Bahrain debt alert
MANAMA: Bahrain must drastically curb and reduce public debt – or face a potential crisis. This warning has come in the audit report, which fears an international ratings downgrade if swift action is not taken.
The National Audit Office Report showed the overall public debt stood at BD3.8 billion last year, compared with BD3.1bn in 2011.
The loan ceiling rose by 42 per cent last year to reach BD5bn, up from BD3.5bn in 2011.
The report urged the Finance Ministry to rethink its borrowing policies to avert facing insolvency and stressed the need to find other funding alternatives for Bahrain to be able to continue repaying its loans and avert further interests on debt.
According to updated figures released in the report, increased annual loan ceiling caused public debt inflation to rise by 187pc last year, compared with the 2009 benchmarks.
The report warned that international financial agencies could downgrade Bahrain’s rating, which would mean higher interest rates on development loans granted to Bahrain. It warned that Bahrain could find it difficult to honour its future obligations and sustain further accumulated interests on the loans in case it fails to contain public debt and tame debt inflation.
According to the report, the loan interest soared to BD150 million last year – including BD92m as external interest, while interests on local loans topped BD58m.
Judge Approves ResCap Settlement With Housing Regulator
A federal judge approved Residential Capital LLC’s settlement with the Federal Housing Finance Agency resolving billions of dollars in claims tied to mortgage-backed securities sold to mortgage finance firms Fannie Mae FNMA -2.21% and Freddie Mac FMCC -2.03%during the financial crisis.
Judge Martin Glenn of the U.S. Bankruptcy Court in New York on Tuesday signed off on ResCap’s settlement with FHFA, the government overseer of Fannie and Freddie. The agreement is an ancillary pact tied to a settlement the housing regulator struck last month with ResCap’s parent, the government-backed auto lender Ally Financial Inc.
Under the deal, FHFA will receive a $1.2 billion claim against ResCap’s bankruptcy estate and will retain some of its mortgage-related claims against Ally.
Under ResCap’s restructuring plan, most unsecured creditors would receive around 35 cents on the dollar, though specific recoveries depend upon whether ResCap or one of its affiliates actually owes the money. FHFA will also receive $24 million in cash when the subprime mortgage lender exits bankruptcy.
Arson in America: Data shows arsons not reported to federal government, and its links to foreclosure
Arson in America is much more common than is reported by the U.S. government, Scripps News found in a yearlong national investigation.
Most acts of arson in America go unreported to the federal government, the investigation found.
Scripps News conducted an audit of arson fires reported in 9 sample cities and uncovered an alarming rate of deliberate fires that were not reported to the National Fire Incident Reporting System – or NFIRS. Select a city below to see the discrepancy between what NFIRS said was arson and what a Scripps audit found.