Nearly 3.8 million households in the U.S. will receive a combined settlement of up to $8.5 billion from ten major banks, reported the New York Times, after their home purchase loans were prematurely foreclosed during the height of the financial crisis in 2009-2010.
IMF and European economists “significantly underestimated” the cost of austerity measures on economies across the eurozone, wrote the fund’s chief economist Oliver Blanchard in a working paper published last week, admitting also that the fund did not fully understand how government austerity efforts would undermine economic growth for countries such as Greece.
The United States economy is worth approximately $15.8 trillion and more than two thirds of that amount is spent on consumption. But how do ordinary Americans spend their money and how has their spending pattern changed over time?
Consumer spending is one of the largest drivers of growth in the United States and its share of total GDP has been rising steadily over the years. But America’s spending habits have changed significantly over the last decades.
Last week’s US budget deal and better-than-expected jobs data helped lift the S&P500 to a five-year high. But expectations for the New Year are subdued: the clock is ticking on a resolution for the $16.4 trillion American debt ceiling as temporary measures installed will only provide funding until about mid-February. Over the weekend, IMF managing director Christine Lagarde warned that failure to find a solution to the US debt-ceiling debate and matters in Europe could trigger a “major world economic crisis”.
Monday, January 7
The presidents of neighbouring Sudan and South Sudan have agreed to set up a demilitarised zone along their disputed border region “without further delay,” reported Reuters on Sunday, in a deal that may open the way for the two countries to resume oil exports since production was shut down last January.
The world’s top banking regulatory body, the Basel Committee on Banking Supervision, has agreed to relax a global banking liquidity rule aimed at preventing future financial crises, reported AFP on Sunday, following two years of intense pressure from the banking industry, who complained that the new guidelines would hurt economic growth and throttle lending.
Despite maintaining aggressive stimulus measures that have been credited with aiding economic recovery, minutes from December’s Federal Reserve meeting show that officials are increasing split over when to halt the central bank’s controversial bond buying policy.
Wegelin & Co., the oldest Swiss private bank, said on Thursday it would shut its doors permanently after pleading to a criminal conspiracy charge in the U.S. and admitting that it had helped wealthy Americans for years avoid tens of millions of dollars in taxes.
In the latest blow to Switzerland’s centuries-old banking secrecy laws, Wegelin became the latest bank on Thursday to reach a deal with U.S. prosecutors as they continue a crackdown on offshore banks suspected of helping American evade taxes.
France may have one of the best overall healthcare systems in the world, according to the World Health Organisation at least, but the government’s national health insurance policy may be “unaffordable and unsustainable” in the long run, reported Bloomberg Businessweek on Thursday, following a projected budget shortfall of nearly 5.1 billion euros ($6.65 billion) for 2013.
Tourists and pilgrims headed to the Vatican City this year must be prepared to pay for any museum tickets, souvenirs and services using cash or cheque only, reported the Associated Press on Thursday, after Italy’s Central Bank suspended all bank card payments in the tiny city-state starting from January 1, citing concerns over the Vatican’s lack of financial transparenc
