Investigations in India Point to New Government Focus on Corruption

NEW DELHI — Less than a year after India was rocked by a large fraud at one of its biggest technology companies, Indian authorities are starting a raft of high-profile corporate investigations.

On Thursday, Sesa Goa, the country’s biggest exporter of iron ore, confirmed that the Serious Fraud Investigation Office had begun an inquiry into “mismanagement, malpractices, financial and other irregularities” at the company. Regulators have sought documents dating to 2001.

Other government agencies are investigating the finances of India’s second-largest mobile phone company, allegations of favoritism against an energy regulator and irregularities in how the Telecommunications Ministry handed out cellular licenses nearly two years ago.

The nature and scope of these investigations may signal that the government, which was recently re-elected with a bigger mandate, may finally be getting more serious about fighting fraud and corruption. Investors both here and abroad have long complained that India’s lackadaisical attitude toward law enforcement has hobbled its economic and social development.

“It is a positive sign that there is an attempt to right wrongdoings wherever they exist,” said Anjan Deb Ghosh, a general manager in Mumbai at ICRA, a unit of Moody’s Investors Service. He said he could not remember when authorities here had taken on so many high-level investigations at the same time.

Sesa Goa, the iron ore exporter that is 51 percent owned by the London mining and metals company Vedanta Resources, said it was cooperating with the investigation. A spokesman for Vedanta said the activities in question occurred before its 2007 acquisition of Sesa Goa.

Earlier this week, V. K. Sibal, who regulates India’s oil and gas exploration businesses, asked to retire early after he became the subject of an investigation by the Central Bureau of Intelligence, India’s equivalent of the Federal Bureau of Investigation. The bureau is looking into accusations that Mr. Sibal took favors from companies that were later awarded government contracts.

Last week, the bureau announced a wide-ranging inquiry into the Telecommunications Ministry, examining whether officials there improperly priced and awarded licenses to favored companies. The bureau has raided more than a dozen private and government offices.

In a separate matter, India’s top accounting body said this month that it was investigating claims that Reliance Communications had underreported revenue to a regulator that collects fees based on that figure. Reliance, one of the largest wireless companies in India, has denied the allegations. The Institute of Chartered Accountants is expected to examine reported revenue at all of India’s big mobile companies.

Earlier this year, Indian authorities moved swiftly to contain the fallout from a big accounting fraud at Satyam Computer Services, a big player in India’s prized outsourcing industry bad credit payday loans.

Many Indian companies are tightly controlled by family founders or small groups of insiders, known here as promoters. These corporate leaders often have close relations with government officials.

On average, individual and institutional investors own just 15 percent of the shares of India’s publicly traded companies. The rest are controlled by promoters. In July, the finance minister proposed that companies should list at least 25 percent of their shares on exchanges. The hope is that such a requirement would make it more difficult to manipulate share prices and would empower minority investors.

The Ministry of Corporate Affairs has also suggested that the number of seats on different company boards that one person can hold should be lowered from 15 to ensure that directors were not spreading themselves too thin.

But it is unclear if or when these changes will be adopted, or how effective they will be.

Some economists and analysts say that as India’s economy grows and its companies become bigger, they have become more powerful and have greater say in government policies.

Prithvi Haldea, who operates a service to track corporate fraud cases, said the recent investigations appeared to have come about because they had become “too uncomfortable for the government to ignore” or because some companies were conspiring to create trouble for rivals.

“The government has never shown any proactiveness vis-à-vis corporate fraud,” he said. “It would be hard to detect one minor or major cause where the government smelled something and ordered an investigation or looked at data and ordered an investigation.”

But a spokesman for the bureau of investigations, Harsh Bhal, said Thursday that the agency was focusing on “systemic and sector-wise corruption” rather than specific individuals. Its focus on coal, education, oil and telecommunications has “paid rich dividends,” he said.

Some investigations appear to focus on why only some corporations have repeatedly won major government licenses, leases and concessions, and whether politicians are directly involved in activities they regulate.

For instance, in the telecommunications matter, the bureau said it was investigating a possible criminal conspiracy between government officials and private individuals. The number of applicants for lucrative cellular licenses may have been artificially limited, and some licenses may have been awarded without bidding, the bureau said.

The telecommunications minister, A. Raja, said that the ministry followed all government procedures and that the licenses were awarded after a review by the prime minister.

Heather Timmons reported from New Delhi and Vikas Bajaj from Mumbai.

Investigations in India Point to New Government Focus on Corruption

In Transcripts, Madoff Called S.E.C. Exams ‘a Nightmare’

Hundreds of exhibits supporting a scathing report on the Securities and Exchange Commission’s past investigations of Bernard L. Madoff were released on Friday by the author of the report, the agency’s inspector general, H. David Kotz.

The exhibits include a full account of a June 17 interview with Mr. Madoff, who confessed in March to running the largest Ponzi scheme in history, a fraud whose victims number in the thousands and whose cash losses are now put at more than $21 billion.

In short excerpts from that interview, included in the full 477-page report made public last month, Mr. Madoff expressed amazement that regulators failed so many times to detect his fraud, given the numerous credible tips that came into the agency over a 16-year period.

The exhibits provide additional details about Mr. Madoff’s comments, including his observation that the agency’s investigators seemed to find it “inconceivable” that he was operating a massive fraud.

Indeed, he said he got the impression through all the examinations and investigations over the years that "it never entered the S.E.C.’s mind that it was a Ponzi scheme," according to a 12-page summary of the interview.

Mr. Madoff said he was "worried every time" examiners from the agency showed up. "It was nightmare for me," he said. adding "I wish they caught me six years ago, eight years ago."

Among the exhibits are transcripts or reports on more than 160 other interviews conducted during the extensive internal investigation, including conversations with four former S.E.C. chairmen, a number of former top officials at the agency and dozens of current and former staff members involved in the various botched investigations examined in the original report.

E-mail messages, letters, memoranda, telephone records and other bits of evidence are also included in the Madoff trove, which were posted on the agency’s Web site.

Mr. Kotz concluded in his full report that, since 1992, inexperienced and sometimes incompetent staff members had failed to adequately investigate numerous warnings and tips about the enormous Ponzi scheme.

While the exhibits add no new charges to Mr. Kotz’s unofficial indictment of the nation’s top market regulators — the worst documented failure in the 75-year history of the S.E.C. — they do provide a vivid sense of the tensions, confusions and petty squabbles that derailed each failed inquiry.

Employees described a culture at the agency that allowed investigations to languish for months, even years on end, and that was openly dismissive of anonymous tips like some of the Madoff warnings.

Indeed, one former senior agency lawyer acknowledged to Mr payday advance. Kotz that he thought investigations of Ponzi schemes were not an appropriate use of S.E.C. resources and should be left to law enforcement agencies. Several staff members said those views had shaped their own decisions in the Madoff inquiries.

The paperwork gathered from past investigations also tells a tale of unseasoned people uncertain about what to do and unwilling to ask for help. In numerous instances cited in the exhibits, employees shared their doubts about some of Mr. Madoff’s assertions in notes or e-mails, but then never took steps to resolve their suspicions or press for more information.

The report detailed six substantive complaints against Mr. Madoff received by the agency since 1992. While Mr. Kotz found no evidence of any bribery, collusion or deliberate sabotage of those investigations, his investigation exposed dozens of major lapses by staff members — including their remarkable failure to verify Mr. Madoff’s supposed trading with any third parties.

An examination of customer records after Mr. Madoff’s arrest in December showed that he had made no trades for those customers for decades. Moreover, credible tips to the agency over the years, more fully detailed in the exhibits, repeatedly warned that market records strongly suggested no trading was going on.

But in each examination, agency staff members relied heavily on Mr. Madoff’s own testimony and records, which turned out to be lies and fabrications.

The exhibits released on Friday shows how the people involved in those investigations explained what happened in interviews conducted after Mr. Madoff’s arrest on Dec. 11. Those interviews were matched against the notes and records assembled at the time.

The report also documented that Mr. Madoff frequently cited the S.E.C.’s various investigations to reassure investors that he had passed muster with government regulators. The exhibits include numerous reports from investors that they had been lured into the Ponzi scheme by exactly those assurances.

The exhibits released on Friday ranged from conversations with unnamed former girlfriends of Eric Swanson, an S.E.C. lawyer who married Mr. Madoff’s niece in 2007, to an interview with a former secretary at the Madoff firm, who described young agency investigators as being awestruck by Mr. Madoff and asserted that some had even left resumes at the office hoping for help in getting Wall Street jobs.

In Transcripts, Madoff Called S.E.C. Exams ‘a Nightmare’

Economy returns to growth after deep slump

WASHINGTON (Reuters) – The U.S. economy grew in the third quarter for the first time in more than a year as government stimulus helped lift consumer spending and home building, fueling an unexpectedly strong advance.

Signaling the end of the worst recession in 70 years, the Commerce Department on Thursday said the economy expanded at an annual rate of 3.5 percent in the July-September period, snapping four down quarters with its fastest growth pace since the third quarter of 2007 and exceeding forecasts for a 3.3 percent rate.

The report helped lift global stock markets which were also boosted by improving third-quarter corporate earnings, including higher-than-expected profits from household goods makers Procter & Gamble Co and Colgate-Palmolive Co.

On Wall Street, the broad S&P 500 index of U.S. stocks had gained more than 1 percent in morning trade after four days of falls caused by investor concerns over the outlook for economic growth.

Prices for U.S. government debt and the U.S. dollar fell as traders exited safe havens.

"The economy has emerged with gusto from the deepest recession since World War Two," said Harm Bandholz, economist at UniCredit Markets and Investment Banking in New York. "The short-term prospects for the economy remain good."

Growth was generally broad-based with solid gains in consumer spending, exports and home construction.

But, worryingly for economists, it was also driven by emergency government programs like the popular "cash for clunkers" incentive for new auto purchases and an $8,000 tax credit for first-time home buyers.

The auto discount program ended in August and the home tax credit is due to expire next month, although Congress is working on a plan to extend it.

Stripping out auto output, the economy would have expanded at only a 1.9 percent rate in the third quarter.

"The economy is entirely dependent on federal deficit spending at the moment. But the stimulus will not fade right away ... that means we can rely on solid growth continuing through the first quarter of next year," said Chris Low, chief economist at FTN Financial in New York.

"Once the government steps aside, growth is likely to fall back to a 1-2 percent rate of growth."

The United States is entering recovery following in the footsteps of major economies like China and the euro zone.

For a graphic see http://graphics.thomsonreuters.com/109/US_GDP1009.gif

MORE WORK NEEDED

Data on Thursday showed German unemployment fell unexpectedly in October and Japanese industrial output rose for the seventh straight month in September.

The Obama administration, which has directed a $787 billion stimulus package to the economy, said more work was needed.

"For every person out of work, for every family facing foreclosure, for every small business facing a credit crunch, the recession remains alive and acute," Treasury Secretary Timothy Geithner told the Senate's Finance Committee no teletrack payday loan.

Officials from the Federal Reserve -- the U.S. central bank -- meet next Tuesday and Wednesday and will sift through the economic tea leaves to try to determine whether a sustainable recovery is building. They are widely expected, however, to keep stimulative monetary policies in place for some time.

Consumer spending, which normally accounts for more than two-thirds of U.S. economic activity, rose 3.4 percent in the third quarter, the fastest advance since the first quarter of 2007. Spending fell 0.9 percent in the previous quarter.

Residential investment jumped 23.4 percent, contributing to GDP for the first time since 2005, after declining 23.3 percent in the April-June period. It was also the sharpest rise since the second quarter of 1986.

A housing slump had been the main drag behind the economy's downturn. A sharp slowing in the pace of inventory liquidation by businesses also supported recovery in the third quarter.

Business inventories fell $130.8 billion, slowing from the record $160.2 billion plunge in the second quarter. The change added nearly 1 percentage point to the growth in GDP.

Analysts are hoping that the slowdown in the inventory decline by businesses will continue to prop up the economy in the fourth quarter, even as consumer spending is expected to retreat amid the worst labor market in 26 years.

"Longer term, inventory stabilization buys time to generate the conditions, most importantly job and income growth, for a sustained healthy expansion," said Stephen Stanley, chief economist at RBS in Greenwich, Connecticut.

"As such, a turnaround in the labor market is the last key piece of the puzzle that needs to fall into place to support a solid economic recovery."

With inventories at a lean level, any advance in consumer spending is more likely to lead to an increase in output.

Excluding inventories, GDP rose at a 2.5 percent rate compared to a 0.7 percent increase in the second quarter.

The weaker dollar boosted exports but a rise in imports subtracted from real GDP. Federal government spending helped growth but both state and local governments were a drag.

Business investment fell at a 2.5 percent pace with spending on nonresidential structures dropping at a 9 percent rate. A lack of credit has hit the U.S. commercial property market hard.

The Labor Department said on Thursday the number of U.S. workers filing new claims for jobless benefits dipped by 1,000 last week to 530,000, above expectations of a drop to 521,000.

However, the number of people still on jobless aid after an initial week of benefits slid by 148,000 to 5.8 million in the week ended October 17. It was the lowest reading since March, hinting at some stability in the job market.

(Additional reporting by Alister Bull; Editing by Andrea Ricci)

Economy returns to growth after deep slump

Big Lender GMAC Asks for More U.S. Aid

GMAC, the troubled consumer finance company, is seeking billions of dollars in additional federal aid, a move that would be its third taxpayer bailout and could give the government a majority stake in the company, according to people briefed on the situation.

GMAC and Treasury Department officials have been locked in negotiations over how to structure the third bailout as it approaches a crucial deadline in early November for shoring up its finances. The government has injected $12.5 billion into the company and already owns about a 35 percent stake from a broader restructuring of General Motors, its onetime parent.

Any fresh injection of government money, or the conversion of its existing preferred shares into common stock, would give taxpayers a much larger — perhaps even a majority stake — in the company. The government’s investment in GMAC would vastly surpass its nearly 34 percent stake in Citigroup, and could reignite the public debate over the Obama administration’s role as a major investor in corporations.

The talks highlight the importance of GMAC, a 90-year-old institution designated as a bank only late last year, to the national economy — and its continued trouble in surviving without government support.

GMAC was selected by the Obama administration earlier this year as a key source of buyer and dealer financing to G.M. and Chrysler. Many of its problems, however, stem from now-soured sub-prime mortgages and other real estate loans it made at the height of the housing bubble.

GMAC’s financial issues are not new. Following a government-mandated stress test last spring, GMAC was found to need another $11.5 billion of capital — and given six months to raise it.

In May, it struck a deal with federal officials to plug part of that hole with about $7.5 billion of special preferred shares that could automatically convert into common stock. But more than half of that money was allocated to provide financing Chrysler dealers and customers as part of the auto industry bailout.

As a result, GMAC needs to come up with as much as $5.6 billion of fresh capital by November.

With all three helpings of federal aid, it is possible that the government could wind up owning at least half of the company no faxing payday loans. But GMAC and Treasury officials are discussing ways to structure the investment in a way that could limit the government’s ownership interests. One possible option would be to also ask some of its private preferred stockholders to convert their investments into common stock.

Gina Proia, a spokeswoman for GMAC, declined to comment.

Even with a majority stake, the government would not be able to oust current management. But according to governance guidelines agreed to in May, the government can designate up to four directors if it holds a stake of between 50 and 70.8 percent of GMAC; it can name up to six directors if its ownership stake is over that amount. Currently, the government has appointed two board members.

GMAC is the only one of the 19 banks that underwent the stress test that could not raise additional capital from private investors. Ten of the 19 large banks were deemed healthy enough to need little or no additional money; the eight remaining banks were able to raise enough capital from issuing stock, selling businesses, and strong quarterly earnings.

But as a private company, GMAC struggled to find interested investors. And unlike Citigroup, it did not have enough preferred shares that could be exchanged for new common equity. For most of its history, GMAC served as the financing arm for G.M.’s vast network of dealers and thousands of car buyers. But the company’s Residential Capital unit branched out into subprime mortgage lending.

Concurrent drops in the housing and auto sales markets pushed GMAC into the red, running up hundreds of millions of dollars in losses and curtailing its ability to lend out money. The company also struggled to finance its operations in the midst of the credit squeeze, largely unable to attract investors in the capital markets.

The company lost $3.9 billion in the second quarter this year.

GMAC was one of several firms that sought an emergency conversion into a bank holding company last fall, which qualified it for a host of federal aid programs, including government guarantees of its debt.

Big Lender GMAC Asks for More U.S. Aid

Small Indian Maker of Electric Cars Looks to Upsize

BANGALORE, India — Depending on whom you ask, this tiny company is either the next big thing in automobiles, or a maker of glorified golf carts.

What’s indisputable is that as the whole automotive world seems to be racing suddenly toward the age of electricity, the Reva Electric Car Company is in the lead, ahead of better-known local competitors like Tata Motors and global giants like General Motors and Toyota.

Daimler and Toyota are supposed to start trials of electric versions of the Smart Car and the Prius, respectively, by the end of the year. The Nissan Leaf will come out next year, as will the Chevy Volt. And the Obama administration is committing billions of taxpayer dollars to loans to help companies produce alternative vehicles, including hybrids and all-electric cars.

Vice President Joseph R. Biden Jr. was in Wilmington, Del., on Tuesday at a defunct G.M. plant that Fisker Automotive, backed by a $528.7 million government loan, will refurbish and use to make hybrids.

But years before the sleek Tesla Roadster hugged California highways or General Motors unveiled the Chevrolet Volt, Chetan Kumar Maini was making and selling stubby electric vehicles turned out by a nondescript factory here. Reva has more all-electric vehicles on the road than any other company, but it still has a long haul before it can make the vehicles marketable for the masses.

Last month, the company won a important stamp of approval when General Motors said it would use Reva’s technology in the electric version of its Chevrolet Spark, a small car whose conventional gasoline version G.M. sells here already. The electric version of the Spark is expected to go on sale in India by the end of next year, according to G.M. officials.

Reva’s technology is “second to none,” said Karl Slym, president and managing director of G.M. India, adding that Reva’s appeal came from its drive train, the collection of components that move the car, which is easily installed in different vehicles and works with various batteries.

G.M.’s vote of confidence is a big boost for the privately held company, which has been making vehicles for eight years, but has sold only a few more than 3,000 cars and has not yet turned a profit. By contrast, big Indian automakers sell tens of thousands of cars each month.

But now Reva’s moment may have arrived.

The company is retiring its only model, known here as the Reva i and in Great Britain as the G-Wiz — and mocked for its small, boxy size and its lack of speed. The vehicle doesn’t even qualify as an automobile but is called a quadracycle, a slower, four-wheeled vehicle similar to an all-terrain vehicle, which is not required to meet car safety standards in countries like Britain.

Reva’s new model, the NXR, will comply with European safety regulations, seat four and travel up to 100 miles on a full battery charge, at speeds of up to 65 kilometers an hour — what’s known in the industry as a city car.

“I have been doing this for 15 years, and I have never seen everything come together like I have” now, said Mr. Maini, the 39-year-old vice chairman and chief technology officer of Reva. The company is jointly owned by his family; AEV L.L.C., a small technology company based near Los Angeles; and two venture capital firms.

Mr. Maini also said the company was also in talks to franchise production of the NXR in New York State to Bannon Automotive, a company based in Long Island. Bannon is negotiating with local and state officials and lining up financing, Mr. Maini said, adding that once a deal was struck, a plant could be up and running in 12 months.

Companies like G.M. and Nissan are already spending billions to develop electric cars. Carlos Ghosn, chief executive of Nissan and Renault, said recently that electric vehicles would make up 10 percent of all cars sold by 2020.

But before that can happen, both electric cars and their batteries have to become more efficient and cheaper, a whole battery-charging station infrastructure has to be created, and consumers have to want the cars, which cost considerably more than gasoline-powered vehicles.

In addition to these challenges, Mr. Maini’s company has to grow from being a maker of niche vehicles for early adopters into a producer of mass-market cars.

“The Mainis are certainly good guys, but I don’t think they have the resources to make that happen,” said Rishikesha T. Krishnan, a professor of corporate strategy at the Indian Institute of Management in Bangalore. They have to “align themselves with a bigger player easy pay day loans.”

Reva officials agree that they need partners and they are trying to develop three businesses: building cars under the Reva brand; franchising production of Reva cars to other manufacturers like Bannon; and licensing Reva technology to automakers like G.M.

The company also says it believes that its coming cars will be much more enticing. It has such faith in the NXR that it is building a factory that can produce 30,000 cars a year. The company plans to release one new model every year; it has a sporty coupe, the NXG, ready to be released in 2011.

“It was very clear to the management and the board that we have to do something truly game-changing, and hopefully that’s what we have done with the new design,” said Mohanjit Jolly, a Reva board member and the executive director at Draper Fisher Jurvetson, a venture capital firm based in Silicon Valley that has invested in both Reva and Tesla Motors.

In many ways, Reva is the opposite of Tesla, a Silicon Valley company that has grabbed the limelight with its high-performance electric sports cars. Whereas Tesla’s cars are fast and expensive — in the case of the Tesla Roadster, a whopping $101,500 — Reva’s vehicles are small, slow and cheap, by electric car standards anyway.

And Reva’s compound on the outskirts of Bangalore is a far cry from the Bay Area. To get to it, visitors must drive through a warren of dusty, potholed streets in an old industrial area south of the city.

“If Tesla is on one end producing cars to compete with Ferrari, we are on the other end,” said R. Chandramouli, who heads sales and marketing at Reva. “We believe in really small cars.”

Mr. Maini said electric cars have to be small and affordable to succeed in places like India and Europe, where most car trips are short and involve stop-and-go driving, unlike in the United States where commuters can drive 50 miles or more a day, mostly on highways.

The NXR, which is about a foot and a half shorter than the Mini Cooper, will come in two variations. In Europe, the higher-end model will sell for about 15,000 euros, or $22,000, not including batteries, which the company will lease for an undetermined monthly fee.

By contrast, Tesla’s Model S sedan will cost $49,900 after a $7,500 tax rebate. That car will seat five adults and two children and have a range of 300 miles. Tesla is taking reservations for the car, but deliveries will start in 2011. It has sold nearly 900 of its Roadster sports cars.

If all goes according to plan — a big if — Reva, which is named after Mr. Maini’s mother, should turn a profit sometime next year, he said. For him, that milestone would be the culmination of a long journey.

His love for motors began early. He built remote-controlled cars and planes when he was 10, and motorized go-carts as a teenager. Because specialized components were hard to come by in India, he asked his father’s friends to buy spare parts when they traveled abroad.

His well-to-do business family supported him then and continues to finance him today. “When I was 11 or 12, I had a hobby room that was bigger than the room where the three of us slept at night,” he said, referring to the room he shared with his two older brothers. “I had my own lathe and mill.”

Mr. Maini studied mechanical engineering at the University of Michigan, where he was on a team that built an award-winning solar car in 1990, and then at Stanford. After working in California for a few years at AEV, he returned to Bangalore in the late 1990s to start Reva as a joint venture between his family and AEV. (His family owns two other companies that make auto parts, golf carts and forklifts.)

The Maini family and its partners have invested more than $50 million in Reva, plus in-kind services like technology and office space.

Perhaps because of his long experience with cars, Mr. Maini, does not come across as a wide-eyed technology evangelist. He doesn’t brag excessively or predict the death of the internal-combustion engine like other electric-car entrepreneurs.

“Electrics are not going to overnight replace gasoline engines,” he said. “But they could be a large portion of” cars sold in the next 10 years. Reva is betting on it.

Heather Timmons contributed reporting from New Delhi.

Small Indian Maker of Electric Cars Looks to Upsize

Hot News: For Delphi Pensioners, the Union Label Helps

Fund to Invest in Companies That Promote Women Board Members

LONDON — A Swiss investment company plans to raise awareness about the shortage of women on corporate boards around the world, and generate returns for its investors in the process.

Naissance Capital, based in Zurich, is to start the Women’s Leadership Fund in January, which will invest exclusively in companies whose boards include women, or take minority stakes in companies that do not “understand the need for greater female representation” and use it as leverage to push through changes.

R. James Breiding, a co-founder of Naissance Capital and a former director of Rothschild Corporate Finance, said the fund was created after several studies showed a correlation between the number of female directors and a company’s performance.

“We feel companies that select and recruit people on merit should do better,” Mr. Breiding said. “Having greater diversity and independence of opinions helps.”

The fund’s board includes Kim Campbell, the former prime minister of Canada; Cherie Blair, a lawyer and the wife of Tony Blair, the former British prime minister; and Jenny Shipley, the former prime minister of New Zealand. Naissance has lined up $200 million from institutional investors and individuals to invest in 30 to 40 companies around the world, and plans to increase the size of the fund eventually to about $2 billion.

Naissance, which was founded in 1999 and specializes in what it calls “niche investment opportunities,” is one of a handful of firms that have created funds over the past three years to invest in companies with female senior executives.

Stargate Capital in Britain is in the process of raising a second venture capital fund, worth about £10 million, or $16 million, to help women entrepreneurs, while Amazone Euro, a fund run in Geneva, has invested in companies with female board members unsecured personal loans.

Two separate studies in 2007 by McKinsey and Catalyst, the business research firms, showed that companies in Europe and the United States with the most women on their boards were more profitable than others. But the studies did not point to specific causes for any such correlation.

In 2003, Norway became the first country to adopt a law that said 40 percent of board members at large companies must be women, but there is not yet any research that analyzes how the changes have affected the companies’ performance.

The banking crisis and the collapse of Lehman Brothers have ignited a debate about whether more women in senior roles would help improve corporate governance. In Britain, the minister for women and equality, Harriet Harman, caused a stir over the summer when she partly blamed the lack of women in senior roles in the financial industry for the crisis, saying if it would have been “Lehman Sisters” rather than Lehman Brothers, the company might have survived.

A review sponsored by the British government on an overhaul of corporate governance, to be published next month, could add to pressures on companies to promote equality of the sexes among their directors.

Europe lags behind the United States in gender equality in boardrooms, according to the consulting firm 20-First. About 68 percent of companies in Europe have no women on their executive committees, compared with 11 percent in the United States. In Asia, the figure is 82 percent.

Naissance hopes its Women’s Leadership Fund will “make a real contribution towards advancing opportunities for women in the workplace,” according to its Web site. The minimum investment for the fund is $100,000.

Fund to Invest in Companies That Promote Women Board Members

Swap your Yahoo shares for Google: Barrons

NEW YORK (Reuters) – Investors should swap their shares of Yahoo Inc (YHOO.O) for those of Google Inc (GOOG.O) because Yahoo's advertising revenues are on the decline while Google's are rising, Barron's reported in its October 26 edition.

Google's cost to acquire new subscribers is also falling and its marketshare for Web search grew in September while Yahoo's did not, Barron's wrote.

"What would you pay, then, for a company that's cutting expenses to the bone and producing only 'less bad' results? You certainly wouldn't want to pay what Yahoo! is fetching," Barron's wrote quick guaranteed personal loans.

(Reporting by Caroline Humer; Editing by Richard Chang)

Swap your Yahoo shares for Google: Barron's

Land deal advisor resigns from Calpers: report

LOS ANGELES (Reuters) – The real estate investment manager who led the California Public Employees' Retirement System, the nation's largest pension fund, into a money-losing land venture has resigned as an adviser to the fund, according to news reports.

Victor MacFarlane, chairman and chief executive of MacFarlane Partners, "has terminated" his relationship with the $200 billion pension fund, the Wall Street Journal reported on Saturday.

A spokeswoman for MacFarlane said his resignation was voluntary and that he would continue advising Calpers through the end of the year, the Journal reported.

MacFarlane's resignation was first reported by Reit Zone Publications.

Representatives for MacFarlane Partners and Calpers could not be reached to confirm the reports on Saturday afternoon.

MacFarlane Partners Inc is a real estate investment management firm in San Francisco that manages $10 billion in assets for some of the world's largest pension plans and institutions, according to its website.

The firm came under fire for a $970 million investment it managed for Calpers into LandSource Communities Development, the Journal said free credit report and score.

LandSource filed for bankruptcy in 2008, about 18 months after Calpers had bought into the 15,000-acre (6100-hectare) tract outside Los Angeles, Calpers said in a 2008 press release.

Calpers had invested in the development through its investment partner, MW Housing Partners, which was jointly managed by MacFarlane Housing and Weyerhaeuser Realty Investors, the release said.

MW Housing held a 68 percent interest in LandSource, whose holdings were hit hard by the California real estate bust, it said.

The separation comes as Calpers examines its relationships with private equity firm Apollo Global Management and other outside money managers.

Calpers said earlier this month that its probe centers on around $50 million in payments that outside managers made over a five-year period to ARVCO Financial Ventures LLC, a firm headed by former Calpers board member Al Villalobos, to win the pension fund's business.

Land deal advisor resigns from Calpers: report

Dow ends below 10,000; industrials drag

NEW YORK (Reuters) – U.S. stocks fell on Friday, with the Dow slipping below the 10,000 mark, as weak results from industrial companies overshadowed robust earnings from tech heavy-weights.

* The Dow Jones industrial average (.DJI) was down 109.13 points, or 1.08 percent, to end unofficially at 9,972.18. The Standard & Poor's 500 Index (.SPX) was down 13.31 points, or 1.22 percent, to finish unofficially at 1,079.60. The Nasdaq Composite Index ( free instant credit report.IXIC) was down 10.82 points, or 0.50 percent, to close unofficially at 2,154.47.

* For the week, the Dow industrials slipped 0.2 percent, the S&P 500 fell 0.7 percent and the Nasdaq dipped 0.1 percent.

(Reporting by Edward Krudy; Editing by Jan Paschal)

Dow ends below 10,000; industrials drag

Hot News: U.S. cuts pay at bailed out firms, BofA hits back

Amazon Reports 62% Rise in Earnings

SAN FRANCISCO (AP) — Amazon.com shares surged Thursday after the company said its third-quarter profit soared 62 percent, showing that consumers are comfortable opening their wallets to the online retailer despite the still-shaky economy.

Throughout the recession, shoppers have flocked to Amazon for deals on all kinds of products, from books to baby strollers, even while offline competitors were struggling.

The most recent report shows that the summer months were no exception — and that Amazon expects to carry the momentum through the holidays. It said it expects revenue in the current quarter to grow more than 20 percent.

The results and outlook sent Amazon shares up $8.35, 8.9 percent, to $101.63 in after-hours trading. Before the earnings report the stock had finished regular trading up 3 cents at $93.45.

Amazon said Thursday that it earned $199 million, or 45 cents per share in the third quarter. This far exceeded the 30 cents per share that analysts polled by Thomson Reuters were expecting.

Revenue climbed 28 percent to $5.45 billion, also surpassing analyst estimates for $5.03 billion.

Revenue from items like books, CDs and DVDs rose 17 percent to $2.93 billion. Revenue from electronics and other general merchandise jumped 44 percent to $2.36 billion.

Amazon said its revenue rose 23 percent in North America, and increased 33 percent internationally auto loan interest rates.

For the current quarter, Amazon predicted revenue of $8.13 billion to $9.13 billion. Analysts were expecting $8.11 billion.

The company declined to give details about sales of its electronic reader, the Kindle, beyond saying it is the company’s best-selling product.

Though e-books still make up a small portion of the overall book market, the market has grown rapidly. Now Amazon faces tougher competition from such companies as Sony and Barnes & Noble — which both soon will release devices that, like the Kindle, can wirelessly download books.

Amazon said Thursday that it intends to release software next month that lets people buy Kindle books and read them on a computer, regardless of whether they own a Kindle device. This is similar to an application already offered to owners of Apple’s iPhone and iPod Touch, and may provide Amazon with a way to expand its e-book revenue.

Also Thursday, Amazon lowered the price of its international version of the Kindle by $20, to $259, matching the cost of a version sold only in the United States that it is discontinuing. Now all Kindles will have wireless access that works around the world.

Amazon Reports 62% Rise in Earnings

Feds Yellen: No tightening in next several months

SANTA BARBARA, California (Reuters) – The time for the U.S. Federal Reserve to start pulling back its extensive support for the economy is not close at hand and policymakers have time to decide what sequence of steps they will take, San Francisco Fed President Janet Yellen said on Tuesday.

"We have used the language of an extended period," Yellen, a voting member of the Federal Open Market Committee, told reporters after a Fed conference.

"This is not something I anticipate happening over the next several months. Certainly not."

Yellen's comments are in line with recent Fed statements, which have emphasized that while the U.S. economy may be emerging from recession, the recovery will be tepid and the central bank is in no hurry to raise interest rates, which have been virtually zero since December last year.

Reflecting a cautious mood among policymakers about the pace of the recovery, minutes of Fed meetings released on Tuesday showed Fed regional bank directors felt the economy was gaining strength in the second half of the year although the banking sector was still strained.

Financial markets have been impatient for a clear sign that the Fed is beginning to ratchet back its flood of cash and ultra-low interest rates amid rising stock markets and signs of economic recovery.

On Monday, the Fed announced it is testing one of its tools for withdrawing cash from the banking system, but stressed that the dry run should not be interpreted to mean it has begun to put its exit strategy into operation.

NOT NECESSARY TO DECIDE

Yellen said the U.S. central bank has not made up its mind which tools to use and when.

"I'm not sure it's necessary at this point to have decided on exactly what the sequence will be when the time comes," she said.

Decisions about the exit would be influenced by economic conditions more broadly, but also by conditions in specific financial markets, Yellen said.

The condition of house finance markets might color whether the Fed would sell assets it bought specifically to improve conditions in those markets, she added.

Another Fed official warned that the central bank risks sowing confusion unless it provides markets with clear explanations for the basis of its decisions on which it acts car loans for people with bad credit.

Philadelphia Fed President Charles Plosser said the U.S. central bank needs stricter policies dictating when it should step in with bailouts, saying such measures would have reduced confusion during last year's financial crisis.

"Going forward, the Fed as well as other policy makers should strive to follow a systematic, more 'rule-like' approach in bad times as well as good," said Plosser in a speech at Stanford University in Palo Alto, California.

The Fed has said it will use measures like reverse repos or the sale of long-term assets to drain reserves from the banking system to prevent inflation from taking off once the economy begins to grow solidly.

CONFIDENCE IN THE DOLLAR

Discussing concerns about the declining value of the U.S. dollar relative to other currencies amid worries about the yawning U.S. budget deficit and rising public debt, Yellen said imbalances in trade and capital are a vulnerability in the global economy.

If the United States and Asian countries address the causes of those imbalances, Yellen said those actions could increase confidence in the value of the dollar.

The dollar has recently fallen to a 14-month low against a basket of currencies.

At the same conference, Fed Governor Kevin Warsh wondered during a panel discussion whether "remarkable" gains in Asian and U.S. asset prices signal a return to financial normality after a wrenching crisis or suggest the risk of an asset bubble.

A Singapore central bank official, Heng Swee Keat, said at the conference that the Singapore Monetary Authority was watching asset price developments carefully, but would be inclined to address worries about growing bubbles with regulatory tools rather than the blunter tools of monetary policy.

Yellen said she is not worried that rising asset prices in Asia are a significant problem. While one lesson from the financial crisis is that monetary policy must be more sensitive to asset price volatility, it is to be expected that capital flows will be driven by a search for higher yields, she said.

(With additional reporting by Alister Bull in Washington and Jim Christie in Palo Alto, Calif.)

Fed's Yellen: No tightening in next several months

Producer Prices Fall, Indicating Sluggish Wholesale Demand

Even as investors were bidding up the prices of commodities like oil and gold last month, wholesale prices in the United States were falling, reflecting weak demand at home.

The government’s Producer Price Index fell 0.6 percent in September after rising by 1.7 percent a month earlier, the Labor Department reported Tuesday. The figures show that, despite a weakening dollar, inflation remains a remote concern as the American economy struggles to pull itself out of a deep recession.

“The demand for goods is still very soft; the United States economy is just barely recovering,” said Allen Sinai, president of Decision Economics. “In a weak economy where consumer spending is weak, businesses have been slashing left and right. This surprisingly deflationary result reflects that.”

Food and energy prices fell for the month, and prices were sharply lower than last year, when the financial crisis deflated a commodities bubble that had lifted gasoline prices to $4 a gallon and sent the dollar to record lows. In September, producer prices were down 4.8 percent from a year ago, and prices paid by consumers were 1.3 percent lower.

Last week, the Labor Department reported that consumer prices rose 0.2 percent in September from a month earlier, reflecting small increases in energy prices.

In the latest report on prices received at the wholesale level, the government said that prices for crude goods fell 2.1 percent, showing that there is little inflation further down the ladder of production.

So-called core producer prices, which exclude volatile food and energy costs, fell by 0.1 percent in September, their third monthly decline of the year.

But some economists said wholesale prices would probably head higher for October as the government’s data collectors captured the rising prices of gasoline and crude oil. In September, gasoline prices at the producer level fell by 5.4 percent, making up nearly 80 percent of the overall decline.

Since the start of October, crude oil prices have risen more than 10 percent in New York markets as the value of the dollar slipped to its lowest levels of the year fast cash advance loan. Gasoline prices at the pump have risen by 10 cents in the last week, to a nationwide average of $2.58 a gallon, according to AAA, the automobile group.

Despite these increases, policy makers at the Federal Reserve believe that inflation will remain muted in the months ahead. With 15 million people out of work, consumer demand shaky and businesses operating at reduced capacity, there is still an enormous amount of slack in the economy.

“The biggest factor for inflation will be the level of slack,” said James O’Sullivan, chief economist at MF Global. “That’s going to keep downward pressure on inflation.”

The price data coincided with a report from the Commerce Department that new home construction rose by 0.5 percent in September to a seasonally adjusted annual rate of 590,000. The figures showed that the housing market is continuing to make a tentative recovery because of lower prices and a government tax credit for first-time home buyers.

But despite some stability in home sales and prices, potential buyers are still circling the edges of the market, and many homebuilders are still unable to get financing to break ground on new projects.

“Gains from here on will probably be much more difficult to achieve, as poor labor market conditions, tight credit, overly leveraged household balance sheets, and still considerable inventory of new and existing homes all exert downside pressures,” Joshua Shapiro, chief United States economist at MFR, wrote in a research note.

The number of housing starts was 28 percent lower than a year ago, and new building permits in September fell by 1.2 percent from August to a seasonally adjusted 580,000. The number of building permits issued in September was down nearly 30 percent from last year.

Producer Prices Fall, Indicating Sluggish Wholesale Demand

Asia To Become Fastest Growing Region For Wealth

The growth in the number of wealthy individuals in the Asia-Pacific region is expected outpace all other regions of the world within the next five years. That growth will be driven in large part by consumer demand in China.

The predictions come in a recent report by the investment firm Merrill Lynch and consulting group Capgemini Financial Services. Their World Wealth Report 2009 forecasts the North America and Asia-Pacific regions will outpace the rest of the world in the number of wealthy individuals over the next few years. And by 2013, the Asia-Pacific region is expected to surpass North America, the current leader. [China has 130 billionaires]

The report, which defines the wealthy as having investable assets exceeding $1 million, says the United States, Japan and Germany together account for 58% of the world's high net worth individuals. China, it says, surpassed Britain in 2008 to become the home to the fourth largest wealthy population payday loans with low fees.  

Another publication, the Hurun Rich List, highlights the rise in China's wealth. Five years ago, China had three billionaires.   Hurun’s 2009 rankings indicate China has 130 billionaires.  That compares to the United States, which currently has 371 billionaires, according to Forbes magazine.

The Asia-Pacific region has seen a decline in wealthy individuals due to the world financial crisis. In 2008, the region had a total of 2.4 million wealthy people, or 14-percent fewer than the previous year. Japan saw a relatively mild decline in the number of its rich (-9.9%), compared to Hong Kong (-61.3%) and India (-31.6%).

Asia To Become Fastest Growing Region For Wealth

UBS registered mail warns U.S. clients on tax: report

GENEVA (Reuters) – Swiss bank UBS AG warned U.S. customers by registered mail their account details may be given to U.S. tax authorities, a method that could itself breach secrecy laws, a Swiss paper said on Sunday.

The use of registered mail and envelopes showing the sender was UBS could enable the U.S. authorities to trace customers wanted for tax evasion well before their details are handed over under a U.S.-Swiss double taxation agreement, Sonntag weekly paper said.

A spokesman for UBS declined to comment on the report.

Switzerland and the United States settled a row over evasion of U.S. taxes in August when Switzerland agreed to hand over details of 4,450 U.S. accounts at UBS.

But it could take into early 2010 before the first names are handed over under the agreed legal procedures.

Some 7,500 Americans voluntarily disclosed information about hidden overseas assets under a tax amnesty program that expired on October 15, according to the top U allstate insurance company.S. tax collector.

UBS had agreed in February to pay $780 million to settle a criminal investigation accusing it of helping American clients evade taxes. At the same it agreed to release the names of about 250 clients in a first breach of Switzerland's banking secrecy.

Sonntag quoted lawyer Andreas Rued, who is representing some U.S. clients of the bank, as saying the use of registered mail and envelopes showing the name of the bank could constitute a contravention of Switzerland's banking secrecy laws. He said he was considering whether to seek a criminal investigation against the bank.

No one was immediately available at Rued's Zurich office.

(Reporting by Jonathan Lynn, editing by Will Waterman)

UBS registered mail warns U.S. clients on tax: report

Indonesias Flag Carrier Defying the Odds

HONG KONG — Amid the toughest airline conditions in decades and financial markets that are still jittery, maybe an accountant-turned-banker is what it takes to restructure an airline saddled with debt and memories of a poor safety record. That, and a lucky exposure to some thriving economies.

Garuda Indonesia has all that, and it is bucking the industry trend by adding routes, planes, passengers and — if the financial markets cooperate — a stock market listing by the middle of next year.

Just a few years ago, the idea of listing Garuda, Indonesia’s flag carrier, would have seemed laughable. Its chief executive, Emirsyah Satar, is the first to acknowledge as much.

“Everything was against Garuda,” said Mr. Satar, describing what greeted him when he first joined the airline as finance chief in 1998.

At the time, Asia was reeling from a financial crisis, but most of Garuda’s problems were homemade: a bloated work force, an aging fleet, inefficient operations and debts totaling $1.8 billion.

“The company was running on negative cash flow — it was funding itself by issuing debt,” Mr. Satar said in an interview during a visit to Hong Kong last week. “When I came in, no audit had been done for three years.”

Mr. Satar, a personable 50-year-old who speaks candidly about the issues facing the company, began his career as an auditor at Coopers & Lybrand, which later merged with Price Waterhouse, before moving to the financial sector. That varied background brought him first a four-year stint as Garuda’s finance chief and then, after another period in the finance sector, the top job at Garuda, for which he returned to the airline in March 2005.

“The first thing we had to do was to get out of the state of denial,” he said. “And we had to remind ourselves that we are not a transportation company but a travel company — that means the customer comes first.”

In the past four and a half years, Mr. Satar has overhauled the staff’s business and service mentality and overseen a financial and operational restructuring aimed at sprucing up the airline with an eye on an initial public offering next year.

Several previous attempts at an offering have been scrapped because the company was not quite ready to list, but now chances look reasonable, despite the global downturn that has sent many other airlines into a tailspin.

“If they can get their debt restructuring sorted and deliver another year of decent profitability — their third — then all the stars are in alignment for the I.P.O. next year,” said Derek Sadubin, an analyst at the Centre for Asia Pacific Aviation, a consulting firm based in Sydney.

Mr. Satar is confident he can deliver on both fronts. Net profits during the first seven months of this year topped those for all of 2008, he said, adding that he was confident of a full-year profit. And Mr. Satar expects to complete the drawn-out process of restructuring Garuda’s outstanding debt by the end of October.

Garuda’s transformation helped it to a net profit of 669 billion rupiahs, or $71.6 million , in 2008, against a loss of 881 billion rupiahs in 2004. Its planes are now fuller, its staff has been slimmed down and productivity and punctuality are much improved.

By 2014, Garuda wants to fly nearly 28 million passengers, up from 10.3 million last year, with 116 aircraft, more than twice as many as are in its current fleet.

Mr. Satar wants to have 1,222 international departures per week by 2014, up from 338 in 2008. The airline has already started direct flights from Jakarta to Melbourne, Sydney, Shanghai and Seoul, cities to which it had previously flown only from Bali. And it is planning to fly to Amsterdam beginning next June payday loan lenders.

He also aims to increase domestic departures to 2,072 a week, from 1,333 last year.

Possibly the most important new feather in Garuda’s cap: In July, a European Union ban prohibiting Indonesian carriers from entering E.U. airspace, imposed after a series of accidents in Indonesia in 2007, was lifted for Garuda and three other local carriers.

One of those accidents involved a Garuda plane that overshot a runway in the province of Central Java, killing 21 people. In another accident, a plane belonging to the low-cost airline Adam Air crashed into the sea, killing all 102 people aboard.

Since then, Garuda has improved its safety and security procedures, and last year it received an air safety certification from the International Air Transport Association.

Aiding Garuda is an economic backdrop that many carriers elsewhere can only dream of.

Disasters like the tsunami in December 2004 and terrorist attacks in Bali and Jakarta have hit travel to Indonesia in the past, but the country also has one of the fastest-growing economies in Asia. Economists widely predict growth of 4.3 percent for this year and 5.1 percent for 2010.

And with a population of 237 million, Indonesia is not only one of the most populous nations but also one whose sprawling geography of more than 17,000 islands cries out for more air travel.

Overseas, Garuda’s main markets are either within Asia or in Australia, which avoided a recession, and are now picking up speed. The carrier also has little exposure to those segments of the airline business that have been hit especially hard by the global downturn: international long-haul travel, business and first-class travel, and cargo.

The airline has consciously positioned itself as a premium carrier, rather than seeking to compete with low-cost carriers like AirAsia.

Around the world, airlines like easyJet, Ryanair and AirAsia have benefited as cost-conscious travelers have switched away from traditional “full-service” carriers. But in Indonesia, low-cost carriers, or L.C.C.’s, have simply helped expand the domestic market.

Indonesia’s domestic air market, Mr. Satar said, has more than tripled, to more than 30 million passengers a year, from about 9 million in 2001. Garuda has added 13 new domestic routes since the start of 2009.

“The overall pie is growing. L.C.C. growth is stimulating the market and is thus not necessarily to the detriment of Garuda,” said Mr. Sadubin, the analyst.

“If anything, Lion Air could be a bigger challenge — they have been positioning themselves as a full-service carrier and have been expanding very aggressively,” he added, referring to the largest privately held airline in Indonesia.

Much of the success of Garuda’s planned I.P.O. will depend, of course, on the state of the financial markets next year. The aim is to list by the middle of the year and raise $300 million to $400 million for a 20 percent stake.

The recovery in the world’s stock markets this year has allowed I.P.O. activity to revive, with many large transactions getting off the ground in Asia in particular. Still, markets remain nervous, and the situation could look different by next year.

“Over all, growth plans like Garuda’s are seldom seen outside the realms of the privately funded L.C.C. segment and will require deft management execution and significant amounts of finance,” Mr. Sadubin said. “I’m quite impressed with what they have managed to do so far.”

Indonesia's Flag Carrier Defying the Odds

BofA posts $1 billion loss amid consumer credit woes

CHARLOTTE (Reuters) – Bank of America Corp (BAC.N) posted its second quarterly loss in less than a year as it suffered from consumer credit losses.

The nation's largest bank reported a net loss of $1 billion, or 26 cents per share, for third quarter, compared with net income of $1.18 billion, or 15 cents per share, in the same period last year at the height of the financial crisis.

Bank of America's latest quarterly results come as U.S. consumers, who compromise roughly 60 percent of the bank's loan portfolio -- from home mortgages to credit cards -- are showing signs of continued weakness and an inability to repay debt fast cash advance.

The bank's Merrill Lynch unit made a positive contribution in the latest quarter. Bank of America said the unit boosted its overall results.

Bank of America shares fell 3.6 percent to $17.45 in premarket trading.

The shares rose 29 percent during third quarter, keeping pacing with the broader KBW Banks Index. But the shares are down 23 percent over the past 12 months.

(Reporting by Joe Rauch; editing by John Wallace)

BofA posts $1 billion loss amid consumer credit woes

Citi still playing catch-up as credit losses bite

NEW YORK (Reuters) – Citigroup Inc (C.N) posted a quarterly per-share loss as it suffered $8 billion of credit losses, raising questions about when the bank can return to sustained profitability.

The loss per share was narrower than analysts expected but still underlined how far the bank has to go to catch up with stronger rivals like JPMorgan Chase & Co (JPM.N). Citigroup has received $45 billion of capital from the U.S. government and is now one-third owned by taxpayers, while JPMorgan has paid back the government bailout it received last year.

Citigroup's shares were down 6 percent to $4.70 in afternoon trade.

"On first blush, this is not particularly optimistic," said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York. "They did beat on earnings and revenue, but the $8 billion credit losses ... is a reminder that we are in a weak economic environment."

The bank did post net income of $101 million, but it reported a $529 million loss from continuing operations before taxes. The ultimate bottom line for shareholders was negative, including one-time losses from converting preferred shares into common stock, and tax benefits.

Results were further muddied by accounting losses that resulted from the bank's bonds performing better.

"It can give you brain damage trying to figure this out," said Walter Todd, portfolio manager at Greenwood Capital Management in Greenwood, South Carolina. "With all the other opportunities out there in the financial space, I don't know why you'd spend the time to try to understand what the heck's going on here, unless you can take a lot of risk."

Citigroup set aside less money to cover bad loans than it did in last year's third quarter, but that may make sense because the bank's assets also declined from the year-ago period, and net credit losses declined from the second quarter. The bank said it has enough money set aside to cover losses in consumers loans for the next 13.3 months, the highest level in at least two years.

Analysts have struggled to nail down when Citigroup will start posting profits from its main businesses. Some have forecast a return to "core profitability" as soon as early next year.

The bank's inability to post earnings from its main businesses has made some analysts impatient. But others argue that by the time the bank is clearly profitable, its shares will no longer be cheap. The shares trade at about three-quarters of their book value, while competitors trade above their book value.

A key source of uncertainty for Citigroup is the performance of its U.S. credit card and mortgage loans, which have suffered and may be stabilizing quick payday loan.

"Clearly, U.S. consumer credit remains the number one issue affecting our near-term results," Chief Executive Vikram Pandit said on a conference call with analysts.

Citigroup has posted more than $100 billion of writedowns and consumer credit losses since the credit crisis began. It posted more than $37 billion of net losses between the fourth quarter of 2007 and the fourth quarter of 2008.

In the third quarter, it posted a net loss to shareholders of $3.2 billion, or 27 cents a share, compared with a loss of $2.9 billion, or 61 cents a share, a year earlier.

Analysts' average forecast was a loss to shareholders of 38 cents a share.

BETTER BY OTHER MEASURES

The bank reported net income of $101 million, which excludes preferred stock dividends and a $3.1 billion charge linked to converting preferred shares into common stock. In the same quarter last year the bank posted a net loss of $2.8 billion.

Citigroup suffered $8 billion of credit losses, compared with $4.9 billion in the same quarter last year and $8.4 billion in the second quarter of 2009.

The bank said revenue in its securities and banking unit dropped by about a third, to $4.89 billion. Excluding the impact of an accounting loss from improved credit spreads, the unit's revenue was $6.6 billion.

Major competitors including JPMorgan Chase and Goldman Sachs Group Inc (GS.N) posted big increases in investment banking revenue, driven in large part by fixed-income trading.

Net revenue at Citigroup rose 25 percent from a year earlier to $20.39 billion.

Total assets rose 2 percent from the second quarter, to $1.89 trillion.

Pandit has struggled to fix a bank formed through decades of acquisitions that resulted in a hodgepodge of fiefdoms. He has tried to shed bad assets and focus on Citigroup's main businesses, including international commercial and investment banking.

In a conference call, Citigroup Chief Financial Officer John Gerspach declined to comment on a possible timetable for repaying TARP funds. But he insisted the bank had "the capacity to begin to repay TARP" and that it was just a question of when.

Citigroup shares are down roughly 30 percent this year, compared with a rise of about 10 percent rise in the KBW Bank index (.BKX) and a nearly 50 percent advance by shares of Citigroup rival JPMorgan Chase & Co.

Citigroup earlier this year separated the businesses it wanted to keep, which it calls Citicorp, from the units and assets it aims to shed, which it calls Citi Holdings.

(Reporting by Dan Wilchins; editing by John Wallace)

Citi still playing catch-up as credit losses bite

House Panel Begins Push on Financial Overhaul

WASHINGTON (AP) — A crucial House panel moved to tighten rules on unregulated financial instruments on Wednesday, a long-awaited step toward governing the obscure and complex transactions at the heart of the troubles that befell some prominent Wall Street firms.

The House Financial Services Committee adopted a proposal close to the Obama’s administration’s plan to move most private trading in over-the-counter derivatives to regulated exchanges. The committee chairman, Barney Frank, Democrat of Massachusetts, dropped his proposal for an outright ban on trades that regulators judge detrimental to markets.

While many companies use derivatives to protect themselves against market fluctuations, these products have also become a means for financial speculation. They grew into a $600 trillion global market that regulators say can threaten the entire economy.

Mr. Frank said exemptions would apply to companies that use derivatives for commercial reasons to protect against risk, not those that use it for financial reasons. Companies could lose that exemption if regulators see a pattern of activity that places other participants in the transactions at risk.

Mr. Frank said he was persuaded not to give regulators the power to ban so-called abusive swaps. “There was a concern that a broad grant to ban absolutely abusive swaps was going to be unsettling,” he said.

Instead, regulators would be required to oversee transactions and look for potential problems.

Regulating derivatives is one element of President Obama’s proposal to correct the practices of banks, investment houses and other financial institutions that caused last year’s economic collapse.

Derivatives such as credit default swaps brought down the investment firm Lehman Brothers Holdings and nearly toppled the insurance giant American International Group fireplace plans.

Republicans said they preferred that derivative transaction be disclosed and operate under great visibility, but objected to trading them in regulated exchanges.

Spencer T. Bachus of Alabama, the top Republican on the committee, said exchanges, together with requirements for more capital to protect against the risks, could backfire and hurt investors that are unfamiliar with the complicated instruments.

The committee also wants to establish a Consumer Financial Protection Agency to police mortgages, credit cards and other consumer products offered by banks and other financial institutions.

Bankers and Republicans generally oppose the new agency, but community banks and the Chamber of Commerce have wielded the most influence in getting the House panel’s Democrats to modify and clarify the regulatory powers that President Obama would give it.

One sticking point is whether to give states additional powers to regulate the consumer practices of federally chartered banks.

President Obama and Treasury Secretary Timothy F. Geithner have made the regulatory overhaul a priority, meeting privately with lawmakers in recent weeks and agreeing to scale back the administration’s consumer protection plan in the face of widespread business opposition to it.

Mr. Frank dropped several of President Obama’s proposals, including making banks offer standardized “plain vanilla” mortgages. His draft bill also omits the president’s proposal to make lenders take added measures to ensure that their communications with customers are not deceptive.

House Panel Begins Push on Financial Overhaul

Strong China trade figures point to recovery

BEIJING (Reuters) – China reported surprisingly strong trade figures on Wednesday, providing fresh evidence that the world's third-largest economy is firmly on a recovery track and that global demand is improving too.

Exports in September fell 15.2 percent from a year earlier, beating forecasts of a 21 percent fall, while imports fell just 3.5 percent -- well short of expectations of a 15.3 percent decline, the General Administration of Customs said.

Brian Jackson, an economist at Royal Bank of Canada in Hong Kong, said the slower pace of decline was good news for China's recovery because growth this year has depended too much on the government's 4 trillion yuan ($585 billion) stimulus package.

Indeed, after adjustments to take account of the number of working days in each month, exports rose 6.3 percent in September from August and imports rose 8.3 percent, Customs said.

"Stronger external demand will provide an alternative source of support for growth and provide scope for Beijing to start tightening policy gradually from early 2010," Jackson said.

With imports showing strength, China's trade surplus fell to $12.9 billion last month from $15.7 billion in August. Markets had expected a figure of $17.0 billion.

Economists expect the year-on-year readings in exports to keep improving. Trade slumped after a shock to confidence from the collapse of investment bank Lehman Brothers in September 2008, creating an increasingly favorable statistical base of comparison as 2009 wears on.

Nomura said it expected the year-on-year change in exports to turn positive by December. Barclays Capital said it could be as early as November.

"Overall, export performance will be much better in the months to come. I think it's going to be sustainable and it's going to accelerate. There are some rush orders coming to China for Christmas, so I expect probably a pretty strong rebound in November and December," said Dong Tao, chief China economist for Credit Suisse in Hong Kong.

DEMAND AT HOME AND ABROAD

Yu Song and Helen Qiao at Goldman Sachs said calendar quirks -- there were more working days last month than in September 2008 -- were not the only explanation for the relatively robust data payday loans online.

"We believe the underlying growth momentum of exports and imports has been improving, on the back of continued strength in the domestic economy as well as the increasingly visible signs of recovery in external demand," they said in a note to clients.

Mingchun Sun with Nomura in Hong Kong agreed. He said China was busy buying more investment goods, to implement the infrastructure-centered stimulus package, as well as consumer goods following an unexpected spending boom lately in China.

Commodities were a driving force behind the sharp improvement in imports. China bought a record 64.55 million tons of iron ore in September, up 30 percent from August; imports of copper rose 23 percent, propelling Shanghai's benchmark copper futures contract to a 0.5 percent gain at 0640 GMT.

"The Chinese economy is obviously strong and that has created demand for copper," said David Moore, a commodity strategist at the Commonwealth Bank of Australia.

Annual economic growth probably accelerated to 8.9 percent in the third quarter, from 7.9 percent in the second, according to economists polled by Reuters. The figures are due on October 22.

The Shanghai stock market halved its gains to end up 1.17 percent, a four-week closing high, while currency traders started building in expectations of renewed appreciation in the yuan.

China halted the currency's three-year climb against the dollar in July 2008 to protect the country's vast export sector.

But economists say that Beijing will eventually want to let the yuan resume its rise to boost domestic demand and so help rebalance both the Chinese and the global economies -- a key aim of the Group of 20 forum, where Beijing is an influential voice.

(Additional reporting by Aileen Wang and Sally Huang; Writing by Alan Wheatley; Editing by Ken Wills and Tomasz Janowski)

Strong China trade figures point to recovery

Hot News: Japan Central Bank Keeps Interest Rate Unchanged

FTSE 100 hits year-high

LONDON (AFP) – The leading stock exchange struck its highest level for more than a year on Monday while the British pound slumped to multi-month lows versus rivals as investors assessed the economic outlook.

London's FTSE 100 rose 0.94 percent to 5,210.17 points.

Telecom giant Vodafone was the most traded stock, seeing 136 million shares change hands, followed by banker Lloyds, which saw 80.9 million switch owners.

Insurance firm Old Mutual was the session's top performer gaining 4.56 percent -- or 4.8 pence -- to end at 110.1.

Investment company Man Group followed adding 3.63 percent -- or 12.4 pence -- to close at 353.7.

The losing blue-chip company was Lloyds bank shedding 2.54 percent -- or 2 guaranteed personal loan approval.44 pence -- to end at 91.61

Travel agent Thomas Cook followed losing 2.06 percent -- or 4.8 pence -- to end at 227.7.

Sterling slumped as the Centre for Economics and Business Research forecast the Bank of England would keep British interest at a record low 0.50 percent until 2011.

The pound fell to its lowest level in more than six months against the euro and also lost ground to the dollar.

At 16:58, the pound was trading at $1.5797 dollars, down from $1.5846 dollars at Friday's close, while it fell to 1.0675 euros down from 1.0757 over the same period.

FTSE 100 hits year-high

Blackstone to list up to 8 firms, sell 5 others: report

LONDON (Reuters) – Private equity firm Blackstone Group LP is planning to list up to eight companies it owns and sell at least five others, the Financial Times said on Monday.

The FT said the move by Blackstone, the world's largest buyout firm, marked a reversal of its pessimistic view of the global economy and financial markets.

The newspaper quoted Blackstone founder Steve Schwarzman as telling investors in a letter sent on Friday that the firm saw the world changing once again:

"At least for private equity, the worst is behind the industry," it quoted him as saying.

Schwarzman said Blackstone was in the process of selling five companies at values twice as high as those estimated at the end of 2008 . Investors were likely to receive about $2.8 billion as their share of the profits, it said.

Blackstone had invested more than $4 billion in the eight companies it was considering listing in the next year, it said.

The expected valuation for these companies "compares very favorably to our costs, in some cases significantly," it quoted Schwarzman as saying.

(Reporting by Christopher Johnson; Editing by Jan Paschal )

Blackstone to list up to 8 firms, sell 5 others: report

Off the Charts: The Divided States of Health Care

Where do those without health insurance live?

The Census Bureau sought to find that out, for the first time, in a survey taken last year and released in September. Over all, it found that 9.9 percent of children lack any health insurance, half the rate for adults under 65.

But there was widespread variation in coverage. Children in Texas, the state with the least health insurance, are more than eight times as likely not to have it than children in Massachusetts, the state with the broadest coverage.

Those who lack health insurance now are far more likely to live in states that usually vote Republican — the states whose senators and representatives are least likely to support a law to extend coverage.

That would seem to indicate that Republican constituents are the ones who would most benefit from passage of universal health insurance coverage. But an analysis of Congressional districts within those states indicates that those without health insurance are much more likely to live in strongly Democratic Congressional districts. Many of those contain large minority populations with relatively low incomes.

In the Congressional debate now going on, Democrats have generally supported plans aimed at assuring that all Americans have some sort of insurance, while nearly all Republicans have opposed the Democratic bills, raising concerns ranging from cost to worries that providing better health coverage for those who now lack it would diminish coverage for those who have it.

The accompanying graphic divides the states into red states — states that both voted for Senator John McCain in the last presidential election and are represented by two Republican senators — and blue states, which have two Democratic senators and voted for President Obama. The purple states are the ones that split their ballots in the presidential and Senate elections.

The figures show that residents of blue states are far more likely to have health insurance than are residents of red states, with residents of purple states in the middle.

The figures on insurance cover both private insurance and public insurance, including Medicaid, which is available to poor people. Since nearly all people over 65 years of age have Medicare insurance, those over 65 are excluded from the statistics shown one hour payday loans.

Another way of looking at the figures is to imagine two Senates — one chosen by the 25 states where residents are more likely to have health insurance, and the other chosen by the 25 states where there is less insurance.

The Senate from the states with less insurance would have 30 Republicans and 20 Democrats. But the one from the states with more health insurance would have a 40-to-10 Democratic majority.

The District of Columbia, although not a state and unable to elect senators, is listed as a blue state because it generally votes for Democrats. The two independent senators — Bernard Sanders of Vermont and Joe Lieberman of Connecticut — caucus with the Democrats and are counted as Democrats.

There are a number of reasons for a greater amount of health insurance in blue states. Some of those states have relatively generous child insurance programs, most notably Massachusetts, which has nine of the 10 Congressional districts with the most health insurance. (The 10th is in Hawaii, another blue state.) Some Democratic states have also been more generous in setting Medicaid coverage standards, thus providing more coverage for people with low-paying jobs that do not provide insurance.

Of the 10 Congressional districts with the least health insurance, seven are in Texas, two in California and one in Florida. Nine of those districts are largely black or Hispanic, and are represented by Democrats who faced little if any Republican opposition in the last election.

While heavily Democratic districts often have less insurance, the red states tend to have less insurance than other states even without including those districts. Of the 150 Congressional districts with the most health insurance, only three are in red states — one each in Alabama, Tennessee and Kansas. Another 25 are in purple states, with the rest in states that consistently vote Democratic.

Floyd Norris comments on finance and economics in his blog at norris.blogs.nytimes.com.

Off the Charts: The Divided States of Health Care

After Heartening Reports, Shares Rise

The economy is still a long way from healthy, but on Thursday, a constellation of signals on job losses, company profits and retail sales gave Wall Street a little more reason for optimism.

First-time unemployment claims fell by 33,000 last week to their lowest levels since early January, brightening hopes about employment. The aluminum maker Alcoa turned a profit over the summer after a year of losses. Mortgage rates fell, making it easier for borrowers to afford a home. And retailers posted their strongest sales of the year.

Taken together, the reports provided some evidence that the economy was still on a gradual route to recovery and eased some worries that flared last week amid a flurry of worsening economic figures.

“This is a good day,” said Stu Schweitzer, global markets strategist at JPMorgan Private Bank. “People who pulled back out of fear are starting to spend more. And we are seeing the evidence now. This confirms that the improvement is likely continuing.”

Many are expecting a long, plodding recovery hampered by high unemployment and plenty of residual worry, but the figures suggested that the economy was nonetheless heading higher after a drastic contraction.

And the president of the Richmond Federal Reserve, Jeffrey M. Lacker, who is a voting member of the Fed policy-making board, told reporters Thursday that the risk of a double-dip recession had dwindled.

On Wall Street, investors rushed to buy energy producers, retailers and basic-materials companies whose businesses would boom as business picks up.

The Dow Jones industrial average gained 61.29 points, or 0.63 percent, to 9,786.87, and the broader Standard & Poor’s 500-stock index was 7.90 points, or 0.75 percent, higher, at 1,065.48. The Nasdaq was up 13.60 points, or 0.64 percent, higher at 2,123.93.

In the energy market, crude oil rose $2.12 to settle at $71.69 a barrel in New York trading, and gold continued to race higher, closing at a record $1,056 an ounce. The dollar fell for another day, to its lowest levels of the year, as investors continued to bet that the American currency would lose its luster as the global economy healed paydayloans.

The three major equity exchanges in Europe — London, Paris and Frankfurt — all ended the day about 1 percent higher.

“We’re up eight months in a row now,” said Bruce A. Bittles, chief investment strategist at Robert W. Baird & Company. “We’re looking to see if optimism gets excessive, especially after news developments like today.”

On Thursday, the Labor Department reported that first-time jobless claims fell to a seasonally adjusted 521,000 last week, and that continuing claims for unemployment aid fell by 72,000 to 6 million for the week ending Sept. 26.

Few economists expect the job market to snap back after nearly two years of relentless layoffs and firings, but the numbers hint that October could be better than last month. Job losses accelerated in September, dashing hopes that businesses would do any substantial hiring before the end of the year.

Retailers said sales had improved in September as families went back-to-school shopping, and were 0.6 percent higher than a year ago, when the economy was collapsing.

Although retail sales are still dreary by historic standards and are likely to be flat during the holiday season, the numbers offered some evidence that consumers were spending at least a little. Consumer spending, which makes up 70 percent of the economy, has edged up over the last four months, and is expected to grow in the third quarter.

Interest rates were higher. The Treasury’s benchmark 10-year note fell 18/32, to 103 5/32, and the yield rose to 3.25 percent from 3.18 percent late Wednesday.

Following are the results of Thursday’s Treasury auction of 16-day cash management bills and 30-year bonds:

After Heartening Reports, Shares Rise

Bernanke boosts dollar, commodities down

LONDON (Reuters) – The dollar rose on Friday after Federal Reserve Chairman Ben Bernanke indicated U.S. monetary policy could be tightened as a recovery takes hold, sending crude and metal prices lower.

World stocks (.MIWD00000PUS) were steady as retreating commodity prices hurt heavyweight miners, offsetting gains in Asia (.MIASJ0000PUS) and emerging markets.

Shares in emerging markets (.MSCIEF) advanced 0.4 percent, hitting a more than 13-month high for the fourth straight day, after better-than-expected U.S. corporate earnings and economic data soothed fears about the strength of the economic recovery.

In Europe, the FTSEurofirst 300 (.FTEU3) index was up 0.3 percent.

Bernanke said on Thursday that the Fed must continue to prop up the economy for an extended period but can't do so indefinitely for fear of triggering an inflationary surge.

His comments lifted the dollar (.DXY) off 14-month lows against a basket of currencies. The greenback was up 1.1 percent at 89.29 yen, while the euro fell 0.5 percent to $1.4723.

"Explanations by Fed officials have been helpful in clearing the air on what strategy will be taken as the economy recovers," said Ulrich Leuchtmann, currency strategist at Commerzbank in Frankfurt.

But Leuchtmann said that dollar gains on Bernanke's comments would be limited, as Fed was unlikely to raise rates until the second half of 2010.

"The market is not yet ready to jump on the rate rise outlook to aggressively buy the dollar," he said.

Gold prices pulled back to below $1,050 an ounce, snapping a rally that took prices of the precious metal to all-time highs for three days in a row, while oil fell to $71 a barrel faxless payday loans.

Governments and central banks around the globe have injected trillions of dollars in the past year or so to pull the world out of a most severe recession since the 1930s Great Depression.

The flood of liquidity has helped boost all investment asset classes from equities to government bonds.

"The longer that the rally lasts -- and the higher that equity prices go -- the greater the likelihood that, in this new world, policymakers will see their new job description as being to take away the punch bowl before the party gets going, not just in the usual sense of the word ... but before asset price pick-ups can become booms," said Michael Dicks, head of research and investment strategy at Barclays Wealth, in a report

"For this reason, we remain circumspect concerning the longevity of any equities rally persisting through 2010."

In another sign that the economy is on the mend, Europe's largest telecom Telefonica (TEF.MC) offered bigger-than-expected dividends. The Spanish company said it would hike its dividend per share by nearly 22 percent to 1.40 euros ($2.07) per share, far outstepping analyst expectations for 1.27 euros per share.

Yields on benchmark 10-year U.S. Treasuries were up 5 basis points at 3.301 percent, while the 10-year German bund yield, the euro zone's benchmark, was up 3 basis points at 3.171 percent.

(Additional reporting by Naomi Tajitsu in London; Editing by Toby Chopra)

Bernanke boosts dollar, commodities down

Wall St futures point to higher start for equities

(Reuters) – Futures for the Dow Jones industrial average, the S&P 500 and the Nasdaq 100 rise 0.9 to 1 percent, pointing to a higher open on Wall Street on Thursday.

At 8.30 a.m EDT, Labor Department releases first-time claims for jobless benefits for the week ended October 3. Economists in a Reuters survey forecast a total of 540,000 new filings compared with 551,000 in the prior week.

Commerce Department releases wholesale inventories for August at 1400 GMT. Economists in a Reuters survey forecast inventories to fall by 1.0 percent versus a drop of 1.4 percent in July.

ICSC releases chain store sales for September versus a year ago. In August, sales fell 2.0 percent versus a year earlier.

The Bank of England and the European Central Bank are expected to keep interest rates unchanged.

PepsiCo, maker of Pepsi-Cola, Tropicana juice, Quaker Oats and Frito-Lay snacks, reports third-quarter results.

Marriott International is scheduled to announce financial results.

A Food and Drug Administration advisory panel considers if Pfizer (PFE.N) should be allowed to promote its AIDS drug Selzentry more widely. The company is seeking permission to sell the drug for HIV patients who have not yet tried any medications for the disease. The FDA usually follows panel recommendations.

Commodity stocks will be in focus after spot gold topped $1,050 per ounce to mark a record high for the third session in a row on Thursday. Key base metals and crude oil prices are also stronger.

Alcoa Inc (AA.N) posted a surprise profit on Wednesday through cost cutting and higher aluminum prices after three consecutive quarterly losses, sending its stock higher payday cash advance loans.

Alcoa, which has curtailed metal production by more than 20 percent and cut its workforce by about 30 percent since the economic downturn began a year ago, said there are signs that key markets are stabilizing and it expects global consumption to rise by 11 percent in the second half of this year.

Savient Pharmaceuticals (SVNT.O) fell 6 percent in after-hours trade on Wednesday following the company's announcement of an offering of four million shares of stock.

U.S. asset manager BlackRock Inc (BLK.N) is in the running to help state regulators estimate risks in insurers' investments, the Wall Street Journal said, citing regulators and a National Association of Insurance Commissioners official.

The pan-European FTSEurofirst 300 (.FTEU3) index of top shares is up 0.9 percent at 997.98 points following a 0.4 percent fall in the previous session. The index is up around 20 percent this year and has surged almost 55 percent since hitting a record low in early March.

The Standard & Poor's 500 (.SPX) and Nasdaq (.IXIC) indexes edged up on Wednesday with investors responding positively to early earnings results as the quarterly reporting period got under way.

The Dow Jones industrial average (.DJI) was down 5.67 points, or 0.06 percent, at 9,725.58. The Standard & Poor's 500 Index was up 2.86 points, or 0.27 percent, at 1,057.58. The Nasdaq Composite Index was up 6.76 points, or 0.32 percent, at 2,110.33.

(Reporting by Atul Prakash)

Wall St futures point to higher start for equities

Julius Baer to buy ING Swiss private bank

SINGAPORE (Reuters) – Julius Baer (BAER1.VX), bulking up in its home market, has agreed to buy the Swiss private banking assets of Dutch financial services group ING (ING.AS) for 520 million Swiss francs ($507 million), the two said on Wednesday.

As part of its global restructuring, ING is selling its Asian and Swiss private banking units in what would be the biggest deal in the wealth management industry since the credit crisis began.

Julius Baer is paying for the deal with cash, and expects the deal to generate 35 million francs in cost savings and add to earnings from 2011.

Sources familiar with talks earlier confirmed the widely-expected deal.

Julius Baer, which recently build its war chest by listing its U.S. asset management arm Artio, has said it is on the lookout for acquisitions with Europe its key strategic market. Ranked after UBS (UBSN.VX) and Credit Suisse (CSGN.VX) as the third biggest wealth manager in Switzerland, Julius Baer is also seeking to build Asia as a second major market.

With the deal, expected to be closed early in 2010, Julius Baer said it will have 160 billion Swiss francs under management.

ING, which is selling off its private banking business outside of its home Benelux market, said the deal will deliver 150 million euros of profit and free up 250 million euros of capital.

ASIA SALE WEEKS AWAY

The sale of the Swiss assets came more than a month after most bids for the private banking units went in on September 3. The sale of the Asian assets could take more time because of regulatory issues, sources said.

"The Asian sale is a few weeks away," said one of the sources, adding regulatory approvals from the Monetary Authority of Singapore, the city-state's central bank, could take time free credit report and score.

HSBC is seen as a front-runner for these assets, while Singapore's DBS Group (DBSM.SI) had also bid for the Asian assets, sources have said.

"This signals that the consolidation phase has just begun in the industry and we are of the opinion that going forward we will see many such deals coming through in the Asia Pacific market," said Ravi Nawal, a senior analyst for wealth management at consultant Celent.

HSBC's CEO of global private banking Chris Meares told the Reuters Wealth Management Summit the bank has looked at ING assets and described the proposed sale by the Dutch bank as a rare opportunity in Asia.

The sale process of the private banking units is part of ING's restructuring drive to sell 6-8 billion euros in assets and exit 10 of the 48 countries where it does business.

It is also involved in negotiations with the European Union over its 10 billion euro state aid package from last October and its 22 billion euro asset guarantee program from last January.

Once ING completes the private banking asset sale, it is not clear what its next target for disposal might be. It has already declared some assets sacrosanct, including properties in its core Benelux market and some Indian and Russian investments.

Some analysts are eyeing its 16 percent stake in the Bank of Beijing as a possible target to raise a relatively easy 1.0 billion euros.

($1=1.025 Swiss Franc)

($1=.6806 Euro)

(Additional reporting by Nishant Kumar in Mumbai; Editing by Lincoln Feast and Hans Peters)

Julius Baer to buy ING Swiss private bank