Business highlights. Two more Boston banks report they failed to list cash moves
Bank of New England and Shawmut Bank -- the second- and third-largest banks in Boston -- have reported several failures to notify the government of cash transactions. The problems are similar to those experienced by Bank of Boston, the city's largest bank. Shawmut said it did not report cash transactions with 28 other financial institutions, including $190 million in transfers with foreign banks. As with Bank of Boston, Shawmut said it had failed to notify departments within the bank of changes in 1980 to federal currency reporting requirements. The tightened restrictions are aimed at curbing money laundering.
Bank of New England said it discovered two sets of unreported cash transactions. One involved cash transactions with a Canadian bank; the other was a series of large cash withdrawals by a customer with numerous commercial accounts.
A United States Senate subcommittee, chaired by Sen. William V. Roth Jr. (R) of Delaware, will hold hearings in Washington beginning today on the banking irregularities. Shawmut president John Hamill, Bank of Boston chairman William L. Brown, and Comptroller of the Currency C. Todd Conover will testify at the hearings.
Hoping to reassure customers, American Savings & Loan Association kept its 122 branch offices in California open last Saturday -- but company officials say there were few withdrawals from concerned customers. American Savings' parent company, Financial Corporation of America, announced last week that it expects a loss of between $500 million and $700 million for 1984 when its year-end financial statement is released later this month. The projected losses were attributed to setting aside massive reserves to cover problem loans and real estate investments inherited from FCA's previous management. FCA is the nation's largest savings-and-loan holding company.
The Australian government has decided to allow 16 major foreign banks to set up full-scale operations in Australia. Five of the banks are from the United States, three from Japan, and three from Britain, while there will be one each from Canada, Singapore, Hong Kong, West Germany, and New Zealand. Although the government originally said that applicants should form partnerships with Australian interests, half of the new banking licenses have gone to foreign banks offering no local equity at all.
These include three of the US banks -- Citibank, J. P. Morgan & Co., and Bankers Trust. Bank of America has teamed up with a major Australian retailer, G. J. Coles, while Chase Manhattan will be in partnership with a large insurance company, the AMP Society.
The decision to allow such a large number of banks to set up in Australia was partly dictated by the government's desire to negotiate reciprocal arrangements with some other countries.
The International Energy Agency has lowered its estimate of oil consumption by Western industrialized nations for the first quarter of this year. Its original estimate of energy consumption in the first quarter for the nations of the Organization of Economic Cooperation and Development had been for a 2 percent increase over first-quarter 1984. But the IEA said low demand, brought on by unusually warm winter weather in North America -- though the winter was colder in Europe -- necessitated a new, lower energy consumption estimate. The agency also reported that OPEC oil production reached 16.3 million barrels a day in February.