Dame Street Journal

Banking Review

China: The New Bank Complements to Existing Institutions

March 31st, 2015

The finance minister of China said that the new bank will complement with existing institutions and will not in any way compete. This is the statement of the finance minister after allegations and concerns raised in Washington that the new bank will compete with established international lenders like the World Bank. The Xinhua News Agency quoted the statement of Lou Jiwei, saying that the establishment of the Asian Infrastructure Investment Bank (AIIB) is expected to be finished by the end of the year and this will enable China to accomplish more responsibility in the global development.

The new bank will act like the regional investment vehicles like the European Bank for Development and Reconstruction and the Asian Development Bank. The AIIB will not weaken these establishments but will help reinforce them by being more vigorous to push the global economy forward. The comments of Lou appeared at the worries of the US after France, Italy, Germany and Britain announced that they have plans of joining the AIIB. After the support of these countries, Washington expressed concern that AIIB will not help the global economy forward but will pave way for looser lending standards in terms of transparency, labor and environment and undercut the International Monetary Fund and the World Bank. Even with the negative statement from the US, Lou said that other countries are welcome to become part even after the expiration of the deadline which is on March 31.

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On the other hand, this news is similar even in small-scale establishments or new lenders coming out in the market like the guarantor loan UK. New faces in the finance industry will receive various comments and allegations but their main reason is to help the people access money in case of emergencies or big things happening in their lives which needs a big amount of funding.

In 2013, China proposed the bank in order to finance construction of ports, roads and other infrastructure. In fact, the initial capital pledge is $50 billion. After this, 21 other governments like India, Thailand, New Zealand would want to become part but the US and their close allies such as Australia, South Korea and Japan have not. The AIIB is part of the series of initiatives developed by Beijing so that their influence in global finance and expansion of trade links will be increased. For some, they think that this attempt will erode the influence of the US and Japan over the institutions like the Asian Development Bank and the World Bank.

Also, Switzerland announced plans of becoming a founding member, saying that this move will play a significant role to ensure that the AIIB will be able to comply with the standards set internationally in terms of development cooperation and operating activities.

The Role of Credit Unions

January 27th, 2015

Now is the best time for credit unions to step into the space of the predatory payday lenders place. Often, these payday lenders place themselves following the mainstream financial institutions, they have been providing complementary loan services which should be the role of credit unions. With this, they can provide lower cost according to the study of Filene Research Institute. The problem with credit unions is that they deny consumers who want to avail small dollar loans especially those with very limited credited histories.

The consumers can be good candidates but still, they are not entertained by the credit unions. As a result, more consumers nowadays prefer payday lenders than credit unions because they have shorter wait times and convenient hours. Unfortunately, the consumers pay a huge price by choosing payday lenders instead of the credit unions. Visit Swift Money, this is an example of a payday lender that provides small-amount loans to consumers with very manageable requirements like: minimum age of 18 years old, verifiable income and has a valid bank account. Also, they claim that they are an excellent option for those who have no credit or even with credit issues like foreclosure, bankruptcy that prevent them from traditional financing. Any consumer in need will be persuaded to borrow money from payday lenders because they do not have stringent requirements like credit unions do.

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Transforming Banks

January 25th, 2015

The pressures brought by the post-financial crisis world have forced banks to evaluate their business models, minimize their expenses, innovate, and re-assess how to promote their growth. The people who don’t have banks represent the part of the population that the banks haven’t tapped yet; it is vital that banks target this population to enhance organic growth.

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Some financial institutions like Uncle Buck pay day loans LLP have already enhanced their traditional branch-based distribution models to include correspondent-based distribution and include mobile services. Banks won’t go through this transformation completely alone. The World Economic Forum is able to correctly determine financial inclusion as a worldwide issue that touches the lives of consumers; thus, it will need global players from the public and private sectors to create and implement the solutions.

Warning to Consumers

January 7th, 2015

The Federal Trade Commission, the nation’s consumer protection agency, issued an instruction on how to chose a loan in a smart way.

Online payday loan has become an easy alternative for every individual in need but based on complaints and reports, it is full of threats, fraud and unauthorized withdrawals. These are the words explained in the report of the Pew Charitable Trusts which was released after the federal regulators’ recent actions towards the fraudulent online payday lenders.

Generally, payday loans are small and short-term loans yet the interest is so high. In the past, payday lenders were operating in storefronts but with the advancement of technology, the loans are offered through the Internet. Statistics showed, about one-third have originated online. Also, in the report, it showed that the borrowers of online payday loans are younger, have higher incomes and more educated compared to the storefront borrowers. However, resorting to online lenders proved to be more troublesome than the physical lending stores since 90% of the payday loans’ complaints are addressed to the online lenders.

The report showed that one-third of the online borrowers are threatened by the debt collector or lender like threats to contact their families, employers or friends or they will be arrested if they cannot pay on time. These harassments to borrowers are illegal according to the laws of federal debt collection. For this reason, it is very important for online borrowers to look for reputable and big lenders like the QuickQuid online payday loan. You can tell that the lender is reputable by reading reviews to tell how they operate and if their policies are governed by laws.

Is the Demand of Gold on Chinese New Year, Bigger than Guessed?

March 17th, 2015

The Chinese New Year is the peak period of buying gold for the Chinese households, according to reports. In fact, even before February 19 which is the Lunar New Year as the Year of the Goat, the gold coins were already sold out, these are issued by the Bank of China and reports said that there are gold-plated fakes sold just to satisfy the demand of old-aged Chinese buyers. These consumers are the key figure in tracking gold demand as they are the second largest economy all over the world. After all, their demand for gold bars, jewellery and coins accounts for 1 ounce in every 5 ounces sold worldwide in the last 5 years, they are second to India.

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Bank of China

China being the second largest consumer of gold all over the world, analysts say that they matter in the prices of gold. This has become a topic of many debates since the country’s demand is not very big again because of many reasons such as effectively banning of bullion exports, the output of gold mining is number one since 2007 and it is one of the largest importer nations. The output of China’s gold mine hit 2014’s new record highs and in the last autumn, imports went directly to Shanghai including Hong Kong. The import supplies and mining in 2014 increased by about two-thirds compared to the demand in 2013. This is not the first time where Western observers saw a big gap of China’s reported demand and visible gold supplies but no matter how true the data are, the fact still remains that the country’s huge gold demand has a direct impact to the world prices.

However, there is a contrast from the reports of China since in the last fifteen years, their demand did not show any connection with the world prices or perhaps the data had a negative correlation of their private demand for gold bar, jewellery and coin. More often, the connection is negative, the demand is moving inversely with regards to prices. One example is in the last two years, in 2013 China’s demand for gold bar, jewellery and coin increased by over 60% and it hit all-time records yet the prices fell by 30% during this year against the Yuan, Dollar, Pound and Euro. In 2014, the demand went back dramatically; it erased the gain of previous years.

Despite the increasing or decreasing demand of gold in China, gold remains a promising investment worldwide. With the recent economic state and the highs and lows of inflation rate, many are finding solutions on how to protect their savings and retirement. One of the best investments is investing gold through Gold IRA, for more information and enlightenment, you can visit http://www.goldirareporter.com.

Checking Your Mortgage Rate Is Very Important, Financial Experts Say

March 10th, 2015

Often, mortgage is the biggest expense a homeowner pay each month but most of the homeowners did not realize that they have been overpaying every month if they were not able to avail the best interest rate. In order to reduce your mortgage payment, look at your interest rate so that you will be able to determine the possibility of lowering it down. In a study conducted by Bankrate, about 35% of mortgage borrowers do not know their mortgage rate. This often neglected fact is not advantageous to borrowers; this could prevent them from making decisions in terms of borrowing which can help save thousands of dollars in the future.

Financial experts say you should check your mortgage rate and here are the reasons why:

  • Rates can be lower compared to what to expect. If you are unsure of the rate you were given, never hesitate to call your lender and ask to give you a copy of your interest rate and your type of mortgage. Homeowners who opt for the fixed-rate mortgages are aware that the rate will be the same all throughout the term of the loan and they can plan their finances while paying monthly. The problem is with the borrowers whose mortgages are under the adjustable rate since they have to understand that their current interest rate may change anytime depending on the market. According to Investopedia, adjustable-rate mortgages change after the introductory period. For instance, when your adjustable-rate mortgage is 2/28, this means that for 2 years, the interest rate will be fixed before varying the next 28 years.
  • Do a rate shopping. To be knowledgeable about interest rates offered by various credit unions and banks, you must do a rate shopping. This will provide you with the best interest rate you can ever have and smaller mortgage rate too. You can also decide to refinance your existing loans. To avail the best interest rate, get quotes from 3 or more lenders, this is according to the CFPB.
  • Improved credit rating will save you money. By the time you applied for the first time of your mortgage, the approved interest rate by the lender depends upon your credit profile. This means that if you have an outstanding credit rating, you have been paying regularly over time, then, your credit score is high and interest rate applied to your loan will be lower. However, this is not usually the case, there is a big number of borrowers who have a very low credit score and this will have a big impact when they avail for a loan. If this is your situation now, you need the help of credit repair companies, to give you professional advice on how to improve your credit score. Remember, your credit score is very important especially when you have bigger plans for the family like looking for a new home or buying a new car.

Some people are unaware that the interest rate of their mortgage depends upon how well they manage their finances and borrowings. To avail the best possible interest rate, your credit scores should be high.

On Making Wise Decisions on Mortgages

January 27th, 2015

According to the website of the PAR Program, founded by Jeremy Schoemaker , “many study show that people interact with a service or product eight (8) times on average before making a buying decision.”

Although that holds true for 50% of home buyers, the other 50% – according to the report by the Consumer Financial Protection Bureau (CFPB) – do not take time to shop around for a mortgage when purchasing a home.

This just goes to show that Americans may seem penny-wise but they are also pound-foolish in terms of finances.

Though consumers spend a major amount of time to look for bargains for their daily purchases, they also spend as little time to look for mortgage bargains (which is a lot more important).

American consumers, in general, are fond of using coupons, looking for sales, and also looking for stores that would give them more for only a buck. They’d put huge efforts into getting huge bargains from electronic gadgets, cars, appliances, and even hotel accommodations.

But according to a survey conducted by the CFB, they’ve found that almost half of the recent mortgage borrowers do not shop around for the best mortgage rates available for buying a home; which is considered to be one of the biggest investments they will ever make.

Their failure to look for the best mortgage rate will surely cost them significantly. The CFPB found that “consumers who consider interest rates offered by multiple lenders or brokers may see substantial differences in the rates. For example, our research showed that a borrower taking out a 30-year fixed rate conventional loan could get rates that vary by more than half a percent.”

According to the CFPB, a mortgage rate of 4% compared to 4.5% can significantly make a difference of at least $60 per month; which means that you can save up to about $3,500 over 5 years. Lower interest rates would only mean that the house can be paid off earlier since the additional principal can be paid although there are lower payments.

This mistake commonly made by Americans can be attributed to being the easy target of the internet marketing strategy by some of the financial institutions. They often e-mail potential borrowers or post ads that will entice them into sending loan applications for mortgages; thereby, pushing them to make an unwise decision.

This is primarily the reason why some consumer credit organizations are now doing an initiative on educating people about mortgages. This initiative helps promote financial literacy – which is, frankly, what many Americans really need.

How To Report Credit Fraud

January 8th, 2015

One of the worst nightmares that could happen to anyone is credit card fraud since financial well-being greatly depends on how well is the person’s credit history. Every individual must know the basics on how to report if this happens by reading facts from anywhere like the Internet or you can visit the stop credit fraud website. You will surely learn important things about how to avoid it and if it happens in the future, you are certain of the steps to undertake.

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This article will give you instructions on how to report credit card fraud, they are:

  • Get your credit report by calling the credit agency or through online. You can get a free credit report each year.
  • Go to the nearest police department and file a report of the incident. You can do this step through a phone call in various places and once the police report is done, get a hard copy.
  • Immediately notify your bank and inform them to freeze all your accounts. Also, you can change the passwords and account numbers of your accounts.
  • On the back of the credit card, look for the telephone number and call it to monitor all the activities of your credit card.
  • Report the credit fraud to the FTC (Federal Trade Commission). Once you inform them, they can give additional information about your credit history.
  • Directly notify the company of your credit card that it was misused or stolen and put the account on a fraud alert.

Additional Tips and Warnings

  • When you get your free credit report, wait for a few days after the fraud to see any changes or activities of your credit card. Sometimes, it would take days after an activity will appear.
  • Make sure that you did not lose your checkbooks or credit cards.
  • An effective option is to have an online banking account, this will allow you to monitor the charges credited by the credit card company. If you are a victim of credit card fraud, you can immediately keep track of the activities made by the thief.
  • Guard your personal and financial information fiercely and never ever give them to anyone especially from a caller. Also, your important documents like checkbooks, credit cards and other important papers should be secured, the most important thing that you must keep in mind is for no other person to know much about your personal information.

When you report a fraud to various agencies, make sure you are not giving too much information. You can disclose your SS number to a police department and your bank only.

Being knowledgeable of the steps to undertake when credit card fraud happens is an extra advantage, you know who and where to inform the incident immediately.

CySEC Withdraws Suspension of EZTrader

January 5th, 2015

Cyprus financial regulator, CySEC, withdrew the suspension case of the binary options broker EZTrader – through WGM Services Ltd, its parent company -, thereby restoring their CIF license.

EZTrader is the owner and operator of the GlobalOption.com and EZInvest.com brands, as well as the 888binary.com wherein their target market is the Chinese. This company is being run by its founder and chief executive officer Shimon Citron. Among its board of directors are private equity fund pros Ron Lubash who is the CEO of Markstone Capital Group, and Gustavo Perrota who is the managing partner of Hamilton Ventures LLP.

EZTrader reported that they are gaining profits of $7.95 million for the first half of 2014, but was actually losing money. In fact, the company has just raised $3.94 million from its investors last May 2014, thereby raising their cash levels up to only $6.95 million as of the 30th of June 2014. Recently, the company has gained sponsorships from leading soccer clubs in Germany and Netherlands (Bayer 04 Leverkusen and Feyenoord Rotterdam).

EZTrader is just among the many regulated Binary Option Hero brokers. Note that, most binary brokers work without any license. The disadvantage of having a license as a broker is that your license will be revoked when there is even just a slight administrative error; which may result to bad press time.

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The company had its license temporarily suspended late November 2014, with CySEC citing several suspicions regarding:

  • The safeguard of clients’ funds,
  • Capital adequacy of investment firms, and
  • Large exposures.

CySEC is seemingly satisfied that everything is in order, stating that they have been satisfied that EZTrader has complied with all the provisions of the Law.

Have a Productive Investment: Opt for the Right Trading Opportunity

January 2nd, 2015

Among traders, trading is becoming very in demand. Binary options let the buying of an asset wherein the purchases get the chance to earn a fixed payoff (double the amount of his investment) just by effectively calculating if the price will increase or decrease. With option trading, it will allow an investor to have the opportunity to have a bigger return of income in just a short span of time. Binary is considered to be an event with two possible results: it can either be a “yes” or a “no”, the outcome wasn’t predicted.

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From the name itself binary, meaning it involves two, so for binary trading submits to the two likelihood. When a trader invests on a fixed sum, and if such option is effective, the trader will get back a set amount of income. But, if the option isn’t effective, the trader will have a loss of his invested money, therefore making binary options investing an easy with direct procedure investment item. For successful trading, it is necessary to learn binary options reviews.

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Call and Place Options

A call option refers for the purchase of the binary options at a fixed amount by a set date (the expiry date). The purchaser of call can purchase asset at the particular price till the expiry date. When the purchaser thinks that the price of the asset is becoming greater than the amount of the shutting time of the maturity, then the finest option would be put a call option.

Conversely, if call options allows you to buy, well then a put is way for you to have the asset sell at a fixed strike amount until a fixed due time. The put option buyer can make the assets sold at the strike cost, and if one opts to sell, the put writer has to purchase at that certain cost. If the purchaser deems that the cost will decrease, the most evident option would be to go for a “put” option.

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