lucy Prebble - whose play charts the energy company's 2001 collapse as a result of widespread accounting fraud, a foreshadowing of the current crisis - told The Guardian newspaper she thought it was important "to try and create a tragic hero within whom you may not agree, but who is dramatically magnetic".
Warner said Fuld, a domineering figure whose nickname was "Gorilla", has "all the hallmarks of a tragic hero."
The events being depicted in these works are still headline news. That adds to their immediacy - but does it lessen their impact as art?
Some reviewers found Warner's Lehman Brothers movie less dramatic than a BBC documentary on the same subject aired the next night, in which the real bankers proved more mesmerising than their fictional avatars.
Hytner is warning people in advance that "The Power of Yes" is "not so much a play as a narrtaie in response" to the crisis.
"Those looking for 'Death of a Salesman' will not find it," he said.
"Probably the great play about this crash and its consequences will not come for a few years. A play written in the whiete heat of the moment might not have the reflectiveness of great works of art.
"But", he added, "it might."
One of Britain's leading play-wrights, David Hare, is tackling the world of toxic securities and subprime mortgages in his new play at the National Theatre in London.
Author Sebastian Faulks has a new best-seller about a swashbuckling hedge fund trader.
The BBC has made a TV drama about the collapse of Lehman Brothers.
You may think stocks, derivatives and collateralised debt obligations are not the naturla stuff of drama.
Think again, says National Theatre artistic director Nicholas Hytner, who commissioned Hare's play, "The Power of Yes". "The people who suffer this recession will not be the people who caused it," Hytner said. "And there you have the beginnings of a play."
A year after Lehman Brothers' bankruptcy, artists on both sides of the Atlantic are grappling with the causes and effects of the worst financial crisis since the Great Depression.
Michael Moore stormed sthe Venice and Toronto film festivals with "Capitalism: A Love Story", a documentary screed against financial fat cats and corporate profiteers.
A central character of Faulks' novel "A Week in December" - riding high in British best-seller lists - is a hedge fund manager politting an audacious deal that will make him a fortune, and bring down a bank.
The BBC has hust aired "The Last Days of Lehman Brothers", a docu-drama that starred James Cromwell ("Babe") as then-US treasury secrevene as the venerable investment house imploded unde rthe weight of its huge debts.
In a touch of irony, the fictional account was filmed in Lehman Brothers' real - and now empty - high-rise offices in London's Canary Wharf.
It's fascinating, if unfamiliar, terrain for writers, who are seeking to use the arts where economists failed and answer the pressing question: How did we end up in this mess?
"You can bring a freshness to it if it's not your area of expertise," said Craig Warner, the US-born, UK-based writer of "The Last Days of Lehman Brothers."
"Before writing this I knew there was a subprime mortgage crisis, I knew they were giving mortgages to people with a bad credit history, but I didn't know why or what the connection was to Wall Street.
"As soo as I learned how those things were connected, I wanted that knowledge to be imparted to the world."
Evidence suggests the world is eager to know." Enron", a play at the Royal Court Theatre about the 2001 demise of the American energy giant, was sold out weeks before opening, and will move to a bigger West End playhouse this winter and to Broadway next April.
More broadly, the recession does not seem to have dulled the public's appetite for the arts.
London theatres had a record year, cinema takings were up in 2008 and book sales are booming.
Hytner said evidence from past downturns suggest arts and entertainment are "one of the very last things people stop payting for."
"When times are tough, it is a reassuring touchstone of people's common humanity to sit with 1,000 other people and have a common experience," he said.
In the story of how capitalism became unbalanced - "too much greed, not enough fear", in Hare's words - writers are finding humour, tragedy and irony.
Surprisingly, perhaps, there's more sorrow than anger in their accounts.
"The Power of Yes", which runs from September 29, looks at the way government subsidies were used to bail out the rich while ordinary people lost their jobs - a sort of socialism turned upside down.
But Hytner says "those looking merely for a caricatured banker-bash" will be disappointed.
The writers acknowledge the allure of corporate "masters of the universe" like Lehman Brothers' hubristic CEO Richard Fuld and Enron's Jeffrey Skilling.
"Enron" writer Lucy Prebble - whose play charts the energy company's 2001 collapse as a result of widespread accounting fraud, a foreshadowing of the current crisis - told The Guardian newspaper she thought it was important "to try and create a tragic hero within whom you may not agree, but who is dramatically magnetic".
Warner said Fuld, a domineering figure whose nickname was "Gorilla", has "all the hallmarks of a tragic hero."
The events being depicted in these works are still headline news. That adds to their immediacy - but does it lessen their impact as art?
Some reviewers found Warner's Lehman Brothers movie less dramatic than a BBC documentary on the same subject aired the next night, in which the real bankers proved more mesmerising than their fictional avatars.
Hytner is warning people in advance that "The Power of Yes" is "not so much a play as a narrtaie in response" to the crisis.
"Those looking for 'Death of a Salesman' will not find it," he said.
"Probably the great play about this crash and its consequences will not come for a few years. A play written in the whiete heat of the moment might not have the reflectiveness of great works of art.
"But", he added, "it might."
Former Fortis executives face shareholders
Shareholders of dismantled bank Fortis won the right at the weekend to call senior bank and government officials to court to explain the actions they claim caused them huge financial losses last year.
The district court in Amsterdam "orders a preliminary evidentiary heaing," said a statement, granting an application by FortisEffect, a group that claims to represent some 1,250 investors.
Dutch Prime Minister Jan Peter Balkenende and his former Belgian counterpart Yves Leterme, Dutch Finance Minister Wouter Bos and Dutch Central bank president Nout Wellink as well as several former Fortis bosses would "almost definitely" be among those called to give evidence, FortisEffect lawyer Adriaan de Gier said.
No date has been set for the hearing, which he said was likely to be held in December or January.
The former Belgian-Dutch bank and insurance group was dismantled and partly nationalised in October last year as the impact of the global economic crisis started being felt.
Fortis' Dutch-based assets, including ABN Amro bank, were nationalised by the government for 16.8 billion euros (Bt832 billion).
With an eye on claiming damages in future, FortisEffect now ants to question decision-makers about the negotiations leading up to Fortis' dismantling.
FortisEffect accuses officials having distributed false information to influence the financial markets and claims its members should have been consulted on its break-up.
The district court in Amsterdam "orders a preliminary evidentiary heaing," said a statement, granting an application by FortisEffect, a group that claims to represent some 1,250 investors.
Dutch Prime Minister Jan Peter Balkenende and his former Belgian counterpart Yves Leterme, Dutch Finance Minister Wouter Bos and Dutch Central bank president Nout Wellink as well as several former Fortis bosses would "almost definitely" be among those called to give evidence, FortisEffect lawyer Adriaan de Gier said.
No date has been set for the hearing, which he said was likely to be held in December or January.
The former Belgian-Dutch bank and insurance group was dismantled and partly nationalised in October last year as the impact of the global economic crisis started being felt.
Fortis' Dutch-based assets, including ABN Amro bank, were nationalised by the government for 16.8 billion euros (Bt832 billion).
With an eye on claiming damages in future, FortisEffect now ants to question decision-makers about the negotiations leading up to Fortis' dismantling.
FortisEffect accuses officials having distributed false information to influence the financial markets and claims its members should have been consulted on its break-up.
G-20 LEADERS EXPECTED TO DISCUSS BONUSES FOR BANKERS
Global leaders meeting at the Group of 20 summit it Pittsburgh next week are moving toward a compromise on compensation rules that fall short of the political rhetoric branding bnkaer pay a workdwide disgrace.
Pay caps, once pushed by Franch President Nicolas Sarkozy, were excluded from recommendations made by finance officials this month. European leaders now may be willing to endorse linking bonuses to a bank's capital level, moving closer to a US position that avoids specific limits.
"It's a way of getting both sides to the same place," said Morris Goldstein, a senior fellow at the Peterson Institute International Economics in Washington and former International Monetary Fund economist.
The Germans and French are taking a firm stance that we need concrete steps. The US wants higher capital levels, and if this is necessary to get higher capital, they can sign onto it."
Europe's leaders have been assailing bankers and their pay while President Barack Obama says setting a specific limits is impractical.
Sarkozy, who vowed last month to block banks from state business unless pay is capped, may be open to compromise, a French official said.
European Union leaders September 17 agreed to tie bonuses to bank performance and said guaranteed pay should be avoided.
French Finance Minister Christine Lagrde in July called such bonuses an "absolute disgrace".
Obakma, Sarkozy, UK Prime Minister Gordon Brown and Chinese President Hu Jintao, meeting in Pittsburgh September 24-25, will discuss proposals for banks to retain more assets in economic expansions and satisfy a leverage ratio, which measures equity as a proportion of total assets.
Pay caps, once pushed by Franch President Nicolas Sarkozy, were excluded from recommendations made by finance officials this month. European leaders now may be willing to endorse linking bonuses to a bank's capital level, moving closer to a US position that avoids specific limits.
"It's a way of getting both sides to the same place," said Morris Goldstein, a senior fellow at the Peterson Institute International Economics in Washington and former International Monetary Fund economist.
The Germans and French are taking a firm stance that we need concrete steps. The US wants higher capital levels, and if this is necessary to get higher capital, they can sign onto it."
Europe's leaders have been assailing bankers and their pay while President Barack Obama says setting a specific limits is impractical.
Sarkozy, who vowed last month to block banks from state business unless pay is capped, may be open to compromise, a French official said.
European Union leaders September 17 agreed to tie bonuses to bank performance and said guaranteed pay should be avoided.
French Finance Minister Christine Lagrde in July called such bonuses an "absolute disgrace".
Obakma, Sarkozy, UK Prime Minister Gordon Brown and Chinese President Hu Jintao, meeting in Pittsburgh September 24-25, will discuss proposals for banks to retain more assets in economic expansions and satisfy a leverage ratio, which measures equity as a proportion of total assets.
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