Connect with us

Finance

Many small companies can borrow without Main Street

Published

on

WASHINGTON — Federal Reserve Chair Jerome Powell says that many mid-size U.S. businesses are now able to borrow from banks, suggesting that the need for a Fed lending program that was designed to serve struggling medium-size companies has waned.

In remarks prepared for delivery Tuesday to the House Financial Services Committee, Powell said there are 230 loans, accounting for a total of about $2 billion, that have been provided or are in the pipeline under the Fed’s Main Street Lending Program. Powell’s testimony was released Monday by the Fed.

Still, that sum is far short of the $600 billion that the Fed had initially set aside for the Main Street program. The Treasury Department and the Fed allocated $75 billion from congressionally approved taxpayer funds to support the Main Street program; any losses up to that amount would be covered by Treasury.

“Main Street loans may not be the right solution for some businesses, in part because…these loans cannot be forgiven,” Powell said. “The evidence suggests that most creditworthy small and medium-sized businesses can currently get loans from private-sector financial institutions.”

The Fed chair has said that Main Street was intended to help companies that were too large for the Paycheck Protection Program, which provided forgivable loans to small companies, and too small for the Fed’s corporate bond purchases, which are intended for businesses large enough to issue their own bonds.

The central bank has faced criticism for not making the Main Street program easier to use for banks, which evaluate and issue the loans. The Fed buys 95% of the loan from the banks, reducing their credit risk.

On Tuesday, Powell will testify to the House committee along with Treasury Secretary Steven Mnuchin in a hearing focused on the implementation by the Fed and Treasury of emergency programs that Congress established in its $2 trillion relief package approved in March.

Christopher Rugaber, The Associated Press

Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Finance

Millionaires’ financial decisions are different in a few surprising ways, study finds

Published

on

By

The Canadian Press

Canadian cyclist Michael Woods wins Stage 7 of Spanish Vuelta

MADRID — Ottawa cyclist Michael Woods won the seventh stage of the Spanish Vuelta on Tuesday, finishing the hilly 159.7-kilometre route from Vitoria-Gasteiz to Valdegovía in three hours 48 minutes 16 seconds.
Woods, who finished second in Sunday’s sixth stage, improved to 48th overall with the win.
The EF Pro Cycling rider made his move to the front entering the final kilometre and finished four seconds in front of Spanish cyclists Omar Fraile (Astana) and Alejandro Valverde (Movistar) to take his second La Vuelta stage win.
“It was a special day,” Woods said. “I had a bit of luck, I had the legs and managed to get the win. I’m going to savour this one.”
Ecuador’s Richard Carapaz maintained the overall lead by finishing in the peloton, which crossed the line almost a minute later. The Ecuadorian kept an 18-second lead over Hugh Carthy, with Dan Martin and defending champion Primoz Roglic close behind. Roglic finished the stage in 19th place.
“I think we kept the situation under control,” Carapaz said. “We tried to stay calm and we knew things were not too dangerous with the finale. We tried to keep the breakaway under control and I think we finished with a good gap.”
Woods was the seventh different stage winner at the Vuelta this year.
“He played his cards and it worked well,” Fraile said of Woods.
Woods also won a stage in the 2018 edition of the race, when he joined Ryder Hesjedal as the only Canadians to claim a stage in the Vuelta, traditionally the third Grand Tour race on the calendar.
An emotional Woods outlasted the field in a demanding 157-kilometre Stage 17 of the 2018 Vuelta, dedicating the win to his stillborn son, who died earlier in the year when his wife was 37 weeks pregnant. They have since celebrated the birth of daughter Max (Maxine).
Hesjedal won stages in 2009 and 2014. He also won the Giro d’Italia in 2012, the only Canadian to win a Grand Tour event.
Woods has been on a good run of late. He finished third at the Fleche Wallonne one-day classic on Sept. 30.
Woods’ cycling resume also includes a victory in the 2019 Milano-Torino one-day race, a bronze medal in the road race at the 2018 world championships and a second place at the historic Liege-Bastogne-Liege one-day race in Belgium in 2018.
On Wednesday, riders will face a mountain stage of 164 kilometres (102 miles) from Logroño to the Alto de Moncalvillo.
The Vuelta is taking place amid tight health restrictions as Spain endures a surge in coronavirus cases. The race was postponed from earlier in the year because of the pandemic.
—With files from The Associated Press.
 
This report by The Canadian Press was first published Oct. 27, 2020.
 

The Canadian Press

Source link

Continue Reading

Finance

North Cowichan council members face financial ding for bad behaviour – Cowichan Valley Citizen

Published

on

By

Council members in North Cowichan will now have to pay a financial price if found guilty of contravening the municipality’s new standards of conduct policy.

In 2018, the municipality adopted the policy which set out the expectation for council members to adhere to when carrying out their duties and functions on behalf of North Cowichan.

If a council member is accused of harassment, bullying, intimidation, violence, and/or discrimination during these times, the municipality is mandated under the policy to hire a third-party investigator to determine the validity of the accusations.

The hiring of an investigator can be a significant expense, and council decided at its meeting on Oct. 21 that when a member of council has been found to have breached the policy, he or she must contribute towards the costs of the investigation.

For the first offence, council members will receive a 10 per cent pay reduction for 12 months, which is approximately $3,000 for a councillor and $8,000 for the mayor.

A second offence will result in a 15 per cent pay reduction, but if there is any overlap between the first offence and second offence, the offending council member will see a pay reduction of 25 per cent while those periods coincide.

Council members will face a 25 per cent reduction in pay for 12 months for the third and subsequent offences, and overlapping offences within those 12 months could result in reductions of 50 per cent where there are three concurrent offences, 75 per cent for four concurrent offences, or even 100 per cent if there are five or more concurrent offences.

Mayor Al Siebring said some may say that the financial penalties are overkill, but they are a good deterrent to bad behaviour of council members.

“Without this, our code of conduct would be just symbolic, but this will add some enforcement to it,” he said.

Coun. Kate Marsh said she was impressed with the repercussions council members could face when exhibiting bad behaviour.

“One of the challenging things about the code of conduct is consequences, and a cut in pay will add teeth to it,” she said.



robert.barron@cowichanvalleycitizen.com

Like us on Facebook and follow us on Twitter

municipal politics

Get local stories you won’t find anywhere else right to your inbox.
Sign up here



Source link

Continue Reading

Finance

HSBC considers paying 2020 dividend as profits beat estimates

Published

on

By

HSBC said it would consider paying a “conservative” 2020 dividend after Europe’s largest bank unveiled a better-than-expected third-quarter profit on lower provisions for bad loans.

The lender on Tuesday reported a 36 per cent year-on-year drop in pre-tax profits to $3.1bn for the three months to September, which was above bank-compiled analyst forecasts of $2.1bn. Noel Quinn, HSBC’s chief executive, labelled the results “promising”.

HSBC shares rose as much as 5.3 per cent in Hong Kong on Tuesday after the results were released, hitting their highest level in about two months.

HSBC cancelled its payout for the first time in 74 years earlier this year following pressure from the Bank of England, infuriating its Hong Kong shareholders. It said a 2020 payout would depend on the bank’s forecasts for 2021 and its consultations with regulators. “We will seek to pay a conservative dividend if circumstances allow,” Mr Quinn said.

Provisions for bad loans dropped to $785m in the third quarter compared with $3.8bn in the previous quarter. The average analyst forecast was for $2bn in provisions for the third quarter.

The lender said it expected total loan losses to be closer to the lower end of the $8-13bn range it had earlier forecast for the whole year.

“This latest guidance, which continues to be subject to a high degree of uncertainty due to Covid-19 and geopolitical tensions, assumes that the likelihood of further significant deterioration in the current economic outlook is low,” the bank said.

The slower rate of new provisions in the third quarter came as the global economy tentatively reopened from strict lockdowns prompted by the pandemic.

This matched the trend last week at Barclays, which set aside an additional £608m, substantially lower than the £3.7bn reserved in the first six months of the year.

HSBC revenue fell by 11 per cent year on year to $11.9bn in the third quarter.

HSBC’s shares have plunged by more than 40 per cent this year as the lender struggles with the combined challenges of coronavirus, a UK regulatory ban on dividends, ultra-low interest rates and a confrontation between China and the west over Hong Kong, its most important market.

The bank said it expected to further cut costs. It would look to lower its original $31bn target for its annual cost base for 2022, adding it would release a “detailed and updated” transformation plan when it published its full-year results.

Mark Tucker, chairman, and Mr Quinn are re-evaluating a strategy unveiled only in February, preparing deeper cuts and exploring the sale of persistently underperforming businesses, such as its US retail arm, the FT has reported.

Mr Quinn said on Tuesday that the smaller fall in profits before tax for the quarter was in part due to the lower expected loan losses and “continued good cost management”. 

HSBC said it expected to increase investment in Asia due to the region’s economies “rebounding strongly” from the pandemic. The bank said it would provide an update on the future of its French and US operations in February 2021.

The bank highlighted the passage of a national security law and US sanctions on 11 Hong Kong officials under a list of risks to its operations. The US has threatened secondary sanctions on financial institutions which fail to cut ties with the officials.

“The financial impact to the group of geopolitical risks in Asia is heightened due to the strategic importance of the region, and Hong Kong in particular, in terms of profitability and prospects for growth,” HSBC said.

Source link

Continue Reading

Trending