Our correspondent Andreas Frank reports;
The same day, the OECD published its “Standard for Automatic Exchange of Financial Account Information”, which allows for the exchange of tax information upon request, joining all major countries worldwide in addressing tax evasion, the Swiss Bankers Association (SBA) criticized the framework as very complex and too costly.

Reacting to this latest move by the OECD, which is mandated with setting global standards for framing policy to address tax evasion and related issues, SBA said in statement issued from Basel that it has been in favour of a global standard for automatic exchange of information for over a year and has also contributed constructively to the drafting process.  Terming the OECD recommendations a “general a step in the right direction”, SBA however said that an important positive point was confidentiality of the exchanged data, that is, adherence to strict data protection rules by the responsible authorities abroad.

The grouping of Swiss banks said that “what has still not been satisfactorily addressed is the question of a level playing field.  The basis to be used for client identification is domestic money laundering regulations. There are still different standards in this area. As a result thereof, countries with less strict regulations will be able to exchange less information than countries such as Switzerland.

Hitting out at the US, it further said that “it is becoming apparent that the US will not be prepared to offer full reciprocity” and said that there were chances that some provisions introduced in the US could be misused as a loophole for clients of US banks.

The SBA further said that the implementation of the new OECD standard is highly complex and will result in significant costs.  The SBA said: “Because it is a multilateral set of rules, the costs are estimated to reach between Swiss franc 500-800 million (Rs 3,500-6,000 crore), and therefore will be clearly higher than the costs of implementing FATCA (the US law for addressing offshore tax evasion).

“… Due to the complexity, the SBA estimates that a proper implementation will require at least two years from the date that the standard comes into effect,” it added.

The association continues to expect that all concerned issues are addressed before an automatic exchange of information comes into effect.

On October 2013, Switzerland signed the OECD convention, which allows for the exchange of tax information upon request, joining all major countries worldwide in addressing tax evasion.

In Switzerland, the convention will still have to be submitted for consultation before heading for ratification by parliament. It could also potentially go to a nationwide vote before being implemented.   Swiss Bankers Association Statement

Empirical proof that activists exacerbate short-termism is strangely elusive. Indeed, such evidence as there is suggests the opposite. “The Long-Term Effects of Hedge-Fund Activism”, a recent paper by Lucian Bebchuk of Harvard Law School and others, examined the roughly 2,000 interventions at companies by activist funds from 1994 to 2007. Over the five years following an intervention both the share price and the operating performance of the target company improved, on average. The operating performance got stronger towards the end of the five-year period, not weaker.

This is the sort of evidence that has convinced Mary Jo White, the chairman of America’s Securities and Exchange Commission, to argue in a recent speech that activist shareholders should no longer be automatically viewed negatively. These days, she said, “There is widespread acceptance of many of the policy changes that so-called ‘activists’ are seeking to effect.”  Shareholder Activists

The signal that the Fed has got its eyes on Europe came from the Minneapolis Fed.  Its President,  Narayana Kocherlakota has become a convert to perpetual QE. Kocherlakota resembles the worst kind of reformed smoker, who will not tolerate smokers in his house even if they smoke outside. His last egregious act was to fire personnel with dissenting economic opinions to his own. Now it appears that he has taken a step to promote the global remit of his dogma. In a pamphlet, similar to ones that can be imagined to have advised Presidents Woodrow Wilson and FDR, the Minneapolis Fed asked the rhetorical question:  Is it Too Late to Bail Out Troubled Countries in the Eurozone.  Narayana Kocherlakota Speech

QE, OMT and Taper

In the US the tax deductibility of child care expenses for children up to twelve whose parents are working is worth about 20-35 percent of the expense.  Australia is struggling to legislate a deduction. This is a crucial question for working women.  Deductibility of Child Care Expenses

Glitch in technology frightens off investors.  Our correspondent Andreas Frank states:  Bitcoin prices plunged again Monday morning after Mt.Gox, the major exchange for the virtual currency, said technical problems require it to continue its ban on customer withdrawals.

Mt.Gox said it has discovered a bug that causes problems when customers try to use their account to make a transfer or payment of bitcoins to a third party. It said the problem is not with Mt.Gox software but affects all transfers of bitcoins to third parties.

The exchange said it was suspending withdrawals and third-party payments until the problem is fixed, although trading in bitcoins continues.

A bug is allowing a third party receiving a bitcoin transfer to make it look as if the transfer did not go through, which can lead to improper multiple transfers, Mt.Gox said. Mt.Gox tried to put the best face on the technical problems in its latest statement, noting that the technology is “very much in its early stages.”  MtGox on Bitcoins