Violent Extremists in Rome Have to Be Punished, Berlusconi Says

By Francesca Cinelli - Oct 16, 2011 5:49 PM GMT+0700

Violence by demonstrators in Rome yesterday is a “worrying signal for civil coexistence” and rioters need to be identified and punished, Italy’s Prime Minister Silvio Berlusconi said.

Berlusconi, who described the violence as “unbelievable,” also thanked security forces for handling the demonstrations in a statement released yesterday.

Police arrested 12 out of 20 people held yesterday, Corriere della Sera reported today, adding that more than 100 people were injured, of whom three are in serious condition.

Violent demonstrators accounted about 2,000 out of some 200,000 who turned out, Corriere reported.

To contact the reporter on this story: Francesca Cinelli in Milan at fcinelli@bloomberg.net.

To contact the editor responsible for this story: James Ludden at jludden@bloomberg.net

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G-20 to Consider List of 50 Important Banks

By Mark Deen and Cheyenne Hopkins - Oct 16, 2011 5:00 AM GMT+0700

Group of 20 governments are considering naming as many as 50 banks as systemically important to the global economy and in need of extra capital, two officials from G-20 nations said.

The list, drawn up by Financial Stability Board Chairman Mario Draghi, will be published in time for a G-20 leaders meeting in Cannes, France, on Nov. 3-4, said the officials, who declined to be identified because the discussions are private. Regulators have said the banks named will be forced to take on more capital.

Regulators are at loggerheads with some institutions over the additional capital rules, with lenders arguing the requirements may harm the world’s economic recovery. Jamie Dimon, chief executive officer of JPMorgan Chase & Co. (JPM), and Bank of America Corp. (BAC) CEO Brian T. Moynihan are among bankers who have suggested this year that the new rules will constrain lending and hurt growth.

G-20 finance ministers and central bankers meeting in Paris yesterday discussed the standards that will be applied when compiling the list of systemic banks.

Twenty-nine to 40 banks could be designated depending on the potential impact on financial markets, according to one person familiar with the matter. Two officials from G-20 nations said the list could even be expanded to about 50 institutions. The regulators are also contemplating including the institutions in categories according to their ability to absorb losses.

G-20 Statement

French Finance Minister Francois Baroin confirmed at a news conference that the G-20 members will publish a list of the systemic institutions at the Cannes summit next month. In its communiqué, the G-20 said it endorsed a framework to reduce the risks posed by systemically important institutions through strengthened supervision, a cross-border resolution plan and additional capital requirements.

The FSB is assessing how systemically important institutions are on the basis on five broad categories: size, interconnectedness, lack of substitutability, global activity and complexity.

The Basel Committee on Banking Supervision said in July that, based on data available at the time, 28 banks would be considered systemic and face an additional capital surcharge.

The framework for systemic institutions was set to be the focus of the G-20 meetings before Europe’s sovereign debt crisis intensified. The Basel panel announced in June that it had completed its work on the surcharge rules, and the FSB approved them on Oct. 3. The FSB brings together finance ministry officials, central bank governors and regulators. Lenders whose collapse could roil global markets will face global capital surcharges as high as 2.5 percentage points on top of Basel III capital standards.

Carney Leading Candidate

Bank of Canada Governor Mark Carney is the leading candidate to replace Draghi as head of the FSB, two officials said on condition of anonymity because a final decision is pending. Draghi becomes president of the European Central Bank on Nov. 1

Carney, 46, worked at Goldman Sachs Group Inc. for more than a decade before becoming a policy maker in 2003 and then chief of Canada’s central bank in 2008. At a gathering of bank executives on Sept. 23 in Washington, Dimon, 55, attacked Carney on the Basel III capital surcharge rules, saying many of them discriminated against U.S. banks and he would continue to describe them as “anti-American.”

One official said global regulators recommended areas for strengthening oversight of shadow banks and that they will contemplate plans for such institutions in 2012. The FSB suggested assessing banks’ involvement with shadow banks, reform of money-market funds, securitization regulation, supervision with an emphasis on risk and scale, and regulation of lending and repo markets, the official said.

To contact the reporters on this story: Mark Deen in Paris at markdeen@bloomberg.net; Cheyenne Hopkins at Chopkins19@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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Wall Street Protests Spread to Asia-Pacific Region

By Francesca Cinelli, Esmé E. Deprez and Maria Kolesnikova - Oct 16, 2011 5:36 AM GMT+0700

The Occupy Wall Street protest against income disparity spread across Western Europe, Asia, the U.S. and Canada today. Rome’s demonstration turned violent, contrasting with peaceful events elsewhere.

As many as 500 marchers in Rome wielding clubs attacked police, two banks and a supermarket, Sky TG24 reported. Authorities used tear gas and water cannon. Londoners were barred from Paternoster Square, home of the London Stock Exchange, and Tokyo protesters demanded an end to nuclear power. New York police arrested 24 at a Citigroup Inc. (C) bank branch and 6,000 gathered in Times Square.

The rallies started last month in New York’s financial district, where people have been staying in lower Manhattan’s Zuccotti Park. They widened to 1,500 cities today, including Sydney and Toronto, the organizers said, in a “global day of action against Wall Street greed.”

“The world will rise up as one and say, ‘We have had enough,’” Patrick Bruner, an Occupy Wall Street spokesman, said in an e-mail.

Protesters say they represent “the 99 percent,” a nod to a study by Nobel Prize-winning economist Joseph Stiglitz showing the top 1 percent of Americans control 40 percent of U.S. wealth.

March on Banks

In New York, demonstrators marched past a JPMorgan Chase & Co. (JPM) branch urging clients to transfer accounts to “a financial institution that supports the 99 percent.” They distributed fliers with a list of community banks and credit unions.

“I’m interested in sending a message to support banks that actually support the community as opposed to those like Chase that took government money and fired workers anyway,” said Penny Lewis, 40, a City University of New York labor professor. She said she planned to close her Chase account.

Twenty-four were arrested later for refusing to leave a Citibank branch, the police said, and about 6,000 marched to Times Square as night fell, the organizers said. There were also protests in Boston, Philadelphia, Miami, Denver, San Francisco and other U.S. cities.

About 1,000 people gathered in Toronto’s financial district carrying signs saying “Nationalize the Banks,” “CEO Pay Up 444 Percent in 12 years. How About You?” and “We’re All in the Same Boat.” Others opposed war, serial killers and hydro- electric costs.

Protests were planned in at least 15 Canadian cities, including Montreal, Calgary, Vancouver, Edmonton and Winnipeg, according to the Canadian Broadcasting Corp.’s website.

Violence in Italy

Demonstrations turned violent in Italy, where the unemployment rate for 15-to-24-year-olds was 27.6 percent in August. Thirty police and 20 protesters were injured in Rome, Sky TG24 reported. Firecrackers were thrown at the Ministry of Defense and windows of Cassa di Risparmio di Rimini and Poste Italiane SpA shattered, according to the report.

“Something like this is clearly not spontaneous,” James Walston, who teaches politics at the American University in Rome, said in a telephone interview. “We have been in a risky situation for months with expectations -- above all of young people -- falling lower and lower. The potential for violence today, with so large a number of demonstrators, was high.”

Mayor Giovanni Alemanno told Sky TG24 that “the worst of Europe planned to meet in Rome.”

“Now, the citizens of Rome are those who have become angry,” he said.

London Banners

The Occupy London Stock Exchange protest drew about 4,000 people, according to organizers. Police didn’t provide a number. In the shadow of St. Paul’s Cathedral, banners had slogans that read “No Bulls, No Bears, Just Pigs” and “Bankers Are the Real Looters.”

“The financial system benefits a handful of banks at the expense of everyday people, the taxpayers,” said Spyro Van Leemnen, a 27-year-old public-relations agent. “The same people who are responsible for the recession are getting away with massive bonuses.”

In Berlin, 6,000 took to the streets and 1,500 gathered in Cologne, ZDF television said. In Frankfurt, 5,000 marched by the European Central Bank headquarters with toy pistols firing soap bubbles and planned to camp out, ZDF reported.

“A few hundred” met at the Paris city hall, according to BFM TV. Thousands marched in Madrid with placards criticizing bank bailouts. In Zurich, about 200 coalesced on Paradeplatz, playing Monopoly and sipping free coffee from a stand.

In Taiwan, several hundred demonstrators sat mostly quietly outside the Taipei World Financial Center, known as Taipei 101.

Communist Anthem

Levin Jiang, 22, an English major at Taipei’s Fu Jen Catholic University, joined others singing the communist anthem L’Internationale in front of a Hermes watch shop.

“I’m angry about the unjust capitalist society,” he said. “I’m anti-capitalism.”

In Seoul, 600 converged on the city hall after changing the location of the protest as police banned the rally today, Yonhap News reported. They urged rules for speculative investments and demanded lower college tuition.

In Hong Kong, about 200 people gathered at the Exchange Square Podium in the central shopping and business district, according to Napo Wong, an organizer.

“Hong Kong is heaven for capitalists,” said Lee Chun Wing, 29, a community college social sciences lecturer in Hong Kong. “Wealth is created by workers and so should be shared with the workers as well. Capitalism is not a just system.”

In Tokyo, morning rain may have deterred some from joining three planned protests. More than 120 people demanding an end to nuclear power marched from Hibiya Park to the offices of Tokyo Electric Power Co., owner of the Fukushima atomic plant crippled by a March 11 earthquake.

To contact the reporters on this story: Francesca Cinelli in Milan at fcinelli@bloomberg.net Maria Kolesnikova in London at mkolesnikova@bloomberg.net Esmé E. Deprez in New York at edeprez@bloomberg.net

To contact the editors responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net Claudia Carpenter at ccarpenter2@bloomberg.net

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Europe Crisis Plan Wins Global Backing

By Simon Kennedy and Cheyenne Hopkins - Oct 16, 2011 5:00 AM GMT+0700

Europe’s revamped strategy to beat its two-year sovereign debt crisis won the backing of global finance chiefs, who urged the region’s leaders to deal “decisively” with the turmoil when they meet for emergency talks in a week’s time.

European officials yesterday outlined the initiatives they’re considering at a meeting in Paris of finance ministers and central bankers from the Group of 20 economies. With the continent’s fiscal woes rattling financial markets and threatening the world economy, governments were urged to complete the plan at their Oct. 23 summit in Brussels and to tame the threat of contagion by maximizing the firepower of their 440 billion-euro ($611 billion) bailout fund.

“The plan has the right elements,” U.S. Treasury Secretary Timothy F. Geithner told reporters in Paris. Bank of Canada Governor Mark Carney said that “some of what is being considered, if fully implemented, would be sufficient in our opinion.”

Policy makers held out the possibility of rewarding European action with more aid from the International Monetary Fund, while splitting over whether the Washington-based lender needs a fillip of cash.

‘Substantial Arsenal’

“The IMF has a substantial arsenal of financial resources, and we would support further use of those existing resources to supplement a comprehensive, well-designed European strategy alongside a more substantial commitment of European resources,” Geithner said. He added that the U.S. would back more money for the IMF only if a “compelling case” was made as its current $390 billion war chest is “very, very substantial.”

Europe’s strategy, which has still to be made public, currently includes writing down Greek bonds by as much as 50 percent, establishing a backstop for banks and multiplying the strength of the newly-enhanced European Financial Stability Facility, people familiar with the matter said Oct. 14. Optimism the crisis may soon be tamed spurred stocks higher last week and pushed the euro to its biggest gain against the dollar in more than two years.

European officials “will have left Paris under no misunderstanding that there is a huge amount of pressure on them to deliver a solution,” U.K. Chancellor of the Exchequer George Osborne told reporters. Next weekend “is the moment people are expecting something quite impressive.”

Agreement ‘Close’

German Finance Minister Wolfgang Schaeuble said his G-20 counterparts welcomed Europe’s “confirmation that we’re aware of our responsibility and we’ll solve the problems in the euro zone.” European Union Economic and Monetary Affairs Commissioner Olli Rehn told Bloomberg Television that euro-area authorities are “close” to an agreement on how to capitalize banks.

The G-20 officials -- who met to prepare for a Nov. 3-4 gathering of leaders in Cannes, France -- said the world economy faces “heightened tensions and significant downside risks” that must be addressed.31

They vowed to keep banks capitalized and financial markets stable, while reiterating an aversion to excess currency volatility. They also considered shortly naming as many as 50 banks as systemically important, two officials said.

Almost two years to the day since Greece set the crisis in motion by announcing it had underestimated its budget deficit, Europe’s latest strategy hinges on putting it on a viable path. Austerity has plunged Greece deeper into recession and provoked civil unrest that threatens political stability.

Italy Targeted

Failure to curb the pain has led to Portugal and Ireland requiring bailouts, and markets are now targeting larger debt- strapped nations such as Italy. Investors are concerned that if the crisis is allowed to fester, the world economy could face a repeat of the chaos that followed the 2008 collapse of Lehman Brothers Holdings Inc. Geithner warned three weeks ago that failure by Europe to act would risk “cascading default, bank runs and catastrophic risk.”

In the works is a five-point plan foreseeing a solution for Greece, bolstering of the EFSF rescue fund, fresh capital for banks, a new push to boost competitiveness and consideration of European treaty amendments to tighten economic management.

The Greek bond losses now envisaged in the plan may be accompanied by a pledge to rule out debt restructurings in other countries that received bailouts, such as Portugal, to persuade investors that Europe has mastered the crisis, said the people on Oct. 14.

Options Discussed

Options include tweaking a July accord struck with investors for a 21 percent net-present-value reduction in Greek debt holdings. One variant would take that reduction up to 50 percent, the people said.

Under a more aggressive proposal, investors would exchange Greek bonds for new debt at a lower face value collateralized by the euro area’s AAA-rated rescue fund, the people said. The ultimate option is a restructuring involving writedowns without collateral, they said.

The bank-aid model under discussion is to set up a European-level backstop capitalized by the rescue fund, the people said. It would have the power to take direct equity stakes in banks and provide guarantees on bank liabilities.

Officials are considering seven ways of multiplying the strength of Europe’s temporary rescue fund. The options break down into two broad categories: enabling it to borrow from the European Central Bank or using it to partly insure new bonds issued by distressed governments. The ECB has all but ruled out the first method, making bond insurance more likely, the people said.

EFSF Guarantees

EFSF guarantees of new bonds might range from 20 percent to 30 percent, a person familiar with those deliberations said. Recourse to bond insurance suggests the central bank will need to maintain its secondary-market purchases for an unspecified “interim” period, people said.

ECB President Jean-Claude Trichet, who attended his last G- 20 meeting before he retires Oct. 31, reiterated the central bank hopes to stop purchasing government bonds once the EFSF is able to take over.

A consensus is emerging to accelerate the setup of a permanent aid fund planned for July 2013, the European Stability Mechanism. This week’s discussions will focus on creating it a year earlier, in July 2012, and easing unanimity rules that permit solitary countries to block bailouts.

Officials divided over whether Europe’s travails meant the IMF should be handed more cash, beyond agreeing it must have “adequate resources to fulfil its systemic responsibilities.” Emerging markets such as China are considering whether the lender needs more money, while officials from the U.S., Germany and Canada were among those to say either that the euro area must fix for its problems first or the IMF already has plentiful and untapped resources.

To contact the reporters on this story: Simon Kennedy in Paris at skennedy4@bloomberg.net Cheyenne Hopkins in Paris at chopkins19@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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Occupy Wall Street Protest Brings Crowd to Times Square

By Esmé E. Deprez - Oct 16, 2011 11:04 AM GMT+0700

Occupy Wall Street demonstrations in New York City yesterday culminated with a Times Square rally that drew thousands opposed to economic inequality, echoed by protests from London to Tokyo.

Participants in the month-old movement marched past a JPMorgan Chase & Co. (JPM) branch early in the day to urge clients to close accounts. At least 6,000 gathered later in Times Square, the organizers estimated.

About 70 people were arrested as part of the day’s demonstrations, including 42 in the Midtown area who failed to disperse when warned, police said. Two police officers were hospitalized because of injuries, the department said.

Hong Kong, Sydney, Toronto and other cities also saw protests, which turned violent in Rome, in what organizers called a “global day of action against Wall Street greed.” Backers say they represent “the 99 percent,” a nod to Nobel Prize-winning economist Joseph Stiglitz’s study showing the top 1 percent of Americans control 40 percent of U.S. wealth.

“The world will rise up as one and say, ‘We have had enough,’” Patrick Bruner, an Occupy Wall Street spokesman, said in an e-mail. A news release from the organization said there were demonstrations in 1,500 cities worldwide, including 100 in the U.S.

March From Zuccotti

New York participants walked from an encampment in lower Manhattan’s Zuccotti Park to 1 Chase Manhattan Plaza near Wall Street. They passed out fliers urging clients to transfer accounts to “a financial institution that supports the 99 percent.”

The fliers provided a list of alternatives, including the Lower East Side People’s Federal Credit Union and Amalgamated Bank, described as the nation’s only union-owned bank.

“I’m interested in sending a message to support banks that actually support the community as opposed to those like Chase that took government money and fired workers anyway,” said Penny Lewis, 40, a City University of New York labor professor. She said she planned to close her Chase account on Monday.

Howard Opinsky, a spokesman for JPMorgan, said the bank has paid back the government funds and has been hiring employees. JPMorgan, the second-largest U.S. bank, received and repaid $25 billion from the government’s Troubled Asset Relief Program.

“JPMorgan Chase utilized TARP funds at the request of the government and was the first bank to pay the funds back plus an additional $1.7 billion more than was lent,” Opinsky said in an e-mailed comment.

He said JPMorgan Chase hired more than 13,000 people in the third quarter and more than 2,000 veterans this year.

Citibank Branch

A group left a demonstration at Washington Square Park and entered a downtown branch of Citibank at nearby LaGuardia Place, Deputy New York City Police Commissioner Paul J. Browne said in an e-mail.

They refused the bank manager’s request to leave and 24 were arrested for trespassing, he said. One was charged additionally with resisting; the others were compliant, he said.

More than 700 have been arrested in New York since the movement began Sept. 17, mostly for disorderly conduct. Police said they arrested 15 on Friday for infractions such as sitting in the street and overturning trash bins.

A wider confrontation was avoided after Zuccotti Park’s owner, Brookfield Office Properties Inc., postponed a cleanup that would have removed and banned protesters’ sleeping bags, tents and other gear that provided overnight accommodations.

Protesters and local politicians had gathered 300,000 signatures, flooded the city’s 311 information line and drew more than 3,000 people to the park to oppose the cleanup, Bruner said.

Donations Received

Pete Dutro, a member of the group’s finance committee, said it had received at least $150,000 in donations.

Justin Strekal, a Cleveland native and member of the protesters’ shipping, inventory and storage committee, said about 200 packages are being received daily. He said names and return addresses are being recorded so thank-you notes can be sent.

Letters of solidarity are also being archived to post online, he said. One that was included in a box holding 10 packets of ramen noodles said the sender couldn’t afford more because they were unemployed for two years and their house was in foreclosure, Strekal said.

David Gorman, who lives on Wall Street and works nearby as president of capital markets at Kern Suslow Securities Inc., said the area’s activity is a nuisance.

Banging Drums

“They’re banging drums and screaming and it’s a quarter to eight in the morning and this is literally in my back yard,” he said. “People live here. If someone was protesting in front of my house in the suburbs, I don’t think they’d let that happen.”

The Occupy Wall Street protest has spread to U.S. cities including Boston, Philadelphia and San Francisco. While New York’s participants have been allowed to stay at their encampment, other cities haven’t been as tolerant.

Near the Colorado Capitol building in Denver, police in riot gear took down protesters’ campsite and arrested two dozen people, the Associated Press reported. In San Diego, police used pepper spray to split up a human chain formed around a tent, the news agency said. In Trenton, New Jersey, police removed tents and other gear from an area near a war memorial on Friday.

To contact the reporter on this story: Esmé E. Deprez in New York at edeprez@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

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Wall Street Protest Rallies at JPMorgan Branch in Support of Worker Banks

By Esmé E. Deprez - Oct 16, 2011 8:20 AM GMT+0700

Occupy Wall Street demonstrations in New York City today culminated with a Times Square rally that drew thousands opposed to economic inequality, echoed by protests from London to Tokyo.

Participants in the month-old movement marched past a JPMorgan Chase & Co. (JPM) branch early in the day to urge clients to close accounts. At least 6,000 gathered later in Times Square, the organizers estimated. About 70 people were arrested as part of the day’s demonstrations, including 42 in the Midtown area who failed to disperse when warned, police said. Two police officers were hospitalized because of injuries, the department said.

Hong Kong, Sydney, Toronto and other cities also saw protests, which turned violent in Rome, in what organizers called a “global day of action against Wall Street greed.” Backers say they represent “the 99 percent,” a nod to Nobel Prize-winning economist Joseph Stiglitz’s study showing the top 1 percent of Americans control 40 percent of U.S. wealth.

“The world will rise up as one and say, ‘We have had enough,’” Patrick Bruner, an Occupy Wall Street spokesman, said in an e-mail. A news release from the organization said there were demonstrations in 1,500 cities worldwide, including 100 in the U.S.

March From Zuccotti

New York participants walked from an encampment in lower Manhattan’s Zuccotti Park to 1 Chase Manhattan Plaza near Wall Street. They passed out fliers urging clients to transfer accounts to “a financial institution that supports the 99 percent.”

The fliers provided a list of alternatives, including the Lower East Side People’s Federal Credit Union and Amalgamated Bank, described as the nation’s only union- owned bank.

“I’m interested in sending a message to support banks that actually support the community as opposed to those like Chase that took government money and fired workers anyway,” said Penny Lewis, 40, a City University of New York labor professor. She said she planned to close her Chase account on Monday.

Howard Opinsky, a spokesman for JPMorgan, said the bank has paid back the government funds and has been hiring employees. JPMorgan, the second-largest U.S. bank, received and repaid $25 billion from the government’s Troubled Asset Relief Program.

Thousands Hired

“JPMorgan Chase utilized TARP funds at the request of the government and was the first bank to pay the funds back plus an additional $1.7 billion more than was lent,” Opinsky said in an e-mailed comment. “Despite the challenging economic conditions today, JPMorgan Chase continues to lend, invest, and contribute billions of dollars across the country enabling job creation, economic development, and homeownership. In addition, the firm has hired over 13,000 employees in the third quarter and hired over 2,000 veterans this year.”

A group left a demonstration at Washington Square Park and entered a downtown branch of Citibank at nearby LaGuardia Place, Deputy New York City Police Commissioner Paul J. Browne said in an e-mail.

They refused the bank manager’s request to leave and 24 were arrested for trespassing, he said. One was charged additionally with resisting; the others were compliant, he said.

More than 700 have been arrested in New York since the movement began Sept. 17, mostly for disorderly conduct. Police said they arrested 15 yesterday for infractions such as sitting in the street and overturning trash bins.

Confrontation Avoided

A wider confrontation was avoided after Zuccotti Park’s owner, Brookfield Office Properties Inc., postponed a cleanup that would have removed and banned protestors’ sleeping bags, tents and other gear that provided overnight accommodations.

Protesters and local politicians had gathered 300,000 signatures, flooded the city’s 311 information line and drew more than 3,000 people to the park to oppose the cleanup, Bruner said.

The protesters have sought to transform Zuccotti Park into a self-sustaining community with donated food, medical supplies, hygiene products, sleeping bags and clothing. Pete Dutro, a member of the group’s finance committee, said it had received at least $150,000 in donations.

Justin Strekal, a Cleveland native and member of the protestors’ shipping, inventory and storage committee, said about 200 packages are being received daily. He said names and return addresses are being recorded so thank-you notes can be sent.

Letters of Support

Letters of solidarity are also being archived to post online, he said. One that was included in a box holding 10 packets of ramen noodles said the sender couldn’t afford more because they were unemployed for two years and their house was in foreclosure, Strekal said.

David Gorman, who lives on Wall Street and works nearby as president of capital markets at Kern Suslow Securities Inc., said the area’s activity is a nuisance.

“They’re banging drums and screaming and it’s a quarter to eight in the morning and this is literally in my back yard,” he said. “People live here. If someone was protesting in front of my house in the suburbs, I don’t think they’d let that happen.”

The Occupy Wall Street protest has spread to U.S. cities including Boston, Philadelphia and San Francisco. While New York’s participants have been allowed to stay at their encampment, other cities haven’t been as tolerant.

Near the Colorado state Capitol in Denver, police in riot gear took down protesters’ campsite and arrested two dozen people, the Associated Press reported. In San Diego, police used pepper spray to split up a human chain formed around a tent, the news agency said. In Trenton, New Jersey, police removed tents and other gear from an area near a war memorial yesterday.

To contact the reporter on this story: Esmé E. Deprez in New York at edeprez@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

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G-20 Tells Europe to Deal ‘Decisively’ With Debt Crisis at Oct. 23 Summit

By Simon Kennedy and Cheyenne Hopkins - Oct 16, 2011 5:00 AM GMT+0700

Europe’s revamped strategy to beat its two-year sovereign debt crisis won the backing of global finance chiefs, who urged the region’s leaders to deal “decisively” with the turmoil when they meet for emergency talks in a week’s time.

European officials yesterday outlined the initiatives they’re considering at a meeting in Paris of finance ministers and central bankers from the Group of 20 economies. With the continent’s fiscal woes rattling financial markets and threatening the world economy, governments were urged to complete the plan at their Oct. 23 summit in Brussels and to tame the threat of contagion by maximizing the firepower of their 440 billion-euro ($611 billion) bailout fund.

“The plan has the right elements,” U.S. Treasury Secretary Timothy F. Geithner told reporters in Paris. Bank of Canada Governor Mark Carney said that “some of what is being considered, if fully implemented, would be sufficient in our opinion.”

Policy makers held out the possibility of rewarding European action with more aid from the International Monetary Fund, while splitting over whether the Washington-based lender needs a fillip of cash.

‘Substantial Arsenal’

“The IMF has a substantial arsenal of financial resources, and we would support further use of those existing resources to supplement a comprehensive, well-designed European strategy alongside a more substantial commitment of European resources,” Geithner said. He added that the U.S. would back more money for the IMF only if a “compelling case” was made as its current $390 billion war chest is “very, very substantial.”

Europe’s strategy, which has still to be made public, currently includes writing down Greek bonds by as much as 50 percent, establishing a backstop for banks and multiplying the strength of the newly-enhanced European Financial Stability Facility, people familiar with the matter said Oct. 14. Optimism the crisis may soon be tamed spurred stocks higher last week and pushed the euro to its biggest gain against the dollar in more than two years.

European officials “will have left Paris under no misunderstanding that there is a huge amount of pressure on them to deliver a solution,” U.K. Chancellor of the Exchequer George Osborne told reporters. Next weekend “is the moment people are expecting something quite impressive.”

Agreement ‘Close’

German Finance Minister Wolfgang Schaeuble said his G-20 counterparts welcomed Europe’s “confirmation that we’re aware of our responsibility and we’ll solve the problems in the euro zone.” European Union Economic and Monetary Affairs Commissioner Olli Rehn told Bloomberg Television that euro-area authorities are “close” to an agreement on how to capitalize banks.

The G-20 officials -- who met to prepare for a Nov. 3-4 gathering of leaders in Cannes, France -- said the world economy faces “heightened tensions and significant downside risks” that must be addressed.

They vowed to keep banks capitalized and financial markets stable, while reiterating an aversion to excess currency volatility. They also considered shortly naming as many as 50 banks as systemically important, two officials said.

Almost two years to the day since Greece set the crisis in motion by announcing it had underestimated its budget deficit, Europe’s latest strategy hinges on putting it on a viable path. Austerity has plunged Greece deeper into recession and provoked civil unrest that threatens political stability.

Italy Targeted

Failure to curb the pain has led to Portugal and Ireland requiring bailouts, and markets are now targeting larger debt- strapped nations such as Italy. Investors are concerned that if the crisis is allowed to fester, the world economy could face a repeat of the chaos that followed the 2008 collapse of Lehman Brothers Holdings Inc. Geithner warned three weeks ago that failure by Europe to act would risk “cascading default, bank runs and catastrophic risk.”

In the works is a five-point plan foreseeing a solution for Greece, bolstering of the EFSF rescue fund, fresh capital for banks, a new push to boost competitiveness and consideration of European treaty amendments to tighten economic management.

The Greek bond losses now envisaged in the plan may be accompanied by a pledge to rule out debt restructurings in other countries that received bailouts, such as Portugal, to persuade investors that Europe has mastered the crisis, said the people on Oct. 14.

Options Discussed

Options include tweaking a July accord struck with investors for a 21 percent net-present-value reduction in Greek debt holdings. One variant would take that reduction up to 50 percent, the people said.

Under a more aggressive proposal, investors would exchange Greek bonds for new debt at a lower face value collateralized by the euro area’s AAA-rated rescue fund, the people said. The ultimate option is a restructuring involving writedowns without collateral, they said.

The bank-aid model under discussion is to set up a European-level backstop capitalized by the rescue fund, the people said. It would have the power to take direct equity stakes in banks and provide guarantees on bank liabilities.

Officials are considering seven ways of multiplying the strength of Europe’s temporary rescue fund. The options break down into two broad categories: enabling it to borrow from the European Central Bank or using it to partly insure new bonds issued by distressed governments. The ECB has all but ruled out the first method, making bond insurance more likely, the people said.

EFSF Guarantees

EFSF guarantees of new bonds might range from 20 percent to 30 percent, a person familiar with those deliberations said. Recourse to bond insurance suggests the central bank will need to maintain its secondary-market purchases for an unspecified “interim” period, people said.

ECB President Jean-Claude Trichet, who attended his last G- 20 meeting before he retires Oct. 31, reiterated the central bank hopes to stop purchasing government bonds once the EFSF is able to take over.

A consensus is emerging to accelerate the setup of a permanent aid fund planned for July 2013, the European Stability Mechanism. This week’s discussions will focus on creating it a year earlier, in July 2012, and easing unanimity rules that permit solitary countries to block bailouts.

Officials divided over whether Europe’s travails meant the IMF should be handed more cash, beyond agreeing it must have “adequate resources to fulfil its systemic responsibilities.” Emerging markets such as China are considering whether the lender needs more money, while officials from the U.S., Germany and Canada were among those to say either that the euro area must fix for its problems first or the IMF already has plentiful and untapped resources.

To contact the reporters on this story: Simon Kennedy in Paris at skennedy4@bloomberg.net Cheyenne Hopkins in Paris at chopkins19@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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Wall Street Protests Spread Globally, With Rome Violence, Calm Elsewhere

By Francesca Cinelli, Esmé E. Deprez and Maria Kolesnikova - Oct 16, 2011 5:36 AM GMT+0700

The Occupy Wall Street protest against income disparity spread across Western Europe, Asia, the U.S. and Canada today. Rome’s demonstration turned violent, contrasting with peaceful events elsewhere.

As many as 500 marchers in Rome wielding clubs attacked police, two banks and a supermarket, Sky TG24 reported. Authorities used tear gas and water cannon. Londoners were barred from Paternoster Square, home of the London Stock Exchange, and Tokyo protesters demanded an end to nuclear power. New York police arrested 24 at a Citigroup Inc. (C) bank branch and 6,000 gathered in Times Square.

The rallies started last month in New York’s financial district, where people have been staying in lower Manhattan’s Zuccotti Park. They widened to 1,500 cities today, including Sydney and Toronto, the organizers said, in a “global day of action against Wall Street greed.”

“The world will rise up as one and say, ‘We have had enough,’” Patrick Bruner, an Occupy Wall Street spokesman, said in an e-mail.

Protesters say they represent “the 99 percent,” a nod to a study by Nobel Prize-winning economist Joseph Stiglitz showing the top 1 percent of Americans control 40 percent of U.S. wealth.

March on Banks

In New York, demonstrators marched past a JPMorgan Chase & Co. (JPM) branch urging clients to transfer accounts to “a financial institution that supports the 99 percent.” They distributed fliers with a list of community banks and credit unions.

“I’m interested in sending a message to support banks that actually support the community as opposed to those like Chase that took government money and fired workers anyway,” said Penny Lewis, 40, a City University of New York labor professor. She said she planned to close her Chase account.

Twenty-four were arrested later for refusing to leave a Citibank branch, the police said, and about 6,000 marched to Times Square as night fell, the organizers said. There were also protests in Boston, Philadelphia, Miami, Denver, San Francisco and other U.S. cities.

About 1,000 people gathered in Toronto’s financial district carrying signs saying “Nationalize the Banks,” “CEO Pay Up 444 Percent in 12 years. How About You?” and “We’re All in the Same Boat.” Others opposed war, serial killers and hydro- electric costs.

Protests were planned in at least 15 Canadian cities, including Montreal, Calgary, Vancouver, Edmonton and Winnipeg, according to the Canadian Broadcasting Corp.’s website.

Violence in Italy

Demonstrations turned violent in Italy, where the unemployment rate for 15-to-24-year-olds was 27.6 percent in August. Thirty police and 20 protesters were injured in Rome, Sky TG24 reported. Firecrackers were thrown at the Ministry of Defense and windows of Cassa di Risparmio di Rimini and Poste Italiane SpA shattered, according to the report.

“Something like this is clearly not spontaneous,” James Walston, who teaches politics at the American University in Rome, said in a telephone interview. “We have been in a risky situation for months with expectations -- above all of young people -- falling lower and lower. The potential for violence today, with so large a number of demonstrators, was high.”

Mayor Giovanni Alemanno told Sky TG24 that “the worst of Europe planned to meet in Rome.”

“Now, the citizens of Rome are those who have become angry,” he said.

London Banners

The Occupy London Stock Exchange protest drew about 4,000 people, according to organizers. Police didn’t provide a number. In the shadow of St. Paul’s Cathedral, banners had slogans that read “No Bulls, No Bears, Just Pigs” and “Bankers Are the Real Looters.”

“The financial system benefits a handful of banks at the expense of everyday people, the taxpayers,” said Spyro Van Leemnen, a 27-year-old public-relations agent. “The same people who are responsible for the recession are getting away with massive bonuses.”

In Berlin, 6,000 took to the streets and 1,500 gathered in Cologne, ZDF television said. In Frankfurt, 5,000 marched by the European Central Bank headquarters with toy pistols firing soap bubbles and planned to camp out, ZDF reported.

“A few hundred” met at the Paris city hall, according to BFM TV. Thousands marched in Madrid with placards criticizing bank bailouts. In Zurich, about 200 coalesced on Paradeplatz, playing Monopoly and sipping free coffee from a stand.

In Taiwan, several hundred demonstrators sat mostly quietly outside the Taipei World Financial Center, known as Taipei 101.

Communist Anthem

Levin Jiang, 22, an English major at Taipei’s Fu Jen Catholic University, joined others singing the communist anthem L’Internationale in front of a Hermes watch shop.

“I’m angry about the unjust capitalist society,” he said. “I’m anti-capitalism.”

In Seoul, 600 converged on the city hall after changing the location of the protest as police banned the rally today, Yonhap News reported. They urged rules for speculative investments and demanded lower college tuition.

In Hong Kong, about 200 people gathered at the Exchange Square Podium in the central shopping and business district, according to Napo Wong, an organizer.

“Hong Kong is heaven for capitalists,” said Lee Chun Wing, 29, a community college social sciences lecturer in Hong Kong. “Wealth is created by workers and so should be shared with the workers as well. Capitalism is not a just system.”

In Tokyo, morning rain may have deterred some from joining three planned protests. More than 120 people demanding an end to nuclear power marched from Hibiya Park to the offices of Tokyo Electric Power Co., owner of the Fukushima atomic plant crippled by a March 11 earthquake.

To contact the reporters on this story: Francesca Cinelli in Milan at fcinelli@bloomberg.net Maria Kolesnikova in London at mkolesnikova@bloomberg.net Esmé E. Deprez in New York at edeprez@bloomberg.net

To contact the editors responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net Claudia Carpenter at ccarpenter2@bloomberg.net

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