MADRID (AFP) – Spain said Tuesday it would support Mexico's Agustin Carstens for the post of IMF head under an agreement it has with Latin American countries -- although it would prefer France's Christine Lagarde.
Spain shares a seat at the International Monetary Fund with Mexico, Venezuela and four smaller Central American nations, Finance Minister Elena Salgado said.
As a result of the alliance, if one of the countries sharing the seat presents a candidate, the others must vote for that person, she said, even if Spain represents 35 percent of the votes among those countries.
But "the position of Spain is that the French minister (Finance Minister Lagarde) is an excellent candidate and it is she whom we would like to see in the (IMF) post."
Carstens, 52, the governor of the Bank of Mexico and former Mexican finance minister, is a declared candidate for the IMF managing director's post vacated by Dominique Strauss-Kahn after the Frenchman was arrested and charged with attempted rape in New York.
He will face Lagarde, who has the backing of other large European countries.
Traditionally the post of IMF chief has gone to a European while the World Bank president has been from the United States.
But in interviews with Spain's El Pais daily and Expansion economic journal on Tuesday, Carstens said the current woes of the euro illustrated that "Europe doesn't need a European at the IMF but solutions".
"I dare say that it might be more appropriate to have a non-European because a new set of eyes can look at Europe's problems more objectively, especially if it's someone of experience, who comes up with a plan of action which might be a bit tougher but also more realistic," Carstens said.
ZURICH (Reuters) – Wealthy U.S. individuals have already pulled most of their money from Swiss private banks and could exit altogether as a global clampdown on tax evasion and banking secrecy benefits onshore rivals, a report showed.
Boston Consulting Group (BCG) data showed U.S. clients have withdrawn almost completely from Swiss banks since 2006, particularly since an extended tax dispute between U.S. authorities and UBS (UBSN.VX)(UBS.N), Switzerland's largest bank.
North American assets held in Swiss private banks fell to just 2 percent of the total in 2010 from 18 percent just four years earlier, the BGC report showed on Tuesday.
"While the U.S. is the largest single country in terms of wealth, it is fairly irrelevant for offshore business in Switzerland and other offshore centers," said Zurich-based BCG partner Peter Damisch.
BGC's Global Wealth 2011 report said Swiss offshore bank assets under management were almost flat in 2010, while the assets of European onshore rivals swelled 6.2 percent and U.S. private bank assets climbed some 8 percent.
While much of the discrepancy was explained by the strength of the Swiss franc, which reduced the local currency value of dollar and euro-denominated assets held in Switzerland, U.S. and European clients also made net withdrawals from Swiss banks, offsetting a large part of emerging market inflows.
"We would expect the business of U.S. clients in Switzerland (private banks) will really erode and almost disappear over the next couple of years," said Damisch.
Swiss private bank revenues and margins also came under pressure as client risk aversion and new restrictions on the advice given to western European clients, holding 59 percent of total assets, dampened client activity.
Switzerland, which has the second highest proportion of millionaire households in the world, is expected to remain one of the world's biggest wealth management centers, although regulatory developments in developed markets are helping shift the focus to the onshore management of assets from offshore.
(Reporting by Martin de Sa'Pinto and Joe Giannone; Editing by David Holmes)
WASHINGTON (AFP) – US consumers' outlook on the economy darkened sharply in May amid growing worries about unemployment and rising food and fuel prices, private data showed Tuesday.
The Conference Board said its consumer confidence index slid to 60.8 from 66.0 in April.
The slump surprised analysts, whose median forecast was for a rise to 63.0.
"Consumers are considerably more apprehensive about future business and labor market conditions as well as their income prospects. Inflation concerns, which had eased last month, have picked up once again," said Lynn Franco, head of research at the Conference Board.
Consumers' short-term outlook, which had improved marginally in April, turned decidedly more pessimistic in May. There was a growing sense that business conditions would deteriorate, jobs would be harder to find and incomes would shrink.
The research association, however, found a bright spot in the monthly survey.
"Consumers' assessment of current conditions declined only modestly, suggesting no significant pickup or deterioration in the pace of growth," Franco said.
The economy grew at a lackluster 1.8 percent annual rate in the first three months of the year.
Notable in the latest data was that consumer spending had been lower than originally understood -- a sign, analysts said, that high oil and food commodity prices were hitting shoppers' budgets for other things.
The Conference Board index comes ahead of Friday's May jobs data from the Labor Department, expected to report the unemployment rate remained unchanged at 9.0 percent from April.