UNITED STATES
Fed revises test results
The Federal Reserve corrected errors in loan-loss estimates for banks and financial firms including Citigroup Inc in a stress test of capital under a hypothetical economic slump. The revised calculations do not affect capital ratios that determined whether the banks passed the tests, the Fed said on Friday in a statement. In Citigroup’s test, an estimate for losses on first-lien mortgages in a stressed scenario was decreased by US$400 million to US$8.9 billion, while the estimate for losses on other loans was increased by the same amount to US$4.8 billion. The Fed required financial firms with more than US$50 billion in assets to submit capital plans that would demonstrate whether the industry can withstand another crisis. Banks deemed strong enough were cleared to raise dividends and buy back shares.
SWITZERLAND
Zurich loses millionaires
The region of Zurich, the home of Swiss banking, has lost nearly half its foreign millionaires two years after scrapping special tax breaks, official figures published on Friday showed. Of the 201 foreign residents who benefited from the tax breaks that the canton scrapped in early 2009, 97 have decamped to more favorable tax regimes, the region’s tax services department said. Those departures represent a loss of 12.2 million Swiss francs (US$13 million) in tax revenues last year, but that figure is more than recouped by the higher tax bills charged to the high-earners who decided to stay on. Switzerland has come under pressure from its neighbors — many of which have depleted state coffers — as well as from some of its own citizens over its flat rate tax system, which has attracted the wealthiest to claim residency there. Among them are celebrities such as musician Phil Collins and Formula 1 ex-champion Michael Schumacher.
GERMANY
Reduced borrowing sped up
Germany will speed up its plans to reduce new borrowing as it works to balance its budget by 2016, an official said on Friday. The federal government will reduce its new borrowing between next year and 2016 by about 27 billion euros (US$35 billion), to 45.6 billion euros from the previously planned73 billion euros, the senior official said. A robust economy has helped increase Germany’s tax intake, allowing the country to run up less new debt. Germany, which has Europe’s biggest economy, plans to balance its budget in 2016, when it expects to borrow only 1.1 billion euros, the official said. Germany borrowed 17.3 billion euros last year, down from 44 billion euros in 2010, and got its budget deficit down to about 1 percent of GDP — far below the often-flouted 3 percent limit for countries that use the euro. For this year, the official said, the government expects borrowing to increase to 34.8 billion euros.
PETROLEUM
Exxon ‘freezes’ contract
US energy giant ExxonMobil has told the Iraqi oil ministry that it has “frozen” its controversial contract with the country’s autonomous Kurdish region, a government official said yesterday. On Oct. 18, Kurdish authorities inked a deal with ExxonMobil for it to explore six areas in Kurdistan, but Baghdad regards as invalid any contracts not signed with the central government. The Kurdistan contract potentially put an Exxon contract with the central government in jeopardy. In January 2010, the Iraqi oil ministry completed a deal with ExxonMobil and Anglo-Dutch giant Shell to develop production at West Qurna-1, which is the country’s second-biggest field.
TECH PARTNERSHIP: The deal with Arizona-based Amkor would provide TSMC with advanced packing and test capacities, a requirement to serve US customers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is collaborating with Amkor Technology Inc to provide local advanced packaging and test capacities in Arizona to address customer requirements for geographical flexibility in chip manufacturing. As part of the agreement, TSMC, the world’s biggest contract chipmaker, would contract turnkey advanced packaging and test services from Amkor at their planned facility in Peoria, Arizona, a joint statement released yesterday said. TSMC would leverage these services to support its customers, particularly those using TSMC’s advanced wafer fabrication facilities in Phoenix, Arizona, it said. The companies would jointly define the specific packaging technologies, such as TSMC’s Integrated
China’s economic planning agency yesterday outlined details of measures aimed at boosting the economy, but refrained from major spending initiatives. The piecemeal nature of the plans announced yesterday appeared to disappoint investors who were hoping for bolder moves, and the Shanghai Composite Index gave up a 10 percent initial gain as markets reopened after a weeklong holiday to end 4.59 percent higher, while Hong Kong’s Hang Seng Index dived 9.41 percent. Chinese National Development and Reform Commission Chairman Zheng Shanjie (鄭珊潔) said the government would frontload 100 billion yuan (US$14.2 billion) in spending from the government’s budget for next year in addition
Sales RecORD: Hon Hai’s consolidated sales rose by about 20 percent last quarter, while Largan, another Apple supplier, saw quarterly sales increase by 17 percent IPhone assembler Hon Hai Precision Industry Co (鴻海精密) on Saturday reported its highest-ever quarterly sales for the third quarter on the back of solid global demand for artificial intelligence (AI) servers. Hon Hai, also known as Foxconn Technology Group (富士康科技集團) globally, said it posted NT$1.85 trillion (US$57.93 billion) in consolidated sales in the July-to-September quarter, up 19.46 percent from the previous quarter and up 20.15 percent from a year earlier. The figure beat the previous third-quarter high of NT$1.74 trillion recorded in 2022, company data showed. Due to rising demand for AI, Hon Hai said its cloud and networking division enjoyed strong sales
Protectionism: US trade chief Katherine Tai said the hikes would help to counter unfair trade practices from China, while boosting domestic clean energy investments US Trade Representative Katherine Tai (戴琪) defended stiff tariff hikes against countries such as China, saying that paired with investment, they were a “legitimate and constructive” tool for reinvigorating domestic industries. Tai’s comments come a week after sharp tariff increases on Chinese electric vehicles (EVs), EV batteries and solar cells took effect — with levies down the line on other products also recently finalized. The latest moves targeting US$18 billion in Chinese goods come weeks before next month’s US presidential election, with Democrats and Republicans pushing a hard line on China as competition between Washington and Beijing intensifies. In an interview on Thursday