Asian banks remain to be seen more scandals will surface

HSBC, Standard Chartered and DBS were among 20 banks at which 133 traders tried to manipulate the Singapore interbank offered rate (Sibor). Photo: Bloomberg

HSBC, Standard Chartered, JP Morgan Chase, Barclays and DBS were among 20 banks at which 133 traders tried to manipulate the Singapore interbank offered rate (Sibor), swap offered rates and currency benchmarks in the city state, [the Monetary Authority of Singapore] said.

BANKING scandals are surfacing in Asia, this time in the form of a US$250mil (RM799mil) fine on Mitsubishi UFJ Financial Group Inc on claims that it had transferred money to countries facing US sanctions.

According to the South China Morning Post, The Bank of Tokyo-Mitsubishi UFJ Ltd, the main lending unit of Japan's biggest bank by market value, moved an estimated US$100bil through the state for government and privately owned entities on the Specially Designated Nationals list.

This list was issued by the US Treasury Department's Office of Foreign Assets Control between 2002 and 2007, the New York State Department of Financial Services and New York Governor Andrew Cuomo said in a statement recently.

Just about two weeks earlier, the Monetary Authority of Singapore (MAS) had cracked down on the rigging of the Singapore Interbank Offered Rate or Sibor.

HSBC, Standard Chartered, JP Morgan Chase, Barclays and DBS were among 20 banks at which 133 traders had tried to manipulate the Sibor, swap offered rates and currency benchmarks in the city-state, MAS said in a statement recently.

Greedy

These incidents within Asian banks are significant, as the European and US banks have been bearing the brunt of criticism.

The major UK banks have been fined for the Libor (the London equivalent of Sibor) rigging and the mis-selling of products.

Due to their role in the churning of derivatives, these banks in the West have been described as greedy, careless and manipulative.

The recent scandals seem to involve only a few Asian banks, but it remains to be seen how many more names will surface and what sort of rules have been flouted.

In view of their important role in the economic growth of Asia, they will be closely watched in terms of risk exposure and ethical banking practices.

So, Asian banks, some of which have become very profitable, beware on all fronts.

In Europe, overnight talks aimed at ensuring shareholders and bond holders bear the brunt of bank failures collapsed after almost 20 hours of discussion, reports The Telegraph.

After investors, the proposals would impose losses on savers with more than 100,000 euros in their account, but France and non-eurozone countries want the ability to tailor the rules, the report says.

Discussing possible bank failures may not be the most urgent agenda, although extreme stress testing and estimation of potential bank losses should be conducted.

This is tied to the capital position of the bank.

However, there should be a constructive approach to boosting capital buffer and ensuring that the bank does not fail rather than what to do if it fails.

It is like pointing a gun at a man's head even before the crime is committed.

Bond bubble

There is said to be a “bond crisis” out there, where the bond bubble is about to burst, with investors looking for other asset classes to invest in.

With the impending halt to the US quantitive easing programme of additional liquidity, this search for other asset classes has become more urgent.

Nevertheless, 'We see improving US gross domestic product as a positive support to risk' assets such as shares, but would expect liquidity reductions to remove some of the froth' from current valuations, including in corporate bonds.

“Where we have the biggest concern is some of the riskier banks.

'Even five years on from the financial crisis, we cannot with any confidence say we are happy with the quality of their balance sheets; this is where risks of capital losses are highest,'' says Chris Bowie, manager of Ignis fund management.

Such is the reality of investing. It involves constant assessment of risk, changes in the markets and valuations.
Micromanagement is usually discouraged but may be useful in this case.

 By Yap Leng Kuen
Columnist Yap Leng Kuen cautions on the headwinds.
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Winning education, America and China!

Providing a student with a taste of life in two of the most powerful and dynamic nations in the world is a winning combination.

I AM always being asked by anxious parents about where they should send their sons and daughters to school or university.

As a graduate of a British university, most people would expect me to be a big promoter of UK institutions.
In the past, that would have been the case, but nowadays I’m no longer so convinced.

Indeed, the smartest Malaysian parents have already anticipated changing trends, sending their offspring to the United States, especially schools on the East Coast (and Ivy League colleges).

At the same time, virtually every young Chinese Malaysian scion is expected to spend at least a year or so brushing up his or her Mandarin in Beijing.

Some even attempt courses at the city’s prestigious Peking University.

To my mind, it’s a winning combination: providing a student with a taste of life in two of the most powerful and dynamic nations in the world.

This doesn’t mean that I think American graduates (even Ivy Leaguers) are cleverer than their British counterparts.

If anything, they’re just more articulate and confident.

These are qualities, however, that tend to evaporate the moment they put pen to paper.

Indeed, I’ve never understood the educational value of multiple choice tests so in vogue in the American education system.

Why is this trend occurring?

Well, for one thing, American universities really score in terms of the money at their disposal and the incredibly diverse student body.

This in turn creates a superb and influential network for the future for their students.

At the same time, one of the most high-profile recent British graduates was Bo GuaGua, the son of disgraced Communist Party apparatchik Bo Xilai.

The young Bo studied at the elite British public school, Harrow, followed by Oxford University’s Balliol College.

When his father and mother fell so spectacularly from grace, GuaGua’s ostentatious ways and flamboyant educational choices were viewed as evidence of his parent’s waywardness and lack of discretion.

With China now the source of the world’s largest number of overseas students (surpassing even India), GuaGua’s disastrous stint in the UK may well prove to be a powerful disincentive for other parents in Beijing and Shanghai.

Indeed, a million Chinese students were studying abroad by the end of 2006 and in 2011 alone, 340,000 students headed overseas.

The shift may well take time as London remains an important financial capital despite its fading diplomatic leverage.

Still, the Great Power rivalry across the Pacific means that the United States possesses a powerful allure for Chinese parents as they seek to prepare their children for the future.

The children of China’s new rich can now be found in places like the Phillips Andover Academy (founded in 1778, the alma mater of President George W. Bush), its rival Phillips Exeter (1781) and the Groton School (1884, where President Franklin Delano Roosevelt studied).

They’re attractive to Chinese parents because it gives their children the edge for entry to Ivy League universities like Harvard or Yale.

Even Bo GuaGua headed to the Harvard Kennedy School (HKS) to study public policy after Oxford.

US Department of Homeland Security numbers indicate that there were 6,725 Chinese students in American secondary schools in 2011, compared to just 65 in 2006.

Overall, more than 157,000 Chinese students studied in America that year – a full 22% of the total number of foreign students there.

China again surpassed India as the largest source of overseas students for America in 2010.

Malaysia, in contrast sent just 6,190 students to America that year.

It would seem that many Malaysians still hanker for British educational institutions – perhaps to our disadvantage.

As this is being written, the best and brightest minds from the world’s two superpowers are rubbing shoulders in the schoolyards and lecture halls of America as well as, increasingly, China.

It’s always a good thing when young people come together.

Perhaps the long-feared clash between China and the West may not materialise after all as children from both compete in their respective elite institutions instead.

  Ceritalah
By Karim Raslan

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Deactivate your Facebook account!

Malaysians have firmly entrenched Facebook in their lives

Did you know that Malaysians have the most number of Facebook friends in the world? A British research agency, TNS, revealed that on average Malaysians have 233 Facebook friends and spend roughly nine hours a week on Facebook. What a lot of time indeed!

Before proudly shouting Malaysia Boleh!, think about what this actually means. Facebook has become an integral part of our lives like nasi lemak, hence we need to fully understand its consequences before it becomes an enemy. Only a fraction of your Facebook friends are your actual friends.

It has become to easy to be Facebook friends with anyone. The list includes your neighbour’s best friend’s sister whom you once met at a Christmas party. The time spent on Facebook per week is disturbing. If today’s youth spend hours communicating online, what is the impact on their real life communication and social skills?

THE PERILS OF FACEBOOK

As we all know, online communication is a distant, disfigured cousin of face-to-face communication. Communication is a delicate tool with many layers to it.

To start off, there is verbal and non-verbal communication. This consists of spoken words, pauses, hand gestures, facial expressions, body language, vocal variety and intonation.

Facebook, like many other platforms of online communication, is a different ball game altogether. An entire conversation can take place without even a single properly constructed sentence. For that matter, an entire conversation can take place with just emoticons!

This has resulted in a generation who lack basic communication skills.There are so many people who can have hours of online conversations but can barely have a decent five minute face-to-face chat. In the real world, conversations cannot entirely consist of LOLs and smileys.

IMPAIRED COMMUNICATION

In reality, making new friends and meeting new people does not happen with a literal click. It takes time to build relationships and get to know people. Now, it is possible to be someone’s friend on Facebook without even having a single conversation or interaction with that person.

This destroys the natural flow of human interaction. Communication has been watered down thoroughly indeed. This evolution indicates the ebb of human communication skills.

Besides that, on Facebook, we are unable to observe the other party’s body language. This leaves a gaping hole in the communication flow, as body language makes up for nearly half of non-verbal communication.

Consequently, youngsters whom are major Facebook users are insensitive to body language responses of the other party. This will ultimately result in poor communication skills as youths are unable to decipher the non-verbal response of the other person.

It is also a common trend amongst the youth to respond to text/chat messages first rather than to the person speaking in front of them.

With electronic communication gaining preference over actual conversations, it is a common sight at gatherings to see people busy texting or tweeting instead of talking to the people at the party.

Our minds are tuned to prefer online communication, alienating traditional chit chat. It is a rather rude compulsion to respond to your beeping phone first as opposed to a person talking to you.

  Have we lost our offline communication skills? 

“SO WHAT?”

The inevitable “So what?” will echo from Gen-Y. Arguably, this is progression thanks to technology. Again, the age-old debate of whether technology is a bane or a boon. Using Facebook as an example, technology has created one-dimensional communicators.

There are a few scenarios to consider, the first being a job interview. Employers are invariably complaining about how job applicants are unable to hold a proper discussion despite scores of degrees and higher qualifications.

While they may have the knowledge, they are unable to communicate their ideas effectively. This is a career crutch, so to speak, because being able to shine in the workplace requries solid communication abilities. In this era, communication skills are a golden ticket to securing that job.

Another scenario would be networking events as traditional networking still plays a role in our personal and professional lives. Be it birthday parties, industry launches or university events, human interaction is much needed!

It is wrong to assume that being able to communicate and network skilfully online automatically translates to good face-to-face communication. Learning the art of networking can lead to obtaining valuable contacts and forging important relationships that will go a long way. Savvy communication skills will snag you a potential client or that really hot date.

As always, practice makes perfect. Thus, actively participating in such events instead of being physically there but virtually not (pun intended) will lead to better communication skills. We need to be able to sit down and enjoy a good old fashioned chat.

Another challenge young people face is to communicate with people of different generations, something you would not usually encounter on Facebook. While online, you tend to mingle with people of your age, with similar interests but in reality it is a useful skill being able to talk to anyone and everyone.

A sad scenario nowadays would be a family out for dinner but everyone is glued to his or her smartphone and tablets. Again, there is minimal interaction, defeating the very purpose of having dinner together.

THE PHONE STACKING GAME

There is a popular game to combat this issue; the stacking game. Commonly played with friends, it requires everyone to stack their phone in the middle of the table and the first person who reaches for the phone has to foot the bill. This ensures there is proper conversation and interaction between everyone present, with less virtual distractions.

So, be proactive about the situation. Consciously monitor your online and offline communication. Ensure you have sufficient skills to hold a conversation with just about anyone for a reasonable duration.

Realise that while online communication is good, offline communication will take you a long way especially in terms of career and relationship building. Take the initiative to practise and sharpen your communication skills before it is too late.

There are many organisations out there dedicated to improving communication skills such as Toastmasters International. Find out how you can be part of it.

Should we deactivate Facebook? Admittedly it is a little too harsh, but striking the right balance between our online and offline communication is the key.

Undeniably, Facebook has become part of our lives. Just like McDonald’s, the key is moderation. A good practice is to engage with people when with company instead of communicating with someone else online. Learn to be more articulate and expressive when speaking as there are no emoticons! Let us work together to ensure technology does not cause the annihilation of proper communication skills amongst us.

By RADHIKA CHELLIAH
mystarjob@leaderonomics.com

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