The real cost of systems neglect. The repercussions of Westpac’s latest “technical glitch” are still being felt by consumers and businesses alike. On the night of July 2 Westpac processed a batch of payments twice resulting in thousands of accounts being double debited or credited.
The bank moved quickly to redirect the millions of dollars of transactions affected, but not before accounts became overdrawn, fees were charged and hundreds of people were left wondering why they got paid twice. Westpac would be wise to refund the penalty fees arising out of this error, and it’s likely this is what it is doing, but what about additional costs? Today I received a letter from Medecins Sans Frontieres. It’s a charity I’m happy to support, largely because more than 80 per cent of money donated to the group ends up where it’s needed most, and not covering administration costs.
Of course those administration costs have now increased thanks to Westpac’s error and the need for MSF to explain why it double-debited my account. Call centre staff at MSF must now spend time answering questions and chasing up funds – time and money that could be better spent on MSF’s core activity of sending doctors to crisis areas where they are needed most. – The Better Banking Blog
KKR staging a revival. HENRY KRAVIS, in May 2007, heralded a “golden era” of private equity. Today things look very different. With debt markets still closed, big-buy-outs are off the agenda. Meanwhile falling stockmarkets and profits have left many of the mega-deals struck during that golden age looking pretty idiotic. Yet Mr Kravis still plans to list Kolberg Kravis Roberts (KKR), the firm he co-founded in 1976 and which he runs with his cousin, George Roberts.
KKR was originally set to float just after Blackstone, another big private-equity firm, did the same thing last summer—it had even filed an initial prospectus with American regulators. That plan was put on ice after the credit crunch took hold. It has now been revived, but with a twist. Instead of a straight listing, KKR said on Sunday July 27th that it will first merge with KKR Private Equity Investors (KPE), a Dutch-listed vehicle which invests in the firm’s leveraged buy-outs. The combined firm will then float in New York. – The Economist
Get Crikey FREE to your inbox every weekday morning with the Crikey Worm.
Housing is all. One day in, and I’m wrong already. I could put it down to many factors, but the bottom line is that I had my priorities out of order – I took my eye off the housing ball. The perfect playbook for the past year would have merely been to keep a weather eye on house prices, and inventory-to-sales ratios. This is my lesson for the week – forget about US GDP and labour market data, the most important release is the CS house price index (tonight). As I said yesterday, given that the architecture of the US mortgage market has collapsed, house prices still have further to fall (at least I got something right…).
The IMF blew the top off what started as a mild equity market rally in NY, when they said that estimates of losses of the order of $US1 trillion were probably about right, and that a bottom for the US housing market was not visible. Treasuries already had a bit of a bid tone, as a result of sour developments in finance, and soft European data (German consumer confidence crashed). The IMF said that “credit quality is worsening across many loan classes”, and that “credit risk remains elevated, and markets fragile”. – Matthew Jonson, Business Spectator
China overtakes US online. I’ve seen several stories trumpeting the much-anticipated news that China, with 253 million internet subscribers at the end of June, has officially overtaken the U.S. as having the largest online community in the world. But for me the real story behind these figures is the yawning digital divide between China and India. The dusty old country of 1.1 billion denizens has just 42 million internet subscribers. That amounts to an internet penetration of less than 4% compared to China’s which is in excess of 19%.
When it comes to broadband penetration, India’s position looks even starker. According to India’s Business Standard, the country has just 4.38 million broadband subscribers, amounting to slightly more than 10% of internet users. That’s shockingly low compared to China, which boasts 214 million broadband subscribers, accounting for about 85% of all users.
I find it a more than a little surprising that a country like China, which operates a vast and sophisticated firewall to prevent its citizens from accessing information and opinions the communists deem a threat to their monopoly on power, continues to see such a boom in internet growth. – BusinessWeek
Women on boards bring more women to top jobs. As women struggle to crack corporate America’s so-called glass ceiling, they may find more success in breaking the job barrier from the top down, a study said Wednesday. The more women on a company’s board of directors, the more women are likely to be among that company’s senior management, according to the study by Catalyst, a nonprofit organization that researches and helps promote women in business.
Firms with 30% of women board directors in 2001 on average had 45% more women corporate officers by 2006, compared with ones with no female board members, it said. Companies with the lowest percentages of women board directors in 2001 on average had 26% fewer female corporate officers than those with the highest number five years later, the study said. Those with two or more women board members in 2001 had 25% more female corporate officers by 2006 than those with just one woman board member.
“What this shows is that the number of women, or more women, more directors today, predicts pretty reliably more women in leadership five years from now,” said Ilene Lang, president of Catalyst. – Information Week