Credit agency regulator proposed by EU

The European Union (EU) has proposed the creation of a new regulator to monitor the actions of credit rating agencies within the eurozone.

According to reports, the new European Securities and Markets Authority would have oversight for agencies operating within the territory as well as offices outside the EU. The step follows criticism leveled at agencies, which suggested the current debt crisis within the EU has been worsened by their grading.

A second piece of proposed legislation calls for an overhaul of the way banks are managed, which included analyzing how corporate boards are established and remuneration processes for top bankers.

Michel Barnier, EU financial services commissioner, said: “The changes to rules on credit rating agencies will mean better supervision and increased transparency in this crucial sector.

“But they are only a first step. We are looking at this market in more detail.”

The new agency would see national bodies transfer their supervisory powers to it under the terms set out by the EU.

Heads of member states are expected to discuss financial regulation when they meet at the G20 summit in Canada later on in June.

Remittances - MoneyGram expands in Nigeria

MoneyGram International has announced that it will provide money transfer services at more than 500 First Bank of Nigeria locations across the west African nation. The agreement with First Bank of Nigeria PLC expands MoneyGram's presence in Nigeria, which dates to 1998.

First Bank, established in 1894, is Nigeria's oldest bank, with one of Nigeria's largest networks, MoneyGram said.

Nigeria, Africa's most populous nation, is ranked among the world's top 10 receiving countries for money transfers, MoneyGram said. The World Bank estimates that $10 billion in remittances was sent to Nigeria last year, with the U.S. the primary sending country.

Nigeria is widely recognized as the country of origin of many e-mail scams and financial fraud operations involving money transfers.

Company spokeswoman Lori Burzynski said MoneyGram data show that less than one-half of 1 percent of the company's total transactions represent third-party fraud. She said MoneyGram has committed "significant resources to building a state-of-the-art consumer anti-fraud program, and we continue to improve the program."

Operations Risk: Ex- Bank of America call centre worker pleads guilty to selling client details

A call centre worker formerly employed by Bank of America (BoFA) Merrill Lynch has pleaded guilty to stealing and subsequently attempting to sell customer details.

According to court records, Brian Hagen recorded information of accounts at a call centre in Florida where he was employed. The former BoFA staff member is believed to have taken details of the bank’s clients including names, addresses and birth dates.

Mr Hagen was caught out after he met with undercover agents from the Federal Bureau of Investigation, whom he thought were looking to source data on individuals with a high-net worth.

The ex-employee thought he may take as much as 25 per cent of the proceeds of the scam, the court documents showed.

However, Adam Allen, the defendant’s attorney, said: “Mr Hagen has worked in the banking industry since he was 17 years old and the conduct in this case constitutes an isolated incident for which Brian deeply regrets.”

Although the defendant could face a maximum of 30 years in prison and a $1 million fine, his guilty plea is expected to reduce the size of his potential punishment.

Citibank launches contactless payments stickers

US banking giant Citibank has begun offering customers contactless payments stickers that can be attached to the back of mobile phones.

Citi has quietly rolled out the option for customers who request it via the bank's Web site, using the tag-line: "The back of your phone just became its coolest feature".

The Citi payment tags, enable customers to make payments of up to $50 at the point of sale at MasterCard PayPass readers.

It is linked to customers' Citi credit card accounts with purchases appearing on monthly statements.

SEPA migration deadlines: Possible end dates floated

With SEPA-compliant transaction volumes still weak, Harcus Cooper of Barclays is forecasting the introduction of phased end-dates for mandatory conversion to the new EU-wide payment instruments, with credit transfers expected to get the nod in 2013 and direct debits by 2015.

The SCT scheme was introduced in early 2008, yet, according to ECB figures, two years later it accounted for just 7.5% of credit transfers in the Euro area. SDD take-up has been equally sluggish - at the recent EBAday it was noted that a paltry 200 SDD transactions per day, globally, go through EBA Clearing.

Cooper, who is Barclays' senior product manager on SEPA, was speaking at a payments event in London. He noted that many corporates are having trouble justifying the business case for SEPA in the absence of a firm migration deadline away from legacy infrastructure.

The Experian event takes place just a week after the European Commission and European Central Bank hosted the first meeting of the SEPA Council, a new body created to guide the future development of the project which has been dogged with criticism.

The meeting is understood to have seen broad consensus reached that January 2013 would be a likely end date for credit transfers with direct debits following in 2015.

It has long been acknowledged that deadlines are necessary. Last March ECB executive board member Gertrude Tumpel-Gugerell warned: "We need a migration end date from which on onwards only the European payment instruments will exist. We all know that it is inefficient and costly if two schemes continue to run in parallel for a prolonged period of time".

After talks with stakeholders last year saw widespread support for deadlines, the move appeared to gain impetus, with the EC initiating talks with member states in November yet final dates have still not been set.

Jerome Kerviel trial begins in Paris

The trial of 'rogue trader' Jerome Kerviel has got underway in Paris on Tuesday. Mr Kerviel is accused of losing his former bank Societe Generale around €4.5 billion ($5.36 billion) through unauthorized trades he made.

The firm says that Mr Kerviel made these trades without its knowledge and covered his tracks by inventing fictitious transactions.

However, the trader states that Societe Generale was aware of what he was doing and actively supported his actions until the deals became public knowledge, reports the Guardian.

"I was wrong and committed errors, faults even, but I was serious and efficient at work and the fact my bosses protected me and I was promoted during my short career shows this," he said in a recently-published book.

If he is found guilty, Mr Kerviel may be given a jail sentence of five years.

In 2008, Societe Generale was fined €4 million for its role in allowing the trading losses to take place.

Filipinos in Canada swindled out of remittance money

Filipinos who sent money through a remittance center discovered that they had been cheated out of their money. An estimated Can$100,000 worth of remittances never reached their intended recipients in the Philippines.

Ofelia Hermosa is a victim of a remittance company which allegedly stole money she gave them to send back home. Hermosa used the maximum limit on her credit cards just to raise more than Can$8,000 to send to her ailing mother. Being a patron of “Jak En Poy”, she sent her money through the store.

Several days later, she found out that her mother still had not received anything. When she confronted the owners, they blamed their agent in the Philippines who allegedly ran off with all the other remittances.

Albert Quidalos, who also lost more than Can$1,000 to Jak En Poy, estimates that about 90 other Filipinos got promissory notes from owners Danny and Irene Ongkeko. He said Danny Ongkeko assured him, he would return the money. But when Quidalos went back to the agency, he discovered the store has already changed its name and now has new owners.

Quidalos and Hermosa are asking other victims to join them in filing charges against the Ongkekos. But Gina Oliveros, a contract worker in Langley, British Columbia, said she cannot afford lawyer’s fees.

Another victim, Leopold Dallo also hopes that the Ongkekos will hear their pleas and return the money.

But Ed Gloriani, who lost Can $2,500, is taking action against the couple. He asked a relative in the Philippine National Police to track down the Ongkekos, who are believed to have gone back home in the Philippines to hide from their claimants here.

Documents reveal that as early as November 2009, Danny Ongkeko had already filed for bankruptcy, which when approved, will make it harder for their victims to get their money back.