These are stories Report on Business is following Friday, Feb. 27, 2015.
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Tax scandal widens
The Queen's private banker has been caught up in a widening scandal over tax evasion.
Coutts & Co. in Switzerland, the wealth management arm of Royal Bank of Scotland, is the latest to be pulled into the saga.
HSBC, too, is caught up in the controversy.
RBS, which is majority-owned by the British government, says Coutts is now being probed by German officials.
"A prosecuting authority in Germany is undertaking an investigation into Coutts & Co. Ltd. in Switzerland, and current and former employees, for alleged aiding and abetting of tax evasion by certain Coutts & Co. Ltd. clients," RBS said yesterday in the notes of its annual results.
"Coutts & Co. Ltd. is co-operating with the authority."
RBS chief executive officer Ross McEwan told reporters that the bank will "come down incredibly hard" if it finds evidence of wrongdoing.
"This is what has tarnished the banking industry, and in my view private banks have taken far too long to catch up with the public's expectations," Mr. McEwan said, according to reports.
Coutts, which boasts billions in assets under management, and the Queen among its clients, is up for sale.
- Eric Reguly: USBC chief drawn into Swiss scandal, bank issues fresh apology
- Ian McGugan: HSBC scandal reveals extent of pressure to attract wealthy investors
- HSBC chiefs offer contrition for past mistakes
Markets mixed
Global markets are mixed this morning in advance of an economic report from the United States.
Tokyo's Nikkei gained 0.1 per cent, while Hong Kong's Hang Seng slipped 0.3 per cent.
In Europe, London's FTSE 100 was down 0.1 per cent by about 7:05 a.m. ET, though Germany's DAX and the Paris CAC 40 were up by between 0.2 per cent and 0.3 per cent.
S&P 500 and Dow Jones industrial average futures were down in the run-up to the second estimate of fourth-quarter economic growth in the U.S.
It's expected to be weaker than the first reading of 2.6 per cent, annualized.
"We're seeing a slightly negative start to the last trading day of February," said senior economist Jennifer Lee of BMO Nesbitt Burns.
"It is capping off what has been a busy week, driven by the main event: Greece getting four more months of breathing room," she added.
"We also saw the FTSE hit a record high, Germany's biggest union landed a hefty 3.4-per-cent pay raise, the EU gave France and Italy some extra time to bring down their budget deficit, and there were rumblings of discontent/disbelief within the [Bank of Japan] on whether or not they can realize their goal of 2-per-cent inflation."
Germany approves extension
It turns out the Germans can say ja, after all.
The Bundestag today approved a four-month extension to Greece's bailout provisions despite the controversy.
Earlier this week, for example, the newspaper Bild, in a rather big one-word headline, had urged Parliament to say nein.
"We Germans should do everything to keep Europe together as far as we can and bring it together again and again," said German Finance Minister Wolfgang Schaeuble.
This came as the Hellenic Statistical Authority, or Elstat, reported that Greece's economy shrank by 0.4 per cent in the fourth quarter of last year.
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