June 1, 2012, 4:23 PM SGT
http://blogs.wsj.com/searealtime/2012/06/01/singapore-no-1-for-millionaires-again/

Singapore No. 1 For Millionaires – Again


By Shibani Mahtani

Reuters


The Louis Vuitton Island Maison store at the Marina Bay Sands, pictured at dusk against the skyline of Singapore’s central business district.

Looking for millionaires? Take a drive around Singapore’s residential districts – more than one in six houses you see will be inhabited by one.

The Southeast Asian city-state has retained the honor of having the highest percentage of millionaires in the world, according to a new report from the Boston Consulting Group. Singapore had 188,000 millionaire households in 2011 – or slightly more than 17% of its resident households. Effectively, that equates to more than one in every six Singapore households having disposable private wealth of over US$1 million, excluding property, businesses and luxury goods. If those were included, it would likely push the number of millionaire households even higher, since property in Singapore is among the world’s most expensive.



The millionaires number has grown 14% since 2010, when Singapore also had the highest percentage of millionaires in the world, according to a similar BCG report.

Singapore’s über-wealthy population has also grown, with 10 in every 100,000 households now classified as “ultra-high-net-worth” households, defined as households with more than US$100 million in private financial wealth. That puts Singapore right below Switzerland, which has the highest concentration of ultra-high-net-worth households at 11 for every 100,000, and above Hong Kong which has 7 of these for every 100,000 households.

Hong Kong takes the prize of having the highest concentration of billionaire households relative to its small size, according to the report.

Across Asia-Pacific (excluding Japan), private wealth increased by 10.7% to US$23.7 trillion. Conversely, in North America, Europe and Japan, private wealth declined by 0.9%, 0.4% and 2% respectively, particularly affecting the ultra-wealthy, though North America still has the world’s largest share of private wealth at US$38 trillion.

China is fast catching up with America’s millionaires, and is now host to the world’s 3rd highest number of millionaire households (1.43 million). According to BCG, this number is set to grow over the year 2012, and is already up 16% from 2010.

The report also tracks offshore wealth, with Switzerland emerging, again, as the world’s largest offshore wealth center. However, this position is increasingly being challenged by the likes of Hong Kong and Singapore, according to BCG, especially as calls for greater tax rigor and transparency become louder in Europe and North America and places like Switzerland are compelled to take more steps to regulate incoming deposits.

“In Switzerland… asset inflows from investors in neighboring countries will certainly decline,” said the report, citing “new, stricter tax regulations.”

“If recent growth rates remain constant, it is possible that Singapore and Hong Kong combined will surpass Switzerland as an offshore booking center in terms of size in 15 to 20 years.”

Already, many high-profile wealthy individuals are choosing to relocate to the two port cities, with tax experts crediting this not only to lower taxation rates but the relative ease of filing taxes in Singapore and Hong Kong, and fewer regulatory hurdles.

In 2011, US$2.1 trillion in offshore wealth was held in Switzerland, compared in US$1 trillion in Hong Kong and Singapore combined. In Hong Kong and Singapore, roughly three quarters of this wealth comes from Asia-Pacific. Given that wealth is rising so quickly in Asia, this means the two cities’ roles as private wealth centers are likely to keep growing rapidly.

Indonesia, which is experiencing an enviable economic boom, is also a large contributor to Asia-Pacific’s share of private wealth. A separate report released this May from Wealth-X, which tracks the world’s super-wealthy, estimates that the combined net worth of Indonesia’s ultra-high-net-worth population is at least US$125 billion, with at least 25 Indonesians worth over US$1 billion.

makes sense given all the government money they invest in eduction.

17 July 2012 Last updated at 12:12 ET

US Senate hearing

HSBC 'allowed money laundering'
Fears oil prices could be rigged
Banks guilty of more mis-selling


HSBC provided a conduit for "drug kingpins and rogue nations", according to a US Senate committee investigating money laundering claims at the bank.

Its report said suspicious funds from countries including Mexico, Iran and Syria had passed through the bank.

The committee is hearing from HSBC officials, one of whom said he found it "painful and embarrassing" to talk about the bank's shortcomings.

HSBC's head of group compliance, David Bagley, stepped down at the hearing.

Mr Bagley told the committee that the bank had "fallen short of our own and regulators' expectations but that a major overhaul of the bank's compliance activities was underway and that HSBC had "learned a lot of valuable lessons".

He said despite being head of compliance he had not had full authority to act over all parts of the bank.

Dangerous environment
Senator Carl Levin said HSBC's lack of controls at its US and overseas units had been "a recipe for trouble".


"HSBC's chief compliance officer knew what was going on"
Mr Levin is chairman of the Senate Permanent Subcommittee on Investigations, which is looking into HSBC's activities between 2006 and 2010.

Its report also says that some HSBC bank affiliates got round US government rules prohibiting financial transactions with Iran and certain other countries, in some cases assisting terrorism.

According to the Senate committee, HSBC accepted more than $15bn in cash from subsidiaries in Mexico, Russia and other countries at high risk of money laundering but failed to conduct any monitoring of these bulk cash transactions between mid-2006 and mid-2009.

Furthermore, the report found that HSBC knew of lax anti-money laundering practices at its Mexican subsidiary HBMX, which had dated back to its purchase in 2002.

HBMX was warned, on at least two occasions, by Mexican authorities that drug money was probably being laundered through HBMX accounts.

'Breathtaking'
One HSBC executive, Paul Thurston, who was head of retail banking and wealth management, said the bank had taken wrongdoing seriously, and had taken action on many occasions, including dismissing staff.

He told the hearing of the difficulties of working in Mexico, which, he said, was a dangerous environment where kidnapping of bank staff was widespread and employees came under pressure from criminals who would attempt to corrupt them.

Mr Thurston referred to substandard record-keeping and the difficulty of knowing who the bank's clients were. He said: "Some of the things I found frankly took my breath away."

Another executive, Christopher Lok, said he found it "painful and embarrassing to talk about where we fell short".

The subcommittee heard first from David Cohen, Under Secretary for Terrorism and Financial Intelligence and Leigh Winchell, assistant director, of the customs enforcement unit ICE, which is part of Homeland Security.

Before the hearing began, HSBC said in a statement, that it expected to be held accountable for what went wrong.

Continue reading the main story
“
Start Quote

It is right that we will be held accountable and that we take responsibility for fixing what went wrong”

Stuart Gulliver
HSBC chief executive
"We will apologise, acknowledge these mistakes, answer for our actions and give our absolute commitment to fixing what went wrong," HSBC said.

Senator Levin spoke of a "polluted" system that allowed black-market funds to move through the US banking system.

"In an age of international terrorism, drug violence in our streets and on our borders, and organised crime, stopping illicit money flows that support those atrocities is a national security imperative," said Mr Levin.

The report also concludes that the US bank regulator, the Office of the Comptroller of the Currency, failed to properly monitor HSBC.

Drugs charges
The report names individual cases such as that of Chinese-Mexican citizen, Zhenly Ye Gon, a long-standing client of HBMX.

In 2007, a joint operation between the Mexican government and US Drug Enforcement Agency seized more than $205m in cash at his residence - described as the largest drug-related cash seizure in history.

Many of HSBC's breaches of US anti-money laundering relate to its use of bearer share accounts. Under the rules for these accounts, ownership of shares and the income they incur can be passed from person to person in secrecy.

HSBC's US subsidiary HBUS had opened more than 2,550 accounts for bearer share corporations.

These businesses are commonly set up in tax havens such as the British Virgin Islands.

i'm sure they're only embarrassed because they got caught.