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(JOHANNESBURG): J.P. Morgan announced today that its two-year pilot programme for South African Small and Medium Enterprises (SMEs) successfully achieved the objectives set out at inception. All companies in the SME Catalyst for Growth Programme (C4G Programme) are still successfully operating, with an overall median annual revenue increase of 27%, growth in employment and an increase in successful applications for finance by 14%. Furthermore, as planned, a business development services (BDS) analytics platform is being established and the C4G Programme is transforming into an independent not-for-profit organisation where the platform will be housed.

The C4G Programme has also added its first corporate partner, Anglo American, through its Zimele enterprise development initiative. As a corporate partner, Anglo American will commit to using the C4G analytics platform when procuring BDS. As buyers of BDS, corporate partners have an opportunity to drive quality in the BDS market by intentionally moving their enterprise development investments towards BDS providers that create value for their SME clients and away from those that are unable to assist SMEs in reaching their full potential.

The C4G Programme, supported by the JPMorgan Chase Foundation, was the firm’s first significant social investment in the SME space in South Africa, with an investment of more than $1.5 million to date. The two-year pilot programme has been run in collaboration with three core partners: Aurik Business Incubator (Aurik), Raizcorp and Dalberg Global Development Advisors (Dalberg). The C4G Programme supports the provision of BDS to selected entrepreneurial companies, while building knowledge and experience on the value and impact of effective BDS services.

Historically, the inability to assess or compare different types of BDS has been a hurdle to SMEs seeking assistance to grow. The BDS analytics platform being built by the C4G Programme will address this knowledge gap by providing performance data on BDS providers. The platform combines both objective measures of SME and BDS provider success with qualitative evidence related to SMEs’ experience of BDS. It aims to improve allocation of scarce resources to the best providers, improve the quality of the BDS pool by introducing transparency and competition, and attract investment into BDS by demonstrating its impact.

75% of SMEs who participated in the C4G Programme experienced revenue growth from their baseline levels in 2012. In contrast, only 60% of SMEs tracked in the SME Growth Index – the largest survey tracking SMEs over time in South Africa, with approximately 500 SMEs included – experienced revenue growth during the same period. Between financial years 2011 and 2013, the C4G Programme’s SME median annual growth was 27%, a number substantially above the 10% threshold that the SME Growth Index classifies as high growth.

Between 2012 and 2014, 60% of the C4G Programme’s SMEs managed to increase their number of customers, with median growth at 49%. While only 5% of the businesses had accessed growth capital before entering the programme, by the close of the programme 20% of SMEs had accessed growth capital. Employment growth amongst the SMEs has been particularly encouraging. Between 2012 and 2014, 50% saw an increase in staff. In contrast, only a third of SMEs in the Growth Index managed to grow their staff numbers, including part-time staff during the same period.

On average, the SMEs involved in the C4G Programme gained one job each. This may seem small, but if just one job was added to 15 % of existing SMEs in South Africa 0.8 million jobs could be created, potentially leading to a 4 percentage point drop in unemployment. Combining this intervention with improving the five-year survival rate of South African SMEs to 40%, using high quality BDS, would decrease South Africa’s unemployment rate by 6 percentage points and create 1.2 million jobs. This would represent 24% of the 5 million jobs envisioned by the country’s National Development Plan.

Brian Smith, Head of Investment Banking for J.P. Morgan in Sub-Saharan Africa (SSA) said:

“We are extremely pleased with the strong growth of the companies who participated in the C4G Programme. The programme led the SMEs to tangible growth in revenue, employment, customer reach and enhanced access to capital. In two short years, the pilot has proven that BDS has strengthened key business systems and instigated greater focus, prioritisation and strategic thinking amongst SMEs. At the close of the programme, all 20 SMEs were still in business, which is impressive given that about 18% of their peer firms fail each year. We are excited that the first corporate partner Anglo American will join the growing list of partners of the C4G Programme, a strong endorsement of this successful initiative.”

The current C4G Programme investment partners are Cadiz Asset Management (through their Protected High Impact Fund), GroFin, Imprint Capital, IDF Managers and Makuna Growth. These partners have the funding, interest, and capability to invest in SMEs in South Africa, and have committed to consider C4G SMEs for investment. They will have access to a pipeline of high-performing SMEs that are currently seeking finance, and information for investment already collated and verified directly by the BDS providers, thereby limiting transaction costs. As the programme enters the next phase, and begins collecting data from an increasing number of SMEs, there will be an even bigger role for investment partners to play.

Pavlo Phitidis, the CEO from Aurik, said:
“The J.P. Morgan C4G Programme provided us with the opportunity to prove the benefit of our BDS programmes across start-up, early stage and growth companies in the eye of the public domain. The fact that this programme was monitored and evaluated by a third party specialist agency has provided the evidence of our impact and lent credence to the fact that BDS grows businesses that grow our economy. J.P. Morgan’s contribution to the South African economy through this programme is invaluable and humbling. SMEs are the job generators and fiscal contributors that collectively can have a major impact on our economic development. These facts are now apparent, as demonstrated through this programme.”

Allon Raiz, the CEO from Raizcorp, said:
“It has been wonderful to see such an organisation of the size of J.P. Morgan put their weight behind a programme in a way that keeps the entrepreneurs’ best interests at heart. We have seen such huge strides in terms of this programme. The C4G Programme has allowed Raizcorp to develop its programmes further and use some cutting edge approaches to BDS. This has already produced benefits and results for the entrepreneurial ecosystem.”

James Mwangi, the Global Managing Partner of Dalberg, said:
“Dalberg is pleased to have had this opportunity to partner with J.P. Morgan in the creation of the C4G Programme. The programme has brought rigour to the assessment of business development support and creates a pathway though which the field can objectivity maximise the long-term impact of such programmes on SMEs. The C4G Programme not only promises to drive much needed improvements in the support available to South Africa’s SMEs, but it also creates a means to transfer these learnings from South Africa’s relatively well developed SME support ecosystem to more nascent SME support environments across the developing world.”

Khanyisile Kweyama, Executive Director of Anglo American in South Africa, concluded:
“Partnership is an important part of our strategy for enterprise development in South Africa and we are constantly finding new partners and initiatives to help us not only create sustainable jobs, but thriving local economies in the areas where we have a presence.”

About J.P. Morgan
J.P. Morgan’s Corporate & Investment Bank is a global leader across banking, markets and investor services. The world’s most important corporations, governments and institutions entrust us with their business in more than 100 countries. With $21.1 trillion of assets under custody and $412 billion in deposits, the Corporate & Investment Bank provides strategic advice, raises capital, manages risk and extends liquidity in markets around the world. For more information, go to www.jpmorgan.com.

About Aurik Business Incubator
Aurik Business Incubator was started in 2001 from a genesis of starting, building and selling 12 businesses. With two failures, two listings and eight trade sales, the overall portfolio achieved an IRR of 44.2%. This direct experience led to the development of three business development support programmes suited to start-up, early stage and growth businesses. With over 512 businesses engagements in Aurik’s programmes, an average annual revenue growth rate of 102% has been achieved across the portfolio. The programmes include proprietary selection, assessment and engagement processes focused on achieving a single outcome, working with entrepreneurs to build their businesses into an asset of value. Aurik provides its services in five of South Africa’s provinces, serving individual entrepreneurs and business owners directly as well as big businesses and corporates through various supplier and enterprise development programmes. For more information, go to www.aurik.co.za.

About Raizcorp
Raizcorp is Africa’s only unfunded for-profit business incubator/Prosperator model, which provides full-service business support programmes that guide entrepreneurs to profitability. Raizcorp was founded in 2000, and has since become one of Africa’s premier business incubator models. Raizcorp has developed a rigorous selection process that ensures that those who make it into the various programmes are indeed those with the highest potential to succeed. Once selected, the entrepreneurs are exposed to a high touch support programme that continues to produce excellent results. Raizcorp has worked with over 1 500 businesses and currently supports in excess of 500 companies in eight locations in South Africa and Angola. Approximately 86% of Raizcorp’s partner companies have growth rates of over 15% per annum. Over a period of one to two years, Raizcorp has managed to increase the revenue and profitability of over 95% of its partner companies. For more information, go to www.raizcorp.com.

About Dalberg Global Development Advisors
Dalberg Global Development Advisors is a strategy and policy advisory firm focused on global development.. Its mission is to mobilize effective responses to the world’s most pressing issues. Dalberg works with senior decision-makers in governments, international organisations, NGOs and corporations to help bring about change and lasting impact.

Dalberg’s core advisory services include: (i) the development of innovative strategies, approaches and market mechanisms; (ii) internal organizational reforms and restructuring initiatives; (iii) market and investment analysis and market-entry strategies; and (iv) coordination and facilitation of large multi-stakeholder initiatives. We focus on eight key sectors: Access to Finance, Agriculture, Conflict & Humanitarian Aid, Corporate, Economic Development and Competitiveness, Energy & Environment, Global Health, and Strategy & Performance.

Dalberg has a global network of offices located in Bogota, Copenhagen, Dakar, Geneva, Johannesburg, London, Mumbai, Nairobi, New York, San Francisco, and Washington, D.C. It serves global clients and fields international and local teams in developing countries. For more information, go to www.dalberg.com.

About Zimele
Since 1989, Anglo American’s enterprise development arm, Zimele has successfully empowered numerous black Small and Medium Enterprises (SMEs) and entrepreneurs, and generated sustainable job creation and socio-economic development in predominantly peri-urban mining communities. Zimele enables the companies it invests in to stand on their own feet and to grow through a strategic blend of financial support and incubator-style mentorship.

Between 2008 and 2013, Zimele invested R921 million in 1 619 businesses which collectively employ 30 092 people. With 2 358 transactions during this time, the businesses’ collective turnover was approximately R4.5 billion annually.

About Anglo American
Anglo American is one of the world’s largest mining companies, is headquartered in the UK and listed on the London and Johannesburg stock exchanges. Our portfolio of mining businesses meets our customers’ changing needs and spans bulk commodities – iron ore and manganese, metallurgical coal and thermal coal; base metals and minerals – copper, nickel, niobium and phosphates; and precious metals and minerals – in which we are a global leader in both platinum and diamonds. At Anglo American, we are committed to working together with our stakeholders – our investors, our partners and our employees – to create sustainable value that makes a real difference, while upholding the highest standards of safety and responsibility across all our businesses and geographies. The company’s mining operations, pipeline of growth projects and exploration activities span southern Africa, South America, Australia, North America, Asia and Europe. For more information, go to www.angloamerican.com.

BOSTON- –Gillette® (NYSE: PG), the world’s leading male grooming brand, today unveils a video that shows the evolution of men’s style over the last century. In just sixty seconds, the video uses the perspective of a man’s bathroom mirror to show iconic looks from each era, spotlighting the way grooming habits have played a role in defining each look and ultimately ending on a man with a fully-shaved chest to highlight the global trend of body shaving. And to ensure guys have the right tools for the times, Gillette has introduced the Gillette BODY Razor built for a man’s terrain.

The video uses a stop motion approach to show evolution of men’s grooming and fashion trends demonstrated through man’s dress, surroundings, soundtrack and hair and shave styles throughout time – moving from an early 20th century man in full suit to a man ready to disco-dance the night way, all the way through to today’s body grooming trend. In addition to the video which was released Wednesday June 25, 2014 on Gillette’s YouTube channel, special behind-the-scenes footage with film creators is available highlighting how the stop motion technology came together to chronicle 100 years of men’s style in only sixty seconds.

“Every era has an iconic look – a combination of fashion and grooming choices. Today’s look calls for body shaving,” said Francesco Tortora, Gillette Global Marketing Director, Procter & Gamble. “Just as fashion constantly evolves, we constantly refine and engineer our precision products to help men feel and look their best. We are proud to offer a precision tool designed to give men an edge in keeping up with the times.”

A recent study conducted by Gillette shows men are more eager than ever to improve their look and hygiene, and to properly prepare for intimate encounters. Body shaving is increasingly part of the routine of 44% of men globally who body groom1. Despite the rising popularity of body shaving, men have had limited tools to choose from, with 58% of current body shavers saying a better razor would enhance their body-shaving experience2.

“Gillette has always worked hard to address the needs of men,” said Tortora. “With body shaving on the rise, we applied our 100+ years of shaving expertise to engineer our first razor specifically built for the terrain below a man’s neck.”

Gillette BODY allows men to tackle the challenging task of body terrain with precision, accuracy, and ease. A unique series of Gillette technologies and features help the razor glide comfortably over body contours:

Rounded Head for increased maneuverability and total body comfort, adapting to body contours and allowing the razor to move through even the tightest spaces.
3 Lubricating Strips providing outstanding glide for incredible comfort, no matter the region.
Ergonomic Anti-Slip Grip for exceptional control, even in the shower, because the last thing you want to do when body shaving is lose control of the razor.
3 Floating Blades for a close, comfortable shave on some of the most sensitive areas of a man’s body.
Forward Pivoting Head that easily adapts to body contours.
Gillette BODY razors are available in specific countries. To find out availability in your country, go to Gillette.com.

Visit Gillette’s YouTube channel to view the online content.

About Gillette
For over 110 years, Gillette has delivered precision technology and unrivaled product performance – improving the lives of over 800 million men around the world. From shaving and body grooming, to skin care and sweat protection, Gillette offers a wide variety of products including razors, shave prep (gels, foams and creams), skin care, after shaves, antiperspirants, deodorants and body wash. For more information and the latest news on Gillette, or to see our full selection of products, visit http://www.gillette.com/.

About Procter & Gamble
P&G serves approximately 4.8 billion people around the world with its brands. The Company has one of the strongest portfolios of trusted, quality, leadership brands, including Always®, Ambi Pur®, Ariel®, Bounty®, Charmin®, Crest®, Dawn®, Downy®, Duracell®, Fairy®, Febreze®, Gain®, Gillette®, Head & Shoulders®, Lenor®, Olay®, Oral-B®, Pampers®, Pantene®, SK-II®, Tide®, Vicks®, Wella® and Whisper®. The P&G community includes operations in approximately 70 countries worldwide. Please visit http://www.pg.com for the latest news and in-depth information about P&G and its brands.

– See more at: http://news.pg.com/press-release/pg-corporate-announcements/emerging-trend-identified-evolution-mens-style-almost-half-#sthash.LemgiUl8.dpuf

Bank of America Merrill Lynch Global Transaction Services (GTS) today announced the implementation of a tailored collections and payments solution in China for OSI Group (OSI) LLC, a privately-owned U.S.-based food processing corporation. In addition to a full suite of treasury management services to help OSI optimize working capital in China, the customized solution includes dedicated credit facilities to support its new operations in Weihai, Shandong province, China.

The integrated collection and payments solution provides OSI with enhanced efficiencies and control of treasury processes for its expanding China operations. Under the solution, OSI maintains local currency operating accounts and USD capital accounts with Bank of America Merrill Lynch, while also integrating existing accounts with local banking partners. Additionally, Bank of America Merrill Lynch’s solution will include various deposit and FX services.

By implementing CashPro Online™ and CashPro Connect, Bank of America Merrill Lynch’s unified global platform, OSI will utilize a single portal to manage all its China treasury operations, which is supported by automated and comprehensive information reporting processes.

“This deal highlights the unique ability of Bank of America Merrill Lynch to pair local market experience with global connectivity and solutioning,” said Ivo Distelbrink, head of Global Transaction Services, Asia Pacific. “As OSI continues to expand in China, we commit ourselves to delivering the full strength of our local presence, global resources and unrivaled universal banking model.”

Bank of America Merrill Lynch’s unique China UnionPay (CUP) Alliance also represents an important differentiating component of the larger solution developed for OSI. The alliance supports card acquiring from all domestic cards and the majority of non-China cards, while also providing direct debit collection from individual accounts opened with over 100 major local banks. Through this market-first alliance in China, OSI can use point of sale machines provided by CUP to collect debit and credit card payments from their diversified base of local buyers, and automatically centralize funds in their Bank of America Merrill Lynch account, allowing for clear reporting and streamlined reconciliation.

“Bank of America Merrill Lynch’s solution meets our requirements for a comprehensive and scalable banking solution to manage daily treasury management activities, streamline banking arrangements across our entities in China, and build cost efficiencies as we expand in this strategic market,” said Frank Wang, Finance director of OSI China.

OSI has been operating in China since opening its first factory in Beijing in 1992. In addition to integrated poultry facilities and two existing protein further-processing plants, the company operates four produce plants and a dough operation in this market. Additionally, OSI has facilities in India, Japan, Taiwan, the Philippines and Australia, and employs approximately 10,000 people throughout Asia Pacific.

Bank of America
Bank of America is one of the world’s largest financial institutions, serving individual consumers, small businesses, middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 49 million consumer and small business relationships with approximately 5,100 retail banking offices and approximately 16,200 ATMs and award-winning online banking with 30 million active users and more than 15 million mobile users. Bank of America is among the world’s leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.

Bank of America Merrill Lynch is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp., all of which are registered broker-dealers and members of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA.
Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured * May Lose Value * Are Not Bank Guaranteed.

About OSI Group
For close to 60 years, OSI Group, LLC has been a global leader in supplying value-added protein items and other food products to leading foodservice and retail brands. It is a privately held corporation with more than 55 facilities in 16 countries. The company’s global headquarters is located outside of Chicago in Aurora, Illinois, USA.
Copyright 2014 Bank of America Corporation. All rights reserved. Bank of America, Merrill Lynch, Broadcort and their logos are trademarks of Bank of America Corporation and/or its affiliates.
Visit the Bank of America newsroom for more Bank of America news.
www.bankofamerica.com
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The 2014 U.S. Trust Insights on Wealth and Worth® survey released today provides a new, in-depth look at the structurally diverse modern American family and finds the dynamics add complexity to money issues already heightened in families with increased wealth.

Based on a nationwide survey of 680 U.S. high net worth individuals with $3 million or more in investable assets, the annual study finds that changing family structures, multi-generational and extended family circumstances, evolving gender roles, and generational views on investing and use of wealth are challenging traditional approaches to wealth planning.

Wealth and the modern American family
U.S. Trust found that family dynamics, including change in family structures and roles among men, women and multiple generations affect both immediate and extended family members.

The perspective of mine, yours and ours is the new reality of wealth management. Nearly half (46 percent) of wealthy families in the study have experienced a change or disruption in the family dynamic, following a divorce, loss of a spouse or partner and subsequent remarriage and blending of families.

In modern families, women are playing an active role in wealth planning and decision-making as they make significant contributions to family wealth. More than half (52 percent) of women came into their marriage or relationship with financial assets equal to or greater than their spouse or partner, and one-third (33 percent) of women are now the primary income earner or contribute equally to household wealth.

While families grow more complex, so do their challenges. A concerning trend among modern high net worth families is assuming financial responsibilities for family members and encountering family circumstances that they are, in many cases, unprepared to handle.

Six in 10 (59 percent) wealthy people have provided substantial financial support to adult members of immediate and/or extended family, including siblings, parents, children, nieces and nephews. Yet few (3 percent) have a financial plan that accounts for this.

The top five circumstances that affect overall family financial well-being include: divorce, addictions, untimely death or disability of a primary income earner, medical crises and disagreements over inheritance or distribution of family assets.

Despite the prevalence of medical crises, and risk it represents to wealth, only 38 percent of married couples have a financial plan to address the cost of long-term care for both partners. Only one in 10 have a financial plan that accounts for the long-term care needs of aging parents.

“Families today come in all shapes and sizes and the wealthy are not immune to the ripple effect of extenuating circumstances on overall family financial well-being,” said Keith Banks, president of U.S. Trust. “While these circumstances are not unique to the wealthy, they can complicate an already complex wealth planning process. Traditional approaches to wealth management need to evolve and incorporate the diverse perspectives, roles and contemporary needs of the modern family.”

The great intergenerational transfer of wealth
The changing dynamic of the modern American family coincides with the ongoing transfer of more than $15 trillion1 in financial and non-financial high net worth assets over the next two decades. The majority of wealthy people today (78 percent), and particularly baby boomers, achieved financial success through creating it, versus inheriting it, and at least half (52 percent) grew up in middle-class or lower-middle-class households.

Their children and heirs are more likely to grow up wealthy and are the current and future beneficiaries of substantial family wealth. More than half (56 percent) of surveyed millennials (ages 18 through 33) are second- or third-generation wealthy, and nearly half (48 percent) already have received a financial inheritance. However, the vast majority of wealthy parents (96 percent) think children aren’t mature enough to handle family money until they are at least age 25.

Possibly the source of this concern, only four in 10 (38 percent) wealthy parents with adult children over the age of 25 have fully disclosed their financial status to their children, and only 38 percent of wealthy parents strongly agree their children will be well-prepared to handle the inheritance planned for them. Parents of children of all ages appear open to rectifying this disconnect, as the vast majority (92 percent) believe their children would benefit from a discussion with a financial professional.

“We know from our long history of working with wealthy families, and our survey confirms, that effectively transferring wealth and keeping family relationships intact is of utmost importance,” said Chris Heilmann, chief fiduciary executive at U.S. Trust. “Even the more complex issues that modern families face can be managed with careful planning and efforts to build the financial skills and values future heirs need to be good stewards of family wealth.”

Millennials approach to investing and money management
In addition to receiving their wealth under different circumstances, millennials also plan to put it to use in distinctively different ways, shedding new light on the direction and purpose of the substantial amount of family wealth changing hands in the coming years.

Two-thirds (66 percent) of millennials say that their investing focus is on meeting long-term goals, and their approach is innovative, individualized and opportunistic.

Three-quarters (75 percent) of millennials consider the social and environmental impact of the companies they invest in to be an important part of investment decision-making.

Nearly eight in 10 (79 percent) millennials feel strongly that private capital from socially motivated investors can help hold public companies and governments accountable for their actions and results.

Eight in 10 (81 percent) millennials either own or are interested in owning tangible assets such as land, real estate and timber, and they are more interested than any other age group in using private equity and hedging strategies.

Millennials are most likely to describe themselves as opportunistic investors, and they, more than any other age group, are using credit to make strategic and opportunistic investments including starting or growing a business.

Use of wealth for meaning and impact
In general, the wealthy feel strongly about putting their financial success to work in a way that is meaningful and will create positive social change. They rank “giving back to society” among the most important uses of their wealth, second only to providing for their own families.

Nine in 10 (89 percent) wealthy Americans say they would help foster greater income and opportunity in the country primarily by financially supporting programs that support employment and education opportunities, paying more in taxes, creating jobs, and/or supporting legislation to reduce regulation and taxes on small business and entrepreneurs.

“Most of the wealthy today are self-made and want their legacy to matter,” added Banks. “They want to make a meaningful and positive contribution that will benefit their families, the companies they own, the communities they live in and society overall, but many lack the proper guidance and tools given the complexity of their lives. At U.S. Trust, our work with clients and the robust family services we offer reflect our understanding of how needs and expectations change as circumstances and the family dynamic evolve.”

Opportunistic investing and borrowing
U.S. Trust found that distinct generational perspectives and changing family roles and responsibilities are reflected in the widely varied investment outlook and approaches among the wealthy. Only 40 percent of high net worth investors, especially men, feel bullishly optimistic about the market, while the remainder are more likely to describe themselves as fearful of losing money (12 percent), pessimistic (10 percent), opportunistic in down markets (12 percent), unsure but remaining hopeful (9 percent) and unsure which way the market is headed but following the herd (6 percent). Other findings include:
One in four high net worth investors say they missed out on the bull market rally.
More than half (53 percent) don’t think they are on track to meet long-term goals with their current asset allocation strategy.

Two in 10 still have more than 25 percent of their portfolio in cash positions. High net worth investors who currently have more than 10 percent of their investment portfolio allocated to cash were three times more likely to say they missed the market rally.

However, risk tolerance is returning with 42 percent pursuing higher investment returns despite increased risk, compared to 37 percent in 2013 and 30 percent in 2012.

The very wealthy have a reputation for knowing how to use credit strategically to their advantage. The top five ways high net worth investors use credit are: to invest opportunistically, buy real estate, pay taxes, fund education expenses, and start a new business.

Credit accounts for more than 10 percent of the personal balance sheets of half of wealthier households (with more than $10 million in investable assets), while the majority (two-thirds) of $3-million-plus households have less than 10 percent. The survey findings suggest that one reason they aren’t using more credit may be lack of knowledge. Only 35 percent of respondents feel they have a good understanding of how to use credit strategically, and just 31 percent feel they were well prepared in life with the financial skills to strategically use credit.

The 2014 U.S. Trust Insights on Wealth and Worth survey also includes findings on high net worth business owners and senior executives and additional detailed findings about high net worth women executives, trust and estate planning, and additional gender and generational findings.
The complete 2014 U.S. Trust Insights on Wealth and Worth survey findings can be found at www.ustrust.com/survey.
1 Cerulli Associates, “Wealth Transfer: Sizing, Trends & Opportunities”, 2010

Survey Methodology
The 2014 U.S. Trust Insights on Wealth and Worth® survey is based on a nationwide survey of 680 high net worth and ultra high net worth adults with at least $3 million in investable assets, not including the value of their primary residence. Respondents were equally divided among those who have between $3 million and $5 million, $5 million and $10 million, and $10 million or more in investable assets. The survey was conducted online by the independent research firm Phoenix Marketing International in February and March of 2014. Asset information was self-reported by the respondent. Verification for respondent qualification occurred at the panel company, using algorithms in place to ensure consistency of information provided, and was confirmed with questions from the survey itself. All data have been tested for statistical significance at the 95 percent confidence level.

U.S. Trust
U.S. Trust, Bank of America Private Wealth Management is a leading private wealth management organization providing vast resources and customized solutions to help meet clients’ wealth structuring, investment management, banking and credit needs. Clients are served by teams of experienced advisors offering a range of financial services, including investment management, financial and succession planning, philanthropic and specialty asset management, family office services, custom credit solutions, financial administration and family trust stewardship.

U.S. Trust is part of the Global Wealth and Investment Management unit of Bank of America, N.A., which is a global leader in wealth management, private banking and retail brokerage. U.S. Trust employs more than 4,000 professionals and maintains 140 offices in 32 states.

As part of Bank of America, U.S. Trust can provide access to a broad range of banking solutions for individuals and businesses, and an extensive retail banking platform.

Bank of America
Bank of America is one of the world’s largest financial institutions, serving individual consumers, small businesses, middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 49 million consumer and small business relationships with approximately 5,100 retail banking offices and approximately 16,200 ATMs and award-winning online banking with 30 million active users and more than 15 million mobile users. Bank of America is among the world’s leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.

Visit the Bank of America newsroom for more Bank of America news.
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The 2014 U.S. Article IV highlighted five broad themes to both strengthen the recovery and improve the long-term outlook: raising productivity growth and labor participation, confronting poverty, keeping public debt on a sustained downward path, managing the exit from zero policy rates, and securing a safer financial system. To achieve these goals and fortify the country’s economic future the policy focus should be to undertake more proactive labor market policies that lower long-term unemployment and raise participation; increase the minimum wage while strengthening the Earned Income Tax Credit; invest in infrastructure; improve the tax structure and raise revenues; fundamentally reform social security; and lower the growth of health care costs.

Growth and Poverty Reduction
1.Near-term growth and jobs. In the early part of this year, as a harsh winter conspired with other factors (including inventory drawdown, a still-struggling housing market, and slower external demand), momentum faded in the U.S economy. Recent data, however, suggest a meaningful rebound in activity is now underway and growth for the remainder of this year and 2015 should well exceed potential. This renewed dynamism, however, provides only a partial offset to the weak first quarter and so growth is now projected at 2 percent for 2014, rising to 3 percent in 2015. As the economy strengthens, the current account deficit is expected to slowly widen with an increased demand for imports only partially offset by fiscal consolidation and the improvements in the trade balance that are linked to rising self-sufficiency in energy. Despite the cyclically-adjusted current account being somewhat on the weaker side, the U.S. external position appears broadly consistent with medium-term fundamentals and desirable policies. Job growth has been healthy but labor markets are weaker than is implied by the headline unemployment number: long-term unemployment is high, labor force participation is well below what can be explained by demographic factors, and wages are stagnant. With better growth prospects, the U.S. should see steady progress in job creation. However, headline unemployment is expected to decline only slowly—in part because improving prospects will draw discouraged workers back into the labor force—and long-term unemployment will take time to fall to historic levels.

2. Longer-run growth. Potential growth is forecast to average around 2 percent for the next several years, below both historic averages and the outlook assessed at the last Article IV consultation. A combination of factors is at work in lowering longer-run growth including the effects of population aging and more modest prospects for productivity growth. This puts a significant premium on taking immediate steps to raise productivity, encourage innovation, augment human and physical capital, and increase labor force participation. Such measures should involve investments in infrastructure and education, improving the tax system, and active labor market policies. They may also include reaching agreement on a broad, skills-based approach to immigration reform (to expand the labor force, raise average labor productivity, and support medium-term fiscal adjustment) as well as fully capitalizing on the gains from rising U.S. energy independence while protecting the environment (including by removing existing restrictions on U.S. oil exports). No single measure will be sufficient and a manifold solution will certainly be required. There is no shortage of good ideas currently under public debate and so the challenge ahead is to forge political agreement on specific legislation.

3. Poverty. The latest data showed almost 50 million Americans living in poverty (as measured by the Census Bureau’s supplemental poverty measure) and the official poverty rate has been stuck above 15 percent despite the ongoing recovery. Reducing poverty will require, first and foremost, a much more robust return to growth and job creation. However, other policies have a role to play. The recent expansion of Medicaid and the increase in health insurance coverage have been concrete steps whose effect on poverty and health outcomes should become more evident over time. An expansion of the Earned Income Tax Credit—to apply to households without children, to older workers, and to low income youth—would be another effective tool to raise living standards for the very poor. Similarly, the government should make permanent the various extensions of the EITC and the improvements in the Child Tax Credit that are due to expire in 2017. Finally, given its current low level (compared both to U.S. history and international standards), the minimum wage should be increased. This would help raise incomes for millions of working poor and would have strong complementarities with the suggested improvements in the EITC, working in tandem to ensure a meaningful increase in after-tax earnings for the nation’s poorest households.

Macroeconomic and Financial Policies
4. The macroeconomic policy mix. Given the substantial economic slack in the economy, there is a strong case to provide continued policy support. Ideally, steps should be taken to approve and implement a credible medium-term fiscal consolidation plan so as to provide the flexibility for more near-term fiscal support to the economy. Such fiscal support should be designed with a heavy focus toward encouraging longer-term gains to productivity, the capital stock, and labor supply. Helping to kick-start growth and job creation in this way would allow for an earlier withdrawal of exceptional monetary stimulus which, in turn, would alleviate the potential risks to both domestic and international financial stability posed by the protracted period of exceptionally low policy rates. This would be the best policy mix from an economic perspective but, regrettably, political agreement on such an approach remains elusive.

5. Monetary policy stance. The Fed currently has to contend with multiple areas of uncertainty: the degree of slack remaining in U.S. labor markets; the extent to which this slack will translate into future wage and price inflation; and the transmission to the real economy of a future move upwards in policy rates. These substantive ambiguities make the outlook for U.S. monetary policy particularly uncertain, as the Fed has repeatedly communicated. This incertitude stands in contrast to the narrow range of market views on the path for future policy rates as well as the current historically low pricing of asset price volatility. At the same time, longer-term treasury yields and the term premia have been compressed to very low levels. This sets up the risk, even with a successful and well-communicated increase in interest rates, for significant swings in market flows and prices in the months ahead. If such volatility were to unfold, it would have implications that would reach far beyond U.S. borders, potentially straining those countries with weaker fundamentals which could then have second round effects for U.S. growth. Under the staff’s baseline, the economy is expected to reach full employment only by end-2017 and inflationary pressures are expected to remain muted. If true, policy rates could afford to stay at zero for longer than the mid-2015 date currently foreseen by markets. Policy would, however, have to remain cognizant of financial stability risks, particularly those that are inherently difficult to contain through available regulatory and supervisory tools. If inflation were to rise more rapidly than expected and the economy was still well below full employment, tolerating a modest, temporary rise of inflation above the longer-term goal could be consistent with the Fed’s balanced approach as long as inflation expectations remain anchored and financial stability risks were low.

6. Federal Reserve communication. The Fed has made important and substantive efforts to increase transparency and has adopted an adaptable approach to communication. The recent shift to qualitative forward guidance provides the Fed with greater flexibility but puts an even higher premium on clear and systematic communication to guide expectations, particularly given the potential adverse consequences of miscommunication for international markets. Enhancing the Fed’s communication toolkit would be a natural evolution that could help temper the likelihood of market volatility along the exit path. This could include scheduling press conferences by the Fed Chair after each FOMC meeting (to provide a more frequent, structured environment to explain the committee’s evolving thinking). It could also involve publishing a quarterly monetary policy report, that is endorsed by the FOMC and which conveys more detail about the majority view of the FOMC on the outlook, policies, and the nature of uncertainties around the baseline. Such a report may also convey dissenting views on the FOMC as well as broader information on how the FOMC thinks about policy reactions in plausible, non-baseline scenarios. Finally, the FOMC could provide greater clarity about how financial stability considerations figure into its monetary policy calculus.

7. Financial stability risks. Over the past few years, much has been done to reduce financial system risks: the banks are stronger, corporate balance sheets are healthy, overall leverage is contained, and the regulatory framework has been greatly improved. Nevertheless, the prolonged period of very low interest rates continues to raise financial stability concerns, particularly related to activities in the so-called “shadow” banks and in other nonbank intermediaries including:
• The growing amount of maturity and liquidity transformation that is taking place through mutual funds or exchange traded funds, particularly those investing in credit instruments;
• The ongoing weakening of underwriting standards in some areas, particularly those linked to lending to leveraged corporations with higher credit risks;
• The volume of flows that is searching for returns and flowing into higher credit risk and longer duration assets;
• The uncertain leverage and risks that are embedded in securities lending undertaken by large financial institutions;
• The fragmented oversight of the insurance sector, data gaps, and the lack of a consolidated picture of insurance companies’ global activities and risks;
• A decline in broker-dealer involvement in market making activity, potentially hampering the functioning of markets and price discovery at times of market stress.
Some broad combination of these pockets of evolving vulnerabilities—set against a backdrop of a rise in short-term interest rates or an unwinding of currently compressed risk and term premia—could prove disruptive. In particular, a tail risk where there was a precipitous attempt by investors to exit certain markets—perhaps exacerbated by outflows from ETFs and mutual funds as well as near-term market illiquidity—could trigger an abrupt and self-reinforcing re-pricing of a range of financial assets. This, in turn, could have damaging implications for U.S. growth (through wealth effects, difficulties in rolling over or accessing new financing, and strains in the corporate sector) and negative knock-on effects internationally.

8. Regulatory action. Steps that could be taken to tackle these risks and lessen the likelihood of negative spillovers to the global economy include further supervisory scrutiny on underwriting standards, higher risk weights and tighter limits on large exposures to certain assets (such as leveraged loans or high yield bonds), and stronger prudential norms for the holding of securitized loans (such as CLOs) by regulated entities. Addressing the remaining vulnerabilities of the money market funds and of the tri-party repo market also remains a priority. In addition, the U.S. should continue to implement measures that allow for the orderly resolution of too-important-to-fail financial institutions, including through deepening the cooperation with other jurisdictions to manage the resolution of institutions with a significant cross-border presence. The insurance sector warrants particular attention and would benefit from stronger and more uniform capital adequacy and solvency oversight standards, refinement and harmonization of stress testing exercises, greater efforts to close data gaps, further designation of systemically important firms, and a larger federal role in insurance regulation and oversight. The U.S. should also continue to play a lead role in advancing the global regulatory reform agenda, ensuring common practices across countries, and limiting the opportunities for regulatory arbitrage while remaining attuned to the spillover implications of regulatory changes on the international financial system.

9. Housing finance. Limited availability of mortgage financing is a pressing constraint on economic growth. Conservative lending standards are being driven by a range of factors that include persistent anxiety about potential “put-back” risks (i.e., where Fannie Mae or Freddie Mac require mortgage originators to repurchase loans because of discrepancies in underwriting or documentation); litigation and reputational risks to lenders; a tighter regulatory environment and supervisory scrutiny; and uncertainty about the future structure of the mortgage industry. Policy efforts have been made to lessen the impact of some of these factors including by establishing a “safe harbor” for Qualified Mortgages that meet a clear set of minimum standards and by clarifying the conditions for put-backs. However, the recovery of mortgage lending to lower credit rated borrowers is likely to be a slow process. Legislative reforms that clarify the future role of government in housing finance would help. The end objective should be a system where there is:
• A substantial first-loss risk borne by private capital (rather than taxpayers);
• An explicit public backstop that is limited to catastrophic credit losses with risk-based guarantee fees;
• A role for regulatory agencies in setting underwriting standards;
• A common platform for securitization; and
• A clear delineation and transparent accounting of those public interventions in the housing market that are intended to promote social objectives.
While reaching agreement on legislation will be hard, in anticipation of broader legislative reform many of these objectives can still be realized in the medium term through administrative action including by expanding the use of market transactions to transfer first-loss risks from the agencies to private investors; moving gradually to higher and more risk-based guarantee fees; steadily building up capital within the agencies while reducing their role in housing finance; and establishing a single securitization platform.

10. Near-term fiscal policy. The difficulty of finding political common ground on fiscal policy has been very evident over the past few years with negative consequences for both the U.S. and global economy. The Bipartisan Budget Act, enacted in December 2013, and the subsequent raising of the debt ceiling were important steps to reduce fiscal risks and improve both the pace and distribution of near-term deficit reduction. Going forward, even in the absence of a fully articulated medium-term consolidation plan, there is room to build on this progress through the identification of targeted areas to expand the near-term budget envelope, funded by offsetting savings in future years. Specific near-term measures that should be supported—many of which were in the Administration’s budget proposal—include:
• Front-loaded infrastructure spending. Additional investment is urgently needed to upgrade the quality of infrastructure in the U.S., particularly for surface transportation. Most pressing is the need to provide clarity on future financing of the Highway Trust Fund. However, this should be viewed only as a first step. Action is also needed to achieve a sustained increase in both Federal and State spending on infrastructure paid for by savings in entitlement programs, additional revenues, and an expansion of financing sources (including innovations such as the America Fast Forward Bond).
• Changes in the tax system. Itemized deductions for the individual income tax—including the mortgage interest deduction—should be either limited or gradually eliminated. The Federal gas tax should be significantly increased. The tax system could also be used more effectively to incentivize private innovation such as by reinstating and making permanent the Research and Experimentation tax credit that expired at end-2013. In addition, consideration should be given to offering time-bound tax credits or wage subsidies to employers who hire the long-term unemployed.

•Education spending. Educational outcomes could be raised by a reorientation of spending to prioritize early childhood education (including universal pre-K) and to give more support to science, technology, engineering and math programs.

11. Medium-term consolidation. Recent years have seen a rapid reduction in the fiscal deficit. Nevertheless, the general government debt is still not on a sustainable longer-term path and is likely to begin rising again by 2018. There is a pressing need to reach political agreement on a credible and detailed medium-term fiscal consolidation path. To meet the Administration’s goal of ensuring that debt is placed on a downward trajectory, staff believe that a general government primary surplus of 1¼ percent of GDP by 2023 will be needed. This adjustment will need to include measures to:
• Control health care costs. Some progress has already been made in taming the fiscal pressures from rising health care costs—in part through implementation of the Affordable Care Act—but more is needed. This should involve better coordination of services for those with chronic conditions; greater cost sharing with beneficiaries; and limiting tax breaks for higher cost, employer-provided health plans.
• Strengthen social security finances. Addressing the expected depletion of the social security trust fund will require fundamental reform that further raises the retirement age in a gradual manner (perhaps with a link to future life expectancy), increases the ceiling on taxable earnings for social security, and indexes benefits and tax provisions to chained CPI.
• Improve the tax structure and raise revenues. In addition to the near-term tax measures described above, a broad reform of corporate taxes is long overdue and should lower the marginal rate, simplify the system, eliminate a range of exclusions and deductions, and limit base erosion and profit shifting by multinational firms. In addition, the U.S. should introduce a broad-based carbon tax and move toward the introduction of a Federal-level VAT.

12. Institutional fiscal reforms. The recent experience of debt ceiling brinkmanship and the government shut down once again illustrates the potential economic damage from political discord linked to fiscal policies. There is a risk that, in the Spring of 2015, many of these issues will come to the fore once more. While not a panacea, some change to budget procedures could have a lasting effect in lessening such fiscal policy uncertainty. Useful measures could include reaching bipartisan agreement on a clear, simple medium-term fiscal objective (with an integrated view of all budget functions and numerical targets for the debt and deficit); adopting carefully-designed mechanisms to trigger revenue or spending adjustments if targets are breached; an automatic process that would raise the debt ceiling once agreement is reached on the broad budget parameters; and shifting to a budget cycle where annual spending levels are agreed for a two year period (but with the possibility for supplemental budget resolutions during that two year window under clearly specified conditions).
13. In conclusion, the agenda ahead is long and challenging and will take many years to accomplish. Concerted progress will serve to raise long-run growth prospects, lessen poverty, put fiscal finances on a sustainable footing, and reduce financial stability risks. All of which will be advantageous for the U.S. and for the world economy.

This is courtesy of www.imf.org


On Monday, Treasury and the Center for Strategic and International Studies (CSIS) co-hosted a symposium entitled “TFI@10: The Evolution of Treasury’s National Security Role,” on the role of financial tools in advancing U.S. national security. This symposium marked the 10th anniversary of the Treasury Department’s Office of Terrorism and Financial Intelligence (TFI) and convened senior Administration officials, former government and Congressional leaders, foreign policy experts, and representatives from the private sector and media for discussions on the use of financial levers and the importance of upholding financial transparency, protecting the U.S. financial system, and using financial intelligence in achieving national security interests and advancing foreign policy objectives.
In his opening remarks, Secretary Jacob J. Lew reviewed how the U.S. government had shifted its approach to national security after the events of September 11 to focus on the importance of disrupting the finances and funding operations of terrorist organizations. He outlined the Department’s role in strengthening this new national security strategy and its work over the last decade.

Keynote speakers and panelists covered a breadth of issues, including TFI’s important work over the past decade in disrupting and dismantling the financial networks of terrorists and drug traffickers, the evolution of financial tools in securing national security, efforts to uphold financial transparency, and the role of financial intelligence. Key excerpts are included below:

Tom Donilon, Distinguished Fellow at the Council on Foreign Relations and Former National Security Adviser
“Treasury is at the table and has been at the table for addressing some of our most important security issues, national security issues – whether it be the terrorist threat, or it be the North Korea challenge, or the non-proliferation challenge in Iran… a really important point… goes to the point of the strength of being at the center of the world financial system here in terms of our ability to do these things. In many ways, even our unilateral steps become multilateral steps… it is way beyond, as the Treasury Secretary says, way beyond trade limitations, trade embargoes, quite targeted and exceedingly effective.”

White House Chief of Staff Denis McDonough
“The threats we face obviously, as you’ve been discussing and living, are increasingly complex. It’s our job to stay at least one step ahead of them. That means using every tool at our disposal, every element of our national power to protect ourselves and our allies, and to stop bad actors of all kinds, whether they’re political regimes, terrorist networks, or solitary extremists. We have to be innovative and adaptive, always willing to consider new ideas and revise our approach as needed… Ten years ago when this unit was created, the notion of using financial tools to stop terrorism and international crimes was still pretty new, and frankly, it was seen as an issue of defense. Today, it’s a core asset of our national security and it has us on offense.”

Stephen Hadley, Chairman of the Board, U.S. Institute of Peace and former National Security Adviser
“I think the sanctions were one of a series of tools in terms of diplomatic isolation, in terms of things directed at their [Iran] program. I think it’s been a very successful, coordinated, policy of pressure. I think it did bring them[Iran] to the table. ”

Neal Wolin, Former Deputy Secretary of the Treasury
“The global financial system of which the U.S. sort of stands right in the center, I think, depends importantly for its robustness and strength on making sure that the illicit flows are kept to minimum, are not present. That the kinds of integrity principles, which really stand at the foundation of what TFI does are well-observed. And so apart from all of the national security implications, it is critically important for the world’s economy and for the world’s financial system that these kinds illicit activities… have a light shone on them and their activity be scrutinized, and to whatever extent possible, eliminated.”

Under Secretary for Terrorism and Financial Intelligence David S. Cohen presided over the event and concluded the symposium with remarks highlighting the challenges ahead. He stated, “today’s conversation also has illuminated some of the key challenges that we will face in the future as we continue to employ – and increasingly rely upon – financial measures to help achieve our core foreign policy and national security goals…First is the challenge posed by the changing nature of the terrorist financing…Second is the challenge to the international community’s ability to impose targeted, conduct-based financial sanctions…Third, is the challenge to financial transparency posed by new technologies, including new payment methods, such as mobile banking, and new methods of payment, such as virtual currencies…Fourth, we will face the ongoing challenge of balancing our need for timely, accurate, and specific financial intelligence with legitimate demands for privacy, both by American citizens and foreigners.”

This news is courtesy of www.treasury.gov


WASHINGTON, – Developing countries are headed for a year of disappointing growth, as first quarter weakness in 2014 has delayed an expected pick-up in economic activity, according to the World Bank’s Global Economic Prospects (GEP) report, released today.