Treasury cautions Scotland
An independent Scotland would have a vastly oversized financial sector that would leave it vulnerable to a Cyprus-style banking crisis, the Treasury said. Before a referendum due in September next year on whether Scotland should split from the UK, the government is analyzing the impact of independence on Scotland, which has a population of about 5 million. A report from the Treasury said that without the British government’s regulatory framework, Scotland would be left vulnerable by having a banking sector that dwarfs its economy, driving businesses out of the country. “An independent Scotland would have an exceptionally large banking sector compared to the size of its economy — with banking assets of more than 1,250 percent of Scottish GDP — making it more vulnerable to financial shocks and the volatility of the sector,” said a Treasury statement, which contained excerpts from the report, due to be published today.
Plant subsidies canceled
Indiana has canceled subsidies for a planned US$1.8 billion fertilizer plant in the state because of concerns that a Pakistani company involved in the project makes products used in improvised explosives that kill and injure US troops in Afghanistan. Midwest Fertilizer Corp, which has sought to build the plant in southern Indiana, is 48 percent owned by Fatima Group, which produces a calcium ammonium nitrate fertilizer in Pakistan known to have been used in improvised explosives in Afghanistan. Indiana Governor Mike Pence, a Republican, put a US$1.3 billion incentive package for the fertilizer manufacturing plant on hold in January pending a review.
Barclays names executive
Barclays PLC named Haidar Hammoud to be head of wealth and investment management in Abu Dhabi as Britain’s second-biggest lender seeks to tap high net-worth individuals in the emirate, holder of about 6 percent of the world’s oil. Hammoud, previously at Deutsche Bank AG, Citibank, Standard Chartered and BNP Paribas, will be in charge of wealth management business in Abu Dhabi and provide advice to the so-called ultra-high net-worth market and large family offices, Barclays said yesterday in an e-mailed statement. Banks such as Barclays consider the United Arab Emirates and the wider Middle East as a long-term growth market where economic expansion and high oil prices are driving prosperity. Abu Dhabi is home to Abu Dhabi Investment Authority, one of the world’s richest sovereign wealth funds. The emirate has Standard & Poor’s third-highest investment grade.
Mercantile Exchange closes
Hong Kong Mercantile Exchange (HKMEx), the commodities trader whose chairman headed last year’s election campaign for the territory’s Chief Executive Leung Chun-ying (梁振英), has shut down after it ran out of money. Revenue is not enough to support its operating expenses and the commodities exchange has handed back its license, the Securities and Futures Commission said in a statement yesterday. HKMEx is prohibited from trading, the commission said. The exchange will reapply for the license after it completes a rights issue to raise US$100 million next month, the Ming Pao reported yesterday, citing chairman Barry Cheung. Cheung is the largest single shareholder of the commodities trader with a 56 percent stake, according to Ming Pao.