Category Archives: Economies

American banks continue to phase out free checking accounts

Thanks;Maria LaMagna

Published;Jan 23, 2018 12:55 a.m. ET

Bank of America has shut down one of its checking accounts, used by some low-income consumers

Bank of America has eliminated one of its checking accounts.

Bad news for low-income consumers: There’s now one fewer place where you can store your cash for free.

Bank of America BAC, +0.69%has gotten rid of a free checking account called eBanking, The Wall Street Journal reported. More than 45,000 people have signed an online petition protesting its elimination, on

Instead, the account holders will be charged a $12 monthly fee if they don’t have at least a $250 direct deposit that month, or a daily account balance of $1,500 or more. The eBanking accounts debuted in 2010 and offered an affordable alternative to consumers without a lot of cash.

Bank of America, the second-largest U.S. bank by assets behind J.P. Morgan Chase JPM, +1.17% has not allowed customers to open that account since 2013, a bank spokeswoman said. And it was free only if consumers used online services exclusively. Since 2014, it’s offered “SafeBalance,” which costs a flat fee of $4.95 per month and does not allow overdrafts.

Many low-income Americans were already having trouble finding places to keep their money. Approximately 10 million U.S. families don’t use a bank at all. One reason: Monthly maintenance fees triggered by low bank balances, a fear of overdraft fees and a general distrust in banks.

When consumers don’t use a bank, they often end up paying more for individual services that banks provide for free, such as check cashing, said Thaddeus King, an officer of the consumer finance division at Pew Charitable Trusts, a Philadelphia-based nonprofit.

Free checking accounts are rare in areas where low-income consumers need them the most, according to a 2017 analysis by Moebs Services, a firm that researches financial services companies.

Consumers should shop around for low-cost banking options that work for them, said Kimberly Palmer, a credit card and banking expert at the personal finance company NerdWallet.

AmazonAMZN, +2.53%   and Wal-MartWMT, +0.82%   have also created their own financial services programs to cater to customers who don’t use banks. U.S. Bank USB, +1.42%   offers a low-cost checking account. Like Bank of America, it requires a $1,500 minimum balance or monthly direct deposits of $1,000 or more. It also charges $2.50 for out-of-network ATM fees.

Consumers should make sure the institution they choose is insured by the Federal Deposit Insurance Corporation (FDIC), Palmer said. They should also be sure they know in advance how to access their money, whether that’s through an ATM fee reimbursement program, or with a debit card, she said.


Nobel Prize goes to behavioral economics pioneer Richard Thaler

Thanks;Barbara Kollmeyer

Published: Oct 9, 2017 6:09 am ET

Richard Thaler, professor of behavioral science and economics at the University of Chicago Booth School of Business, has won the Nobel Prize in Economic Sciences for 2017. “In total, Richard Thaler’s contributions have built a bridge between the economic and psychological analyses of individual decision-making,” said the Royal Swedish Academy of Sciences, in handing out the prize, according to a press release on Monday. See also Richard Thaler: Here’s the best investing strategy. Thaler is considered one of the founding fathers of behavioral economics. See six books recommended by Thaler.


***Behavioral economics, along with the related sub-field behavioral finance, studies the effects of psychological, social, cognitive, and emotional factors on theeconomic decisions of individuals and institutions and the consequences for market prices, returns, and resource allocation, although not always that narrowly, …

There’s a new way to mine for lithium and it’s right here in the U.S.

Thanks;Claudia Assis

Published: Aug 19, 2017 4:14 p.m. ET

Crater Lake in Oregon, a caldera lake formed after a volcano collapse.

Using trace elements as proxy, Stanford says it is easier to detect lithium in supervolcano lake deposits

Scientists at Stanford University say they have found a new way to detect large deposits of lithium, an essential component of rechargeable batteries powering everything from common household electronics and smartphones to electric vehicles.

Stanford researchers say that lake sediments within supervolcanoes can host lithium-rich clay deposits, which would be an important step toward diversifying the supply of the metal—most lithium found in today’s electronics come from deposits in rock formations in Australia and salt flats in Chile. Moreover, trace elements in such deposits can be used as a proxy for lithium, they say in a study.

“Supervolcanoes” produce massive eruptions and their calderas, formed after the volcano literally blows its roof off, are their most recognizable feature. The huge hole post-eruption often fills with water to form a lake, and Oregon’s Crater Lake is an example.

Over tens of thousands of years, rainfall and hot springs leach out lithium from the volcanic deposits, and the lithium accumulates, along with sediments, in the caldera lake where it becomes concentrated in clay, Stanford said.

The scientists analyzed samples from several calderas, and found a previously unknown correlation between trace elements, such as zirconium and rubidium, and lithium concentrations.

Lithium is a volatile element shifting easily from solid to liquid to vapor, and thus it is hard to measure its concentration. Detecting the trace elements as lithium stand-ins, however, geologists will be able to identify candidate supervolcanoes for lithium deposits “in a much easier way than measuring lithium directly,” Stanford said.

“The trace elements can be used as a proxy for original lithium concentration. For example, greater abundance of easily analyzed rubidium in the bulk deposits indicates more lithium, whereas high concentrations of zirconium indicate less lithium,” it said.

The Stanford study was scheduled to be published Wednesday in the journal Nature Communications and was in part supported by a Defense Department fellowship.

Last week, energy news site wrote about potential lithium constraints, singling out five stock plays for betting on the alkali metal: Albermarle Corp. ALB, +0.43% Canada’s Southern Lithium Corp. SNL, +2.63% Chile’s Sociedad Quimica y Minera de Chile SQM, -0.16% ; the Global X Lithium & Battery Tech ETF LIT, +0.53% and Tesla Inc. TSLA, -1.27%  

The Global X ETF has gained more than 31% so far this year, compared with gains of around 10% for the S&P 500 index SPX, -0.18%

Albemarle earlier this month reported a modest second-quarter earnings beat, saying its lithium sales rose 56% year-on-year and almost all of the gain was in battery-grade lithium.

Analysts at UBS said in a recent note they expect lithium margins at Albemarle to remain above 40% despite an additional $60 million to $70 million in costs from royalty and community payments as well as other expenses.

“Pricing was up 21% in 1Q, 31% in 2Q and the debate continues on how long the industry can maintain that pace,” the UBS analysts said.

The answer, at least as far as electric vehicles are concerned, might be “for a long time.”

Tesla in late July launched its Model 3, an all-electric sedan aimed for the masses, and expects to be able to run its Fremont, Calif., plant at a rate of 500,000 vehicles a year by the end of 2018.

Tesla has talked about adding other commercial and passenger vehicles, including an electric semi truck to be unveiled next month.


People in this Swedish town gather in a ‘Solar Egg’ sauna instead of having town halls

Thanks;Leanna Garfield

Published ; Jun. 21, 2017, 5:41 PM

The Solar Egg by Bigert & Bergström.Jean-Baptiste Béranger

On the western border of Kiruna, Sweden, the state-owned mining company, LKAB, has been extracting iron ore from the Kirunavaara mountains for over a decade. But the long-term mining has caused fissures that are creeping closer to the city center of Kiruna.
Now, LKAB — which also founded the Arctic town in 1900 — is funding Kiruna’s relocation nearly two miles east, so that it can continue mining in the mountains.
Moving an entire town is no easy task and requires lengthy discussions with officials, the mining company, and residents. Local architects from Bigert & Bergström have designed one place where those talks can take place: a golden, egg-shaped sauna. 
Completed in late April, the sauna is a place for locals and officials to unwind and discuss questions and concerns about Kiruna’s relocation, the firm told Business Insider.

Located in Kiruna, Sweden, the Solar Egg is a sauna that’s free for anyone to use.

Visitors can book time in the saun ~>

By Jean-Baptiste Béranger

Its exterior is made of reflective sheets of plexiglass that were painted gold.

By Jean-Baptiste Béranger

The interior walls are made of pine ….

… and the benches from aspen wood. In the center, there’s a wood-powered stove made from iron and stone. The temperature inside can range from 167 to 185 degrees Fahrenheit (75 to 85 degrees Celsius).

Jean-Baptiste Béranger

The space, which fits up to eight people, is meant to serve as a local meeting place to discuss Kiruna’s relocation plan. “The egg shape seeks to symbolize rebirth and new opportunities at the start of Kiruna’s urban transformation,” the architects said.

Jean-Baptiste Béranger

To avoid being swallowed by the mine, Kiruna will need to move nearly two miles east. The Stockholm-based firm White Architects will be in charge of moving the town, where approximately 23,000 people live. Below is a rendering of what the new city center may look like:

Producing 90% of all iron in Europe, Kiruna’s mine has become the world’s largest iron ore extraction site. LKAB is also the biggest energy consumer in Sweden.
“It’s a dystopian choice,” Krister Lindstedt, a partner at White Architects, told The Guardian. “Either the mine must stop digging, creating mass unemployment, or the city has to move – or else face certain destruction. It’s an existential predicament.”Jean-Baptiste Béranger/Source: The Guardian

Later this summer, the Solar Egg will move to Nikkaluokta, a Swedish town about 45 miles west of Kiruna.


How ‘guerilla’ start-ups can make the world a better place

Thanks;  & Word Economic Forum

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REUTERS/Thomas Peter

At the Stockholm Tech Fest this year, Swedish entrepreneur Niklas Zennström issued a rare and refreshing call to implement the UN Sustainable Development Goals (SDGs) in their next startup idea. As founder of Skype, he knows a thing or two about opportunity-spotting.

The UN goals involve complex problems, but when it comes to clever startups, a lot can happen between now and 2030. After all, some of the most exciting ideas in recent decades have come from the “guerilla” startups rather than from the “gorilla” corporations; use of the guerilla’s creativity could help to find solutions to sustainable development problems.

However, it is important to ask: Is Zennström’s call to action just fluff, or is there are a deep enough bench of entrepreneurs with robust ideas? Are there resources to support such startups through different phases of growth?

Historically, keeping the growing body of “social” entrepreneurs nourished has largely fallen to impact investors, foundations, NGOs and a few progressive government agencies. so far, the track record of guerillas has not been stellar; far too often it is the same handful of examples that make the rounds. This is a field that, while not starved for people or ideas, is in need of fresh sources of nourishment. Getting big “gorilla” corporations to work with the “guerilla” startups could provide this nourishment.

Findings from our Inclusion, Inc. research initiative suggest that large corporations are well-placed to unblock startups’ path to wider impact.


How do we find ideas?

There is a growing pool of budding social entrepreneurs; the Skoll World Forumevent alone offers an encouraging and uplifting glimpse of the many guerillas in our midst. We are experiencing a surge in interest and ideas on university campuses. At UC Berkeley, the Blum Center has highlighted examples of businesses and people already helping to fulfil the goals.

Closer to home, The Fletcher School’s collaboration with the One Acre Fund’s D-Prize draws numerous contestants with ideas for social enterprises that take on “poverty solutions”; in recent years, we have funded a startup that used bus networks to distribute solar lamps to far-flung communities in Burkina Faso; a venture finding sponsors for girls’ high school education; and a ground transportation brokerage to serve as “the connective tissue” between smallholder farmers and transporters.

A second piece of good news is that capital is ready to be mobilised. A 2014 study by J.P. Morgan and the Global Impact Investing Network (GIIN) identified $46bn in impact investments under management, with annual funding commitments estimated to increase by 19% in 2014. Sir Ronald Cohen, chair of the Global Social Impact Investment Taskforce, believes the impact investing market can grow to match the “$3tn of venture capital and private equity.”

According to Judith Rodin and Margot Brandenburg of the Rockefeller Foundation: “Aspirational estimates suggest that impact investments could one day represent 1% of professionally managed global assets, channeling up to hundreds of billions of dollars towards solutions that can address some of our biggest problems, from poor health to climate change.”

What are the bottlenecks?

So, why does all this good news not translate into more meaningful outcomes? Two bottlenecks are worth highlighting. The first is what a Monitor and Acumen study calls the “pioneer gap”. Their 2012 study, From Blueprint to Scale, observes that pioneer firms are starved of capital and support at very early stages in their development.

The second choke point occurs in the phase of actually getting to scale. A second report, Beyond the Pioneer, identifies a chain of barriers to scale, ranging from those within the firm and the industry to those in the domain of public goods and the government.

These bottlenecks represent different forms of market failures. An approach to the first of them involves “de-risking” early stage social ventures. However, a key source of risk is the chain of barriers to scale in later stages. If we can make meaningful advances on lowering the barriers, it helps in de-risking and also supports early-stage startup development.

Given the breadth of the barriers to scale, impact investors, NGOs and foundations would find it challenging to facilitate end-to-end solutions. Apart from funding and convening, such organisations have few other levers. Large corporations, on the other hand, can tackle business model and managerial issues within the firm and help boost negotiating power within the value chain or the public sector.

The biggest questions, of course, have to do with whether the gorilla corporations can ever be organisationally and culturally compatible with the startups. Given the potential for value creation these gaps are worth taking on.

The Monitor and Acumen study lists potential barriers: “firm level” barriers, which include weak business models, propositions to customers/producers, leadership and managerial and technical talent and a lack of capital.

Eye Mitra, launched in 2013, had trained over 1,000 young entrepreneurs and reached 150,000 people by the end of 2015. The business helps individuals to set up eye care provider businesses in rural communities using low-cost products.

According to a study by Dalberg Global Development Advisors [pdf], the programme added $4m a year in impact across the six districts surveyed; with Essilor’s scaling resources, Eye Mitra could represent the potential to unlock economic impact of $487m a year across India.

“Value chain barriers”

There are also value chain barriers which include lack of suitable labour inputs and financing for bottom-of-the-pyramid (BoP) producers and customers, weak sourcing channels and weak distribution channels involving BoP producers and customers, and weak linkages and support service providers.

Corporations with experience have become adept at finding creative ways around barriers in the value chain. Consider Unilever’s Project Shakti, which enables rural women to become entrepreneurs by distributing goods to hard-to-access rural communities.

Over 70,000 Shakti Entrepreneurs distribute Unilever’s products in more than 165,000 villages, reaching over 4m rural households. At the other end of the value chain, Coca-Cola’s Source Africa initiative facilitates sustainable and financially viable supply chains for key Coca-Cola agricultural ingredients, e.g. mango production in Kenya and Malawi and citrus and pineapple production in Nigeria.

In another sector, when Saint-Gobain builds a plant in a new country, it trains the local workforce in collaboration with YouthBuild. The latter trains disadvantaged youths in professional skills, while Saint-Gobain adds training in construction science.

“Public goods barriers”

Then, there are the public goods barriers: Lack of hard infrastructure; lack of awareness of market-based solutions; lack of information, industry knowhow and standards.

Olam offers a good illustration of a company’s deep involvement in a nation’s hard infrastructure. Olam jointly owns Owendo, a port in Gabon and is a key partner in the country’s special economic zone. On the “soft” public goods front, Janssen, a unit of J&J, works with multiple stakeholders to increase access to medicines and has formed the Janssen Neglected Disease Task Force to advocate for legislation to support new research into treatments for neglected diseases. It also coordinates a consortium to support HIV patients and their caretakers in managing the disease.

Fourth and finally, there are the government barriers: inhibitory laws, regulations and procedures; inhibitory taxes and subsidies; adverse interventions by politicians or officials.

MasterCard and its growing collaboration with the Association for Financial Inclusion to educate public officials about issues relevant to financial inclusion. This includes technical capacity building, developing national-level public-private engagement strategies, research and best practices to inform policymaking and exposing officials to innovative products, business models and approaches.

Combining global reach with entrepreneurial creativity

Perhaps the best mechanism for bringing gorilla and guerilla together is through a corporate venture or impact investing fund. Consider Unilever Ventures as an example. It has invested in a range of enterprises, including ones that focus on water management as part of its “sustainable living” portfolio, e.g. Recyclebank, a social platform that creates incentives for people to take environmentally responsible actions, WaterSmart, that develops tools for water utilities to help customers save water and money or Aquasana, Voltea and Rayne Water that develop water purification, desalination and filtration technologies.

Gorillas have the global reach and scale but they need the proximity to the problem, local knowledge and the entrepreneurial creativity of the guerillas. Zennström’s call-to-action requires guerillas and gorillas to dance. It is, no doubt, an awkward coupling; but it can – and must – happen for guerilla entrepreneurs to have gorilla impact on the world’s hardest problems.


Traders braced for all-night vigil as Brexit votes counted

THANKS;Harriet Agnew


Traders and brokers across the City of London are bracing themselves for an all-night vigil as the votes are counted in the Brexit referendum.

Senior staff and traders at banks including Citigroup, JPMorgan, Goldman Sachs and Morgan Stanley have been asked to stay overnight in the office while others are working in shifts between the UK market close on Thursday and its reopening on Friday morning.

JPMorgan has booked hotel rooms for its clients in Canary Wharf while Citigroup has organised taxis to make sure key sales and trading employees arrive at the offices before 4am on Friday morning.

The night shift at the banks is mainly being worked by traders in foreign exchange and interest rates markets and senior management.

Online brokers and trading platforms that service retail clients are expecting a flurry of trading activity and firms such as IG Group are CMC Markets are laying on extra staff on Thursday night in anticipation.

“We have got an extra 30-40 people staggered across the night in London,” said Grant Foley, chief financial officer at CMC Markets. “We have paid for people to have hotel rooms near the offices and we will be ordering in food to keep them sustained.”

Central Bankers including the Federal Reserve chair Janet Yellen and the Bank of England governor Mark Carney have warned that a vote for Brexit could upset global markets, while George Soros, the billionaire hedge fund manager who made a fortune betting against sterling in 1992, said on Tuesday that a vote for Brexit risks a Black Friday in the currency markets.

Several hedge fund managers said they planned to leave the office as usual on Thursday evening but expected an early start on Friday.

“We anticipate it being a volatile day on Friday,” said David Harding, founder of quantitative asset manager Winton Capital Management and joint treasurer of the Britain Stronger in Europe campaign. “One way or another, the markets will move quite a lot, which will translate into quite a nervy day.”

Hedge fund managers are largely shying away from making big bets on the referendum outcome, following a period of lacklustre performance for the industry. Many of them believe that the risk/reward profile of trading around Remain is unattractive after the pound made its biggest gains in nearly eight years and stock markets rallied this week as polls began to swing back to the status quo.

What the City stands to lose and gain from Brexit

Sectors such as foreign exchange trading have boomed during EU years

“The upside now that we have rallied so much is fairly limited,” said a portfolio manager at one of London’s largest hedge funds. “The downside is enormous. It is almost impossible to go all in. I am positioned quite neutrally because I am really scared about the surprise if there’s a Brexit.”

“We’re all suffering from Brexhaustion,” said Jim Mellon, the Isle of Man-based financier who gave £100,000 to the Leave. EU campaign. He has structured an options strangle, a type of derivatives strategy that takes a view on sterling. Mr Mellon is betting that if there’s a Brexit, sterling could fall down to $1.32 and if the Bremain camp wins it could rise to $1.50. He is also positioned for a decrease in sterling volatility: “I think volatility in sterling will collapse either way after Friday; I don’t think there will be Soros-like destruction.”

Goldman Sachs’ private bank has told clients that the desk will be staffed all of Thursday night if they wish to trade. Both Goldman and JPMorgan are among banks warning clients that parts of the market may become illiquid and it could be difficult to execute some trades on Friday.

Parties are taking place across the City on Thursday evening as the results begin to roll in from midnight onwards. While the overall picture could be clear by 3.30am, the official result is not expected until around breakfast time on Friday. Businessman Arron Banks’ grass roots movement is throwing a party at the altitude bar at Millbank.

Brokers including CMC, IG and PhillipCapital UK have increased the margin requirements that clients are required to put up to trade, in order to protect clients against any extreme market movements. Many of them suffered massive losses in January 2015 after the Swiss National Bank unexpectedly scrapped a cap on its currency that had held it down against the euro.



Action Plan on the integration of third country nationals


Published;Brussels, 7.6.2016 /COM(2016) 377 final

Chinese hedge funds scramble as regulators clean up ‘Wild East’


China’s hedge fund industry has been thrown into disarray as managers rush to comply with stringent new rules, introduced overnight, that could see over half the industry shut down by August, fund managers and lawyers told Reuters.

Domestic and foreign hedge fund managers are scrambling to secure legal advice, hire qualified staff and launch new products in a bid to save their licenses after the regulator threatened last month to close down around 17,000 “phantom” fund managers as part of a broader government financial sector crackdown.

The new hedge fund rules aim to shrink a vast industry insiders describe as a “Wild East” rife with fraud.

But many in the industry say the measures are heavy-handed and rushed, threatening to suffocate much-needed domestic and foreign institutional investment as the country faces its slowest rate of growth in more than two decades.

“It is very difficult for the regulators to police such a vast landscape so now they’re trying to shake this number out,” said Effie Vasilopoulos, a partner at law firm Sidley Austin in Hong Kong.

“This is a sensible thing to do, but the risk is that in trying to recalibrate, the pendulum is swinging too far in the opposite direction.”

Hedge funds have attracted increased scrutiny in China amid fears the country’s relaxed registration-based licensing regime has allowed fraudsters and shadow-lenders to proliferate.

Private fund registrations more than doubled in 2015 to reach more than 25,000, according to data from the Asset Management Association of China (AMAC), a self-regulatory body that oversees private funds. Roughly two-thirds of these are “phantom” fund managers that have not launched a product, and may be using the registration for illegal fund-raising or lending, said AMAC.

While many “phantom” funds may have done nothing illegal, the AMAC license, a requirement for operating a hedge fund, has often been used as cover for fraudulent peer-to-peer lending platforms, industry insiders say. Some fraudsters also raise money upfront for a bogus fund that is never launched.


Last month on the eve of Chinese New Year, a week-long holiday in mainland China, AMAC said it was raising the bar with new risk management and qualification requirements.

There would also be penalties for tardy information disclosures and an obligation for new fund managers to obtain a legal opinion endorsing their operations – all with immediate effect.

The association said it would revoke the licenses of fund managers if they failed to launch products by two separate deadlines in May and August, sparking a race to save registrations, according to market participants.

“The new rules are going in the right direction, but the problem is that they were published just before Chinese New Year with immediate effect and short compliance deadlines,” said Ying White, a partner at law firm Clifford Chance’s China office.

“So there hasn’t been much time to get to grips with them, and there is still a lot of ambiguity in the rules.”

Although the rules spell boom times for lawyers, who can charge up to 100,000 yuan ($15,000) for a complex legal opinion, market insiders said they expect as many as 12,000 fund managers to de-register or be shut down.

Several managers listed by AMAC as having no products told Reuters they were working on new products in a bid to save the registration.

“We are aware of the new regulations,” said an employee at Shandong Province-based Ocean Brightstone Industrial Fund Management, who did not give their name. “We have new private fund products that we are currently working on.”


A new requirement for senior executives to have fund management qualifications and experience is also proving tricky, because there is not enough talent to go round, said one Shanghai-based banker who helps set up hedge funds.

“In the short-term it’s really annoying for my clients, but in the long-term it’s a good thing for the industry,” she said.

An employee at a small Shanghai hedge fund said the qualification requirement was causing headaches.

“At the moment we only have one person who has taken the test, but now one of my colleagues is rushing to take it,” she said. “Thankfully the test is not hard.”

AMAC did not respond to requests for comment, but one person familiar with its thinking said staff felt the association had approved too many funds and did not have proper oversight of the market.

This person confirmed AMAC, a state-run body supervised by China’s securities regulator and civil affairs ministry, had slowed approvals and was considering further restrictions.

Although the rules are aimed at domestic funds, they are also hitting foreign fund managers that have set-up onshore entities through special cross-border investment schemes, as well as foreign firms hoping to partner up with domestic funds.

One executive at a multi-billion dollar overseas hedge fund looking to set up such an arrangement said his firm had had to delay its launch plans following the rule changes.

“While attacking illegal entities, the restrictions are also impacting those funds that want to do real business,” said Elva Yu, a partner at Llinks Law Offices in Shanghai.

(Reporting by Michelle Price in Hong Kong and Engen Tham in Shanghai; additional reporting by Tris Pan in Hong Kong; Editing by Alex Richardson)





World Bank Group Headquarters Attains EDGE Assess Certification for Gender Equality

Thanks;The World Bank,IBRD•IDR

Published;February 11, 2016

WASHINGTON/GENEVA, February 11, 2016 – The World Bank Group headquarters in Washington, DC, has earned the first level of EDGE certification, EDGE Assess, taking an important step in achieving gender equality. The World Bank Group headquarters is the first location of an international financial institution to attain this certification.

Economic Dividends for Gender Equality (EDGE) is the leading global standard for gender equality in the workplace. Certification requires a rigorous external assessment of five key areas: equal pay for equivalent work; recruitment and promotion; leadership development training and mentoring; flexible working arrangements; and company culture. EDGE Assess recognizes that the World Bank Group headquarters has made a public commitment to strong gender balance and has identified the parameters of a concrete action plan to further its progress.

“Equal opportunity for women and men is a fundamental principle of human dignity and development. Promoting gender equality is both the right thing to do and critical to ending extreme poverty and boosting shared prosperity,” said Jim Yong Kim, President of the World Bank Group. “EDGE certification is a key part of our strategy to make gender equality a core value of our operations and our work with developing countries. It provides a vital external benchmark for measuring our progress and is one more way we’re working to be the employer of choice in the development community.”

The World Bank Group headquarters began the process of achieving EDGE certification in March 2015. The organization expects to achieve certification of its country offices in the near future.

The World Bank Group is one of the world’s most diverse institutions, with staff drawn from more than 170 nationalities and a global footprint of 120-plus offices. Inclusion of people from different demographics, backgrounds and affinities, is a strategic priority, and the Bank Group has set ambitious targets for bolstering the recruitment and development of diverse talent. EDGE certification is a critical part of this effort and follows the release in December of the new World Bank Group Gender Equality Strategy, 2016-2023.

Launched at the World Economic Forum in 2011, EDGE has established itself as the global standard for gender equality in the workplace, ensuring certified organizations have a structured, systematic approach to measure, track, and close workplace gender gaps. The EDGE certification methodology has been extensively tested in more than 100 companies across more than 30 countries and five continents.

Reflecting on the Bank Group’s certification, Aniela Unguresan, Co-Founder of the EDGE Certified Foundation said, “Leading organizations around the world are investing in gender equality because it is good for business. The certification of the World Bank Group sends a powerful signal that gender equality is one of the key drivers to achieve sustainable economic growth and prosperity across countries and industries.”

About the World Bank Group

The World Bank Group plays a key role in the global effort to end extreme poverty and boost shared prosperity. It consists of five institutions: the World Bank, including the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA); the International Finance Corp. (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Working together in more than 100 countries, these institutions provide financing, advice, and other solutions that enable countries to address the most urgent challenges of development. For more information, please visit,, and

About EDGE Certification

EDGE is the leading global assessment methodology and business certification standard for gender equality. The EDGE assessment methodology was developed by the EDGE Certified Foundation and launched at the World Economic Forum in 2011. EDGE Certification has been designed to help companies not only create an optimal workplace for women and men, but also benefit from it. EDGE stands for Economic Dividends for Gender Equality and is distinguished by its rigor and focus on business impact. The methodology uses a business rather than theoretical approach that incorporates benchmarking, metrics, and accountability into the process. It assesses policies, practices, and numbers across five different areas of analysis: equal pay for equivalent work, recruitment and promotion, leadership development training and mentoring, flexible working, and company culture. EDGE Certification has received the endorsement of business, government, and academic leaders from around the world. For more information, visit



Thanks;The Economist
Brazil’s crisis

A former star of the emerging world faces a lost decade

 Jan 2nd 2016  | RIO DE JANEIRO | From the print edition

THE longest recession in a century; the biggest bribery scandal in history; the most unpopular leader in living memory. These are not the sort of records Brazil was hoping to set in 2016, the year in which Rio de Janeiro hosts South America’s first-ever Olympic games. When the games were awarded to Brazil in 2009 Luiz Inácio Lula da Silva, then president and in his pomp, pointed proudly to the ease with which a booming Brazil had weathered the global financial crisis. Now Lula’s handpicked successor, Dilma Rousseff, who began her second term in January 2015, presides over an unprecedented roster of calamities.

By the end of 2016 Brazil’s economy may be 8% smaller than it was in the first quarter of 2014, when it last saw growth; GDP per person could be down by a fifth since its peak in 2010, which is not as bad as the situation in Greece, but not far off. Two ratings agencies have demoted Brazilian debt to junk status. Joaquim Levy, who was appointed as finance minister last January with a mandate to cut the deficit, quit in December. Any country where it is hard to tell the difference between the inflation rate—which has edged into double digits—and the president’s approval rating—currently 12%, having dipped into single figures—has serious problems.

Ms Rousseff’s political woes are as crippling as her economic ones. Thirty-two sitting members of Congress, mostly from the coalition led by her left-wing Workers’ Party (PT), are under investigation for accepting billions of dollars in bribes in exchange for padded contracts with the state-controlled oil-and-gas company, Petrobras. On December 15th the police raided several offices of the Party of the Brazilian Democratic Movement (PMDB), a partner in Ms Rousseff’s coalition led by the vice-president, Michel Temer.

Brazil’s electoral tribunal is investigating whether to annul Ms Rousseff’s re-election in 2014 over dodgy campaign donations. In December members of Congress began debating her impeachment. The proceedings were launched by the speaker of the lower house, Eduardo Cunha (who though part of the PMDB considers himself in opposition) on the grounds that Ms Rousseff tampered with public accounts to hide the true size of the budgetary hole. Some see the impeachment as a way to divert attention from Mr Cunha’s own problems; Brazil’s chief prosecutor wants him stripped of his privileged position so that his role in the Petrobras affair can be investigated more freely. Mr Cunha denies any wrongdoing.

Brazil is no stranger to crises. Following the end of two decades of military rule in 1985, the first directly elected president, Fernando Collor, was impeached in 1992. After a “lost decade” of stagnation and hyperinflation ended in the mid-1990s the economy was knocked sideways by the emerging-markets turmoil of 1997-98. In the mid-2000s politics was beset by the scandal of a bribes-for-votes scheme known as the mensalão (“big monthly”, for the size and schedule of the payments), which eventually saw Lula’s chief of staff jailed in 2013.

Yet rarely, if ever, have shocks both external and domestic, political and economic, conspired as they do today. During the original lost decade global conditions were relatively benign; in the crisis of the late 1990s the tough measures to quell inflation and revive growth taken after Mr Collor’s departure stood Brazil in moderately good stead; when scandal rocked the 2000s commodity markets were booming.

A sad convergence

Now prices of Brazilian commodities such as oil, iron ore and soya have slumped: a Brazilian commodities index compiled by Credit Suisse, a bank, has fallen by 41% since its peak in 2011. The commodities bust has hit economies around the world, but Brazil has fared particularly badly, with its structural weaknesses—poor productivity and unaffordable, misdirected public spending—exacerbating the damage. Regardless of what she may or may not have done with respect to the impeachment charge, Ms Rousseff’s cardinal sin is her failure to have confronted these problems in her previous term, when she had some political room for manoeuvre. Instead, that term was marked by loose fiscal and monetary policies, incessant microeconomic meddling and fickle policymaking that bloated the budget, stoked inflation and sapped confidence.

Poor though her record has been, some of these problems have deeper roots in what is in some ways a great achievement: the federal constitution of 1988, which enshrined the transition from military to democratic rule. This 70,000-word doorstop of a document crams in as many social, political and economic rights as its drafters could dream up, some of them highly specific: a 44-hour working week; a retirement age of 65 for men and 60 for women. The “purchasing power” of benefits “shall be preserved”, it proclaims, creating a powerful ratchet on public spending.20160102_FBC854

Since the constitution’s enactment, federal outlays have nearly doubled to 18% of GDP; total public spending is over 40%. Some 90% of the federal budget is ring-fenced either by the constitution or by legislation. Constitutionally protected pensions alone now swallow 11.6% of GDP, a higher proportion than in Japan, whose citizens are a great deal older. By 2014 the government was running a primary deficit (ie, before interest payments) of 32.5 billion reais ($13.9 billion) (see chart).

Mr Levy tried to live up to the nickname he had earned during an earlier stint as a treasury official—“Scissorhands”—with record-breaking cuts of 70 billion reais from discretionary spending. But Mansueto Almeida, a public-finance expert, points out that this work was more than countered by constitutionally mandated spending increases; government expenditure as a share of output rose in 2015. On top of that, a new scrupulousness in government accounting surely not unrelated to the impeachment proceedings has seen 57 billion reais in unpaid bills from years past newly recognised by the treasury.

Nor could Mr Levy easily fill the fiscal hole by raising taxes. Taxes already consume 36% of GDP, up from a quarter in 1991. And the recession has hit tax receipts hard. On December 18th, days after Fitch, a rating agency, followed the lead of Standard & Poor’s in downgrading Brazilian debt, Mr Levy threw in the towel. His job went to Nelson Barbosa, previously the planning minister, who insists he is committed to following the same policies. But before his elevation Mr Barbosa made no secret of favouring a more gradual fiscal adjustment—for example, a primary surplus of 0.5% of GDP in 2016, against Mr Levy’s preferred 0.7% (and an original promise of 2% a year ago). The real and the São Paulo stockmarket tumbled on news of his appointment.

Analysts at Barclays, a bank, expect debt to reach 93% of GDP by 2019; among big emerging markets only Ukraine and Hungary are more indebted. The figure may still seem on the safe side compared with 197% in Greece or 246% in Japan. But those are rich countries; Brazil is not. As a proportion of its wealth Brazil’s public debt is higher than that of Japan and nearly twice that of Greece.

Unable to increase taxes, Ms Rousseff’s government may prefer something even more troubling to investors and consumers alike: inflation. Faced with the inflationary pressure that has come with the devalued real, the Central Bank has held its nerve, increasing its benchmark rate by three percentage points since October 2014 and keeping it at 14.25% since July in the face of the recession. But despite this juicy rate the real continues to depreciate.

There is a worry that the bank may be unable to raise rates further for fear of making public debt unmanageable—what is known as “fiscal dominance”. This year the treasury spent around 7% of GDP servicing public debt. What is more, raising rates may have the perverse effect of stoking inflation rather than quenching it; an increasing risk of default as borrowing costs grow is likely to see investors dumping government bonds, provoking further currency depreciation.

A handful of economists, including Monica de Bolle of the Peterson Institute for International Economics, believe that Brazil is on the verge of fiscal dominance. And once interest rates no longer have a hold on inflation, she says, it can quickly spiral out of control. Forecasts by Credit Suisse warn that prices could be rising by 17% in 2017. Three-quarters of government spending remains linked to the price level, embedding past inflation in future prices. That said, the economy as a whole is much less indexed than it was in the hyperinflationary early 1990s. That leaves the government a bit more time, thinks Marcos Lisboa of Insper, a university in São Paulo. But not much more: perhaps a year or two.

Despite this pressing economic need for speed there seems to be no political capacity for it. Members of Congress are consumed by Ms Rousseff’s impeachment. By February they must decide whether to send her case to the Senate, which would require the votes of three-fifths of the 513 deputies in the lower house. To fend off such a decision Ms Rousseff is rallying her left-wing, anti-austerity base.

Gently doesn’t always do it

These efforts are meeting with some success: in December pro-government rallies drew more people than anti-government ones for the first time all year. It looks unlikely that the impeachment will indeed move to the Senate (which would trigger a further six months of turmoil). But this hardly provides a political climate conducive to belt-tightening, let alone to the amendment of the constitution which Mr Barbosa has said is needed to deal with the ratchet effect on benefits. Fiscal adjustment is anathema to the government workers and union members who are Ms Rousseff’s core supporters.

Like the country’s economic problems, its political ones, while specific to today’s particular scandals and manoeuvring, can be traced to the transition of the 1980s. History reveals a consistent tendency towards negotiated consensus at Brazil’s political watersheds; it can be seen in the war- and regicide-free independence declared in 1822, the military coup of 1964, which was mild compared with the blood-soaked affairs in Chile and Argentina, and the transition that created the new constitution. One aspect of this often admirable trait is a resistance to purging. The mid-1980s saw a lot of institutions—the federal police, the public prosecutor’s office, the judiciary, assorted regulators—overhauled or created afresh. But many of the old regime kept their jobs in the civil service and elsewhere. The transition was thus bound to be a generational affair.


So it is now proving, with a retiring old guard being replaced by fresh blood often educated abroad. In 2013 the average judge was 45 years old, meaning he entered university in a democratic Brazil. Civil servants are getting younger and better qualified, says Gleisson Rubin, who heads the National School of Public Administration. More than a quarter now boast a postgraduate degree, up from a tenth in 2002. Sérgio Moro, the crusading 43-year-old federal judge who oversees the Petrobras investigations, and Deltan Dallagnol, the case’s 35-year-old lead prosecutor, are the most famous faces of this new generation.

Unfortunately, this rejuvenation does not extend to the institution most in need of it: Congress. Its younger faces typically have family ties to the old guard. “Party politics is a market for lemons,” says Fernando Haddad, the fresh-faced PT mayor of São Paulo and a rare exception to the dynastic rule, nodding to George Akerlof’s classic analysis of adverse selection in the market for used cars: it attracts the venal and repels the honest. Consultants who have advised consecutive Congresses agree that each one is feebler than the last.

Brazilians have noticed the decline, and are transferring their hopes accordingly. “Judges and prosecutors are becoming more legitimate representatives of the Brazilian people than politicians,” says Norman Gall of the Braudel Institute, a think-tank in São Paulo. Everyone wants a selfie with Mr Moro and, disturbingly, nearly half of Brazilians think that military intervention is justified to combat corruption, according to a recent poll. Barely one in five trusts legislators; just 29% identify with a political party.

Monthly, oily, deeply

That last fact is perhaps particularly impressive given that they have so many parties to choose from. Keen to promote pluralism the constitution’s framers set no national cut-off below which a party’s votes would not count. It is possible to get into Congress with less than 1% of the vote: in principle, it could be done with 0.02%. As a result the number of parties has grown from a dozen in 1990 to 28 today. The three biggest—the PT, the PMDB and the opposition centre-right Party of Brazilian Social Democracy (PSDB)—together account for just 182 of 513 seats in the lower house and 42 out of 81 senators.

One of the causes of the mensalão scandal was corruption that provided Lula’s government with a way to get the votes it needed from the disparate small parties. The petrolão (“big oily”, as the Petrobras affair is widely known) apparently shared a similar aim. Such ruses may have helped PT governments pass some good laws, such as an extension of the successful Bolsa Família (family fund) cash-transfer programme. But the party was not able to do all that it had said it would; potentially helpful reforms in which it was less invested fell by the wayside. Raphael Di Cunto of Pinheiro Neto, a big law firm in São Paulo, points to many antiquated statutes in need of an update, such as the Mussolini-inspired labour code (from 1943) and laws governing foreign investments (1962) and capital markets (1974).


A Congress in which dysfunction feeds corruption which feeds further dysfunction is not one likely to take the hard decisions that the economy needs. But this is the Congress Brazil has: though there will be local elections in October 2016, congressional elections, like the next presidential poll, are not due until 2018. Can Brazil’s public finances hold out that long?

Many prominent economists think they just about can. They forecast a “muddling-through” in which Ms Rousseff holds on to her job, Congress passes a few modest spending cuts and tax rises, including a financial-transactions levy, the Central Bank continues to fight inflation, the cheap real boosts exports and investors don’t panic. After three years of this, the theory goes, an electorate fed up with stagnation and sleaze will give the PSDB a clear mandate for change. Ms Rousseff narrowly defeated the party’s candidate in 2014 by deriding his calls for prudence as heartless “neoliberalism”, only to propose a similar agenda (through gritted teeth) immediately after winning. If proposed by a PSDB in power that actually believed in them, such measures might receive cross-party support—though given the PSDB’s spiteful unwillingness to support Mr Levy’s measures in 2015 this would not be without irony.

Such a scenario is possible. Figures for the third quarter of 2015 show exports picking up. Price rises could slow down as steep increases in government-controlled prices for petrol and electricity put in place in 2015 run their course. Politicians and policymakers are keenly aware that Brazilians are less tolerant of inflation than in the 1980s and 1990s, when rates of 10% would have seemed mild.

Investors are staying put, at least in aggregate. Yield-hungry asset managers are taking the place of pension and mutual funds that left in anticipation of Brazil’s inevitable demotion to junk status. The real has fallen 31% since the start of 2015 and the stockmarket is down by 12.4%; but though battered they are not knocked flat. The banking system is well capitalised and, observers agree, diligently monitored by the Central Bank. The $250 billion in foreign-denominated debt racked up by Brazilian companies during the commodity-price-fuelled binge has ballooned in local-currency terms and remains a worry. But much of it is hedged through the firms’ own dollar revenues or with swaps—though settling some of those swaps has cost the government, which sold them, some 2% of GDP this year.


The sardonic Mr Lisboa observes with uncharacteristic optimism that “at last people are talking seriously about Brazil’s structural problems”. Fiscal dominance has left arcane discussions among economic theorists and burst onto newspaper columns. Mr Barbosa is openly discussing pension reform and the constitutional change that would have to go with it. In October the PMDB, which tends to lag behind public opinion more than to lead it, published a manifestothat talked about privatising state businesses and raising the retirement age. Even the famously stubborn Ms Rousseff has begun to listen rather than to hector, says a foreign economic dignitary who met her recently.

But the fact that muddling through may be possible does not mean it is assured. It hinges on the hope that politicians come to their senses more quickly than they have done in the past (witness the lost decade begun in the 1980s). It also assumes that Brazil’s penchant for consensus will hold its people back from social unrest on the sort of scale that topples regimes in other countries. The anti-government protests of 2015 were large, drawing up to a million people in a single day. But they were middle-class affairs which took place on sporadic Sundays, causing Ms Rousseff more annoyance than grief. As wages sag and unemployment rises, though, tempers could flare. If they do there will be every chance of a facile populist response that does even deeper economic damage.

Should Ms Rousseff be booted out—through impeachment, annulment of the election or coerced resignation (none of which looks likely just now)—chaos would surely ensue. Her core supporters may be less numerous than they once were, but she has many more than Mr Collor had in 1992. They would close ranks against the “coup-mongers”.

The strength of Brazil’s institutions suggests something shy of the failed populist experiments of some South American neighbours. And the fact that voters in Argentina and Venezuela rebuffed that populism in the past few months has not escaped the notice of Brazil’s politicians. But every month of dithering and every new petrolão revelation chips away at Brazil’s prospects. The 2010s are already certain to be another lost decade; GDP per person won’t rebound for years to come.

It will be a long time before a president can match the pride with which Lula showed off his Olympic trophy. But if Brazil’s politicians get their act together, the 2020s could be cheerier. Alas, if they do not, things will get a great deal worse.