U.S. Fed to buy 600 billion dollars government bonds

Traders work on the floor of the New York Stock Exchange in New York, Nov. 3, 2010. Wall Street swung to gain on Wednesday after the U.S. Federal Reserve announced a plan to buy 600 billion U.S. dollars more in Treasury bonds. Bernanke and his supporters argue that the Fed is failing in both fronts of its dual mandate: sustainable levels of unemployment and inflation.

U.S. Federal Reserve announced Wednesday it will buy 600 billion dollars more in Treasury bonds, in a move known as the "Quantitative Easing" (QE2) monetary policy to boost the sluggish economic growth.

"The pace of recovery in output and employment continues to be slow," the Fed said in a statement after the policymaking panel meeting.

Federal Open Market Committee (FOMC), the interest rate policy making body of the central bank said that it will "purchase a further 600 billion dollars of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about 75 billion dollars per month."

The Fed also decided to maintain the target range for the federal funds rate at historic low level of zero to 0.25 percent to stimulate the economic recovery.

The central bank cut the interest rate to the current level in December 2008 to tackle the worst recession after the Great Depression in the 1930s. And it has already bought about 1.7 trillion dollars in U.S. government debt and mortgage-linked bonds.




With the U.S. economy growth at only a 2 percent annual pace in the third quarter of this year and the jobless rate seemingly stuck around 9.6 percent, the Fed has come under pressure to do more to stimulate business activity.


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Information technology levy yields N14.5bn

The Federal Government has accumulated N14.5bn from a levy to jumpstart the development of Information Technology.

Despite this, IT has been at a low ebb even with the establishment of the National Information Technology Development Agency in 2001.

Investigations by our correspondent showed that the money was accumulated through the National Information Technology Development Fund Levy, which was introduced by the Federal Government through the NITDA Act that was passed into law in May 2007.

Statistics obtained from the Federal Inland Revenue Service, which has the authority to collect the levy and other taxes on behalf of the government, showed that the IT levy yielded N2.5bn in 2008 and N6.8bn in 2009. Between January and August, 2010, a total of N5bn was collected.

According to the NITDA Act, operators in specified sectors of the economy, including banks, digital mobile operators and oil and gas operators, whose incomes hit the N100m mark, are to pay one per cent of their profits before tax for information technology development.

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Mobil announces gas discovery in OML 104

Mobil Producing Nigeria Unlimited, a subsidiary of Exxon Mobil Corporation, in joint venture with the Nigerian National Petroleum Corporation, has announced a rich gas condensate discovery in Oil Mining Licence 104.

The block is located approximately 75 kilometres offshore Akwa Ibom State.

MPN, in a statement issued on Monday, said, “The Pegi-1 discovery well was drilled in 315 feet (96 metres) of water to a total depth of 11,407 feet (3,477 metres) beneath the Awawa Field and encountered 165 net feet (50.3 metres) of rich gas condensate.

“Analysis of recovered samples indicates an API gravity of approximately 41 degrees. Significant additional potential remains in untested deeper targets within the Pegi fault block as well as in adjacent fault blocks.”

meanwhile the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, has promised to ensure that the Federal Government provides the enabling tools to ensure adequate regulation and enforcement of health, safety and environmental standards in the petroleum industry.

The minister, in her address at the 14th International HSE Biennial Conference on the oil and gas industry in Nigeria, said the dynamic nature of the industry and the ever increasing scope of activities, especially in the offshore frontier, necessitated the ministry to keep pace with the industry with regard to monitoring HSE performance, among its other functions.

The conference, with the theme, “Managing Health Challenges in the Oil and Gas Industry,” was organised by the Department of Petroleum Resources in Abuja on Monday.

She said, in the last couple of months, a number of programmes aimed at improving HSE performance had been established.

The programmes, she said, included the offshore safety permit and the adoption of risk-based inspection philosophy, where applicable, to assure the integrity of petroleum handling facilities.

Source: http://www.punchng.com/Articl.aspx?theartic=Art201011023531056

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Banks’ boards have too many directors – Elumelu

Former Managing Director, United Bank for Africa Plc, Mr. Tony Elumelu
former Managing Director, United Bank for Africa Plc, Mr. Tony Elumelu, said on Monday that there were too many directors on the boards of Nigerian banks.

Elumelu said at the 2010 Stakeholders’ Forum of the Bank Directors Association of Nigeria, held in Lagos, that banks’ boards should be streamlined to include only 12 members, including the executive directors.

He said, “Boards work better when they are not more than 12 people. Based on developments in the advanced countries, I strongly feel that Nigerian boards are too large. Big banks like HSBC and Deutsche Bank don’t have large numbers of board members.”

Buttressing his points, Elumelu said that a report on governance of the 25 largest European banks by a London-based consultancy firm, Nestor Advisors Limited, showed that banks’ boards were too large and not sufficiently independent.

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