Business & Financial News

L'Oreal, the world of cosmetics, said Monday the end of the term of a director of Liliane Bettencourt, replaced the board by one of his grand-son, John Victor Meyers.

The latter, aged 25, is a member of the supervisory board of the family holding company Tethys since January 2011.

Liliane Bettencourt, heiress to the group, is 89 years old. The candidacy of his grand-son will be submitted to L'Oréal shareholders at the next general meeting on 17 April.

European stock markets have reduced their initial losses Thursday mid-morning, investors hope that Greece renounces its proposed referendum on the European aid plan for the country while Angela Merkel and Nicolas Sarkozy launched an ultimatum Wednesday night Athens ordered to implement the overall European level or risk not receiving any help.

At 10:31, the CAC 40 index yields 0.12% after briefly gained 0.3%. The benchmark index of the Paris lost up to 2.6% in early trade.

The London Stock Exchange gained 0.05%, while Frankfurt was down 0.25% and pan-European Euro Stoxx 50 index drops 0.43%.

A year ago the head of state has big plans for the G20 in Cannes, hoping to legitimize its position as world leader and presidential candidate. But on the eve of the summit, Nicolas Sarkozy saw his hopes dashed. The European Council President Herman Van Rompuy, Nicolas Sarkozy and Angela Merkel in Brussels.

It must have been a great moment for France. And especially to Nicolas Sarkozy. Arriving to obtain the presidency of the G20 and G8 in 2011, with the help of his friend Gordon Brown, the head of state hoped to do two things at once: to become the great president of the International that he has always dreamed of being, and credibility for election in 2012. "In a way, it is served by the crisis," he said in November 2010, so do not hide its ambitions.At the time the French president harbored grandiose plans for the world economy: reforming the international monetary system (set the dual problem of the dollar and the yuan), limit the volatility of commodity prices, agricultural, or modernize the governance world. It will not happen, or not much. Already because of Nicolas Sarkozy's ambitions were too ambitious … But also because since November 2010, things have changed for France and its President.

Europe is no longer inspires confidence

It seems a long time since Germany and France landed at the G20 with the design, a bit peremptory, to moralize the financial world. At the time – at the G20 London in particular – the plight of the markets appeared to be the cause of all evil in the world economy.Today, on the verge of drowning, Europe assumed the costume of the responsibility for the crisis, wasting less time than it takes to say its capital credibility.

And it is likely that the G20 is a great opportunity for other states to remind him. All actors have to say good conscious "support and rebalance the global economy face significant risk of deterioration," for most, nothing can be done before that Europe treats his own evils. It is for this reason that the Europeans, Nicolas Sarkozy in the lead, have both hastened to find a solution for Greece. Alas, the great promises of the European Union will not be at the rendezvous.

Tuesday, to everyone's surprise, the Greek Prime Minister George Papandreou decided to submit the European Agreement on Greece in the popular referendum and drawing a large question mark over the future of the euro area.

Finance ministers and central bank governors of the G20 agreed Saturday to impose a surcharge mandatory capital up to 2.5% of their capital for systemically important banks, to be set up gradually from 2016.

According to the statement issued after a two-day meeting in Paris, they endorsed the device in the sense proposed by the Financial Stability Board (FSB), ignoring calls from financial wishing a review of it these or additional time for implement.

Overload, which can be between 1% and 2.5%, will apply to all institutions, by their size, would be of overall risk to the financial system in case of failure.

Would be affected banks like Goldman Sachs, HSBC, Deutsche Bank, JPMorgan Chase but also the largest French banks: BNP Paribas, Societe Generale and Credit Agricole.

"Now that we have agreed on the framework for these institutions, we urge the FSC to define how to extend this system without delay to all systemically important financial institutions," we read in the statement.

The aim is that these banks have enough capital to get through the turbulence of markets so that states are not forced to wear to their rescue when the next crisis.

This overload should be finally adopted at the next G20 summit on 3 and 4 November in Cannes, at which the names of the banks concerned will be announced.

It is one of a set of provisions on the financial sector ministers and central bank governors have adopted Saturday.

AGREEMENT "TEST BANKS"

Among these include the use by supervisory authorities in the sector of "common tools" to liquidate banks in trouble, writing "wills" by major banks to facilitate their dismantling in case of difficulties or strengthening the monitoring of such institutions.

The CSF, which coordinates the work on financial regulation for the G20, has already defined the criteria implemented in a systemic overload.He identified 28 banks that could be subject, but a source close to the G20, it was reported that the number will be between 29 and 50.

The CEO of JPMorgan Chase, Jamie Dimon, the device has already denounced as "anti-American", while the banks concerned will apply in addition to the new prudential framework called Basel III will require them to hold capital "hard" to at least 7% of their commitments.

The CSB has received other support from the G20 for his work on the definition of "shadow banking system" to a regulation of it, with a view to prevent risk activities will migrate banks to other parts of the financial sector such as money market funds or special entities.

Regarding the regulation of commodity markets, one of the priorities of the Presidency of the G20, Paris could not succeed in setting limits on positions that investors can hold.

The statement calls for implementation by the end of 2012 recommendations of IOSCO, the umbrella organization for national supervisors of markets, derivative markets of raw materials that do not provide for such limits.

A new week promises to be tense on Wall Street, where investors are worried about a possible erosion of corporate earnings against the backdrop of the debt crisis in Europe and slowing Chinese economy.

The U.S. stock markets fell more than 2% Friday, signing the third quarter of their worst quarterly performance in three years, and some fear that the benefits of big names backed out because the rating is supported by foreign demand.

Past two years, export sales have averaged 30% of the turnover of listed companies in the S & P 500, allowing the results of many of them to exceed the expectations of analysts.

"If the euro falls, it will have a huge negative impact on companies like McDonald's," Judge Todd Schoenberger, LandColt of Trading.

"I do not expect quarterly results very fast", he adds. The ball must begin quarterly publication October 11 with Alcoa.

In addition, many U.S. multinationals have benefited in recent months the relative weakness of the dollar to support exports.But the euro shows a quarterly decline of more than 7% against the greenback, depriving companies of the damper.

Last major undertaking as to have lowered its profit forecast, Ingersoll-Rand fell by over 12% on Wall Street Friday after the announcement.

Of surprises anyway?

While the S & P 500 fell 14.3% in the third quarter, 1,700 billion in value gone up in smoke, a period of disappointing results could accentuate this downtrend, analysts said.

Most of them have lowered their expectations of results.According to Thomson Reuters data, earnings for the third quarter are expected up 13.3% over the same period of 2010, against an expected increase to 17% in early July.

In this context, investors will closely monitor the economic indicators to try to learn more about the state of U.S. growth.

The employment figures, released Friday, will be eagerly awaited, as well as the ISM index of purchasing managers in manufacturing (Monday) and services (Wednesday).

Still, some strategists believe to possible surprises on the forehead of the results, as Natalie Trunow, Calvert Investment Management.

"U.S. multinationals do not necessarily derive all their additional benefits (European market), and China, the statistics point to a slowdown but not a hard landing," said she.

Others point out that the drastic austerity measures that large firms have emerged after the 2008 financial crisis will maintain their accounts afloat.

"From our perspective, U.S. companies have learned to make a profit in this context (difficult)," wants to believe Hank Smith, chief investment officer at Haverford Trust.

The favorite candidate in the primary socialist believes that the rising tax burden is unavoidable. The effort must be "shared", he says. François Hollande at a rally in Rennes on 27 september 2011.

François Hollande, the favorite in the polls primary PS, said Tuesday that it would "necessarily" increase the tax burden on Tuesday at a meeting in Rennes, defending his plan to re-create 60,000 jobs in education evening mobilization teacher. "There will necessarily be a rising tax burden," said the elected Corrèze to 2,000 people, noting that taxes, fees and expenses had increased by Nicolas Sarkozy (44% against 43% of GDP according to him) while the head of state promised to reduce the "four points" in 2007.

"If this effort is not shared, there will be no recovery," he added.He lampooned the tax on soft drinks recently proposed by the government: "Why sugar? Why not salt? And the salt tax would be reinvented." The evening of a day of action in education, Francois Hollande has again defended his plan to re-create 60,000 jobs in education in five years: "I prefer a plan for education (to) a plan for prisons "he said, referring to the recent announcement by the Head of State to create 30,000 prison places.

Yves Saint Laurent (PPR) has made a firm denial Monday to rumors of his replacement designer Stefano Pilati.

"Yves Saint Laurent denies and considers unsubstantiated rumors about the current direction of the creation of the house.Stefano Pilati continues to dedicate his talent and energy to Yves Saint Laurent and the parade to come, "the fashion house said in a statement.

In an article on fashion ready-to-wear in Milan, the Herald Tribune Monday spoke of the arrival of Raf Simons, current artistic director of Jil Sander, the head of the establishment of the French label.

Rumors continue to go well on the eve of Paris Fashion Week ready-to-wear spring-summer 2012.

Marc Jacobs (Louis Vuitton, LVMH) seems expected to succeed John Galliano at Dior, which has so far not confirmed.

François Fillon has aroused the wrath of unions by proposing to move towards a common retirement age between the two countries, without elaborating. But the French and German are not based on the same criteria.

The German model inspires François Fillon. In a speech on the "convergence" tax, the prime minister even tried to bring the debate in the field of pensions. But considering that it was necessary to "move towards a common retirement age" with the neighbor across the Rhine, it has sparked an outcry, just months after the entry into force of reform swept-fought.Since then, unions, employers' policies and comment on his remarks, not always understand what the Prime Minister referred.

If François Fillon spoke of the legal age …

His little phrase is especially feared the unions and the opposition a further decline in the minimum legal age of retirement, ie the age at which an insured can collect his pension. And it has nothing to do with the threshold of 65 or 67 years in force in Germany.It is "easy to talk about such retirement to 67 years in Germany and to face the French 60 years, omitting the one hand, remember that this is for Germany the retirement age full-rate and for France the legal age of cessation of activity, "lamented last year already economist Julia Cage, in a study of the Jean Jaures.

For the first, from 60 to 62 years by 2018 with the last pension reform, is the legal age of retirement. But for a full pension, you also claim a number of years of contributions, 40 and 3 months now. If it did not, it undergoes a discount at least 65 years of waiting-line gradually lengthened to 67 years in 2023 – the legal age which guarantees the full rate, regardless of the contribution period.The French system is indeed one of the few to impose a double bind, age and minimum insurance.

In Germany, for against, it is primarily the first which is taken into account. Employees receive their full pension at age 65 on the sole condition of having contributed five years. From 2012, this threshold will be gradually decreased by one, then two months per year to reach 67 in 2029, according to the reform adopted in 2007.

If he spoke of the age at full rate …

And so Francois Fillon was actually referring to a convergence of ages starting at the full rate, then the situations in France and Germany do not differ that much. In Germany, it will reach 67 years that by 2028. In France, it will be 67 years from 1 January 2023, for the generations born after 1956.The difference is that the French will have all their quarters from before, while the Germans, with some exceptions, can not do with discount.

The German decision to delay the age of two years starting at the full rate is also one reason: the German population is aging while the birthrate falls. The fertility rate is only 1.3 children per woman, against 2 in France, where the birthrate is one of the most dynamic in Europe. The passage of 67 years accompanied by an appeal also more massive premium pension and a decrease in the level of pensions. Between 2007 and 2009, the poverty rate in over 65 rose from 10.5 to 12.1%.

In Germany, the decline in the age of retirement has therefore not been smooth.Very hostile to reform, the unions pointed out that in a crisis, extend the service period is most likely to create unemployment. Especially since the "seniors" are often left behind when the job market is scarce. In 2009, their participation rate was only 56.2% across the Rhine. In France it was less than 39%.

The three main French banks have made a spectacular recovery on the stock market Wednesday afternoon, unconfirmed rumors recapitalization that gave a boost to their titles.

As they signed in mid-day the worst stock market performance of European banking sector, BNP Paribas, Credit Agricole and Societe Generale took up to 3:45 p.m., respectively, 1.95%, 0.52% and 0.79% while the European banking index fell by 0.13%.

"We feel that the market is abuzz with rumors and there is nothing really solid.I think the market will come back (back), "said one trader told Reuters.

A spokeswoman for BNP Paribas has denied rumors the new recapitalization.

"In the words of (the president) Michel Pébereau yesterday we currently have no need to be recapitalized," she said, noting that his bank had just signed one of his best performances in history in terms of results .

French banks were attacked in the morning, some operators are worrying about their access to liquidity despite the increase in denials.

The climate has become particularly burdensome for banks in recent weeks hexagonal where announcements of measures to promote the return of market confidence have been ineffective.

The German group Siemens has withdrawn funds early July of Société Générale as a result of under-performance of an investment, but the news was interpreted by some as indicative of the financial health of the bank.

Similarly, the decision by Standard & Poor's to lower the sovereign rating of Italy, although it was expected by the markets, also helped fuel the fears of contagion from the crisis of debt in the euro area.

Moody's Investors Service downgraded Wednesday Societe Generale and Credit Agricole up a notch, and extended monitoring of BNP Paribas, adding that any downgrading of the rating on BNP would probably also limited to one notch.

The rating agency had placed the banks under review with negative implications on June 15, citing their exposure to Greece.

Experts had said that the notes were ripe for a downgrade due to higher borrowing costs in the context of sovereign debt crisis of several of the euro area.

In a context of deterioration of refinancing, Moody's said its concerns about the structural difficulties of the profiles of liquidity and financing banks had intensified.

For Credit Agricole, Moody's reduced the rating of the long-term debt and deposits to Aa2 from Aa1, a one notch downgrade and downgraded the Bank Financial Strength Rating (BFSR) to the next level too, C + to C.

Regarding Societe Generale, Moody's Aa2 to Aa3 reduced from the note of the long-term debt and deposits, with a negative outlook.The agency estimates that the impact of monitoring the Bank Financial Strength Rating (BFSR) will be limited to a one notch downgrade.

Moody's believes, however, that Societe Generale has a level of capital sufficient to absorb potential losses it is likely to record its holdings on Greek government bonds.

It added that Societe Generale will remain capitalized at a level consistent with its BFSR, even if the quality of the signature of the Ireland and Portugal were to deteriorate further.

Societe Generale issued a statement following the announcement by Moody's.The bank says it has demonstrated its ability to effectively manage the current situation in the debt crisis in Greece and has taken appropriate measures to strengthen its profile of refinancing.

Societe Generale said Monday it would conduct asset sales and cost reductions designed to release four billion euros in additional capital by 2013.

FRENCH BANKS "KEEP NOTES OF VERY GOOD"

For BNP Paribas, Moody's believes that the first French bank has a level of profitability and capital sufficient to absorb potential losses it may suffer over time due to its exposure to Greece, Portugal and the Ireland.

Moody's continues its review with negative implications for long-term rating and deposits – currently Aa2 – BNP Paribas, but considered unlikely that this under surveillance results in a downgrade of more than one notch.

BNP Paribas said Wednesday it would reduce the size of its balance sheet of about 10% by the end of 2012 and expects to achieve a capital adequacy ratio of 9% under the new banking regulations of Basel III on 1 January 2013.

Following the announcements by Moody's, the French government has reaffirmed the "strong" French banks.

"French banks have withstood stress tests that were very demanding few weeks ago," said Valerie Pécresse, budget minister and spokesman of the government after the cabinet meeting.

"There is no funding problem, or issue credit or liquidity problem for French banks," she said.

French banks are "very strong and keep very good notes," she said.

Radio Europe 1, President of the Financial Markets Authority (AMF) Jean-Pierre Jouyet noted that the cuts of note occurred already anticipated by the market.

On RTL, the governor of the Banque de France Christian Noyer, for its part felt that the situation of French banks was unlikely to deteriorate further after the decision by Moody's.

At the Paris stock exchange, securities of the three banks have opened down sharply after the announcements by Moody's, but have rapidly reduced or erased their losses, with the overall market, thanks to remarks by the President of the European Commission suggesting a forthcoming proposal for the introduction of euro bonds.

French banks are the institutions most exposed to Greece, according to the Bank for International Settlements (BIS).

Earlier this afternoon, the action Societe Generale lost 2.8% and 1.6% gave the BNP.But Crédit Agricole clinching 2%.

Citigroup cut its price targets on French banks.