Italian court gives Berlusconi one-year prison sentence | Japan's recession ends after economy expanded 0.2% in Q4 | JPMorgan and OCC will face Senate hearing over "London whale"
08 March 2013
CFA Institute: Financial NewsBrief

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LSE agrees to revised deal to purchase LCH.Clearnet stake
London Stock Exchange Group has agreed to a €536 million acquisition of a majority stake in trans-Atlantic clearinghouse LCH.Clearnet Group. "We will promote greater innovation, choice and competition in the risk-management industry, especially in listed derivatives," LSE CEO Xavier Rolet said. Nasdaq OMX Group also has increased its stake in LCH.Clearnet, and Nasdaq CEO Robert Greifeld will join the clearinghouse's board. Reuters (07 Mar.), Financial News Online (U.K.) (subscription required) (07 Mar.), Financial Times (tiered subscription model) (07 Mar.), The Wall Street Journal (tiered subscription model) (07 Mar.)
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Italian court gives Berlusconi one-year prison sentence
Former Italian Prime Minister Silvio Berlusconi was sentenced to one year in prison for his role in publishing the transcript of a wiretap of a political opponent. Berlusconi will appeal, but the ruling and other charges against him that await trial are expected to weaken him politically. Adnkronos International (Italy) (07 Mar.), Spiegel Online (Germany) (07 Mar.), The Guardian (London)/The Associated Press (07 Mar.)
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Japan's recession ends after economy expanded 0.2% in Q4
The Japanese economy grew again in the fourth quarter, ending its recession. Gross domestic product increased at a 0.2% annualized rate, the Cabinet Office said. The government had anticipated a 0.4% decline. Bloomberg (07 Mar.), Google/Agence France-Presse (08 Mar.)
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JPMorgan and OCC will face Senate hearing over "London whale"
A hearing by the Senate's Permanent Subcommittee on Investigations will focus on JPMorgan Chase's losses stemming from trades by the "London whale" and how much the bank and regulators knew about the derivatives risks traders were taking. The subcommittee plans to call JPMorgan executives and at least one representative from the Office of the Comptroller of the Currency. The Wall Street Journal (tiered subscription model) (07 Mar.)
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European coal power blamed for health care costs, early deaths
Air pollution from Europe's coal-fired power plants is responsible for $56 billion in health care costs, more than 18,000 premature deaths, 4 million lost working days and 8,500 new cases of chronic bronchitis every year, according to a study by the Health and Environment Alliance. The study concluded that its findings are troubling because after years of decline, the use of coal is increasing in Europe. Deutsche Welle (Germany) (07 Mar.), (07 Mar.)
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Japan, Hong Kong lead gains on Asian-Pacific markets
Japan and Hong Kong's markets solidly advanced Friday, but much of the Asian-Pacific region was relatively flat. Japan's Nikkei 225 advanced 2.6%, ending at pre-2008 levels. Hong Kong's Hang Seng Index rose 1.4%. China's Shanghai Composite edged down 0.2%. Australia's S&P/ASX 200 closed up 0.3%. South Korea's Kospi rose nearly 0.1%. India's Sensex was up 1.4%. The Wall Street Journal (tiered subscription model) (08 Mar.), The Economic Times (India) (03 Sep.)
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Tech retailer CDW reportedly plans IPO this year
CDW, a major computer seller in the U.S., is preparing an initial public offering this year, sources say. The IPO could be worth $750 million. CDW was taken private for $7.3 billion in 2007. Reuters (07 Mar.)
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ECB leaves benchmark rate at record low of 0.75%
Mario Draghi, president of the European Central Bank, has reiterated his stance that the eurozone's economic situation will improve, despite heightened concerns. "Later in 2013, economic activity should gradually recover, supported by a strengthening global backdrop and our accommodative monetary-policy stance," Draghi said. ECB officials have discussed lowering borrowing costs, but the "prevailing consensus was to leave the rates unchanged," Draghi said. Bloomberg (07 Mar.), CNNMoney (07 Mar.), Financial Times (tiered subscription model) (07 Mar.), The Wall Street Journal (tiered subscription model) (07 Mar.)
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BoE maintains bond-buying program
The Monetary Policy Committee at the Bank of England has kept its bond-buying program unchanged, but policymakers discussed implementing more radical initiatives to bolster the economy. "The economy is not quite weak enough to justify more [quantitative easing], or indeed other forms of monetary easing, just yet," said Martin Beck, an economist with Capital Economics. "But with fears that the economy will enter a triple-dip recession still very present, further action by the bank in the next month or two is likely." Bloomberg (07 Mar.), Reuters (07 Mar.)
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German industrial orders unexpectedly drop
Orders received by German factories unexpectedly declined in January, the Economy Ministry says. Between December and January, orders decreased by 1.9%. Economists surveyed by Bloomberg News had expected a 0.6% increase. Bloomberg (07 Mar.)
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First-time unemployment claims surprisingly decrease
Initial jobless claims in the U.S. declined by 7,000 last week, to a seasonally adjusted 340,000, the Labor Department says. Economists had expected an increase to 355,000. The four-week rolling average, seen as a better indicator of labor-market conditions, reached its lowest rate since March 2008. The New York Times (free-article access for SmartBrief readers)/The Associated Press/Reuters (07 Mar.), Medill Reports (Northwestern University) (07 Mar.)
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Analysis: U.K. economy is stuck in a rut
The U.K. economy is barely stumbling along, but increased investment in infrastructure, looser monetary policy and structural reform could boost growth, according to The Economist. Critics might jeer Chancellor George Osborne if he increases borrowing, "but the bond markets will forgive him a little more borrowing in the interests of growth," the magazine notes. The Economist (tiered subscription model) (09 Mar.)
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Study: Clients think advisers are worth what they charge
Research by consultancy Advisor Impact shows that 66% of clients think fees charged by their financial adviser are justified by the value delivered. Meanwhile, 84% say they trust their adviser. AdvisorOne (07 Mar.)
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EU benchmark-rate inquiries at "advanced stage," official says
Eric van Ginderachter, director of cartels at the European Commission, says the commission's investigations into alleged manipulation of benchmark interest rates, such as the London Interbank Offered Rate, are "at an advanced stage." The commission hasn't taken action against banks, brokers or others suspected of manipulation. Bloomberg (07 Mar.), Reuters (07 Mar.)
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IASB seeks to change when banks recognize credit losses
The International Accounting Standards Board says banks should recognize losses on credit portfolios earlier, instead of waiting until they near default. "We believe the model leads to a more timely recognition of credit losses," Chairman Hans Hoogervorst said. "At the same time, it avoids excessive front-loading of losses, which we think would not properly reflect economic reality." The Telegraph (London) (tiered subscription model) (07 Mar.), Bloomberg (07 Mar.), Reuters (07 Mar.)
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EU cybersecurity proposal likely won't see legislative action
The European Parliament is unlikely to act on cybersecurity rules proposed by the European Commission before this term ends in May 2014, senior administrators say. Parliamentary members typically suspend legislative work ahead of an election to campaign. (07 Mar.)
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SEC's proposed rules target dark pools to end trading glitches
The Securities and Exchange Commission has proposed standards for the electronic architecture of dark pools. The intent is to reduce the chance that computer glitches will disrupt markets. About 15% of U.S. stock trades take place in dark pools, compared with 3% in 2007, according to TABB Group. The Wall Street Journal (tiered subscription model) (07 Mar.)
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Deutsche Bank readies ETF investing in China's A-shares
Deutsche Bank has filed with the Securities and Exchange Commission to launch an exchange-traded fund that would buy China's A-shares, which normally aren't available to foreign investors. The db X-trackers Harvest CSI 300 Index ETF would be linked to the CSI 300 Index, which comprises the 300 biggest and most liquid A-shares. (07 Mar.)
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