BANKING ZONE

Recession causes 2,000 heart attack deaths

2012-01-28T07:41:00.001-08:00

Since 2002 the number of people dying from heart attacks in England has dropped by half, the study conducted by Oxford University found. But within that, regional data revealed there was a 'blip' in London that corresponded to the financial crash in 2008 and continued through 2009. Heart attack deaths have dropped due to better prevention of heart attacks in the first place with fewer people smoking and improvements in diet through lower consumption of saturated fat. The treatment of people who do suffer a heart attack has also improved leading to fewer deaths with faster ambulance response times, new procedures to clear blocked arteries and wider use of drugs such as statins and aspirin. The research published in the British Medical Journal showed around 80,000 lives have been saved between 2002 and 2008 as deaths from heart attacks declined.

Survey reveals expat banking fears

2012-01-26T14:48:00.001-08:00

The Expat Banking Poll was sponsored by Lloyds TSB International and conducted by expat website Just Landed. Expats in Spain were found to have the most problems with banking abroad. Almost two-thirds of those polled – 64 per cent – said that they do not trust local banks at all. Some of the most common problems cited by those who distrust banks abroad include unfair charges, trouble with the language barrier and money that was deducted from their account without any explanation. Briton Graham Hunt, who runs a Spanish property website and has written some hard-hitting blogs on banking in Spain, said: "Two years ago, there was a lot more trust in Spanish banks. "But the past couple of years have seen new charges for cards, account maintenance, transfer fees... this put people into the red in unused accounts, and they were then given an additional overdrawn charge. As a result, trust disappeared." Spain is happiest expat destination 19 Jan 2012 He also claims bank charges have increased "dramatically" recently and that lack of clear communication is the major problem for expats not speaking Spanish, and banks not employing people with language skills. "However my experience is that if you have a good relationship with the bank manager then any charges on the account can usually be got back," Mr Hunt said. "You just threaten to take your business elsewhere." Ali Meehan, who runs the Costa Women community network, said however there were many reasons expats wanted to use Spanish banking services. ""Many expats bank with Spanish financial institutions because they have mortgage products or loans locally," she said. "Some banks also offer special deals if you have your UK pension paid direct to Spain." More than 11,800 expats in total were surveyed for the Lloyds TSB International report. More than half of those, 59 per cent, said that they do trust their banks abroad, while only 22 per cent of respondents said they did not trust their banks "at all". In the United Arab Emirates, 74 per cent polled said they completely trust local banks; in Kuwait, this number is even higher, at 83 per cent. In Europe, German banks receive a similar score, with 68 per cent of expats polled completely trusting their services. UK banks – though facing many problems – are completely trusted by 52 per cent of respondents. And despite uncertainties over the British pound, 36 per cent of expatriates surveyed claim they would invest in sterling over any other currency. "While the poll demonstrated a lot of positivity, there are also some issues to be addressed," said Daniel Tschentscher, managing partner at Just Landed. "In the current climate, one would expect the level of trust to be lower, but that really doesn't seem to be the case at all."

Galicia offers attractive alternatives.

2012-01-21T11:17:00.001-08:00

Since the Middle Ages, the Catholic faithful have flocked to Galicia in the far northwest of Spain to worship at the shrine of St. James in Santiago de Compostela.But a new sort of pilgrimage to Galicia is under way, this one prompted by the excellent potential of the region’s vineyards. As travelers along the Way of St. James know, Galicia can be a forbidding place. Before reaching Santiago, they have to cross mountainous badlands where temperatures can dip well below freezing. On the coast, the landscape turns green and fertile — thanks to torrential rains that can roll in off the Atlantic at any time.

But vines are hardy, often producing the best wines in extreme conditions. Those of Galicia are decidedly different from the stereotypical Spanish wines, those that ripen under a powerful Mediterranean sun, which packs them full of fruit and alcohol.

Rather than power, the wines of Galicia display a lively freshness and considerable elegance. They tend to be medium-bodied, with no more than 12 percent or 13 percent alcohol — unusually low at a time when reds with 16 percent are not uncommon and even whites sometimes top 14 percent. And they often contain a streak of what growers call “minerality” — a nebulous term that, to me, means the fruit doesn’t mask a sense of place.

As consumers grow weary of so-called blockbusters — big wines of indeterminate origin that stain your palate and leave you too dazed to drink a second glass — Galicia offers attractive alternatives.

“For people who say there are only blockbuster wines in Spain, this is the answer,” said Wim Van Leuven, an importer in Mol, Belgium, who specializes in Spanish wines. “It’s really the Atlantic side of winemaking in Spain.”

He added: “Galicia is like a laboratory for the new Spanish generation, even though you can’t make these kinds of wines elsewhere in Spain.”

One of the newcomers, Rafael Palacios, is a member of one of the proudest winemaking families in Spain, with its roots in the country’s best-known wine region, Rioja. An older brother, Alvaro, was the key figure in an earlier Spanish winemaking renaissance, in the 1990s, when he started making world-class reds in the Priorat region of Catalonia.

When Rafael Palacios saw the vineyards around O Bolo, a village in the rugged eastern stretches of Galicia, he saw a similar opportunity to raise the profile of the white wines of Spain.

Perched on precipitous slopes at altitudes of 800 meters or so, around 2,600 feet, these are among the most strikingly beautiful vineyards in Europe. They are also extremely difficult to work, requiring the construction and maintenance of an elaborate system of terraces to protect the soil against erosion. Over the years, many growers who were unable to make much of a living from wine had abandoned their vines.

But Mr. Palacios was convinced that he could make great wine here from the godello grape, a variety that is native to the mountains of Galicia. Godello is what is known as a “neutral” variety, without strong fruit flavors. Instead, in the hands of a skilled winemaker, it is a medium for the terroir to express itself.

After overcoming the suspicions of the locals, who saw Mr. Palacios as an outsider, he started buying up vineyards in O Bolo, the highest part of a wine-growing region called Valdeorras. Many of them contain old vines, which produce the most characterful wine; their gnarly beauty seems like a permanent feature of the craggy landscape.

Mr. Palacios set up his bodega, or winery, in 2004, and he now makes three wines, including an entry-level bottling and a premium offering that blends grapes from several top sites. With the 2009 vintage, he added a third wine, called Sorte O Soro, using grapes sourced solely from his favorite vineyard, near the highest point in O Bolo. (Sorte means “lot” in Galician.)

Tasting Sorte O Soro, which will not be available commercially until the spring, was a bit like spending a day in these vineyards. It is intensely flavored, with a structure and breadth reminiscent of good white Burgundy — a bit like the feel of the afternoon sun at these high altitudes.

UK ticketholder wins £41 Euromillions jackpot

2012-01-21T03:15:00.001-08:00

Camelot said that the winner scooped the rollover jackpot of £40,627,241 in Friday night's draw although no one has yet come forward to claim the prize. A Camelot spokesman said: "This is fantastic news – we're absolutely delighted to have yet another huge EuroMillions win here in the UK. "We have plenty of champagne on ice and look forward to welcoming the lucky ticketholder into The National Lottery millionaires' club. "Over 2,800 people have become millionaires since The National Lottery began and, to date, our players have raised an amazing £27 billion and counting for National Lottery Good Causes." The success is the seventh biggest UK lottery win. The record is held by Colin and Chris Weir, from Largs, Scotland, who won £161 million on EuroMillions last July.

City drummer Robbie France dies aged 52

2012-01-21T00:02:00.001-08:00

sheffield-born hard rock drummer Robbie France has died aged 52 at his home in south-east Spain, it has been reported. The Spanish national newsagency EFE quoted ‘family sources’ as saying that the musician, who played with such groups as Diamond Head, Alphaville, UFO, Skunk Anansie and Wishbone Ash, died on Saturday. It said he was buried on Wednesday at Puerto de Mazarron, in the province of Murcia, south of Alicante. Mr France had lived in the Costa Blanca resort for the past three years. He was born in Sheffield in 1959. In the 1970s he emigrated to Australia, returning to the UK in 1982 and joining the hard rock band Diamond Head. Three years later he became drummer with the UFO, replacing Andy Parker. He settled in Puerto Mazaron in 1998 after stints with Skunk Anansie and the German group Alphaville. Last year he published a novel, Six Degrees South, partly set in Mazarron. The report said that the family did not give the cause of death.

Pound Falls Versus Euro, Gilts Drop as France, Spain Sell Debt

2012-01-20T23:47:00.001-08:00

The pound posted its biggest weekly decline against the euro in almost three months and gilts dropped as French and Spanish borrowing costs fell at their first debt auctions after their credit ratings were cut. The yield on 10-year gilts rose the most in four months as demand for the relative safety of AAA government bonds eased amid signs global growth hasn’t lost momentum. Reports this week showed U.K. retail sales rebounded in December while U.S. initial jobless claims fell to the least in almost four years. Further advances in gilt yields may be limited next week before a report predicted to show the U.K. economy contracted in the fourth quarter of last year. “There are worries that the U.K. economy is heading back into recession,” said Michael Derks, chief strategist at FXPro Financial Services Ltd. in London. “It would not be surprising to see further weakness of the pound against euro in the near term.”

RBS to cut 3,500 jobs in investment bank shake-up

2012-01-12T02:04:00.001-08:00

The Royal Bank of Scotland (RBS) has said it is planning to cut 3,500 jobs, with most of them to happen this year. The cuts are part of a reorganisation and shrinkage of its investment bank. The losses, which will be split between its UK and international offices, come on top of 2,000 cuts announced earlier. Its "wholesale banking" business, which provides services to large clients including investment banking services, will be split into separate "markets" and "international banking" divisions. The markets division - which comprises RBS' main trading activities - will focus on the bank's traditional strengths of debt, currency and money markets, the bank said in its statement. The wholesale banking division will provide services for the bank's biggest clients. These will include corporate advisory services transferred from its investment bank - such as helping major companies borrow money by issuing bonds - as well as cash management and payments services. The bank has already shed some 30,000 employees over the last two years, 22,000 of them in the UK. "It is a disgrace that while on a daily basis, stories are emerging about the massive bonuses at the top of the bank, increasing numbers of jobs are being cut from amongst the hard working staff," said David Fleming of the Unite union. Continue reading the main story “ Start Quote For a bank that has shed 30,000 jobs over the past couple of years, a further 3,500 departures may not seem massive” Robert Peston Business editor, BBC News Read Robert's blog Markets took the statement well, although many of the details had been flagged up in advance. RBS's share price rose 6.8% in morning trading, outperforming other banks and other large companies on the FTSE 100 index. Cutting back The bank said that it planned to close or sell off other business lines, such as those dealing with shares and stock markets, as well as its business advising companies on mergers and acquisitions. It is also looking to dispose of its corporate brokerage, Hoare Govett. These business lines were ones that had been added or expanded only in recent years under the leadership of former chief executive Sir Fred Goodwin. Continue reading the main story Royal Bank of Scotland Group RBS also said in its statement that the size of the balance sheet - the total loans and investments - of its former investment banking division would be reduced by more than a quarter, from £420bn to £300bn, over three years. This will enable it to cut its borrowing from wholesale money markets - which evaporated during the 2008 financial crisis, threatening the bank's collapse - by £75bn. "The overall aim is to improve profits and reduce risks," says the BBC's business editor, Robert Peston. "Which matters to most of us, since taxpayers are sitting on losses of £26bn on the £45.5bn they invested in RBS to rescue it." However, he also notes that the business lines being disposed of were not the ones responsible for causing RBS its huge losses during and after the 2008 financial crisis. UK clients RBS said the restructuring was also designed to prepare the bank for new UK regulatory requirements for banks to ring-fence their core UK operations from their riskier investment banking activities. Continue reading the main story Crisis jargon buster Use the dropdown for easy-to-understand explanations of key financial terms: Investment bank Investment bank Investment banks provide financial services for governments, companies or extremely rich individuals. They differ from commercial banks where you have your savings or your mortgage. Traditionally investment banks provided underwriting, and financial advice on mergers and acquisitions, and how to raise money in the financial markets. The term is also commonly used to describe the more risky activities typically undertaken by such firms, including trading directly in financial markets for their own account. Glossary in full The bank's dealings with British small and medium-sized companies will accordingly be transferred away from the new international banking division, and handled via its UK banks. There was no mention of any specific downscaling of its international operations. However, there has been speculation that its operations in the Irish Republic - including Ulster Bank, which RBS bought in 2000 - and in Australia may be affected Chancellor George Osborne announced the change in strategy at the bank in December 2011. "Investment banking will continue to support RBS's corporate lending business but RBS will make further significant reductions in the investment bank, scaling back riskier activities that are heavy users of capital or funding," Mr Osborne told Parliament in December. Mr Osborne's announcement came in the wake of a report into the bank by the Financial Services Authority in December 2011 which pointed to "errors of judgement and execution" by RBS management which led to its failure in 2008. The bank is now 82%-owned by the UK government after taxpayers injected £45.5bn of new capital into RBS.

Cargo ship runs aground off Sweden, crew suspected drunk

2012-01-11T16:09:00.001-08:00

The captain and helmsman are both suspected of being under the influence of alcohol and we have launched an inquiry," coast guard spokeswoman Lotta Brandstroem told AFP. It was not immediately known why the Anke Angela, an 82-metre (270-foot) ship loaded with timber, ran aground around 0100 GMT in the Kalmarsund strait between the Swedish mainland and the island of Oeland. "The captain is a German national and the helmsman is Russian, and the other four crew members are from Ukraine and Cape Verde," Brandstroem said, adding that the vessel was en route from Moensteraas to Ireland with a cargo of wood. The ship was listing slightly on Wednesday and the coast guard was assessing the damage.

Wonga stops targeting students after Twitter protests

2012-01-11T16:01:00.001-08:00

Short-term lender Wonga.com has announced that it is taking down information on student finances from its website following accusations it was encouraging undergraduates to take out one of its high-interest loans. Earlier Wonga.com came under severe criticism after its website claimed that its loans can offer students "a little more financial freedom and independence". The claim attracted outrage on Twitter. One user, Neale Gilhooley, tweeted: "A pox on loan company #Wonga offering students loans at a sharking 4,214pc APR." On the "student loans" section of its website, Wonga.com says these government-backed loans – despite their very low interest rates – could encourage people to borrow too much. Student loans currently attract interest at 1.5pc or 5.3pc, depending on when they were taken out. "It's pretty hard not to get carried away when you're a student on a budget and have the option to borrow large amounts of money with a student loan. But the problem with student loans is that they potentially encourage you to live beyond your means," the website says. "They're intended for living and education costs, but it's all too easy to fritter away the money once you have it. Wonga encourages responsible borrowing because, depending on your trust rating, you can borrow as little as £1 up to £1000, as long as you can repay it within a month."

Europe Banks Hoarding Cash Resist Draghi Bid to Avoid Crunch

2012-01-11T08:03:00.001-08:00

Banks are hoarding the European Central Bank's record 489 billion-euro ($625 billion) injection into the banking system, thwarting attempts by policy makers to avert a credit crunch in the region. Almost all of the money loaned to 523 euro-area lenders last month wound up back on deposit at the Frankfurt-based central bank instead of pouring into the financial system, ECB data show. Banks will use most of the three-year loans to meet their refinancing needs for this year and next, analysts at Morgan Stanley and Royal Bank of Scotland Group Plc estimate. “It's illusory to think that the measure will translate into credit generation,” Philippe Waechter, chief economist at Natixis Asset Management in Paris, said in an interview. “It will assuage some of the anxiety banks have regarding their liquidity needs. But they've engaged into a massive overhaul of their strategy and shrinkage of their balance sheets, which is, coupled with the deteriorating economy, not compatible with increasing credit.” Governments are urging European banks to keep lending to companies and individuals while requiring them to raise an additional 114.7 billion euros of core capital by June to weather a deepening sovereign-debt crisis. Instead of raising equity, most lenders across Europe have vowed to meet capital rules by trimming at least 950 billion euros from their balance sheets over the next two years, either by selling assets or not renewing credit lines, according to data compiled by Bloomberg. ECB Deposits That has stirred concern among policy makers that banks will cut lending and throttle growth in the euro region. Banks have been parking almost all extra liquidity from the ECB loans back at the central bank. Barclays Capital estimates firms used 296 billion euros of the Dec. 21 three-year loans to replace maturing shorter-term ECB borrowings. That left only 193 billion euros of additional money for the financial system. Overnight deposits with the ECB have jumped by about 223 billion euros since the loans to a record 486 billion euros, suggesting the central bank funds haven't so far reached customers. Banks account for about 80 percent of lending to the euro area, making them “crucial to the supply of credit,” according to recently installed ECB President Mario Draghi. By contrast, U.S. companies rely more on capital markets for financing, selling bonds to investors. Refinancing Needs The ECB lending, and a follow-up loan offering on Feb. 28, won't ease the pressure on banks to shrink, say analysts including Huw van Steenis at Morgan Stanley in London. “The ECB loans will largely be used to pre-fund 2012 and some of 2013's bank refinancing needs, but it will not stimulate lending,” Van Steenis said. They will “just stop it falling off precipitously.” Euro-area banks have more than 600 billion euros of debt maturing this year, the Bank of England said in its financial stability report last month. The first ECB loan offering should help cover about two-thirds of that amount, Goldman Sachs Group Inc. analysts say. Morgan Stanley's Van Steenis estimates banks may reduce assets by as much as 2.5 trillion euros in two years, a process known as deleveraging. The volume of loans to households and companies in the 17- nation euro area shrank in November for the second consecutive month, the ECB said on Dec. 29. Loans were still up 1.7 percent over the year-earlier period, slowing from a 2.7 percent increase in the 12 months through October. Merkel, Sarkozy When granted, loans are getting costlier for borrowers. Since July, interest margins have increased, with investment- grade borrowers in Europe paying an average of 91.6 basis points more than benchmark rates, up from 84.4 basis points during the first half of 2011, according to data compiled by Bloomberg. A basis point is one-hundredth of a percentage point. “We must avoid a credit crunch for our economies,” European Union President Herman Van Rompuy said on Jan. 9. “The recent measures by the European Central Bank on a long-term lending facility for the banks are welcome in this context.” The European Banking Authority, which oversees the region's regulators, asked banks on Dec. 8 to retain earnings, curb bonuses and raise equity to boost core capital before resorting to cuts in lending. The EBA followed both French President Nicolas Sarkozy and German Chancellor Angela Merkel in urging banks to keep lending. Sarkozy said on Oct. 27 that he had asked firms to shift “almost all” of their dividends into strengthening balance sheets and to make bonus practices “normal.” Merkel said on Oct. 9 she was “determined to do whatever necessary to recapitalize the banks to ensure credit to the economy.” ‘No Credit Crunch' Bankers have said they haven't restricted lending and that demand for credit is slowing as growth slows. “All banks I talk to keep lending to small- and medium- size enterprises and households,” Christian Clausen, president of the European Banking Federation, an industry association, said on Dec. 9. “That part of the bank will keep rolling.” There is “no credit crunch,” Frederic Oudea, chief executive officer of Societe Generale SA, France's second- biggest lender, and chairman of the French Banking Federation, said last month. “The reality is that credit is available,” he said in an interview on BFM radio on Dec. 16. Even so, companies across Europe say credit is tightening. ‘Double Punch' In France, where credit to the private sector increased by 3.7 percent in November compared with a year earlier, the majority of the country's company treasurers said they encountered “very strong tensions” in negotiating bank loans, with more than 50 percent of respondents saying the process led to more expensive terms, according to a December survey by the French Association of Corporate Treasurers. The majority of those polled said obtaining bank financing was “as difficult as at the end of 2008,” after Lehman Brothers Holdings Inc. collapsed. U.K. banks expect to toughen their criteria on loans to companies and households in the first quarter because of strains in the wholesale funding market, the Bank of England said Jan. 5in its fourth-quarter Credit Conditions Survey. Belgian credit growth slowed to 3.1 percent in the 12 months to the end of October, from 3.6 percent at the end of September, the country's central bank said on Dec. 12. In Italy, some companies with annual sales of 30 million euros to 40 million euros are charged as much as 10 percent interest on loans, Emma Marcegaglia, chief of the country's Confindustria lobby group, said in an interview on Dec. 20. Lending to businesses and consumers grew at the weakest pace in a year, the Bank of Italy said today. Draghi's Priority With the ECB's injection, “deleveraging may happen in a more orderly way, but it doesn't mean it will be painless,” said Alberto Gallo, head of European credit strategy at RBS. Banks are faced with high long-term financing costs, a deteriorating economy and difficulties raising capital, he said. “It's what I call the double punch: A combination of negative growth and banks' deleveraging will affect lending activity.” Even the ECB's Draghi, who has made it one of his priorities is to keep credit flowing into the economy, said the central bank's loan offerings may fail to achieve that goal. “Monetary policy cannot do everything, but we're trying to do our best to avoid a credit crunch that might come from a lack of funding,” Draghi said Dec. 19 at the European Parliament in Brussels. “We have to be extremely careful here, because there may be other reasons that create a credit crunch.” Draghi may be wary of the U.S. experience with multiple rounds of bond purchases. That so-called quantitative easing hasn't stimulated lending, Natixis's Waechter said. ‘Kick the Can' “Lending really picked up when the economy got better,” he said. The ECB cut its forecast for euro-area economic growth in 2012 to 0.3 percent on Dec. 8 from a September prediction of 1.3 percent. The central bank expects the economy to expand 1.3 percent next year. In the U.S., almost all categories of bank lending fell in 2009 and 2010 and didn't start improving until last year, when the Federal Reserve stopped its second wave of quantitative easing, according to data by the U.S. institution. Banks increased their holdings of Treasury and agency securities in 2009 and 2010, showing they were using the Fed's cheap money to own safe government paper. Because quantitative easing tends to improve capital markets first, the healing will be even slower in Europe given its reliance on banks for borrowing, according to Gallo.

Wall Street markets are suffering huge falls this morning as fears grow that Europe's plan to save the euro will unravel

2011-11-01T08:12:00.001-07:00

Wall Street markets are suffering huge falls this morning as fears grow that Europe's plan to save the euro will unravel before it can even kick in.

Greek Premier George Papandreou said he will put Greece's bailout through a referendum, throwing the long-awaited deal into disarray.

Financial markets around the world have tumbled in reaction to the shock announcement today and U.S. stocks have also fallen at the open.

Wall Street: Financial markets around the world have tumbled in reaction to the shock announcement and U.S. stock futures are down on Tuesday

The Dow Jones opened down 258 points, or 2.2 per cent; the Nasdaq fell 78 points, or 2.9 per cent, and the S&P fell 33 points, or 2.7 per cent.

‘The market did not see this Greek referendum coming, which is potentially a killer,’ said Vermont investment strategist Paul Mendelsohn.

‘It could knock the wheels off the bus of the whole (Europe rescue) plan.’

The Italian ship Montecristo, which was hijacked by Somali pirates before being stormed by British commandos

2011-10-30T03:48:00.001-07:00

Photo: REUTERS

9:45AM GMT 30 Oct 2011

A legal ban on weapon-toting protection staff will be relaxed so that firms can apply for a licence to have them on board in danger zones.

The Prime Minister said radical action was required because the increasing ability of sea-borne Somali criminals to hijack and ransom ships had become "a complete stain on our world".

He unveiled the measure after talks at a Commonwealth summit in Australia with leaders of countries in the Horn of Africa over the escalating problem faced in waters off their shores.

Under the plans, the Home Secretary will be given the power to license vessels to carry armed security, including automatic weapons, currently prohibited under firearms laws.

Officials said around 200 were expected to be in line to take up the offer, which would only apply for voyages through particular waters in the affected region. It is expected to be used by commercial firms rather than private sailors - such as hostage victims Paul and Rachel Chandler.

The Occupy London Stock Exchange protest encampment outside St Paul's Cathedral.

2011-10-30T03:21:00.001-07:00

Photograph: Oli Scarff/Getty Images

Christian groups have drawn up plans to protect protesters by forming a ring of prayer around the camp outside St Paul's Cathedral, should an attempt be made to forcibly remove them.

As the storm of controversy over the handling of the Occupy LondonStock Exchange demonstration deepened on Saturday, Christian activists said it was their duty to stand up for peaceful protest in the absence of support from St Paul's. One Christian protester, Tanya Paton, said: "We represent peace, unity and love. A ring of prayer is a wonderful symbol."

With senior officials at St Paul's apparently intent on seeking an injunction to break up the protest, the director of the influential religious thinktank Ekklesia, Jonathan Bartley, said the cathedral's handling of the protest had been a "car crash" and predicted more high-profile resignations from the Church of England.

The canon chancellor of St Paul's, Dr Giles Fraser, and the Rev Fraser Dyer, who works as a chaplain at the cathedral, have already stepped down over the decision to pursue legal action to break up the camp.

Meanwhile, it has emerged that Shami Chakrabarti, director of the human rights group Liberty, is attempting to mediate in the dispute. She said she had contacted the corporation, cathedral and protesters to offer a "neutral space" to sort out the impasse. The corporation had not yet responded, she said, although St Paul's had acknowledged her offer. She said the protesters had been enthusiastic in their desire for dialogue and a peaceful resolution.

"It would have been easy to opt for a line of action that would have led to images of police dragging away protesters, but they want to talk."

It was claimed last night that a highly critical report into the moral standards of bankers has been suppressed by St Paul's amid fears it would inflame tensions over the protest. The report, based on a survey of 500 City workers who were asked if they thought they were worth their salaries and bonuses, was due to be published last Thursday.

But publication of the report, by the St Paul's Institute, has been delayed in apparent acknowledgement that it would give the impression the cathedral was on the side of protesters.

Christian groups that have publicly sided with the protesters include one of the oldest Christian charities, the Fellowship of Reconciliation, and the oldest national student organisation, the Student Christian Movement,Christianity Uncut, the Zacchaeus 2000 Trust and the Christian magazineThird Way. In addition, London Catholic Worker, the Society of Sacramental Socialists and Quaker groups have offered their support.

A statement by the groups said: "As Christians, we stand alongside people of all religions who are resisting economic injustice with active nonviolence. The global economic system perpetuates the wealth of the few at the expense of the many. It is based on idolatrous subservience to markets. We cannot worship both God and money."

Bartley said: "There are some very unhappy people within the Church of England. The protesters seem to articulate many of the issues that the church has paid lip-service to. Many people are disillusioned with the position St Paul's has adopted. To evict rather than offer sanctuary is contrary to what many people think the church is all about. The whole thing has been a car crash."

On Saturday afternoon, more than 20 religious figures gathered on the steps of St Paul's to support the occupation, which began two weeks ago.

The bishop of London, the Right Rev Richard Chartres, has promised to attend St Paul's in an attempt to persuade activists to leave. But protesters say they have no intention of packing up, many reiterating their intention to stay at the cathedral until Christmas and beyond.

A spokesman for Occupy London urged the City of London Corporation to open a dialogue with protesters to avoid a lengthy legal battle that could prove expensive for the taxpayer.

Brussels is stifling City of London, Cameron claims

2011-10-29T06:54:00.001-07:00

David Cameron signalled new European battles ahead as he pledged to resist alleged attempts by Brussels to shackle the City of London in red tape. The Prime Minister echoed claims that the emergence of a two-tier Europe following the financial crisis could result in a wave of EU directives that would harm the Square Mile. The Government has said it is determined to prevent the 17 members of the eurozone acting as a bloc to thwart the interests of the 10 EU states, including Britain, that have retained their own currencies.

Qantas grounds all flights

2011-10-29T06:41:00.001-07:00

Australia’s Qantas Airways grounded its entire fleet on Saturday over a bitter labour dispute in an unprecedented move that prompted the government to warn it feared for the airline’s future and would seek action to end the dispute. EDITOR’S CHOICE Strikes cost A$15m-a week in lost sales - Oct-28 US airlines earnings hit by fuel costs - Oct-27 Lufthansa scales back passenger forecasts - Oct-27 Virgin eyes tie-up with Etihad on BMI - Oct-14 Qantas overhauls lossmaking international operations - Aug-16 Qantas said it would lock out all employees from Monday night in a dispute affecting 70,000 passengers and 600 flights on one of the country’s biggest travel weekends. The grounding does not affect Qantas’ budget airline Jetstar or code-share flights on other airlines. Passengers will get a full refund for flights cancelled due to the industrial action, Qantas said on its website. Customers can also rebook their flights for a later date. The announcement took passengers and the government by surprise, embarrassing Prime Minister Julia Gillard who was hosting a Commonwealth leaders summit in Perth. Some of those leaders are booked to fly home on Sunday with Qantas. Unions, from pilots to caterers, have taken strike action since September over pay and opposing Qantas plans to cut its soaring costs, as it looks at setting up two new airlines in Asia and cutting back financially draining long-haul flights. “They are trashing our strategy and our brand. They are deliberately destabilising the company. Customers are now fleeing from us,” Qantas Chief Executive Alan Joyce said.

The slain Libyan leader Moamer Kadhafi secretly spirited out of Libya and invested overseas more than $200 billion

2011-10-21T23:40:00.001-07:00

The slain Libyan leader Moamer Kadhafi secretly spirited out of Libya and invested overseas more than $200 billion -- double the amount that Western governments previously had suspected, The Los Angeles Times reported late Friday. Citing unnamed senior Libyan officials, the newspaper said US administration officials were stunned last spring when they found $37 billion in Libyan regime accounts and investments in the United States. They quickly froze the assets before Kadhafi or his aides could move them, the report said. Governments in France, Italy, England and Germany seized control of another $30 billion or so. Earlier, investigators estimated that Kadhafi had stashed perhaps another $30 billion elsewhere in the world, for a total of about $100 billion, the paper noted. But subsequent investigations by US, European and Libyan authorities determined that Kadhafi secretly sent tens of billions more abroad over the years and made sometimes lucrative investments in nearly every major country, including much of the Middle East and Southeast Asia, The Times said. Most of the money was under the name of government institutions such as the Central Bank of Libya, the Libyan Investment Authority, the Libyan Foreign Bank, the Libyan National Oil Corporation and the Libya African Investment Portfolio, the paper pointed out. But investigators said Kadhafi and his family members could access any of the money if they chose to, the report said. The new $200 billion figure is about double the prewar annual economic output of Libya, The Times noted. Kadhafi, who lorded over the oil-rich North African nation for 42 years, met a violent end on Thursday after a NATO air attack hit a convoy, in which he was trying to escape from his hometown of Sirte. He survived the air strike but was apparently captured and killed after a shootout between his supporters and new regime fighters.

EU raids banks in lending rates probe

2011-10-19T15:57:00.001-07:00

The European Commission has raided banks, including Deutsche Bank , in a probe into suspected fixing of interbank lending benchmark Euribor, the third major investigation of the finance sector by the EU's powerful executive this year. The EU's executive, which has powers to impose heavy fines if it finds wrongdoing, said it had carried out the searches on concerns that the companies involved may have broken antitrust rules. It is the third major probe into banking this year after separate investigations into credit default swaps, including a probe into whether banks manipulated another interbank lending benchmark, the London interbank offered rate, as well as one into cross-border bank payments. Banks are already facing sweeping regulatory changes and tighter supervision of their business in the wake of the financial crisis. They were also a lightning rod for public protests in a "Day of Rage" over the weekend. "If it is found true, it is a major concern and it is not going to help the cause of banks," said a high-level EU banking regulator, who asked not to be identified, of the suspicions that prompted the EU raids. Euribor is a benchmark rate that banks refer to when fixing a price on interbank euro loans. There are 44 contributors to the Euribor rate, far more than contribute to LIBOR. Most major banks, including Santander , BNP Paribas and UBS , are on the Euribor panel. The rate is based on an average from the 44 and used on trillions of euros worth of euro-denominated loans and debt instruments. The European Banking Federation hosts the committees of banks that set the rate. The investigation suggests that there has been a fixing of prices but Euribor-EBF, which compiles the benchmark, challenged this. "We are open and prepared to share any data with the authorities," said Cedric Quemener, manager of Euribor-EBF, which compiles the benchmark. "We are fully confident in the governance of Euribor. With so many banks involved in setting the rate, fixing a rate artificially would be impossible. I believe the Commission lacks knowledge about how those benchmarks are made. We are ready to help them," Quemener told Reuters. The Commission, which acts as anti-trust regulator in the 27-state European Union, did not identify the companies or countries where it had carried out the raids. But a person familiar with the matter said Deutsche Bank's London offices were among those raided. Deutsche Bank declined to comment. The move comes alongside an investigation by enforcement agencies in the United States, Europe and Japan into whether the London Interbank Offered Rate (Libor) was manipulated during the last financial crisis.

RBS staff told to pay for their own Christmas party

2011-10-16T10:13:00.001-07:00

Another day, another downgrade. Reduced to surviving on two pints of lager and pack of crisps at recent Christmas parties, misery was heaped on Royal Bank of Scotland's highly-paid investment bankers on Friday as they were told that they would have to fund this year's bash entirely out of their own pocket.

HMRC clamps down on Swiss account holders

2011-10-16T09:53:00.001-07:00

6,000 Britons who hold money in the Swiss arm of HSBC will soon receive a letter telling them that they need to own up to unpaid tax. The bank is acting on information received last year under a tax treaty. This revealed that more than 6,000 individuals, companies, trusts and other bodies held accounts and investments with HSBC Geneva. HMRC has already begun criminal and serious fraud investigations into more than 500 individuals and organisations holding these accounts. HMRC will shortly be writing to those who have not yet come forward, or are not under investigation. They will be offered a chance to contact HMRC and disclose all their tax liabilities, HMRC said. Fines of up to 200 per cent of any tax may, in certain circumstances, be imposed on people not coming forwards during this window for disclosure. "This is not an amnesty. There are no special rates of penalty or interest for those who come forward voluntarily," said HMRC's Dave Hartnett. "This is an opportunity for those who have made errors in past returns to correct them. The net is closing on offshore evaders. Don't wait for HMRC to contact you."

FORMER policeman lived the high life in Marbella by running a £300million VAT fraud

2011-10-13T09:24:00.001-07:00

– the biggest ever uncovered in the UK. Nigel Cranswick, 47, tried to cheat the taxman by claiming back tax on £2billion worth of bogus sales made by his mobile phone firm I2G. The “phenomenal” turnover was generated in eight months, HMRC said. Advertisement >> Meanwhile Cranswick lived it up in his rented villa in Marbella. “Despite this phenomenal turnover... I2G operated from a small office in Sheffield,” HMRC said. The scam was smashed after a five-year police probe, Newcastle crown court was told. Cranswick, from Sheffield, admitted conspiracy to cheat HMRC, as did accomplices Brian Olive, 56, of Doncaster, and Darren Smyth, 42, from Rotherham. Claire Reid, 45, also from Rotherham, admitted false accounting. The four will be sentenced next month

BRITS ABROAD

2011-10-13T06:02:00.001-07:00

Rich Brits plot escape to France

2011-10-13T05:55:00.001-07:00

wealthy Britons are planning to flee what they believe to be an over-taxed and crime-ridden UK, with France the most favoured destination, according to a survey published by British bank Lloyds TSB. The survey, published on Monday, found that 17 percent of those with more than £250,000 ($391,025) in savings and investments wanted to move abroad in the next two years, up from 14 percent six months earlier. The most popular destination for the rich exiles was France (21 percent), followed by Spain (15 percent) and the US (11 percent). Three-quarters of those questioned (73 percent) thought that crime was a bigger problem in Britain than other developed countries. "Sadly, it seems August's riots, tax increases and a rising cost of living have cast a pall over life in the UK for some wealthy people," said Nicholas Boys-Smith, managing director of Lloyds TSB International Wealth in a statement. "It may reignite fears of a 'wealth drain' from our economy as rich people seek pastures new," he said. 42 percent of those questioned named tax as a reason for leaving, up from 35 percent six months ago. Cost of living was a factor for 52 percent, up from 31 percent. Research in January 2011 suggested that 4.6 percent of the UK population have over £250,000 in savings and investments, which equals around 2.8 million people.

A poorly designed, over-extended and ill-disciplined monetary union is in danger of falling apart

2011-10-13T02:42:00.001-07:00

Illustration by Matt Kenyon

What if it falls apart? For all my adult life, I have been what in England is called a pro-European or Europhile. For most of that time, European history has been going our way. Now it may be on the turn. Soon, it could be heading the Eurosceptics' way. What then?

Over the last half-century, the institutional organisation of Europe has progressed from a common market of six west European states to a broader and deeper union of 500 million individual Europeans and 27 countries, from Portugal to Estonia and Finland to Greece; 17 of them share a single currency, the euro. There are no border controls between 25 European countries in the Schengen area. Enveloping it all is the fragile skin of the European convention on human rights (now under facile attack from some British Conservatives) which allows any individual resident of no less than 47 countries, including Russia, to contest a violation of their inalienable human rights all the way to a European court of human rights in Strasbourg.

Never has Europe been so united as this. Never have more of its people been more free. Never before have most European countries been democracies, joined as equal members in the same economic, political and security community. Our continent still has a grotesque amount of poverty, injustice, intolerance and outright persecution. (Try living as a Roma or Sinti in eastern Europe for a taste of all that.) I prettify nothing. But – to adapt a famous remark about democracy by that great pro-European British conservative, Winston Churchill – I do say that this is the worst possible Europe, apart from all the other Europes that have been tried from time to time.

Now all this is under threat. A poorly designed, over-extended and ill-disciplined monetary union is in danger of falling apart, bringing bitter recriminations and lasting divisions. More fundamentally, the past emotional motivators and political engines of European unification are no longer there. The peoples of Germany, the Netherlands and other core countries of the European Union are loth to take steps of further integration which many of the creators of monetary union thought would be necessary to sustain it.

I blame politicians like Angela Merkel for not showing more leadership in this respect, but such leadership would involve a heroic, uphill struggle to persuade reluctant publics in what are still (contrary to what Eurosceptics claim) largely sovereign national democracies. If these were not sovereign national democracies, the whole financial world – from Washington to Beijing – would not this week have been waiting with bated breath on the vote of one small party in the parliament of Slovakia.

I note in passing that many of the current difficulties of the eurozone were predicted back in the 1990s, and I was a sceptic about monetary union at that time. This is what I wrote in 1998: "The rationalist, functionalist, perfectionist attempt to 'make Europe' or 'complete Europe' through a hard core built around a rapid monetary union could well end up achieving the opposite of the desired effect. One can all too plausibly argue that what we are likely to witness in the next five to 10 years is the writing of another entry for [Arnold] Toynbee's index [to his A Study of History], under 'Europe, unification of, failure of attempts at'." But I am not now going to hide behind that testament to my own earlier scepticism about one element of a larger project.

As a pro-European, I stand by the whole project, warts and all. I recently contributed to an appeal – which you too can sign – arguing that the eurozone can only be saved by further fiscal integration and a strategy for growth. Remarkably, even the Eurosceptic prime minister David Cameron recently told the Financial Times that Germany and France need to fire a "big bazooka" to convince financial markets and hence preserve the eurozone. That is a bit like the Duke of Wellington wishing Napoleon success in consolidating his continental empire – but extraordinary times do produce such delicious moments.

Beyond this, however, I'm not going to add a single word to the 537 newspaper columns you have already read explaining how the eurozone must and can, or must not and can not, be saved. You decide which economic commentator you believe.

Instead, I want to ask what happens if the eurozone does fail, one way or another – and that failure begins a much larger process of gradual disintegration. Suppose that the EU in 2030 has become something like the Holy Roman Empire in, say, 1730: still extant on paper, but more origami than political reality. What then?

For us pro-Europeans, what happens then will be, first of all, a paradoxical kind of liberation. Rather like the supporters of a long-term incumbent government, for decades now we have felt some obligation to defend the existing state of affairs, with all its obvious flaws. Eurosceptics, by contrast, have enjoyed the glorious irresponsibility of opposition – and, heaven knows, the Brussels institutions furnish endless easy targets for the sceptic and the satirist.

Now the boot will be on the other foot. For a few years, like an incoming government, Eurosceptics will be able to blame current problems on the preceding regime (overhasty monetary union led to German-Greek loathing, etc), but that only lasts so long. Sooner or later it will become clear that it is their kind of Europe we are living in, not mine.

FSA broke its own rules in Keydata probe, judge rules

2011-10-12T01:38:00.001-07:00

High Court judge found that the Financial Services Authority (FSA) had wrongfully used privileged emails to bring its case against Keydata. A further "relief hearing" will now determine the impact of the ruling, which could de-rail the case altogether. It is the latest in a line of setbacks for the regulator, which has been investigating regulatory breaches at Keydata and millions of pounds of missing retail funds for two years. Keydata invested in "life settlement funds", which buy and sell US life insurance and generate high returns. In June 2009 the FSA applied for Keydata's closure "to protect investors", saying it was concerned about "potentially missing assets". The business was fast-tracked into administration and referred to the Serious Fraud Office (SFO). It emerged that £103m of life insurance policies managed by a Luxembourg business, SLS Capital, and sold to Keydata investors as low-risk bonds might have been "misappropriated".

Sicily's tiny anti-Mafia TV channel

2011-10-09T00:30:00.001-07:00

Sicilian TV station that campaigns against the Mafia, Telejato, is among hundreds of channels threatened with closure due to a change in the law. Partinico is a pretty nondescript little town - a handful of baroque churches, a couple of elegant palazzos and a lot of ugly concrete in between. If it were not for the fact that it is in the so-called "Mafia Bermuda Triangle", perhaps nobody outside the province of Palermo would have heard of it. As it is, like Corleone, it is a name that prompts Italians to raise an eyebrow and suck in their breath when you tell them you are planning to visit. Discreet entrance My point of departure is San Giuseppe Jato, another former Mafia stronghold. Continue reading the main story From Our Own Correspondent Broadcast on Saturdays at 1130 BST on BBC Radio 4 and weekdays on BBC World Service Listen to the BBC Radio 4 version Download the podcast Listen to the BBC World Service version Explore the archive Having just visited a vineyard on land confiscated from an infamous jailed boss, I decide to try my luck with the only direct bus of the day to Partinico. I do what the traffic warden advises and wave it down in the middle of the road, just in front of the toy shop. After a picturesque journey through the Jato Valley, I alight an hour later at my destination, a town where the mountains rise up above the church steeples and illegal attic extensions. I find the block of flats which is home to Telejato without too much difficulty. It is on a quiet side street away from the bustle of the main road. The building number seems right but there is no sign or any directions to the TV station inside. I conclude that the best way to find Pino Maniaci is to follow my nose. As I climb the staircase, the smell of cigarette smoke gets stronger. I follow the aroma up to the second floor, through an unlocked door and into the newsroom. Pino Maniaci's daughter Letizia is the station's main reporter It is 13:20 and they go live at 14:00. Pino, his daughter and a couple of volunteer journalists are putting together the bulletin. When I come in, he turns towards me, cigarette between his lips. After the briefest of greetings he says, "We're on air soon so sit down and don't break my balls." His daughter looks up and grins. "Don't worry, that's how he talks to everyone," she says. Indeed Pino Maniaci, when not inhaling smoke, is invariably exhaling expletives. Unable to sit still and not wishing to be a ball-breaker, I nose around the small converted apartment. You can tell by the pictures, tributes and cuttings on the walls, just how proud Pino is of Telejato. Courage He has turned a tiny local TV station into one of Sicily's most powerful anti-Mafia voices. Continue reading the main story “ Start Quote With his Groucho Marx-style moustache and Chico Marx-style accent, he boasts that even the Mafia watch Telejato” He says nearly all the locals watch it. In the heart of Cosa Nostra territory, he was the first journalist to dare to give the full names of arrested mafiosi. Before him, nobody published more than initials for fear of reprisals. Pino, his family and a small team of volunteers put together a daily news show, which is dominated by Mafia and corruption stories. "We're always first on the scene," he tells me. "Even international channels like CNN call and ask to use our footage." The station works closely with the various police forces, including the Catturandi di Palermo - a special squad that hunts mafiosi in hiding. "Wherever we show up, they're there. Wherever they show up, we're there." Pino's childlike bravado conceals his genuine courage. With his Groucho Marx-style moustache and Chico Marx-style accent, he boasts that even the Mafia watch Telejato. "We were the only ones to interview the brother of Bernardo Provenzano, one of the biggest Mafia bosses," he tells me. With a gleeful twinkle, Pino continues, "We even discovered that Provenzano himself had an aerial specially positioned to pick up our signal. If you listen to the police wire taps, you can hear our signature tune!" Murder attempt Telejato has a motto: "They consider themselves men of honour. For us, dishonouring them is a question of honour." Pino uses derision as both weapon and shield, but he admits he is scared, especially for his family. "I smoke three packets a day and always joke that it's just as well the biggest room in our tiny station is the bathroom!" Living under police escort, he has suffered countless attacks - slashed tyres, severed brake cables, burnt-out cars, windscreens shattered by gunshots. "They even tried to bump me off!" he chuckles, describing a failed attempt to strangle him, which left him with four fractured ribs, a broken leg, a black eye and several broken teeth. At 17:00, it is time for me to head for the station to catch a train up to Palermo. Pino refuses to let me go without showing me some true Sicilian hospitality. Police escort in tow, we go to a nearby coffee bar. Everyone, including the officers, gets an espresso and Pino insists I taste a cannolo, the island's famous ricotta-filled pastry. "I have to keep Telejato going," says Pino between mouthfuls, "so that one day Sicily will be more famous for these than for the Mafia."

PM intervenes in Fox flatmate row

2011-10-09T00:21:00.001-07:00

Beleaguered Defence Secretary Liam Fox is fighting for his political career after the row over his working relationship with a close friend deepened. Prime Minister David Cameron is poised to decide his fate on Monday after ordering the head of the civil service to urgently report back on an internal investigation into whether Dr Fox's links to Adam Werritty, a former flatmate, breached ministerial guidelines. A series of allegations have surfaced over the unusual involvement Mr Werritty had in brokering meetings for Dr Fox, as well as the access he enjoyed to Government despite having no formal parliamentary or Whitehall role. Dr Fox, who has been in Libya on what should have been a publicity coup as he met the country's interim government, was forced to issue an embarrassing statement clarifying comments he made earlier about how a meeting in Dubai in June with a businessman had been arranged. But he also insisted he has nothing to hide and indicated he is the victim of a smear campaign, telling The Sunday Telegraph: "I have absolutely no fear of complete transparency in these matters. I think there are underlying issues behind these claims and the motivation is deeply suspect." Further revelations emerged, however, that cast doubt on previous claims made by Dr Fox that Mr Werritty, best man at his wedding, had never attended formal meetings with overseas dignitaries. According to the Observer, footage has been uncovered that shows Mr Werritty meeting Sri Lankan president Mahinda Rajapaksa with Dr Fox in a London hotel last year. During his visit to Libya, Dr Fox was asked to answer allegations that Mr Werritty arranged the Dubai hotel meeting, away from officials, with him and Harvey Boulter, chief executive of private equity company Porton Group. The Secretary of State said defence industry representatives asked for the meeting "when they happened to be sitting at a nearby table in a restaurant", but emails emerged later that appeared to confirm that Mr Werritty had been involved in setting up the discussions for some time - and Mr Boulter told the Guardian he first met Mr Werritty to arrange a meeting with Dr Fox in April. In a statement issued after the emails emerged, a spokeswoman for the minister said: "Dr Fox was referring to Mr Werritty, and not himself, bumping into Mr Boulter at a restaurant prior to the meeting."

Spanish banks in €6bn merger talks

2011-10-07T17:13:00.001-07:00

Banco Popular, Spain’s fifth-biggest listed bank by assets, has offered to buy its smaller listed rival Banco Pastor in a merger that marks a new stage in the restructuring of the country’s financial sector. In filings published on Friday by the Comisión Nacional del Mercado de Valores (CNMV), the market regulator, the banks said they were proposing a friendly all-share deal in which Popular would offer to buy 100 per cent of Pastor. More ON THIS STORY Dismay at Spanish bank restructuring Spain nationalises three more savings banks In depth European banks Santander predicts return to big profits Global Insight Italy and Spain The CNMV had earlier suspended trading in shares of Popular, with a total market value of €4.99bn, and of Pastor, valued at €827m, apparently after news of the discussions leaked before the planned announcement on Monday. At Friday’s share prices, the Popular offer represented a one-third premium for Pastor and valued the target bank at 0.75 times book value, according to the Pastor camp, although Popular’s share price could fall once the suspensions are lifted. CaixaBank, the banking arm of the Barcelona-based La Caixa savings bank, was valued at 0.8 times book value at its flotation earlier this year, but Bankia, comprising Caja Madrid and six others, managed only 0.4 times when it was listed. Three savings banks seized by the official bank rescue fund last month were valued at between zero and 0.12 times book. Until now, the Bank of Spain and the Spanish government have focused on forcing unlisted savings banks to recapitalise themselves and merge with each other to reduce costs and improve efficiency after the collapse of the Spanish housing and construction bubble. Listed banks have been seen as potential buyers rather than takeover targets. “This is only the start,” said one person aware of the talks as the boards of the two companies held separate meetings. “There is going to be a huge shake-out in the banking sector.” Popular is a national Spanish bank that has focused on retail banking and lending to small and medium-sized businesses, while Pastor’s activities are concentrated in the north-western region of Galicia. Pastor – along with four Spanish cajas or savings banks – was one of the nine European banks that failed Europe-wide stress tests in July.

Kelly Hoppen accepts £60,000 damages in hacking case

2011-10-07T09:18:00.001-07:00

Interior designer Kelly Hoppen has accepted £60,000 in damages over the News of the World phone-hacking case. Her lawyer told the High Court the settlement was for "misuse of private information and breach of confidence". Ms Hoppen is the former stepmother of Sienna Miller, whose relationship with fellow actor Jude Law was of huge interest to the now defunct tabloid. News International and News Group Newspapers agreed to pay the money as well as her costs. Numerous articles published in the News of the World between 2004 and 2006 contained "intrusive and private information" relating to Ms Hoppen, her lawyer Mark Thomson told the court. "The claimant did not know the source of this information at the time of publication and often could not understand how it was possible for the News of the World to obtain such private information," he said. New evidence "In 2009, as a result of the claimant's long held concerns, her solicitors, Atkins Thomson, wrote to the Metropolitan Police Service asking whether they had any evidence that the claimant had been targeted by News Group Newspapers Limited in 2004-2006." He said his client was at first told the police had no evidence to suggest she had been a target, but that changed in February 2011 after further evidence emerged. The court heard that News Group Newspapers admitted liability in April. Michael Silverleaf QC, counsel for the newspaper group, told Mr Justice Vos that he wanted to repeat the "sincere and unreserved apology" made to Ms Hoppen in April. Ms Hoppen is one of a number of celebrities and public figures pursuing civil cases against Rupert Murdoch's media group. In January, the High Court is due to hear claims from a handful of test cases involving those who say their phones were hacked into. They include former footballer Paul Gascoigne, Jude Law, sports agent Sky Andrew, and MP Chris Bryant. The mother of a 7/7 bombing victim will also pursue a separate civil case against News International. Sheila Henry's son, Christian Small, was killed in the 2005 Russell Square explosion.

If RBS needs capital, taxpayers will suffer

2011-10-07T08:57:00.001-07:00

news for Europe's banks doesn't get a lot better, with this morning's downgrade of the credit ratings of Portugal's banks by Moody's - on concerns about the quality of their big loans to the Portuguese government (inter alia). And for the UK, the long expected downgrade (also by Moody's) of the credit ratings of Royal Bank of Scotland, Lloyds TSB (sic), Santander and a number of smaller banks and building societies has taken place - which, I have to say, I regard as of lesser significance. The point is that the UK banks' downgrade is an inevitable consequence of government policy to reduce the likelihood that they would be bailed out in a crisis - of which the most conspicuous manifestation has been the Vickers' commission recommendations to put retail banks behind a ring fence and make creditors to banks explicitly liable to losses. So, in a sense, the downgrades should be viewed as a good thing, if they reflect a genuine transfer of risk from taxpayers to the banks' creditors. The important point, for today however, is that these downgrades have been anticipated and discounted by the market for some time, so their real economic impact on the affected banks should be negligible. Or to put it another way, these banks are already paying more to fund themselves, to reflect the perceived increase in the risks faced by those who finance them. But what about the wider problem of the perceived weakness of the eurozone's banks, which is the faultline running through the global economy right now? Health checks If the eurozone does turn the current jaw-jaw into a war-war against the weakness of banks' balance sheets, how much capital would European banks be forced to raise - and which big banks would be forced to raise the most? Well the French financial firm, Natixis, has done a quick, dirty and gripping analysis. It has made a number of assumptions about the parameters that would be used by the European Banking Authority for determining the amount of capital that would need to be injected into banks, to protect them against potential future losses. Natixis assumes the following percentage writedowns (or "marks") on Greek, Irish, Portuguese, Italian and Spanish debt, respectively: 70%, 40%, 40%, 20% and 20%. And then it assumes the banks would need to preserve a core tier one ratio of either 7% or 8% on these stressed scenarios by the end of 2012. Now on that basis, the European banking sector would have to raise €90bn to maintain core equity capital at 7% of assets, or €182bn for 8%. Now what is quite striking is that on Natixis's calculations, the banks that would have to raise the most capital are from Italy and Greece, for the obvious reason that they have greatest exposure to their respective governments, and from Germany. But, interestingly, French banks would be in need of less capital. Here is Natixis's league table of which banks need what: Commerbank of Germany would need €4.6bn to preserve a 7% capital ratio and €7.7bn at 8%; Deutsche of you-know-where would need €3.1bn for 7% and €8.1bn for 8%; Italy's Unicredit would need a staggering €7.2bn and €12.5bn; BBVA and Santander of Spain would need nudging €4bn each if the capital threshold were set at 8%, but negligible amounts at 7%; BNP would need €6.2bn at 8% and nothing at 7%; Soc Gen would need €2.9bn for 7% and €7.3bn for 8%. What conclusions flow from this? That a Europe-wide capital-raising exercise could be painful for the Germans. And if ministers want to do what investors and creditors apparently want them to do, which is to force a serious recapitalisation of big French banks, the minimum capital threshold would have to be set high, at 8%. Given that these measures to strengthen banks will almost certainly apply to all EU banks, not just eurozone banks, what impact would they have on British banks. If the minimum stressed capital ratio were set at 8%, Royal Bank of Scotland, Barclays and Lloyds would all be forced to raise new capital. Among the British banks Royal Bank of Scotland is most vulnerable to being forced to raise new capital, because under July's health checks its stressed capital ratio emerged relatively low at 6.3% (compared with 7.3% for Barclays, 7.7% for Lloyds and 8.5% for HSBC). So if the new minimum capital bar were set at 7% (and we have no idea where it will ultimately be set) RBS would seem to need to raise a few billions of additional capital. Taxpayer loss But there are a couple of important riders. The first is that RBS would claim that the original stress test made it look much weaker than is really the case: in assessing RBS's vulnerability to future losses on financial trading, an average was taken of its losses over the past few years, during which RBS incurred record-breaking, eye-watering losses on financial trading; and since then its trading book has shrunk very considerably and become much less risky. So the stress tests' methodological approach of averaging recent trading losses would exaggerate RBS's current fragility and vulnerability to loss - and in a sense would discriminate against it. The interesting question is whether other European governments will take any heed of this, as and when the Treasury argues that RBS is stronger than it looks. What happens if RBS were forced to raise additional capital? Well that would be quite bad news for taxpayers. Because under the terms of its government bailout, RBS has the right to sell new shares to the government at 50p per share, or roughly twice the current price (in technical terms, 50p is the conversion price of RBS's 'B' shares). In other words, taxpayers would incur massive losses on an injection of capital into RBS which may well be a needless injection of capital. I would therefore expect the chancellor to argue pretty strongly to his eurozone counterparts that RBS has quite enough capital for now. And if he were to lose this battle, he might well be better off launching a takeover bid to acquire all of RBS - to nationalise it fully - than recapitalising the bank through an exercise of the existing rescue mechanism.

Katie Price a victim of £14k fraud

2011-10-06T15:12:00.001-07:00

GLAMOUR girl Katie Price has fallen victim to a fraudster who impersonated the model and stole £14,000. 11 comments Related Stories Jordan’s new man is Danny Cipriani KATIE Price strikes up amazing romance with hunky rugby star – days after dumping toyboy Katie & Leandro in shock 'split'Leandro: I want to marry Katie PriceKatie Price trend is way off- track A busty woman donned a blonde wig and sunglasses during a visit to a bank - believed to be a HSBC in Lincolnshire - and withdrew money. She took out £9,000, followed by two payments of £2,500. The real Katie, 33, who is currently enjoying a fling with rugby ace Danny Cipriani, only learnt of the fraud when her credit cards were rejected during a shopping trip in Brighton. A source told a newspaper: "Katie tried to make a couple of purchases. When she went to pay by credit card, her PIN kept getting declined and the card was eventually blocked – much to her embarrassment. "She tried to pay with three different cards and the same happened with all three. "After calling her bank and speaking directly to her branch manager, she was informed they had received a call from a woman posing as her 24 hours previously who had cancelled the cards. "Katie then asked what the balance of one of her accounts was and informed it was around £14,000 less than the amount she was expecting. A £9,000 withdrawal had been made, followed by two £2,500 ones, and none of them were by her." The source added items were ordered using Katie's credit card details and real address for billing purposes, but were to be delivered to an address in the north. HSBC's fraud department have contacted the police who are trying to track down the person responsible. Investigating officers have obtained CCTV footage of a Jordan look-a-like attempting to withdraw cash. Katie said: "It's really horrible. All I know is that police have footage of these people pretending to be me – I don't even know if it is a man or a woman. "Obviously my ego hopes it was, at least, a female impostor."

Ferronats, a company formed by Spanish construction firm, Ferrovial and British air traffic controllers, Nats, has won 10 of the 13 tenders to run control towers at Spanish airports

2011-09-30T03:22:00.001-07:00

Ferronats, a company formed by Spanish construction firm, Ferrovial and British air traffic controllers, Nats, has won 10 of the 13 tenders to run control towers at Spanish airports as AENA privatises 49% of the company. It will control Alicante, Valencia, Ibiza, Sabadell, Sevilla, Jerez, Melilla, Cuatro Vientos, Vigo and A Coruña. The remaining three towers on the Canary Islands at Lanzarote, Fuerteventura and La Palma have been awarded to the Sacerco company. AENA estimates savings of 46.6% as a result, with Ferronats bidding 70.4 million, and Sacerco bidding 20 million.

Iberia to launch new low cost airline next week

2011-09-30T03:19:00.001-07:00

Iberia is planning to launch a new low cost airline next week. The Iberia board is expected to approve the project on Tuesday 4 October, to launch the low cost airline for the company’s short and medium distance services. The new airline is expected to take up 37 of the 69 A-320 aircraft the airline currently has in service. Iberia is now merged with British Airways to create the IAG, the International Airline Group, and the IAG board would have to ratify the decision on Thursday. Iberia has been holding talks with the pilots’ union SEPLA on the conditions for them in the new airline. The airline contends that it needs a structural reorganisation, but the union considers that all the flights should remain under the Iberia brand, and considers maintenance would be cheaper with a single company. An earlier leasing of six planes to Vueling, the budget airline with a 45.85% Iberia shareholding, proved unsuccessful with Iberia passengers complaining they were being put on Vueling flights. Five of those six planes are now back with Iberia. The expected name for the new airline, Iberia Express, was first mentioned back in October 2009.

Rio hit with £500k bill after losing court battle

2011-09-29T10:31:00.001-07:00

The England and Manchester United star will now be saddled with paying the estimated £500,000 legal bills incurred by the Sunday Mirror in defence of the lawsuit.

Ferdinand sued the newspaper for misuse of private information after they published details of his 13-year relationship with interior designer Carly Storey, who accepted £16,000 for telling the tale of her liaisons with the defender.

But Mr Justice Nicol dismissed the case at London's high court on Thursday, and refused Ferdinand's legal team permission to appeal.

"Overall, in my judgment, the balancing exercise favours the defendant's right of freedom of expression over the claimant's right of privacy," he said.

The judge was not swayed by Ferdinand's claims that he had not tried to meet Storey after being made England captain, despite claims in the newspaper that he had snuck Storey into the team hotel.

"I did not find this answer persuasive. In his evidence the claimant said that (Fabio) Capello had told him to be professional, not only on the pitch but 'around the hotel'," the judge said.

"In the past, the Claimant (Ferdinand) had not behaved in a professional manner around the hotels into which he had tried to sneak Ms Storey.

"Whether or not he had done that in the few weeks since he had been made the permanent captain of England, his relative recent past failings could legitimately be used to call into question his suitability for the role."

Former England captain Ferdinand, who has three children with wife Rebecca, had told the judge at an earlier hearing that, "I do not see why I should not be entitled to a private life just because I am a famous footballer."

Sunday Mirror editor Tina Weaver hailed the judge's decision.

"The Sunday Mirror is very pleased that the court has rejected Rio Ferdinand's privacy claim," she said.

"The judge found that there was a justified public interest in reporting the off-pitch behaviour of the then England captain and discussion of his suitability for such an important and ambassadorial role representing the country.

"We are pleased the judge ruled that Mr Ferdinand had perpetuated a misleading public image and the Sunday Mirror was entitled to correct this impression.

"There has never been greater scrutiny of the media than now, and we applaud this ruling in recognising the important role a free press has to play in a democratic society."

Paramedics Who Tried To Save Singer's Life Give Evidence

2011-09-29T10:18:00.001-07:00

Alberto Alvarez was in charge of back stage during Jackson's final rehearsal on June 24, 2009. He described Jackson as "happy and in good spirits" during the performance. "He was doing very well for the most part," he told the Los Angeles court. He explained that he later drove Jackson back to his rented Holmby Hills home and saw Dr Murray's car parked there. He said the last time he saw Jackson alive was when he said "good night" to the singer. Mr Alvarez was the first person who went into Jackson's bedroom after Dr Murray telephoned for help as he was trying to resuscitate the singer. He said Jackson was lying on his back, with his hands extended out to his side, and his eyes and mouth open. "When I came into the room, Dr Murray said 'Alberto, hurry, we have to get to hospital, we have to get an ambulance'." Jackson's logistics director Alberto Alvarez He then described how Jackson's children Paris and Prince entered the room behind him. "Paris screamed out 'Daddy' and she was crying. "Dr Murray said to me 'Don't let them see their dad like this see'. "I ushered the children out and told them 'Don't worry, we will take care of it, everything is going to be OK'." Mr Alvarez asked what had happened, to which Dr Murray replied: "He had a bad reaction". Two paramedics who tried to save Jackson's life are also due to give evidence on day three of the trial. Martin Blount and Richard Senneff are expected to say that Jackson already appeared to be dead when they arrived at his home on June 25, 2009. The court will also hear from another key witness - Jackson's personal chef Kai Chase. Sky's US correspondent Greg Milam, who is at the court, said: "There are fewer demonstrators, fans of Michael Jackson, and supporters of Dr Murray here today - but they are still being very vocal in their support of both sides in the case." On Wednesday, Jackson's security chief revealed how the star's children crumpled in shock, as they saw their apparently dead father being given heart massage in his bedroom. The court also heard that Dr Conrad Murray, accused of involuntary manslaughter over Jackson's death two years ago, asked aides if any of them knew how to do cardiopulmonary resuscitation (CPR). "Paris was on the ground balled up crying, and Prince was standing there, and he just had a real shocked, you know just slowly crying type of look on his face," bodyguard Faheem Muhammad, referring to two of Jackson's three children, said. "I went and gathered them together, and I kind of talked to them for a second, got the nanny... and we walked downstairs and put them in a different location," he said. He was describing the scene after he was called up to the master bedroom of Jackson's rented Los Angeles mansion where the star died after an overdose of a powerful sedative. The defence team for the doctor insists Jackson self-administered other sedatives, prompting the overdose while his physician was outside the bedroom. Dr Murray, 58, faces up to four years in jail if convicted of involuntary manslaughter for administering the overdose of Propofol.

Raids in 7 countries in $200M investment fraud

2011-09-29T10:12:00.001-07:00

Dutch authorities say raids have been conducted in seven countries in connection with an alleged $200 million investment fraud scheme, and four men have been arrested. The country's financial crime prosecutors say they suspect hundreds of investors were conned into fraudulent investments in U.S. life insurance policies by a firm called Quality Investments BV. Prosecutors said Wednesday four Dutch men have been arrested, two in the Netherlands and one each in Switzerland and Turkey. Raids were also conducted in Spain, Dubai, England and the United States, in which millions of euros in assets were seized in hopes of recovering some money for duped investors.

Global swoop nets huge haul of fake drugs: Interpol

2011-09-29T09:24:00.001-07:00

Police and customs officers from 81 countries have seized 2.4 million doses of counterfeit medicine sold over the Internet during a one-week operation, international police body Interpol said Thursday. Fifty-five people were arrested during the September 20-27 operation, codenamed Pangea 4, and more than 13,000 websites closed down, Interpol said. More than 100,000 illegal doses were seized in France, over half of which were for supposed to be for treating male erection problems, France's medical security agency that took part in the operation, AFSSAPS, said. The operation was carried out for the fourth successive year in an effort to inform the public about the risks of buying medicines online. "Interpol's member countries and partners have shown through the success of Operation Pangea IV the Internet is not an anonymous safe haven for criminals trafficking illicit medicines," said Interpol secretary general Ronald Noble. The agency said it had targeted Internet service providers, online payment companies and delivery companies during the operation, in order that the whole supply chain of fake drugs be broken down. "We cannot halt the illicit online supply of medicines without a consistent, constant and collective international effort involving all sectors," said Aline Plancon, head of Interpol's fake drugs department. "The operation itself was only made possible thanks to a combined effort involving the 165 different participating agencies sharing and exchanging live information via Interpol's headquarters in Lyon," she said. Interpol has also posted messages on Internet video sharing sites warning punters "Don't Be Your Own Killer" by buying unlicensed pharmaceuticals.

Tony Blair is unaccountable over business interests, adviser says

2011-09-25T23:36:00.001-07:00

More questions have been raised over Tony Blair's lucrative business activities after an adviser in his role as a Middle East peace envoy said the former Prime Minister continued to operate outside a defined code of conduct. Channel 4's Dispatches, due to be broadcast tonight, claims that Mr Blair is not required publicly to disclose his commercial interests as he would if he were an MP. Mr Blair combines a £2m-a-year consultancy with the US investment bank JP Morgan with his unpaid post in Jerusalem, where he is heading international efforts in preparation for a future Palestinian state. He also advises the insurance group Zurich Financial, while his company Tony Blair Associates signed a reported £27m-deal advising the Kuwaiti government. They are among a string of globetrotting business interests that have seen him build an estimated personal fortune of £20m since leaving office in 2007. But a senior French diplomat Anis Nacrour, who advised Mr Blair on security for three years, has fuelled doubts over the former Labour leader's public accountability.

UBS CEO Gruebel resigns over rogue trading loss

2011-09-24T13:01:00.001-07:00

UBS chief executive Oswald Gruebel has resigned over a $2.3 billion loss caused by rogue trading at its investment division, which is to be restructured now to prevent similar incidents in future, the Swiss bank said Saturday. Gruebel, who had come under heavy pressure from shareholders over the scandal, said he hoped his resignation would allow the bank to restore its reputation in the eyes of clients and investors. Article Controls EMAIL REPRINT NEWSLETTER SHARE "As CEO, I bear full responsibility for what occurs at UBS ( UBS - news - people )," he said in a memo to staff. "From my first day on the job I placed the reputation of the bank above all else. That is why I want to and must act according to my convictions." UBS Europe chief Sergio P. Ermotti will take over immediately as interim chief executive until Gruebel's replacement is appointed. Gruebel's departure caps 10 days of speculation over his future following the bank's announcement that a single London-based trader had evaded internal control systems and gambled away $2.3 billion. The trader, 31-year-old Kweku Adoboli, was arrested Sept. 15 and charged with fraud and false accounting. A judge ordered him Thursday to be held in jail until a hearing next month.

European banks head towards another meltdown

2011-09-22T16:26:00.001-07:00

Shares in some of Europe's largest banks fell by 10pc as the cost of insuring European lenders' senior bonds rose to record levels, according to credit default swap prices. The Markit iTraxx Financial Index of contracts on the senior debt of 25 banks and insurers climbed to an all-time high 315.5 basis points. The last banking crisis was regarded by most eurozone members as an Anglo-Saxon phenomenon caused by lax lending controls that resulted in major UK and US institutions either collapsing or having to take costly state-funded bail-outs. To offset the threat of another crisis spreading across the eurozone, European regulators ordered their banks to increase their liquidity buffers. Government bonds were generally viewed as the most liquid and least risky assets to hold. However, this policy has come back to haunt them, leaving many lenders across the region seriously exposed to the eurozone sovereign debt crisis. French banking giants BNP Paribas and Société Générale are among the hardest hit. Recent estimates suggest BNP has eurozone sovereign debt exposure of about €75bn (£65bn), amounting to roughly 6pc of total assets, including €14bn of Greek debt and €21bn of Italian government bonds. The other two major French banks, SocGen and Credit Agricole, each have exposures of a similar size. Between them, France's banks have about €56bn of Greek sovereign bonds alone, and have so far taken 20pc writedowns on this.

signs of an institutional run on French banks

2011-09-22T16:23:00.001-07:00

Christine Lagarde, the managing director of the International Monetary Fund, urged Europe's leaders to bail out their fragile banks, as the boss of the eurozone's biggest bank, BNP Paribas, rejected fears that the financial sector was "in peril". Addressing journalists in Washington at the opening of the IMF's annual meeting, Lagarde said that Europe must tackle "this twin problem of sovereign debt and the need to strengthen capital buffers". She said: "It is critical that to fuel growth, banks be in a position to finance the economy, to finance enterprises, to finance households, to finance local governments. To do that they need to have the balance sheet that will actually support credit to the economy." Despite the recent stress tests carried out by the European Banking Authority, which suggested that most of the banks were well-placed to cope with the sovereign debt crisis, the IMF estimates that banks have taken a €300bn (£260bn) hit in the past year as a result of the growing risk of default by Greece and other vulnerable eurozone countries. Lagarde's call came as Baudouin Prot, BNP's chief executive, emphatically denied reports that it was in talks with Middle Eastern investors about securing a capital injection. "I formally deny this," he said. "We have no particular contact because we don't need a capital increase." But French bank shares – which have lost 50% of their value in three months – continued to fall as markets endured one of their worst trading days since 2009. BNP was off more than 5% and close rival Société Générale fell almost 10%. In the UK, bailed-out Lloyds Banking Group was down more than 10%, bearing the brunt of anxiety about a slowdown in economic growth. The FTSE 100 closed down 4.7% with large falls from mining companies, which make up a large part of the index and whose fortunes are closely tied to global economic prospects. Out of the 100 stocks, only technology company Autonomy – supported by a bid from Hewlett-Packard – fell by less than 1%. A survey from the crucial manufacturing sector, which chancellor George Osborne had hoped would lead an economic recovery, exacerbated the nervous mood by suggesting industry had been hit hard by the collapse of confidence around the world. The CBI's monthly industrial trades survey showed declining orders, both at home and abroad, and a rising backlog of finished goods, in the latest evidence that the recovery has stalled. Minutes from the latest meeting of the Bank of England's monetary policy committee revealed on Wednesday policymakers were preparing a new round of quantitative easing to respond to the worsening outlook. The gloom was echoed in the eurozone, where the early, "flash estimates" from the closely watched purchasing managers surveys signalled a sharp downturn in both manufacturing and services growth, adding to fears that Europe could be heading for a new recession. The Greek government announced new austerity measures this week to persuade investors that it is committed to tackling its debts. But investors are still fretting about the potentially devastating impact of a default on the region's banks. BNP insisted on Thursday that it could maintain a core tier one ratio – an important measure of financial strength – of 9% by January 2013 even if it sustained losses through the eurozone crisis. But Mohamed El-Erian, boss of the world's biggest bond investor Pimco, warned in a blog on the FT's website that there were "signs of an institutional run on French banks".

IMF cuts growth forecast for UK for 2011 and 2012

2011-09-20T23:35:00.001-07:00

The International Monetary Fund has cut its growth forecasts for the UK, in a report warning that the global economy is in a "dangerous new phase". UK gross domestic product is predicted to grow 1.1% in 2011, down from the 1.5% forecast in the IMF's previous World Economic Outlook report in June. The growth forecast for 2012 has been slashed from 2.3% to 1.6%. Foreign Secretary William Hague said the UK had the "discipline and determination" to tackle its deficit. But shadow chancellor Ed Balls called them "deeply concerning forecasts for both the UK and world economy". Independent economists are currently forecasting average UK growth of 1.3% in 2011, slower than the IMF, and 2% in 2012, ahead of the IMF figure. The IMF's UK forecast for 2011 falls behind projections for Germany, France, the US and Canada. Germany is forecast to grow 2.7% in 2011 while France is expected to show 1.7% growth. The US should advance 1.5% and Canada 2.1%. However, UK growth in 2012 should surpass both Germany and France, whose forecasts have been cut to 1.3% and 1.4% respectively. A spokesman for the Treasury said the Government remains committed to its deficit cutting plan. He said: "It is welcome that the IMF have forecast that the UK will grow more strongly than Germany, France and the euro-zone next year. "But it is clear that the UK is not immune to what is going on in our biggest export markets, with every major economy seeing lower forecasts for growth this year and next. "The Government remains committed to implementing the deficit reduction plan which has delivered stability, a policy stance that Christine Lagarde described as 'appropriate' earlier this month." Mrs Lagarde, head of the IMF, said the UK's budget deficit stance remained "appropriate" but "the heightened risk" meant a need for a "heightened readiness to respond".

Debt Crisis Infects Companies via Bank Loan Costs

2011-09-20T23:30:00.001-07:00

Banks in Spain and Italy are curbing loans and charging customers more as aftershocks from the sovereign debt crisis drive their own borrowing cost higher. “They can’t lend what they don’t have, I suppose,” said Francesc Elias, the owner of Bomba Elias, a pumps and filters maker near Barcelona, which shelved a 100,000-euro ($144,000) plan to open a Bahrain office when it couldn’t get an affordable bank loan. “The banks are very clever about finding new ways to charge us more.” Spanish and Italian government bond yields surged to euro- era records this quarter as Greece struggled to avoid default, driving the cost of insuring against nonpayment by the region’s banks to a record and making it harder for them to sell bonds. Spain pays 5.35 percent for 10-year money, up from an average of 4.07 percent in the first half of 2010, while Italy pays 5.65 percent compared with a 4.05 percent average last year. As a result, banks such as Banco Santander SA, Spain’s biggest lender, are passing higher funding costs on to their customers. Santander’s return on Spanish loans rose to 3.63 percent in June from 3.37 percent in December, as the yield it pays on deposits fell to 1.32 percent from 1.54 percent. UniCredit SpA, Italy’s biggest lender, said on Aug. 3 it’s being more selective about who it lends to and levying higher rates. One out of three companies asking for credit in the second quarter period didn’t get it or obtained less than they asked for, according to Confcommercio, an Italian retailers’ lobby group. ‘Increasingly Stringent’ “The cost of financing our current activities has increased significantly,” said Riccardo Illy, chairman of Italian coffee maker Gruppo Illy SpA. “We don’t have any problems accessing credit because we’re large enough, but we know many businesses that are having trouble because banks’ requirements have become increasingly stringent.” Spanish banks including Santander and Bankia SA are shrinking their loan books after being pummeled by a collapse in credit demand for real-estate and surging loan defaults. Santander’s Spanish lending shrank an annual 7 percent through June, mirroring a trend in the Bank of Spain’s data that show a 1.9 percent annual drop in lending to companies and individuals. Lending at Bankia, the third-biggest lender formed from a merger of seven savings banks, was down 2.3 percent from December. The average interest rate on new company loans of as much as 1 million euros rose to 4.70 percent in July from 4.57 percent in June and 3.88 percent in December, according to the Bank of Spain. Companies took out 15.9 billion euros of those loans in July, down from 18.7 billion euros in the same month a year ago and 39.2 billion euros in July 2007, according to the central bank. ‘The Bottom Line’ “In our case, it’s not so much the issue of access to credit that’s the problem, it’s the fact that it costs more,” said Luis Zapatero, chairman of Bodegas Riojanas, a Spanish winemaker, which needs to finance putting wine aside to create reserve vintages that may not go on sale until several years after bottling. “Our financial costs have increased 15 percent and that goes straight to the bottom line.” Banks face a dilemma when trying to pass on increased funding costs in full because they risk driving more borrowers into default, said Barclays Capital’s Pascual. Bad loans in the Spanish banking system are near 7 percent of total lending, the highest since 1995. Increased Caution “Banks are more cautious in giving long-term loans because it has become more difficult to transfer increasing funding costs to customers,” said Giovanni Bossi, chief executive officer of Banca Ifis SpA, an Italian bank specializing in short-term loans to companies. As lending slides in Spain and banks struggle to finance themselves, the outlook for growth is worsening, said Antonio Ramirez, an analyst at Keefe Bruyette & Woods in London. Prime Minister Jose Luis Rodriguez Zapatero said Sept. 14 that Spain might miss its 1.3 percent growth target this year because of the “situation of financial tension and economic uncertainty, mainly because of Greece.” Banks, meantime, are struggling to sell bonds. The last benchmark-sized issue of 1 billion euros or more of debt by a Spanish bank was a sale of public-sector covered bonds by Santander in June. UniCredit paid a record spread for Italian covered bonds when it raised 1 billion euros from a sale of 10- year notes that yielded 215 basis points more than the benchmark mid-swap rate. ‘Negative Feedback Loop’ “It’s the negative feedback loop between what’s happening to the sovereign and the effect on banks and the economy,” said Antonio Garcia Pascual, chief southern European economist at Barclays Capital in London. “To a large extent, the problems facing Spanish lenders also apply to Italy.” As financing costs rise in Italy, analysts have started revising down their growth estimates for that country. Nomura International Plc economists revised their Italian gross domestic product growth estimate for 2012 last month to 0.5 percent from 0.8 percent previously. “The increased financial costs will become more evident in the dynamics of the economy,” said Giada Giani, an economist at Citigroup Inc. in London. “I definitely think that the deterioration of financial conditions is a key factor in the macro-economic picture.” A survey by Spain’s national statistics institute published in May showed that one in every four companies that sought loans in 2010 failed in the attempt, compared with 10 percent in 2007. Half of the companies surveyed said they’d been able to line up the credit needed, compared with 80 percent in 2007, according to the survey. Meanwhile, Spanish banks are also demanding higher fees from customers, Bank of Spain data show. The average six-month charge for a retail customer current account jumped 15 percent to 25.80 euros at the end of August from 22.36 euros in December, according to the regulator. “There’s a double effect because commissions have also increased dramatically,” said Elias, the owner of the pumps and filter maker, who has cut his workforce to 12 from 20 in the past year. “It affects any kind of investment plan.”

Ms Moran, 56, looked a shadow of her former self as she arrived to face 21 charges at Westminster Magistrates’ Court in central London.

2011-09-19T11:15:00.001-07:00

One count alleges that she falsely claimed £22,500 for dry rot on a home in Southampton more than 100 miles from her constituency.

The former Labour member for Luton South sobbed throughout the brief hearing and was passed a tissue by a court official.

No plea was entered and jurisdiction in the case was declined by District Judge Daphne Wickham on the grounds of the nature and complexity of the charges and sums involved.

They allegations consist of 15 counts of false accounting and six of forgery.

Moran, of Ivy Road, St Denys, Southampton, was remanded on unconditional bail to appear at London’s Southwark Crown Court on October 28 for a plea and case management hearing.

The former politician spoke only briefly, in a faltering voice, to confirm her name and date of birth.

Moran looked almost unrecognisable as she arrived at court this morning with a dark grey beret over her head, wearing glasses, and clutching a handkerchief to her mouth.

The auburn tresses and bright clothes seen in previous photographs were replaced by a sober dark suit and blonde hair.

In court she continued to sob into a handkerchief as she waited for the hearing to start.

The criminal probe into Moran began after an investigation by The Daily Telegraph.

Margaret Moran in May 2009 and arriving at Westminster Magistrates Court today (PA/NICHOLAS RAZZELL)

Marbella Club Hotel, Golf Resort & Spa: Marbella, Spain hotel:

2011-09-19T08:26:00.001-07:00

Located on the Southern Spanish Costa del Sol, in the heart of the 'Golden Mile' only 5 minutes to Old Town Marbella and Puerto Banús, with 320 days of sunshine and a mild year round average temperature of 21ºC). Open year round, the renowned Marbella Club Hotel, was once the private residence of Prince Alfonso von Hohenlohe. The 121 luxury bedrooms and suites, spread over the beach front resort, harmonize with 14 Andalusian-Style villas throughout 42,000 square meters (452,083 sq. ft.) of lush subtropical gardens. Each guest room is decorated with the finest fabrics and Mediterranean interior design, reflecting the surrounding elements and has furnished balcony / terrace and spacious luxurious bathrooms with separate shower and bath. The 14 charming villas are in the unmistakable style of the Hotel, faithful replicas of traditional Andalucían architecture, blending harmoniously with their surroundings, and are ideal for families and guests seeking to enjoy more space and privacy. The 2, 3 or 5 bedroom villas have their own private garden and heated pool, providing guests with both comfort and privacy during their stay. Both of the 2 outdoor heated swimming pools, one with seawater invite you to relax in the surrounding gardens or to enjoy the views of the Mediterranean through the palm trees of the famous beach club.

Housing Market Woes Even Hit Celebs

2011-09-19T07:59:00.001-07:00

Even celebrities are having a hard time selling their mega-mansions. More on DIS Fan Cam: The Next Sports Cash Machine?Jay Rasulo, Senior Executive Vice President And Chief Financial Officer, The Walt Disney Company, To Speak At The Goldman Sachs 20th Annual Communacopia ConferenceBond Funds See Huge Spike in Inflows Market Activity The Walt Disney Co| DIS Mommy-to-be Hillary Duff has put her first mansion that she purchased while starring in Disney's Lizzie McGuire up for sale with an asking price of $6.25 million. But according to The Real Estalker, Duff also attempted to sell the estate last year, listing for $7 million last time around. Real estate records reveal Duff bought the 9,277 square-foot house in Toluca Lake, Calif., in March 2004 for $3.5 million. Mark Wahlberg, a.k.a. Marky Mark, also recently re-listed his Beverly Hills estate with a $2 million price cut. Wahlberg originally listed the property in 2008 for $15.9 million. The 1.41-acre home is now listed for $13.9 million. The executive producer of Entourage purchased the mansion in 2001 for just $5 million, later remodeling it. Earlier in the summer, Christina Aguilera reduced the price on her home in the Hollywood Hills to $5.5 million from $8 million, while Jodi Foster's Beverly Hills mansion was brought down to $8.9 million from $10 million. The housing market continues to wobble with few consumers taking advantage of record-low mortgage rates. Sales of newly built homes are expected to be at their worst levels for decades this year, while sales of previously occupied homes are on pace for their poorest showing in nearly 15 years

Spain finance chief admits odd quirk in wealth tax

2011-09-19T07:43:00.001-07:00

One aspect of a plan to restore wealth tax in Spain makes no sense but there's nothing the government can do about it, the finance minister said Saturday. Elena Salgado spoke from Poland where she was attending a meeting of euro zone counterparts. The tax stems from the central, Socialist government but is collected by regional administrations. It was suspended in 2008 to stimulate growth as the global economic crisis started to bite in Spain. But the Madrid government has kept compensating regional governments for the lost revenue. Now, regions stand to get the money twice: once from high-earning taxpayers under a decree passed Friday and again from the central government because the compensation must continue under a separate law that has a higher status than a decree. Salgado said "this does not seem reasonable" but there's no way around it. "With a decree, there is nothing you can do to avoid it," she said. Her comments were the latest in a sea of confusing government statements about the wealth tax, which is levy on a person's net worth: assets minus debts. The flip-flops concerned the wealth level at which it will kick in and how much revenue it will raise. In the end, if passed by Parliament next week, the levy will apply to taxpayers' net worth above euro700,000 ($963,000), or an estimated 160,000 people, and raise euro2 billion in revenue. It is temporary, and will be in effect only in 2011 and 2012. The government says the tax is aimed at getting richer people to chip in more as Spain struggles with a 21 percent jobless rate, anemic growth and a high deficit. But it has been criticized by the conservative opposition as a populist nod to leftist voters angry over deficit-cutting austerity measures as Nov. 20 general elections approach. The ruling Socialists are projected to lose badly. Salgado's remarks seemed to contradict some made just Friday by government spokesman Jose Blanco, who said no region would get the wealth tax money twice. Salgado said Blanco really meant the same thing she did: that it seems unreasonable for regions to get the money doubly.

Spain to cover 20bn euros in potential bank losses

2011-09-19T05:59:00.001-07:00

The Bank of Spain has promised to cover up to 20 billion euros ($27 billion) in losses at Caja Mediterraneo as it seeks to offload the troubled savings bank, a newspaper said Monday. The Bank of Spain took control of the bank in July and is now trying to sell it off. According to the daily El Mundo, the central bank let investors know it would cover up to 20 billion euros of losses, the estimated amount of property-related assets at risk in Caja Mediterraneo (CAM), if necessary. If confirmed, the central bank intervention would be "the costliest for the public treasury in Spanish financial sector history," the newspaper said, without identifying its source. The price tag could unnerve financial markets -- it is equal to a government estimate of the maximum cost of recapitalising Spain's entire banking sector. Contacted by AFP, Bank of Spain officials were unable to respond immediately to the report. The Bank of Spain injected 2.8 billion euros and opened a three-billion-euro line of credit for the CAM when it took control of the institution in July. But in early September CAM revealed a first-half loss of 1.136 billion euros and a high 19-percent ratio of bad loans, mostly property-related credits whose recovery was doubtful. The average bad loan ratio for the Spanish banking sector was 6.416 percent in June. According to El Mundo, the Bank of Spain is trying to complete the sale before general elections set for November 20. It said rival banks Santander, BBVA and CaixaBank, as well as a union of three Basque banks, were among candidates to buy the CAM, with Santander the favourite.

Tony Blair 'visited Libya to lobby for JP Morgan'

2011-09-18T15:04:00.001-07:00

A senior executive with the Libyan Investment Authority, the $70 billion fund used to invest the country's oil money abroad, said Mr Blair was one of three prominent western businessmen who regularly dealt with Saif al-Islam Gaddafi, son of the former leader. Saif al-Islam and his close aides oversaw the activities of the fund, and often directed its officials on where they should make its investments, he said. The executive, speaking on condition of anonymity, said officials were told the "ideas" they were ordered to pursue came from Mr Blair as well as one other British businessman and a former American diplomat. "Tony Blair's visits were purely lobby visits for banking deals with JP Morgan," he said. He said that unlike some other deals - notably some investments run by the US bank Goldman Sachs - JP Morgan's had never turned "bad".

Man quizzed over UBS rogue trading

2011-09-15T05:12:00.001-07:00

31-year-old man was arrested in London today in connection with allegations of £1.3 billion of rogue trading at Swiss banking giant UBS. The man, named in reports as Kweku Adoboli, was arrested at 3.30am on suspicion of fraud by abuse of position and remains in police custody, sources said. Related articles Notoriety awaits UBS rogue trader French banks scramble to prove they're strong enough for debt crisis Search the news archive for more stories The bank, which has 6,000 staff in the UK, revealed earlier that a trader had lost two billion US dollars (£1.3 billion) on unauthorised trades and warned that the activity could have tipped the bank to a third-quarter loss. Oswald Gruebel, UBS chief executive, called the loss "distressing" and said he "will spare no effort to establish how it happened". According to his LinkedIn profile, Adoboli works as a director in European equity trading and was previously a trade support analyst at UBS. He was a student at the University of Nottingham, according to his profile on the business networking website.

UBS Has $2 Billion Trading Loss; Police Arrest Man in London

2011-09-15T05:04:00.001-07:00

UBS AG, Switzerland’s biggest bank, may be unprofitable in the third quarter after a $2 billion loss from unauthorized trading at its investment bank. London police arrested a 31-year-old man on suspicion of fraud. UBS management aims to “get to the bottom of the matter as quickly as possible, and will spare no effort to establish exactly what has happened,” the bank’s group executive board, led by Chief Executive Officer Oswald Gruebel, said in a memo to employees today. “While the news is distressing, it will not change the fundamental strength of our firm.” The bank tumbled as much as 9.6 percent in Swiss trading following the announcement, which deals a blow to Gruebel’s attempts to revive the investment bank after the division recorded 57.1 billion Swiss francs ($65 billion) in cumulative pretax losses in three years through 2009. The trading loss may revive calls for Gruebel to shrink or shut the unit. “How many times do we have to see huge UBS losses?” said Simon Maughan, head of sales and distribution at MF Global Ltd. in London. “It looks unreformed, unwieldy and ultimately unsustainable. This could be a critical tipping point for UBS’s strategy.” UBS fell 79 centimes, or 7.2 percent, to 10.14 francs by 11:43 a.m. in Zurich, bringing the drop this year to 34 percent. UBS said in a statement the matter is still under investigation, and that the “current estimate of the loss on the trades is in the range of $2 billion.” No client positions were affected, UBS said, declining to comment further. Arrest in London An unidentified 31-year-old man was arrested in central London at 3:30 a.m. on “suspicion of fraud by abuse of position,” the police said in a statement. The man remains in custody and an investigation has been started, the statement said. Switzerland’s Neue Zuercher Zeitung newspaper, citing the bank, reported that the trading loss took place in the equities unit in London, and was discovered yesterday afternoon. UBS spokeswoman Tatiana Togni declined to confirm or deny the report. UBS had to raise more than $46 billion in capital from investors, including the Swiss state, to make up for the record losses during the credit crisis. The investment-banking unit had pretax earnings of 1.21 billion francs in the first half of 2011, while UBS as a whole had net income of 2.82 billion francs in the period. The bank’s tier 1 capital at the end of the second quarter was 37.39 billion francs, giving it a tier 1 capital ratio of 18.1 percent, compared with 14 percent at Deutsche Bank AG, Germany’s biggest bank. Risk Management While the loss is “manageable” for UBS, it’s “obviously not helpful for sentiment and confidence in the bank’s risk management following the near-death experience of 2008-2009,” said Andrew Lim, a London-based analyst at Espirito Santo Investment Bank, in a note. Lim had estimated third-quarter net income of 1.1 billion francs for UBS. UBS last month said it will eliminate about 3,500 jobs, with about 45 percent of the reductions coming from the investment bank, as stricter capital requirements and market turmoil hurt the earnings outlook. The bank in July scrapped the target of doubling pretax profit from last year’s level to 15 billion francs by 2014. Gruebel, 67, and Carsten Kengeter, 44, who runs the investment bank, have been trying to revive earnings at the division for two years. They hired more than 1,700 people across the investment bank and brought in new business heads to replace those that left or were fired. They’ve also increased risk- taking to improve earnings opportunities. Kerviel, Leeson The investment bank last had a pretax loss in the third quarter of 2010 when what Gruebel called “very low levels of client activity” and a charge related to the bank’s own debt hurt revenue at the division. Gruebel, who formerly ran Credit Suisse Group AG, was brought out of retirement by UBS in February 2009 to take over from Marcel Rohner after the company posted the biggest annual loss in Swiss corporate history. A former bond trader, Gruebel doubled profit at Credit Suisse between 2004 and 2006. UBS isn’t alone in suffering from unauthorized trading. Societe Generale SA of Paris said in January 2008 that the bank lost 4.9 billion euros ($6.7 billion) after trader Jerome Kerviel took unauthorized positions on European stock index futures. Credit Suisse, Switzerland’s second-biggest bank, had a loss in the first quarter of 2008 in part because of writedowns on debt securities that were intentionally mispriced by a group of traders. Nick Leeson piled up $1.4 billion of losses that brought down Barings Plc in 1995. --With assistance from Paul Verschuur and Carolyn Bandel in Zurich and Gavin Finch in London. Editors: Frank Connelly, Stephen Taylor

Citigroup banker faces 30 years in jail after admitting $22m fraud

2011-09-08T01:58:00.001-07:00

Former Citigroup banker Gary Foster has pleaded guilty to embezzling $22m (£14m) from the bank, money he spent on a lavish lifestyle of fast cars and fancy apartments. He faces up to 30 years in jail. The 12-year Citigroup veteran spent hundreds of thousands on cars including a Ferrari and a Maserati Gran Turismo, even though he is legally blind and was unable to drive them. He hired a chauffeur. Foster, 35, was arrested in June at John F Kennedy Airport as he was getting off a flight from Bangkok. He had quit the bank in January before Citi had uncovered his scheme. A former treasury finance department executive, Foster earned $100,000 a year managing internal investments at the bank. Prosecutors said his scheme began in September 2003 and continued into 2011. He wired the money from internal Citi accounts into his personal bank account and covered up his tracks by assigning phony contract or deal numbers to the transfers to make them appear bona fide. According to prosecutors, between July and December 2010, he moved around $14.4m from Citigroup's debt adjustment account and $900,000 from the bank's interest expense account to his personal account in eight separate wire transfers. In a single transfer, on 8 November, he is alleged to have wired himself $3.9m. The US Attorney's Office in Brooklyn has already seized $16m in assets including his cars, an exclusive apartment in Manhattan's Rockefeller Centre, an apartment in Brooklyn and mansion in Englewood Cliffs, New Jersey. "The defendant violated his employer's trust and stole a stunning amount of money over an extended period of time to finance his personal lifestyle," said US attorney Loretta Lynch. "We will vigorously investigate and prosecute such conduct and seek to recover as much of the proceeds as possible."

American Banker Shows DOJ Sat On a Bank-Kickback Scandal

2011-09-08T01:53:00.001-07:00

Jeff Horwitz has a big scoop in today’s paper, reporting on a HUD investigation that says banks forced mortgage insurers to pay them $6 billion in kickbacks over ten years. HUD’s inspector general tied a bow on the case and presented it to Obama’s Department of Justice, which has sat on it for two years now. It’s just the latest example of the Obama administration not going after the banks. Here’s the gist: Most homebuyers don’t put 20 percent down and banks require them to buy mortgage insurance from third parties to cover their risk. In the 1990s, banks started requiring insurers to pay them to reinsure the loans. Reinsurance is basically insurance for insurance companies, and if a deal isn’t crooked, the reinsurer will be compensated based on the risk it takes. But there was a major market flaw here (and an antitrust issue, if you think about it)—Banks control who gets to insure mortgages—and they took full advantage of it, naturally. If a PMI company resisted paying kickbacks—or didn’t want to pay a higher level of bribe—the bank would take its mortgages to someone who would. HUD’s IG says they gouged the PMI companies and consumers: Documents from the investigation show that the inspector general’s staff concluded that banks and insurance companies had created elaborate financial structures that had the appearance of reinsurance but failed to transfer significant amounts of risk to their bank underwriters. Some of the deals were designed to return a 400% profit on a bank’s investment during good years and remain profitable even in the event of a real estate collapse. Making matters worse, banks allegedly forced unknowing consumers to buy more insurance than they needed and failed to properly disclose the reinsurance agreements, another RESPA violation. But AB’s excellence here isn’t just the scoop, nice as that is. Horwitz and the Banker do a very good job explaining a somewhat complicated topic. This piece could have got bogged down in the details of the arcane world of captive mortgage reinsurance, but it doesn’t. That’s no small thing. There are a couple of other interesting points here, including this statement from Wells Fargo: Wells Fargo said in a written statement to American Banker that risk was split equitably under its contracts with mortgage insurers. It further denied that its captive mortgage reinsurance arrangements had ever been under HUD investigation. “It is simply not true that Wells Fargo has ever been the subject of a HUD investigation involving either our captive reinsurance programs or our relationships with any private mortgage insurance company,” the statement says. The Banker nicely places these graphs directly after a quote from the HUD investigation of Wells. It also reports that HUD found that “Nearly all loan files reviewed show borrowers with excessive coverage placed on their loan.” Banks gouged consumers on mortgage insurance because they were getting a taste. Actually, a 40 percent cut with 10 percent of the risk is more than a “taste.” “Half” would be more like it. At some point when you sit on a slam-dunk case like this long enough, it starts smelling pretty bad, particularly when your administration has bailed out and protected them at almost every turn, and you’ve recently been exposed pressuring other law-enforcement agencies to ease up on the banks.

Ailing Spanish bank CAM posts massive first-half loss

2011-09-05T15:54:00.001-07:00

Spain's struggling Caja Mediterraneo (CAM), under state control since in July, Monday posted first-half losses of 1.136 billion euros ($1.602 billion). It also reported a non-performing loan ratio of 19 percent, far above the average of 6.416 percent for the sector in June. The Bank of Spain announced on July 22 that it would take control of the CAM through an injection of 2.8 billion euros and the opening of a 3.0 billion euro line of credit. It now plans to sell-off the ailing savings bank. On Friday, the business daily Cinco Dias said the CAM may need about 1.0 billion euros in additional public funds. The CAM was one of five Spanish banks that failed new European stress tests on July 15 to see if they can survive a major crisis. Spain's lenders, especially its regional savings banks which account for about half of all lending in the country, have been heavily exposed to bad debt since the collapse of the property sector at the end of 2008. The government and Bank of Spain have forced a wave of consolidation in the sector this year and are requiring banks to quickly increase the proportion of core capital they hold to above international norms. CAM, based in the eastern coastal region of Alicante which was one of the worst hit by the bursting of the property bubble, had been set to merge with three other savings banks but the deal fell through earlier this year.

Bosses of banks saved by taxpayer earn more now than before crisis

2011-09-05T15:48:00.001-07:00

The bosses of Britain’s bailed-out banks are paid more than they were before the credit crunch struck, a damning report reveals today. The chief executives of the country’s basket-case lenders earned an average basic salary of more than £1.1million last year before bonuses or other benefits. Shockingly, this figure is an increase on the £1million average from 2007 – the year that the financial crisis struck, crippling Britain and plunging the country into recession. Despite the fact that they have the job of salvaging the banks propped up with more than £65billion of taxpayers’ money, they are among the best-paid executives in this country. Their average wage is almost more than 40 times that of the country’s average of £26,000 and it dwarfs the £142,500-a-year salary earned by our Prime Minister. When bonuses and other perks are included bank chiefs enjoyed average total earnings of £3.7million last year – The damning findings by the country’s leading pay experts are likely to anger British taxpayers, who are sitting on losses of £34billion in RBS and Lloyds – or £1,300 per household.

Share slump hammers Euro banks

2011-09-05T15:47:00.001-07:00

Stocks in Europe and Italian fixed-income securities were pummelled on concern about the euro zone's debt crisis. The benchmark Stoxx Europe 600 Index ended the day with a 4.1 per cent drop. US and Canadian financial markets were closed for the Labor Day holiday. Financial stocks led the decline in Europe as Deutsche Bank chief Josef Ackermann said profit in the banking sector would be curtailed for years because of the sovereign debt crisis and some banks would likely fail. "Prospects for the financial sector overall ... are rather limited," the CEO of Germany's top bank said on Monday. "The outlook for the future growth of revenues is limited by both the current situation and structurally." Deutsche Bank, Credit Suisse Group, Barclays, Societe Generale and Royal Bank of Scotland all shed more than 6.5 per cent, according to Bloomberg News. "Not a great start to the week. There is a lot going on for banks, especially in the light of a low-growth environment and the backdrop in the euro zone not improving," Mike Lenhoff, chief strategist at Brewin Dolphin, told Reuters. Investors also sold euros, buying gold and US dollars instead. The euro dropped 0.7 per cent against the greenback after German Chancellor Angela Merkel's Christian Democratic Union was defeated in an election in her home state, yet another indication voters are unhappy about her efforts to deal with the European debt crisis and reject plans to use more taxpayer money to help solve the problems of countries including Greece and Ireland. "Merkel's problem is that she fails to generate confidence in her policies and those of her coalition partner," Gero Neugebauer, a political science professor at the Free University in Berlin, told Bloomberg. "It's about the consistency of her statements" on bailouts for indebted euro countries. The US currency strengthened 0.66 per cent against a basket of its major counterparts. Investors are eyeing a German constitutional court ruling on Wednesday on claims that Berlin is breaking German law and European treaties by contributing to bailouts for Greece, Ireland and Portugal, according to Reuters. The court is not expected to rule against the contributions, but may add stipulations for dealing with future requests that will complicate the region's bailout plans. "People are pricing in the risk of European meltdown, rather than the likely outcome," Ian King, head of international equities at Legal & General, told Reuters. Against this backdrop, Group of Seven financial leaders are likely to agree later this week to keep monetary policy loose. The G7's finance ministers and central bankers meet on Friday in Marseilles, France to discuss potential to bolster the slowing global economy. Before then however, central bankers are meeting in Australia, Canada, the UK and Europe and may offer investors more perspective on the global outlook.

Swiss bankers demand respect for law from US tax evasion investigators

2011-09-05T15:41:00.001-07:00

Swiss bankers have rejected another UBS-style tax evasion deal following an ultimatum from the United States last week to turn over the names of more tax cheats. The US has turned up the heat on Switzerland after finding evidence that Credit Suisse and other banks allegedly helped its citizens to break the law by hiding their wealth from the tax authorities. The successful prosecution of UBS two years ago led to a Swiss-US treaty that severely dented Swiss banking secrecy laws by providing the names of nearly 5,000 bank clients. But rather than burying the problem, the success of the deal has encouraged the US to pursue yet more banks – some of whom are rumoured to have illegally given UBS clients safe haven after Switzerland’s largest bank was caught out. The Swiss Bankers Association (SBA) is desperate to avoid other banks facing a UBS situation and called on negotiators to find a solution this time that keeps secrecy intact. Law abiding SBA chairman Patrick Odier demanded a universal treaty binding on all countries rather than a raft of ad-hoc agreements between Switzerland and other states. “The solution must be globally applicable, definitive and in line with current Swiss laws,” Odier said at the SBA’s annual conference in Zurich on Monday. While accepting that Swiss banks must pay a penalty if they had broken foreign laws, Odier nevertheless denounced the latest demands from US deputy attorney-general James Cole as “too tough”. “The US must recognise that legal certainty [of banking secrecy] is something that Switzerland must guarantee,” he said. “We cannot have one country refusing to respect the laws of another.” The SBA pointed to the recent deals with Britain and Germany as a possible template. Under the terms of these treaties – yet to be rubber stamped – Swiss banks would pay withholding taxes on past and future earnings of foreign account holders. Switzerland has also negotiated a new double taxation agreement with the US that is awaiting approval by the US authorities. UBS deal stands alone “I am very confident that we can find a common solution that would be in the interests of Swiss banks and the US,” SBA chief executive Claude-Alain Margelisch told swissinfo.ch. “We solved the UBS case and I hope we find a definitive global solution for all Swiss banks. We must make sure that we do not have the same problem for a third time.” Margelisch also dismissed the option of another UBS-style treaty despite that deal containing a paragraph that could force other Swiss banks to hand over client data if they were found to have broken US laws in the same way. “The UBS case was special because it involved only one bank in a context that is not comparable with other Swiss banks,” Margelisch told swissinfo.ch. “I could not imagine that the Swiss parliament would be ready to pass another such treaty for the rest of the banking community during election year.” But the latest signs coming from the US do not indicate that the Department of Justice (DoJ) is willing to compromise. Investigations have widened to around ten Swiss banks and Credit Suisse was recently served with official notice that it was being probed. Not bluffing Stories are also appearing in the media that the US negotiators are losing patience with their Swiss counterparts. The fact that the second-highest ranking DoJ official, James Cole, has become publicly involved suggests to US tax lawyer Scott Michel that the US is not likely to withdraw its demands for new bank client data. “It is a mistake to assume that when the DoJ makes a demand that they are bluffing,” Michel told swissinfo.ch. “There appears to be pent-up frustration that two years after the UBS case there is still evidence that other Swiss banks are helping US citizens hide their money away.” He added: “The DoJ is not even asking for an exchange of information – a lengthy process involving case-by-case examination. They want a large batch of Swiss banking client information and they want it now.” According to Michel, the US authorities appear to be building a legal basis to impose “draconian financial penalties” on Swiss banks that could dwarf UBS’s $780 million ($990 million) fine. Swiss media are also reporting that the US would be prepared to start criminal legal proceedings against banks if they do not comply with their demands.

Co-operative Bank completes major expansion

2011-09-05T15:39:00.001-07:00

The Co-operative Bank has completed the integration of Britannia Building Society today as 245 Britannia branches start to offer Co-op banking services. The Co-op took over Britannia in 2009, but until now Britannia’s branches could only be used by Britannia customers. Share: Related Articles Are big banks failing small businesses? Top 10 banking turnoffs The future of banking for customers Are British banks safe? Demand for bank lending slows Now Co-op customers can carry out everyday banking services in the branches which have been re-branded with signs showing they are part of the new Co-operative Bank. The Co-op now has 342 branches, and it has plans for further expansion. The new bank in town The move means it could be the first building society to approach the size and market domination of Nationwide and could provide competition against the 'Big Five' high street banks. The bank is a member-owned mutual organisation, so customers get shares in the profits and a say in how the business is run. It also doesn’t engage in investment banking, which should reassure customers following the financial crisis. Possibly as a result of this the bank has seen a 73% increase in the number of new current accounts opened in the first half of this year. "This shows that there is an appetite from consumers to switch banks and we are hoping that this move will genuinely help bring some much needed competition to the current account market," says Rod Bulmer, managing director of retail for The Co-operative Bank.

Eurozone woe fuels fresh market chaos as banks bear the brunt of a global stock rout

2011-09-05T14:52:00.001-07:00

Britain's banks bore the brunt of a global stock market rout amid escalating concerns over the eurozone debt crisis and further signs of strain in wholesale money markets. More than £10bn was wiped off the value of Britain’s five biggest lenders as key inter-bank borrowing costs climbed to levels not seen since the height of the 2008 crash. Royal Bank of Scotland lost an eighth of its value, tumbling 3.06p to 21.78p, amid fears that it could be facing a bill of as much as £3.7bn from US sub-prime mortgage lawsuits. Plunge: More than £10bn was wiped off the value of Britain’s five big banks Lloyds slumped 2.47p or 7.5pc to 30.65p while Barclays tumbled 11.05p to 154.15p. Following yesterday’s bloodbath, taxpayers are now sitting on a £37.6bn paper loss from their 83pc and 40pc stakes in RBS and Lloyds. Josef Ackermann, the chief executive of Deutsche Bank, warned that the current turmoil was reminiscent of the panic triggered by the collapse of Wall Street giant Lehman Brothers.

Athens, Rome Hold Europe to Ransom

2011-09-05T14:50:00.001-07:00

Europe is engaged in a high-stakes game of brinkmanship that poses grave risks to the global economy. At last weekend's Villa d'Este Forum in Italy, European policy makers didn't hide their fury at Greece's back-sliding over promised structural reforms and spending cuts. At the same time, Italian ministers undermined the remaining credibility of Silvio Berlusconi's government with a series of complacent speeches. Given such a dangerous breakdown in trust within Europe, investors are right to fear the worst. Germany and its Northern European allies believe only intense market pressure can force weak economies to cut spending and improve competitiveness. But Greece has learned that whenever the crisis in Europe's periphery threatens to overwhelm the core, Europe will ignore previous broken promises and step up with a fresh bailout. Italy now appears to be making the same calculation. The government insists it will fulfill its commitment to balance the budget by 2013, but ministers show no appreciation of the urgent need for structural reforms to address the chronic weakness of an economy that grew on average 0.3% between 2001 and 2010 and experienced a 25% increase in unit labor costs relative to Germany over the same period. Instead, they talk incessantly of euro-zone bonds as a solution to misfortunes they blame largely on external forces. But Italy's dream of euro-zone bonds is likely to remain a fantasy until trust between member states is restored. This no longer depends simply on implementing austerity budgets. Structural reforms have now taken center stage because they are a test of whether the euro zone is worth saving at all: If countries refuse to improve competitiveness, then any attempted solutions to the immediate sovereign-debt crisis will prove short-lived. So what can be done about Greece and Italy? Athens rejects accusations it is dragging its feet but has promised to use a 10-day hiatus in talks with the European Central Bank and International Monetary Fund over progress toward its bailout targets to speed up reforms. If it fails to deliver again, European policy makers now talk darkly of a total loss of fiscal sovereignty. How this might work in practice isn't clear. As for Italy, some now believe its best hope lies with the ECB, which last month threw Rome a life line by agreeing to buy its bonds. If the ECB were to stop buying bonds, the subsequent rise in yields might bring down Mr. Berlusconi's administration, paving the way for President Giorgio Napolitano to appoint a technical government with the constitutional authority to make tough decisions. Then, at least, the long process of rebuilding the credibility of the euro zone's third-biggest economy could begin in earnest.

US recession fears savage world financial markets

2011-09-05T14:47:00.001-07:00

World stock markets took a beating Monday over fears that the U.S. economy was heading back into a recession just as the European debt crisis was heating up and the eurozone's economic indicators were slumping. A trader works on the floor of the New York Stock Exchange on Friday, Sept. 2, 2011 in New York. The jobs report was the weakest in almost a year. It renewed fears that the U.S. might slip back into recession. (AP Photo/Jin Lee) A man looks at an electronic stock board of a securities firm in Tokyo, Monday, Sept. 5, 2011. Asia-Pacific stocks took a beating early Monday after jobs data out of the U.S. last week revived fears of a recession in the world's largest economy. (AP Photo/Koji Sasahara) More business news In tough economy, multi-job holders grateful for balancing act Delta at center of FAA debate Turkish hackers hit UPS Recession over, jobs still elusive New owner for Atlanta Dream Delta Air Lines news, links Coca-Cola Co. news Health Care Reform coverage Read Henry Unger's Biz Beat blog Any troubles in the world's largest economy cast a long shadow over the markets, and a report Friday that the U.S. economy failed to add any new jobs in August caused European and Asian stock markets to sink sharply Monday. But the news from Europe was also discouraging. Wall Street, which was closed Monday due to the Labor Day holiday, braced for losses Tuesday after the yields in so-called peripheral eurozone countries — Greece, Italy and Spain — rose sharply against those of Germany, whose bonds are widely considered a safe haven. Although retail sales in the 17-nation eurozone rose unexpectedly in July, a survey of the services sector Monday showed a slowdown across the continent for the fifth consecutive month. The purchasing managers' index for the eurozone showed the services sector was still growing — unlike the manufacturing sector — but only barely. That will add pressure on the European Central Bank to keep interest rates on hold when it meets this week. "There's so much uncertainty, so much fear, that investors don't know what to do," said David Kotok, chairman and chief investment officer at Cumberland Advisors. "I don't remember the last time stocks were so cheap and nobody wanted them." Investors were also shaken by signs that the Italian government's commitment to its austerity program is wavering. Prime Minister Silvio Berlusconi's government has backtracked on some deficit-cutting measures, prompting EU officials to urge Italy to stick to its promised plan. The difference in interest rates between the Greek and benchmark German 10-year bonds, known as the spread, spiraled to new records on Monday, topping 17.3 percentage points. Yields on the Greek bonds were above 18 percent. Mario Draghi, the incoming chief of the European Central Bank, told a conference in Paris that among the common currency's problems was a lack of coordinated fiscal policies and that the solution was more integration. He dismissed the idea of eurobonds — debt issued jointly by the eurozone countries. Some have argued this would help weaker countries borrow more easily because they wouldn't have to pay such high interest rates. But stable countries like Germany would likely see their rates rise. Instead, Draghi suggested the eurozone should adopt rules that would require more budget discipline. Renewed jitters over the eurozone debt crisis also contributed to the slump in financial stocks amid concerns the banks would need to raise new capital. Deutsche bank closed down 8.9 percent in Frankfurt, while Societe Generale in Paris shed 8.6 percent. The U.S. unemployment crisis has prompted President Barack Obama to schedule a major speech Thursday night to propose steps to stimulate hiring. Until then, however, traders coming back from the U.S. holiday weekend will have little to hold onto. The August jobs figure was far below economists' already tepid expectations for 93,000 new U.S. jobs and renewed concerns that the U.S. recovery is not only slowing but actually unwinding. U.S. hiring figures for June and July were also revised lower, only adding to the gloom. Many traders have already pulled out of any risky investments — such as stocks, particularly financial ones, the euro and emerging market currencies — and pile into safe havens: U.S. Treasuries, the dollar, the Japanese yen and gold. With Wall Street closed, investors focused their selling in Asia and Europe, where the equity losses Monday were some of the heaviest this year. "We've got some rough riding ahead," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago, adding he was "concerned that we could see a second wave of selling when most traders are back at their desks." Dow futures were down 1.8 percent at 11,010 points while the broader S&P 500 futures were 2.0 lower at 1,145.70. After Asian indexes closed lower, with the Japan's Nikkei 225 shedding 1.9 percent, European shares booked sharp losses. Britain's FTSE 100 closed the day down 3.6 percent to 5,102.58. Germany's DAX slumped a massive 5.3 percent to 5,246.18, and France's CAC-40 tumbled 4.7 percent to 2,999.54. The health of the U.S. economy is crucial for the wider world because consumer spending there accounts for a fifth of global economic activity. The U.S. imports huge amounts from Japan and China and is closely linked at all levels with the European market. The U.S. has seen a slump in consumer and business sentiments. Traders were hoping for signs that the Federal Reserve might take action at its September meeting to support the economy — perhaps a third round of bond purchases, dubbed quantitative easing III or QE3, analysts said. "Right now the possibility has increased," said Linus Yip, a strategist at First Shanghai Securities in Hong Kong. "I think they have to do something. The markets are expecting QE3." Banking stocks were among the hardest hit Monday, partly because the U.S. government on Friday sued 17 financial firms for selling Fannie Mae and Freddie Mac billions of dollars worth of mortgage-backed securities that turned toxic when the housing market collapsed. Among those targeted by the lawsuits were Bank of America Corp., Citigroup Inc., JP Morgan Chase & Co., and Goldman Sachs Group Inc. Large European banks including The Royal Bank of Scotland, Barclays Bank and Credit Suisse were also sued. In Asia, Australia's S&P/ASX 200 followed the broaden trend to close down 2.4 percent and South Korea's Kospi slid 4.4 percent. Hong Kong's Hang Seng slid 3 percent. Benchmarks in Singapore, Taiwan, New Zealand and the Philippines also were down. Shanghai's benchmark Composite Index down 2 percent to 2,478.74, its lowest close in 13 months. The Shenzhen Composite Index lost 2.4 percent. In currencies, the euro weakened to $1.4100 from $1.4187 in New York late Friday. The dollar was roughly flat at 76.87 yen. Last month, the dollar fell under 76 yen, which was a new post-World War II high for the Japanese currency. Benchmark oil for October delivery was down $2.12 to $84.33 a barrel in electronic trading on the New York Mercantile Exchange. Crude fell $2.48 to settle at $86.45 on Friday. In London, Brent crude for October delivery was down $1.63 at $110.70 on the ICE Futures exchange.

Bogus pensions adviser jailed over £1.9m transfer fraud

2011-09-05T04:23:00.001-07:00

bogus financial adviser who fraudulently manipulated his “clients’” pension funds to avoid paying tax of over £1.9m has been jailed at Hull Crown Court for three years. Colin Pearson (pictured), who previously worked for the Food Standards Agency and held a McDonalds franchise, claimed to be a financial adviser and persuaded his "clients" to release over ₤3.4m from their pension funds. Pearson completed UK pension transfer forms on behalf of his clients to falsely claim funds were going abroad to avoid paying tax due on the pension withdrawals, said HMRC. His fraudulent actions netted him commission payments of over £377,000. He provided fake documentation to register two overseas pension schemes before submitting the fake documents to ensure the funds were released without suspicion or delay to bank accounts he controlled. On occasions he even made telephone calls to the UK pension companies posing as the policy holder. On one call he disguised his voice with a Cypriot accent giving the impression he was calling from overseas. To add further legitimacy to the scam, he used articles from the internet to create a PowerPoint presentation to sell the scheme to unsuspecting UK clients, HMRC added. He then took a cut of the funds before passing the balance onto the pensioners. In total, Pearson persuaded over thirty UK pension holders to make unauthorised transfers of £3.4m to avoid paying tax of £1.9m. The value of the funds released was estimated as £3,440,143, of which £2,997,018 was returned to "clients". He also released his own pensions, valued at £74,619.08. In total approximately £377,608 was taken as commission. He used the proceeds of his scam to maintain a lavish lifestyle, driving expensive cars and owning luxury homes both in the UK and Cyprus. Bob Gaiger from HM Revenue & Customs said: "Whilst Pearson was living a life most people could only dream of, he left the individuals he conned out of pocket and without the pension funds they expected. "HMRC will not tolerate this type of blatant fraud and will investigate and prosecute those found to be involved in stealing from the public purse. If you have any information about tax fraud please contact our 24 hour hotline on 0800 50 5000". On sentencing Pearson, His Honour Judge Richardson QC, said: "You are branded a criminal, your life is utterly destroyed, and you are totally dishonest in your deceitful actions."

SFO probes banks over asset-backed security sales

2011-09-05T04:20:00.001-07:00

The Serious Fraud Office is conducting an examination into banks and their offering of asset backed securities, as part of a ‘scoping exercise’ to see if products have been misrepresented to UK clients. The watchdog said it is consulting with relevant ‘people in the city’ as part of its broad-sweeping investigation into any potentially fraudulent sales of asset backed securities. A spokesperson for the SFO said: ‘We are conducting a scoping exercise into UK banks about all asset backed securities.’ Although the watchdog said this examination has been going on for ‘some time’, it would not clarify whether it was targeting any particular types of asset backed securities. After 2008, asset backed products such as collateralised debt obligations and mortgage backed securities came under fire for arguably sparking the financial crisis. As part of the exercise, the SFO is making inquiries into Goldman Sachs, including the ‘Timberwolf’ deal, a mortgage security underwritten by the bank in 2007, which has been scrutinised by lawyers in the US, according to the Financial Times. Earlier in the year, the SFO said it was looking into exchange-traded funds, as a 'potential threat' to market stability and as a form of asset-backed security which could follow the path of CDOs.

Former prime minister Gordon Brown was guilty of "appalling behaviour" and used his cabal to brief against his chancellor on the depth of the recession

2011-09-04T06:09:00.001-07:00

Former prime minister Gordon Brown was guilty of "appalling behaviour" and used his cabal to brief against his chancellor on the depth of the recession, according Alistair Darling's memoirs.

In extracts from his memoirs serialised in the Sunday Times, Mr Darling paints a portrait of a prime minister without proper direction, someone who was not clear about what he wanted to do during his premiership.

Mr Darling also claims that in 2008, Prime Minister Brown was convinced that the recession would be over in six months.

In August of that year Mr Darling, then chancellor of the exchequer, told The Guardian newspaper the economic downturn was arguably the worst in 60 years and that it would be "more profound and long-lasting than people thought".

The problem was that clearly he (Gordon Brown) did not trust my advice, and now he appeared indifferent to what I thought.Alistair Darling

Mr Darling says publication of his views on the state of the economy then prompted a series of press briefings against him by members of Gordon Brown's inner circle.

"The press was briefed that I had been 'ordered' by a furious prime minister to make a public apology, which was simply not true,”"Mr Darling writes. Elsewhere he states that the No.10 "briefing machine" told journalists he had "made a hash of it".

He adds: "If I had known that Gordon believed believed that economic recovery lay around the corner - if he'd told me, his chancellor, this - then we could have had a discussion about it. The problem was that clearly he did not trust my advice, and now he appeared indifferent to what I thought."

Mr Darling nonetheless claims that he retains a "residual loyalty" towards his former political ally. "At a personal level, we saw a lot of each other over the years, as did our families. We live a few miles apart, separated by the Forth bridges."

Alistair Darling's memoir - Back from the Brink, 1,000 Days at Number 11 - is published on 7 September.

Taxpayers face '£3.7bn RBS lawsuit' as US agency takes 17 banks to court

2011-09-04T06:08:00.001-07:00

Taxpayer-owned Royal Bank of Scotland yesterday emerged as one of the main targets of a multi-billion pound legal case brought by the authorities in the United States.

RBS, Barclays and HSBC are among 17 banks being sued by America’s Federal Housing Finance Agency.

It claims the banks used false claims in sales documents to sell billions of dollars’ worth of mortgage investments to US government agencies, which were then hit by massive losses in the US mortgage crash.

Target: Bailed-out RBS said it will defend the claims 'vigorously'

If successful, the claim would be a savage blow to RBS’s finances and shatter any hopes of British taxpayers making back the cash they invested in bailing out the bank for years to come.

The 17 banks, which include most of America and Europe’s leading financial institutions are alleged to have a sold a total of more than $200 billion (£123billion) of mortgages to America’s state-sponsored mortgage companies Freddie Mac and Fannie Mae at the height of the credit boom. RBS sold £18.5billion of the mortgages, second in scale only to JP Morgan Chase, which sold £20.3billion.

Stock markets across Europe were slammed Thursday, ending the day with sharp losses as bank shares led the way lower on fears about global growth and the euro-zone debt crisis.

2011-08-18T23:03:00.001-07:00

The Stoxx Europe 600 index slumped 4.8% to close at 226.70 as fear again gripped the market after three fairly calm days.

The index extended its plunge after disappointing U.S. economic data, including a massive drop in the Philadelphia Fed's business outlook index to negative 30.7 in August from 3.2 in July.

Europe's heavy losses were spread across all countries and market sectors, though banks faced some of the biggest falls.

Shares of Barclays PLC sank 12% in London, Societe Generale fell 12% in Paris and Dexia SA slumped 14% in Brussels. The losses for SocGen and Dexia came even after a ban on short-selling introduced last week.

"Banking stocks have been decimated across Europe, with indiscriminate selling even in banks that maintain their exposure to the crisis is slim," said Will Hedden, sales trader at IG Markets. "No sector is surviving this tidal wave of selling, and the fact that financials are first in the firing line will only lend support to the anti-short-selling-ban camp."

Hedden said a downgrade of global growth forecasts by Morgan Stanley was getting a lot of attention. Adding to worries, Ewald Nowotny, a member of the European Central Bank's governing council, said he fears Europe could enter a long period of limited economic growth, akin to Japan.

The Wall Street Journal also reported Thursday that U.S. regulators are stepping up their scrutiny of European banks amid worries that they could face funding difficulties in the U.S. The report came a day after data from the European Central Bank showed an unnamed institution had borrowed $500 million--the first time it had made such a dollar-denominated loan since February.

In its decision to cut growth forecasts, Morgan Stanley said the U.S. and euro zone are "hovering dangerously close to recession."

The firm cut its outlook for global growth in 2012 to 3.8% from 4.5%, though it said another recession is "not our base case," because the Federal Reserve and European Central Bank are likely to take more action.

Losses were particularly heavy in Germany, where Commerzbank AG fell 10% and car makers also tumbled on global growth worries. Shares of Volkswagen AG fell 7% and BMW AG dropped 7.8%.

The DAX 30 index slumped 5.8% to close at 5,602.80.

Italy's FTSE MIB index tumbled 6.2% to 14,970.42, as shares of car maker Fiat SpA lost nearly 12% of their value.

Switzerland's Holcim sank 8%. The cement producer said second-quarter earnings fell 13% as a strong Swiss franc and high raw-material prices hurt profitability.

French rival Lafarge SA also dropped 7.2%, contributing to a 5.5% drop for the CAC 40 index, which settled at 3,076.04.

Other noteworthy decliners in Paris included Veolia Environnement SA, which fell 8.7% after a downgrade by UBS to neutral from buy. The broker said that Veolia's restructuring plans are positive but that it will take time, bring new risks and dilute earnings in the near term.

Vallourec SA tumbled 9.8% after Goldman Sachs cut the steel-tubing producer to a neutral rating from buy previously, citing higher costs.

Dutch firm Royal Boskalis Westminster NV slumped more than 13%. The maritime-services group reported an 8% drop in first-half profit and said economic unrest is likely to delay investments in large-scale oil and gas projects.

In London, mining stocks ranked alongside banks as the worst performers, reflecting the worries about global growth.

Xstrata PLC fell 10% after the firm and its partners approved further investment to expand Cerrejon, a coal mine in Colombia. The FTSE 100 index ended 4.5% lower at 5,092.23.

Cash-strapped high street banks have scaled back on the “freebies” offered to prospective students to persuade them to open a bank account.

2011-08-18T23:02:00.001-07:00

Before the credit crunch, these banks were offering iPods, five-year railcards, free driving lessons and £100 cash to freshers who opened an account when starting university.
Of course, students have long been advised to ignore such blatant bribes and concentrate on which bank provides the most competitive overdraft terms. This advice still holds true today, although few students are likely to have their heads turned by the goodies on offer.
Lloyds TSB, for example, is offering free youth hostel membership for just one year; Halifax (part of the same banking group) will provide discounted breakdown cover; Barclays is supplying vouchers for Phones4U, while Santander has "gadget" insurance. None is likely to set the average undergraduate's pulse racing. In fact, the only decent perk among them is HSBC's travel insurance, valid for two years and including winter sports cover.
But today's freshers have to be far more financially aware now that large debts have become a fact of life for the vast majority of students.
Those starting a three-year degree course next month can expect to graduate with debts of more than £26,100, according to the latest survey by www.push.co.uk, the independent student website. This debt has increased by more than 15pc in just three years.

Bank shares around the world tumbled yesterday on fears that the sovereign debt crisis in the Eurozone could spill into the banking system.

2011-08-18T23:01:00.001-07:00

Investors were rattled by news a lender in the single currency bloc was forced to go cap in hand to the European Central Bank for emergency cash.

Regulators in the United States caused further alarm by stepping up scrutiny of European banks’ operations in America amid worries over funding.

Global fears: Bank shares around the world tumbled yesterday on fears that the sovereign debt crisis in the Eurozone could spill into the banking system

The European banking sector, which is heavily exposed to national debts in the region, fell 6.6 per cent and is down 29.7 per cent this year. ‘Banking stocks have been decimated across Europe,’ said Will Hedden, a trader at IG Index in London.

UK banks were caught in the selloff and led the FTSE 100 index to its worst one-day slide since November 2008, shortly after the collapse of Lehman Brothers.

The blue-chip index fell 4.5 per cent or 239.37 points to 5092.23. Barclays was the biggest faller in the Footsie, down 11.5 per cent or 19.95p to a 52-week low of 154.05p.

It was followed lower by Royal Bank of Scotland, off 2.8p at 21.95p, and Lloyds Banking Group, down 3.04p to 29.81p.

Shares in the three banks have fallen at least 50 per cent since their highs earlier in the year – meaning more than £60billion has been wiped off their value.

RBS and Lloyds shares are now worth less than half the amount the Government paid when it rescued the two banks from collapse during the financial crisis.

It means British taxpayers are sitting on losses of £34.5billion on the investment. Bank shares in Europe also took a beating yesterday. Société Générale was down 11.6 per cent in France while Germany’s Commerzbank was off 10.5 per cent.

But the biggest faller of the day was Dexia, Belgium’s largest bank by assets, which dropped 14 per cent in Brussels. The losses came despite last week’s ban on short-selling – a way traders profit from falling prices – in France, Belgium, Italy and Spain.

‘No sector is surviving this tidal wave of selling, and the fact that financials are first in the firing line will only lend support to the antishort- selling-ban camp,’ said Hedden.

The ECB lent $500million (£303million) to an unnamed bank in the Eurozone – the first time it has made such a loan since February in a sign the normal funding channels are freezing up. ‘It rings a couple of warning bells,’ said Elisabeth Afseth, an analyst at Evolution.

With concerns over the Eurozone debt crisis mounting, US regulators are taking a closer look at the American units of European banks.

The Federal Reserve Bank of New York, which oversees the US operations of many large European banks, has asked for more information about how the lenders fund themselves in a bid to stop the crisis infecting the US banking system.

New York Fed officials are ‘very concerned’ about European banks facing funding difficulties in the US, according to a senior executive at a major European bank. Analysts warned that calm will not return to the markets until the debt crisis is solved.

Richard Hunter, head of UK equities at stockbrokers Hargreaves Lansdown, said: ‘Investors have realised that despite the words of politicians in the US and Europe there are still no concrete plans to sort out the debt crisis.

‘Shares are looking cheap but that is fighting against the twin concerns of growth and debt and neither of these have been sorted out in any way.

‘People are more than willing to listen to concrete plans to deal with the debt situation but none are forthcoming.

Gold purchases by South Korea and Thailand this summer continue a trend in which central banks are net purchasers of the metal as they look to diversify their foreign-exchange reserves.

2011-08-05T13:47:00.001-07:00

“So far in 2011, central banks in the emerging markets have already bought more than double the gold they bought in all of 2010, and we’ve got almost five months to go for the rest of the year,” said Jeff Clark, senior precious-metals analyst with Casey Research.

This buying has occurred despite historically high prices. “So apparently, central banks don’t regard the gold price as too high,” Clark said.

For the year to date, net purchases by the world’s central banks are 203.5 metric tons, which already is a 168% increase from 76 tons for all of 2010, said Natalie Dempster, director, government affairs, with the World Gold Council.

Most of the data is gleamed international financial statistics released by the International Monetary Fund at the beginning of each month. Additionally, some central banks—such as South Korea—make their own announcements.

The buying is coming from emerging-market nations that are accumulating foreign-exchange reserves, Dempster reported. For the year to date, the biggest buyers have been Mexico, 98.8 tons; Russia, 48; Thailand, 26.3; and South Korea, 25.

During just the first five months of the year, the central-bank buying amounted to 15% of global mining production during the same period, said a research note this week from Commerzbank.

“The central-bank buying is coming on top of speculative buying and creating a Perfect Storm for gold,” said Ross Norman, chief executive officer of Sharps Pixley.

Central Banks Buying To Diversify And Manage Risk

The net purchases by central banks are a reversal from the not-too-distant past. Until recent years, European central banks collectively were selling a few hundred tons of gold annually, resulting in net annual sales. Those sales have dried up while purchases have increased from emerging-market nations.

Some of the central-bank buying is due to a rebalancing of portfolios, Dempster said. As emerging-market nations increase foreign-exchange reserves, the percentage from existing gold holdings gets smaller.

“The tonnage was constant but the percentage was declining,” Dempster explained. “So they wanted to rebalance it (the percentage) back up to what they believed was the appropriate strategic level.”

Further, the strategies of reserve managers have changed in the last couple of years since the global financial crisis.

“There is much more emphasis now on risk-management strategies, as opposed to yield enhancement,” Dempster said. “And obviously, if gold is anything, it’s a tool to manage risk.”

Also, gold has become more attractive due to worries about other traditional reserve assets such as bonds, particularly with high debt levels in many European nations and the U.S., analysts said.

“They feel the sovereign-debt risk is high, therefore they’re buying gold even though the price is high,” Clark said. “They are viewing gold as a necessity now and not just one way to diversify, in my opinion.”

Dempster pointed out that the guidelines on which assets that some central banks can buy can be restrictive. “They may not have the option of diversifying into the equity market or diversifying into hedge funds. For a lot of them, it is fixed income and gold,” she said.

Some reserve managers have looked toward the bonds of nations such as Australia and New Zealand. “But they don’t really have sufficiently deep debt markets to offer meaningful diversification, and gold does,” Dempster said. “It’s a deep and liquid market.”

Further, reserve managers are turning to gold for many of the same reasons as private investors, such as concerns about inflation and U.S. dollar weakness, Dempster said.

Sharps Pixley’s.Norman commented that the buying is tending to come from nations that are either rich in resources or perceive themselves as “overly extended” in the U.S. Treasury market. Often on gold-price dips, he said, good support has emerged, suggesting large buyers that just might be central banks.

“I wouldn’t be surprised to find central bank on the other side of any good selling at the moment to acquire a little bit of metal on the dip,” Norman said.

Analysts Anticipate Continued Central-Bank Purchases

Dempster said she anticipates more “meaningful” buying from central banks, “driven by the need to rebalance, the deterioration in the quality of other reserve assets, and a continued emphasis on risk management.”

Clark cited a UBS survey of 80 central bank reserve managers earlier this summer predicting that there would be a further build-up of gold reserves over the next decade. The extent of further central-bank buying could hinge on how they view the sovereign-debt risk, he said.

“If they think the sovereign-debt risk is going to not let up or increase, they are not going to let up on their gold buying,” he said.

Meanwhile, there is an assumption that China is continuing to add gold to its reserves. The country reports its gold holdings less frequently than most.

“You could say it’s a predictable surprise,” Clark said. “At some point, they are going to announce they’ve been buying gold again, just like they did a few years ago.”

The debt-ceiling agreement in Washington this week enabled the U.S. to avoid a technical default by increasing the Treasury Department’s borrowing authority. But it also means still-higher deficits that may become worrisome to investors and other central banks alike.

“The ratings agencies may be holding off on re-rating America, but nevertheless central banks are looking at their risk portfolio and wondering to what extent they want to extend (holdings) in U.S. Treasurys,” Norman said. “I would be surprised to find many seeking to extend their position in U.S. debt. With that being the case, they need to find other reserve assets….There are relatively few things they can move into, and gold is one of them.”

Big U.S. and European banks were hit hard in Thursday’s stock sell-off

2011-08-05T13:44:00.001-07:00

Big U.S. and European banks were hit hard in Thursday’s stock sell-off, highlighting investor concerns about some of the more prominent financial institutions.

In the U.S., Bank of America’s stock fell by 7.44% and has now tumbled by 33% this year. Bank of America’s chief executive, Brian Moynihan, will now really have his work cut out for him next week when he plans to take questions on a public call hosted by Bruce Berkowitz, the rock star hedge fund manager who has taken a big and controversial position in the nation’s biggest bank.

The KBW Bank Index fell by 5.3%, but some of the biggest banks in the U.S. fell more, like Citigroup, which fell by 6.6%. Big banks like Citigroup are struggling to deal with surging litigation costs stemming from the credit crisis while also dealing with more stringent capital standards.

The situation in Europe is worse, where investors are starting to wonder more and more about the Italian government securities being held by the large European banks, not to mention IOUs from the other countries like Spain. Italy is really getting more mired in the euro crisis and UniCredit shares tumbled by more than 9% on Thursday. Lloyds Banking Group has now seen its shares lose nearly half their value in 2011.

The decline in bank stocks could add momentum to the job cuts already being implemented on Wall Street and the banking sector. HSBC recently said it would slice 30,000 jobs. It will also potentially weigh on the economic recovery. But at least some banks are making the best of an ominous situation. Bank of New York Mellon said on Thursday it will start to charge clients fleeing to safety a fee for extraordinarily high deposits.

The euro is once again under pressure as the impasse over the Greek debt crisis continues

2011-06-20T05:03:00.001-07:00

-The euro is once again under pressure as the impasse over the Greek debt crisis continues, putting even greater importance on key decisions within and outside the country for the path of the single currency.

Investors are still holding out for Greece's funding problems to be resolved, a factor which is shoring up the currency. But expectations that crisis negotiations over the weekend would yield a firm solution were dashed. Instead, European Union authorities have put off the decision, hoping for a mid-July end to protracted talks.

The euro succumbed to an early bout of selling Monday, slipping to a session low of $1.4191 against the dollar before coming back above $1.42. But while the outlook for the currency looks uncertain, the prevailing sentiment is still relatively sanguine. Most investors are betting that there is too much at stake for the euro zone as a whole to let Greece default on its loans.

Athanasios Vamvakidis, a currencies strategist at Bank of America Merrill Lynch, said the cost of allowing Greece to fail is too high, which should in the end help support the euro. "The baseline is we expect a 'V shape' for the euro's exchange rate versus the dollar."

Key tests for the common currency ahead include a confidence vote for the new Greek government Tuesday. If there is a vote of no-confidence in the new governmment that all bets are off, as the country would struggle to concoct the cost-cutting measures needed in return for international aid. A further Greek budget vote is scheduled for June 28.

"The internal dynamics of Greek politics inject uncertainty into the whole process, and from the perspective of financial markets threaten fresh volatility as well as the risk of contagion, with the worst case scenario being a Lehman-style [event] for the euro zone," said Neil MacKinnon, strategist at VTB Capital.

"Whatever short-term compromises might be reached in the next few weeks, they are unlikely to mark the end of the euro zone's debt and banking crisis."

That in turn means a period of volatility for the single currency.

These developments are dominating currency market movements, especially as the week starts very slowly on the data front. But another reason for the euro's resilience could be the U.S. Federal Reserve's rate verdict and press conference, due Wednesday.

Analysts at BNP Paribas noted that U.S. rate setters are likely to stick to a less aggressive stance on inflation, a factor that will weigh on the dollar especially against the yen.

What happens in Greece may also have repercussions outside Europe, affecting wider confidence levels. Minutes of the Australian central bank's last rate-setting deliberations Tuesday may give a hint whether markets are correct in scaling back rate-rise expectations.

Elsewhere, the pound held steady despite the continued flow of soft U.K. economic data. The focus will be on the minutes of the Bank of England's June meeting Wednesday, to see if the recent run of data has weakened the resolve to lift interest rates.

Markets fear a Greek default could spark heavy losses among European banks holding Greek government bonds

2011-06-20T05:01:00.001-07:00

Markets fear a Greek default could spark heavy losses among European banks holding Greek government bonds, which may lead to a possible contagion through the global banking system and financial markets.

A year after European officials authorised a bailout package for Greece, European finance ministers, meeting in Luxembourg on Monday, decided to make the next 12 billion euro- ($A16.25 billion) tranche of Greece's 110 billion euro ($A148.99 billion) loan, in early July.

But the funds will flow only if Greece's parliament passes new spending cuts and reforms by the end of June.

"They're still a long way from a permanent solution," CMC Markets chief market strategist Michael McCarthy said.

"Ultimately they have to go towards fiscal union or they have to break up the EU - that's the only choices they have."

"They will live from temporary fix to temporary fix until they can gather the political will to make the structural changes in Greece that are required."

Banks in the UAE have been instructed to search for and freeze any accounts or investments or deposits or safe deposit boxes in the names of the individuals and entities.

2011-06-20T05:00:00.001-07:00

The UAE Central Bank has instructed banks operating in the country to freeze the assets of 19 Libyan individuals and entities in line with the two United Nations Security Council resolutions on Libya, a senior bank official said here on Monday.
"We have implemented UN Security Council’s Resolutions on Libya and are in the process of preparing a report. We are expecting with the next week or so to complete the report for onward submissAon to the Ministry of Foreign Affairs,” said Abdul Rahim Al Awadi, executive director at the UAE central bank’s anti-money laundering and suspicious cases unit.
Al Awadi was speaking on the sidelines of a conference in Abu Dhabi on methods to detect and combat money laundering.
Al Awadi said banks have been instructed to search for and freeze any accounts or investments or deposits or safe deposit boxes in the names of the individuals and entities which appeared in the two UN Security Council resolutions on Libya, one of which has 12 names and the other seven.
The banks have also been told to stop any fund transfers linked to the names mentioned in the two resolutions.

Iranian Company Charged With Tricking U.S. Banks

2011-06-20T04:59:00.001-07:00

An Iranian government-owned shipping line that the United States believes is integral to Iran’s efforts to obtain banned technology for its nuclear and missile programs has illegally funneled tens of millions of dollars in financial transactions through the American banking system over the past three years, evading sanctions by cloaking itself in corporate alter egos and falsifying records, according to an indictment that the Manhattan district attorney plans to unseal on Monday.

The 317-count indictment charges the Islamic Republic of Iran Shipping Lines and 15 other defendants with a conspiracy to set up shell companies in Singapore, the United Arab Emirates and the United Kingdom to trick major clearing banks in New York, like JPMorgan Chase, Bank of America and Citibank, into sending and receiving more than $60 million worth of payments.

The subterfuge was necessary, prosecutors said, because the Iranian company, also known as Irisl, needed access to United States banks to compete in a shipping industry that primarily does business in dollar denominations. American sanctions imposed in 2008 require United States banks to block and seize the proceeds from any transactions made in the names of Irisl or its known affiliates.

For years, the United States has warned that the state-owned shipping line engages in deceptive practices to aid the Iranian regime in its proliferation activities. Its ships, which operate throughout the world, have been caught smuggling a virtual bazaar of weapons in violation of a United Nations arms embargo.

But the grand jury indictment, the result of a 14-month investigation, represents the first time Irisl has faced criminal charges.

It may not be possible for the district attorney’s office to convict the 11 corporations and 5 individuals charged in the indictment, as all are based outside the jurisdiction of the United States. But prosecutors hope the case will compel foreign banks, which have allowed companies linked to Irisl to open accounts using corporate aliases and then move money from those accounts into and out of the United States, to scrutinize their customers.

“There are banks giving them access and turning a blind eye,” said Adam Kaufmann, executive assistant district attorney and chief of the investigation division. Mr. Kaufmann noted that the office’s investigation was continuing and said the indictment sent “a clear message that this is criminal conduct and could expose banks to criminal liability.”

The indictment comes after an investigation last year by The New York Times, which found that Irisl was setting up shell corporations across multiple continents in an attempt to make it appear as if its ships were under new ownership and management. In fact, nearly all of the new companies were wholly owned by Irisl, run by Irisl officials or set up at their behest.

The district attorney’s investigation into whether Irisl shell companies were gaining access to New York banks began when a confidential source provided officials with a suspicious bank account number. Using subpoenas as well as open-source information, investigators followed the trail to other, related accounts.

District Attorney Cyrus R. Vance Jr. said the indictment demonstrated to Iran that his office would not remain idle while New York banks, “which stand at the forefront of international commerce,” were abused.

Sanctions enforcement is primarily the responsibility of the Treasury Department, but the district attorney’s office has a history of working closely with the federal government in this arena, claiming criminal jurisdiction because international dollar-denominated transactions are cleared through New York banks.

Mr. Vance’s predecessor, Robert M. Morgenthau, took on some of the world’s largest international banks for stripping information from wire transfers that would have shown the transactions originated from sanctioned countries like Iran and Sudan.

You could knock Europe's banks over with a feather.

2011-06-20T04:57:00.001-07:00

Financial institutions across the Continent share a terrifying trait with Lehman Brothers before its 2008 collapse: they rely too much on borrowed money, especially the cheap, short-term loans that are vulnerable to a market shock.
That's not exactly a handy characteristic when a Greek default seems almost inevitable. European policymakers this weekend failed to agree to terms on a 12 billion-euro ($17 billion) bailout loan due next month to Greece, warning that the Greek government must first show it is taking austerity seriously. Apparently mere riots aren't enough for these guys.
What's notable is that the most reckless banks, by these measures at least, reside not in gonzo Greece or profligate Portugal, but in the allegedly responsible states at the so-called core of Europe, Germany and France – the very banks that are most exposed to a Greek default, with some 90 billion euros ($129 billion) at stake.
Though it's hard to open the business section lately without finding a story about Germany's economic renaissance, thrift and prudence don't seem to characterize German banks. They hold 32 euros in loans for every euro of capital they have on hand, according to International Monetary Fund data. Lehman's leverage at the time of its collapse was 31-1, if you're keeping score at home. Either way it means a 3% loss leaves the taxpayers picking up the tab. Yes, that again.
The Germans aren't alone in Lehmanville: Belgian banks are using 30-1 leverage and French ones 26-1, the IMF numbers (see chart, right) show. All told, banks across the 17-country euro area average 26-1 leverage – double the ratio in the United States. Against all odds, European institutions have managed the nifty trick of making U.S. banks look good.
If the European leverage numbers sound familiar, it's because they are in line with the leverage ratios seen at the big U.S. investment banks before the financial markets started their nervous breakdown in 2007. Lehman and Bear Stearns, the smallish investment banks that gorged on real estate during the bubble, were both leveraged at more than 30-1 while Goldman Sachs (GS), Morgan Stanley (MS) and Merrill Lynch were well into the 20s.
And in another similarity, the European banks are heavily reliant on short-term market funding, from sources such as the U.S. money funds that are among the biggest wholesale lenders on the planet. History shows that a market panic can make those funds suddenly unavailable, potentially putting an already stretched European Central Bank even more on the spot.
Yet it's not clear the Europeans have picked up just yet on how this year might come to rhyme with 2008. While Germany has backed away from its demand that private sector lenders be forced to accept reduced repayment terms, there is still no sign that Europe's leaders will soon come to their senses and hammer out a package that ends the siege once and for all.
All this tightrope walking is unnerving the staff at the IMF, which warned last week that "though there has been progress on banking system repair, the pace is too slow."
For now, there is no reason to believe a default is imminent or that the banks would be unable to handle the Greek storm. Liquidity is still ample and the financial system isn't as hyped up as it was three or four years ago. But the sight of overextended banks in the middle of a crisis is never reassuring, no matter how familiar it may be.

Virgin Money eyes bank branch deal

2011-05-22T17:21:00.001-07:00

Fledgling bank Virgin Money has reportedly made moves to raise the £2 billion needed to bid for up-for-sale branches of taxpayer-backed banks Lloyds Banking Group and Northern Rock.

Virgin Money, backed by billionaires Sir Richard Branson and Wilbur Ross, has held talks with potential investors about providing the finance for a bid for either of the groups of branches, The Sunday Telegraph said.

Virgin Money is understood to be confident it will have the financing in place to make bids for the branches, although a formal fundraising process has not yet begun with no official letters of commitment signed.

Lloyds Banking Group is selling 600 branches, triggered by a European decision following the Government bailout of the bank, while Northern Rock is selling its 70-branch estate as it looks to return to the private sector.

Virgin Money, run by chief executive Jayne-Anne Gadhia, is understood to be preparing for the bid process for each estate in the summer months, in anticipation of final sales by the end of the year.

The management team is understood to want to ensure it has sufficient tier-one capital in place before making a bid.

American financier Mr Ross has already injected £100 million into Virgin Money and has pledged a further £500 million to be used to help buy a branch estate. In addition, it is estimated Virgin will need to raise a further £1 billion to £1.5 billion to fund its bids.

Other bidders for either or both estates are rumoured to include National Australia Bank, which already owns Clydesdale and Yorkshire banks and private equity firm JC Flowers.

Virgin Money is continuing with its business plans for its own new branches following the announcement it is to open four “lounge-style” branches in London, Edinburgh, Manchester and Norwich.

The bank, which already has three million customers in the UK, is understood to not want to open a branch until its full suite of products is available, including deposits, current accounts and mortgages. Virgin Money was not immediately available for comment.

International Monetary Fund, European Commission and European Central Bank officials will be in Lisbon today as they start preparing an estimated 80 billion- euro ($116 billion) aid program for Portugal

2011-04-11T17:20:00.001-07:00

International Monetary Fund, European Commission and European Central Bank officials will be in Lisbon today as they start preparing an estimated 80 billion- euro ($116 billion) aid program for Portugal, the third euro- region nation to request a bailout in less than a year.

The EU aims to reach an agreement on the aid package on May 16, three weeks before the country’s June 5 early election, which was prompted by the resignation of Prime Minister Jose Socrates after parliament rejected his deficit-cutting plan.

Portugal’s bid for emergency aid last week opened what European officials say will be the final chapter in the debt crisis that erupted in Greece last year, spread to Ireland and triggered speculation that the 17-nation euro area might not survive in its current form.

“It is expected that the program is completed and approved by both the EU and IMF by mid-May 2011 in order to allow the disbursement of the first tranche ahead of the large funding needs of June,” Antonio Garcia Pascual, chief southern European economist at Barclays Capital, said in a note yesterday.

The next government will need “not only to implement further fiscal consolidation measures but also to implement difficult and potentially unpopular structural reforms, which are likely to target a leaner and more efficient public sector, further labor market reforms, and enhanced competition in goods and services markets,” he wrote.

Scottish councils are still owed nearly £40m following the Icelandic banking system collapse in 2008, it has emerged.

2011-04-11T17:17:00.001-07:00

Icelanders rejected the latest plan to repay the UK and Netherlands some 4bn euros lost in the collapse.

Eight Scottish councils had a total of £46.5m invested in Landsbanki and Glitnir and several UK subsidiaries.

So far they have recovered almost £6.9m from the UK arms of two of the collapsed Icelandic banks.

Hopes of recovering at least some of the outstanding money rose earlier this month when an Icelandic court granted councils priority creditor status.

The decision meant about 90 councils in the UK, including affected authorities in Scotland, would be at the front of the queue for any reimbursement.

However, the picture became more complicated at the weekend when Icelanders rejected in a referendum a negotiated settlement to reimburse the UK.

Amounts owed
North Ayrshire Council, which is owed the largest amount of money in Scotland, said it was waiting to get back £15m.

Doing nothing will not get us anywhere. We would be happy to support any measures that will see us getting any return on the money that is outstanding to us”

Pat Watters
Cosla president
South Ayrshire Council said it was still owed £5m, Moray Council £2m, East Ayrshire Council £2.4m, East Renfrewshire Council £1m and Perth and Kinross Council about £1m.

Scottish Borders Council, which had a total of about £10m invested in the Heritable and Landsbanki banks before the banking collapse, has so far received £2.52m - or just over 50% - of its claim from Landsbanki's UK subsidiary, Heritable.

South Lanarkshire Council has also recovered half of its £2.5m exposure to Heritable but is still owed £5m by Landsbanki.

And East Ayrshire Council has recouped just over half of the £5m it had invested with Heritable and Kaupthing Singer and Friedlander (KSF), both of which are subject to UK law.

The figures emerged as the UK government signalled it was set to resort to legal action to recoup billions of pounds paid out to cover the deposits of British savers in collapsed Icelandic banks.

'Disappointing'
A negotiated settlement to reimburse the UK was rejected for a second time by Icelanders in a referendum at the weekend, a result which the Chief Secretary to the Treasury, Danny Alexander, described as "disappointing".

Mr Alexander told BBC1's Andrew Marr Show: "It looks like this process will now end up in the courts.

"There is a legal process going on and we will carry on through these processes to try and make sure we do get back the money that the British government paid out in past years."

Pat Watters, president of local authority body Cosla, told BBC Scotland's news website that councils would continue to push to get their money back.

He said: "This is a tremendous amount of money. We have to continue to pursue this, using any avenue we can.

"Doing nothing will not get us anywhere. We would be happy to support any measures that will see us getting any return on the money that is owed to us."

Families face an average £1,000-a-year rise in mortgage costs to prevent a repeat of the banking crisis.

2011-04-11T17:15:00.001-07:00

A landmark report yesterday said cash-strapped customers would have to pick up the bill for reforming the disgraced industry.

The chairman of the Independent Commission on Banking, Sir John Vickers, warned families to brace themselves for higher charges – even though taxpayer subsidies to the banks are already worth £10billion a year.

FT forecasts Spain will be next in seeking financial assistance

2011-04-11T17:13:00.001-07:00

Under the heading of “Complacent Europe must realize Spain will be next” Wolfgang Münchau points out that the latest statements from European finance ministers are merely “a metric of the complacency that has characterized the European crisis from the start” while the debt of several peripheral Euro zone countries continues to build up.
Last Thursday, the European Central Bank raised its main rate by a quarter point to 1.25% and more are likely to follow says Münchau. He anticipates the main interest rate to rise to 2% by the end of this year and to 3% in 2013. This trajectory “will have negative consequences for Spain in particular” and not only on economic growth, but also for “the Spanish real estate market since almost all Spanish mortgages are based on the one-year Euribor money market rate, which is now close to 2% and rising”.
Münchau says “Spain had an extreme property bubble before the crisis, and unlike in the US and Ireland, prices have so far fallen only moderately” and forecasts prices would have to fall by “another 40% from today’s level”. He adds that in “terms of supply conditions Spain is more similar to the US and I have yet to hear an intelligent reason why Spanish real house prices should be any higher today that they were 10 years ago, and indeed why they should keep on rising”.
More important the number of vacant properties is about one million, “which means that the market will suffer from oversupply for several years”. This will be the driver of further price declines given the stress in the system: recession, high unemployment, a weak financial sector, higher oil prices and rising interest rates.
Meantime “falling house prices and rising mortgage payments are bound to push up the still moderate delinquency rates and the number of foreclosures”. This will then have an impact on the balance sheet of the Cajas (regional savings banks) since their balance sheets carry all property loans and mortgages at cost.
Münchau adds that as default rates rise, the savings bank system will need to be re-capitalized to cover the losses. “The Spanish government implausibly estimates the re-capitalization need to be below € 20bn, while other estimates put the number at between € 50bn and € 100bn. The assets most at risk are loans to the construction and real estate sector, €439bn as of end-2010”. Spanish banks also have an additional exposure of €100bn to Portugal.
However there are also good news says FT: under a worst-case scenario, Spain would still be solvent since the public sector debt-to-GDP ratio was 62% as of end-2010, which according to Ernst & Young, in its latest Euro zone forecast, projects the debt-to-GDP ratio to increase to 72% by 2015, still below the levels of both Germany and France.
But the Spanish private sector debt-to-GDP ratio is 170%. Münchau says that the current account deficit peaked at 10% of GDP in 2008, but remains unsustainably high, with projected rates of more than 3% until 2015. “This means that Spain will continue to accumulate net foreign debt and its net international investment position – the difference between external financial assets and external liabilities – was minus € 926bn at the end of 2010, according to the Bank of Spain, or almost 90% of GDP.
Münchau concludes that “if my hunch on the Spanish property market proves correct, I would expect the Spanish banking sector to need more capital than is currently estimated. It is hard to say how much because we are well outside the scope of forecasting models. When prices drop so fast, there will be much endogenous pressure that no stress test could ever capture”

Ex-prime minister Gordon Brown admitted that he made a "big mistake" in not seeking tighter regulations on banks in the lead up to the financial crisis

2011-04-10T22:27:00.001-07:00

Ex-prime minister Gordon Brown admitted that he made a "big mistake" in not seeking tighter regulations on banks in the lead up to the financial crisis.
The former leader told a conference in the US that he had not fully appreciated how "entangled" the global financial system had become when establishing the Financial Services Authority (FSA), the country's regulatory body.
"We set up the FSA believing the problem would come from the failure of an individual institution," Brown said. "That was the big mistake. We didn't understand just how entangled things were.
"I have to accept my responsibility."
New Chancellor of the Exchequer George Osborne has announced plans to break up the FSA and hand more regulatory power to the Bank of England.
Brown said he believed the will to tighten regulation was weakening in the face of lobbying by the financial sector.
"I do believe we're going back to a race to the bottom," he warned.
"There should be an international agreement, otherwise you'll just have banks threatening to move from one country to another," continued Brown.
"Britain was under relentless pressure from the City (Britain's financial centre) that we were over-regulating. All through the 10 to 15 years, the battle was not that we regulated too little, but that we regulated too much," he added.

The distressed debt market in Europe is set to outstrip the U.S. for the first time as the region’s sovereign crisis forces banks to sell $2 trillion of underperforming assets

2011-04-10T15:35:00.001-07:00

The distressed debt market in Europe is set to outstrip the U.S. for the first time as the region’s sovereign crisis forces banks to sell $2 trillion of underperforming assets, Strategic Value Partners LLC said.

“The opportunity set in Europe is very attractive and rich,” Victor Khosla, founder of the Greenwich, Connecticut-based distressed-debt hedge fund manager, said in a phone interview. “It far exceeds the U.S. for the first time.”

Strategic Value Partners, which oversees $4 billion, is among hedge funds eyeing Europe as the fallout from the credit crisis and governments’ austerity measures trigger fire sales. Mark Unferth, head of distressed debt at London-based CQS U.K. LLP, is boosting investment in Europe and expects rivals to do the same, he said in an April 6 interview. New York-based KKR & Co. said March 1 it hired Mubashir Mukadam to head its push into the European market.

By comparison, U.S. banks have announced they need to sell $800 billion of assets since the credit crisis, Strategic Value Partners calculations show.

Distressed debt typically yields at least 10 percentage points more than government bonds. Hedge funds dedicated to buying the debt earned an average 4.1 percent return this year after reaping 23 percent last year, according to Singapore-based data provider Eurekahedge Pte.

‘American Invasion’

Distressed-debt funds seek to profit by buying assets at below their face value, providing high-yield financing which could give rights to a company’s shares and opportunities to restructure it or install new management before selling it at a higher value.

The second wave of restructuring in Europe will require “hardcore, true restructuring skill” handling debt-for-equity swaps and overhauling corporate operations, Khosla said. Lenders wrote off 6.5 billion euros ($9.4 billion) of senior loans as defaults peaked in 2009, according to Fitch Ratings.

Strategic Value Partners has 50 investment professionals in London and Frankfurt and has invested about $6 billion in European distressed debt since it was set up in 2002.

“Europe is not a market for everyone. Over the years we’ve seen American invasion followed by American retreat from those failing to grasp the how to do business in this region” including knowledge of different legal regimes from country to country, Khosla said. “Given the amount of the legacy non- performing assets that needs to be cleaned up, this restructuring cycle is going be at least three to five years and even longer for the peripheral countries because we don’t expect to see a sharp recovery in the economy there.”

Bank of Ireland said April 4 hired Deutsche Bank AG to sell most of its project finance business of U.K. infrastructure loans. Ireland’s central bank instructed four lenders on March 31 to raise 24 billion euros after publishing the outcome of the banks’ stress tests.

“The spate of equity fund-raising by European banks recently is positive for corporate debt restructuring because it will allow banks to be able to start taking writedowns on these assets,” Khosla said.

.IRISH LIFE and Permanent declined 59 per cent on the stock market after the Government said that it may take control of the company

2011-04-03T03:24:00.001-07:00

.IRISH LIFE and Permanent declined 59 per cent on the stock market after the Government said that it may take control of the company, which has been told it must raise €4 billion by the Central Bank.

The shares fell by 73 per cent at one point, the biggest fall in the stock for more than 17 years, before closing at 17 cent, valuing the company at €46 million.

The company, which owns Permanent TSB bank, said it was exploring a stock market flotation of its pensions and investments, and fund management businesses to raise some of the €4 billion.

Dates in July or September are being considered for the flotation, a company spokesman said.

The company, the only bank to avoid a Government cash bailout since the crisis began, will shortly appoints advisers on the sale.

The businesses to be sold include Irish Life Investment Managers, Irish Life retail and corporate businesses, financial services company Cornmarket and the 30 per cent stake in insurer Allianz.

Irish Life and Permanent’s subordinated debt was downgraded by ratings agency Moodys in the expectation that bondholders would be forced to take losses to help meet the capital bill.

Irish Life and Permanent was “caught in the cross fire” in the Government’s decision to over-capitalise Bank of Ireland and AIB, said Gerry Hassett, chief executive of Irish Life retail business.

The company was told last year it needed to raise €240 million and within six months “the rules of the game had changed and we needed €4 billion”, he said.

Irish Life will be sold before any cash injection by the Government.

Mr Hassett said that Irish Life had an “embedded value” of €1.6 billion and that it planned to float the business unit in the Dublin and London stock markets.

Senior management, including chief executive Kevin Murphy and finance director Dave McCarthy, are expected to move with Irish Life when the business is sold.

Ireland will publish what is meant to be the final bill for propping up its banks on Thursday

2011-03-30T16:52:00.001-07:00

Ireland will publish what is meant to be the final bill for propping up its banks on Thursday, in a last-ditch bid to convince investors it can avoid a damaging restructuring that would deepen Europe's debt woes.

Ireland's new government has pledged to outline a "credible" plan for sorting out its financial system on the back of fresh stress tests but its plausibility will rest on any concessions Dublin can win from its paymasters in Brussels and Washington.

A bailout from the European Union and the International Monetary Fund late last year failed to resolve the financial crisis and Dublin's dismal record in calling the end of its banking woes, now in their third year, mean scepticism is high.

"We have been at moments like this so many times in the past where we thought that this will be the decisive element," said Austin Hughes, chief economist at KBC Bank.

"Once more we cross our fingers and hope that this will be the defining moment and we will able to begin to look beyond the current difficulties.

"The crucial element is that we get a coherent response on this from goverment and Europe."

Dublin is relying on the European Central Bank (ECB) to give medium-term funding to its banks to help cap the cost of recapitalising them below the 35 billion euros set aside for the lenders in an 85 billion-euro bailout package.

An announcement on such a facility, revealed to Reuters by a euro zone central banking source last week, may come after the results of the stress tests are published at 1530 GMT in Dublin.

Even with a credible banking bill and funding from the ECB, Ireland's Prime Minister Enda Kenny still needs to persuade European partners to cut the cost of their loans to the euro zone struggler and possibly extend the loans' duration to convince investors Ireland can tackle its debt mountain.

Local media have said Bank of Ireland (BKIR.I), Allied Irish Banks (ALBK.I), Irish Life & Permanent (IPM.I) and EBS Building Society [EBSBS.UL] will need between 18 billion and 23 billion euros in additional capital after the tests.

Six analysts surveyed by Reuters have put a figure of 23 billion euros on the bill.

banks that are "too big to fail".

2011-03-29T14:11:00.001-07:00

Here's an analyst's research note to put the cat among the pigeons on the subject of banks that are "too big to fail". Rather than Barclays being too big, argues John-Paul Crutchley of UBS, it may be that Britain is too small.

You can see his logic. Barclays looks and feels like JP Morgan, the big US bank. Both are international operators with a broadly comparable mix of retail, commercial and investment banking activities. What's more, Barclays appears better capitalised on a like-for-like basis.

But JP Morgan has been given freedom by the US authorities to increase dividends and buy back shares. Barclays, on the other hand, "remains mired in the fog of regulatory uncertainty", as Crutchley puts it. Dividends are constrained and UK regulators appear determined to impose higher capital thresholds than their US counterparts.

The explanation, suggests the analyst, is the relative size of the banks in the context of their host countries. Barclays' gross balance sheet is 100% of UK GDP; JP Morgan's larger balance sheet is 24% of US GDP.

This is a neat way of expressing the difficulty facing the independent banking commission and George Osborne. If, in the interests of protecting taxpayers, they oblige UK banks to carry more capital than US banks, do they put UK banks at a disadvantage? Or, more precisely, do they put shareholders in UK banks such as Barclays at a disadvantage? We know Barclays has no intention of paying its staff a lot less; it continues to spout the familiar line about the need to remain competitive. Instead, the cost of extra capital would fall on shareholders, in the form of lower dividends.

In time, thinks Crutchley, Barclays may have "little option but to consider shifting domicile" to serve the interests of its owners. Some form of "corporate activity", meaning an acquisition or merger, would be one method.

Crutchley has summed up the policy dilemma well. The banks, no doubt, will claim his analysis shows their threats to move abroad are credible. Even Stephen Hester of RBS (which, being 83% owned by the UK taxpayer, is in no position to make threats) has reminded his investors of the "downside" risk to shareholders from regulators.

But that is not a reason to surrender to banks' threats and tantrums. The primary job of the government in this context is to ensure the solvency of the country is not jeopardised by having a dangerous banking system. If shareholders in UK banks lose a little as a result, that's unfortunate but may be just a fact of life. Attempting to compete with the US by copying its lax standards sounds like a disaster in the making.

'Fatally flawed' accounting standards inflated RBS's worth

2011-03-29T14:09:00.001-07:00

International Financial Reporting Standards (IFRS), which have been described as "fatally flawed", let RBS report a core tier one ratio for 2010 more than 4pc higher than it would have been under the UK's old accounting rules that were replaced in 2005.
The analysis comes ahead of the publication of a House of Lords Economic Affairs Committee report into UK accounting practices expected to be highly critical of the IFRS system.
According to RBS's latest accounts, which were calculated using IFRS, the bank has tangible shareholder assets of £58bn and core tier one capital of 10.7pc.
Tim Bush, a City veteran and member of the "Urgent Issues Task Force" that scrutinizes the work of the Accounting Standards Board, has calculated that under pre-2005 UK GAAP (Generally Accepted Accounting Principles) rules, which governed accounting in Britain for over 100 years, RBS would have a tangible shareholder assets of £33bn and a core tier one capital of just 6pc.
The criticism is of the IFRS framework. There is no suggestion RBS or any other British bank has broken the accounting rules.

from Nairobi to São Paulo, many urban gangs are becoming more sophisticated, more brutal, and more powerful than ever

2008-05-12T21:00:00.000-07:00

from Nairobi to São Paulo, many urban gangs are becoming more sophisticated, more brutal, and more powerful than ever.
Membership: as many as 100,000 men from the Kikuyu, Kenya’s largest ethnic group
Stronghold: the slums of Nairobi, where they manage multimillion-dollar rackets over everything from electricity to public transportation
Known for: formerly, for dreadlocks and bathing in blood; now, for forced female circumcision and the beheading of any opposition, be they members of rival ethnic groups or disloyal minibus drivers
Why they’re dangerous: The Mungiki are just one of Kenya’s many machete-wielding ethnic gangs—some of which sport names like the “Kosovo Boys” or the “Taliban” (an entirely Christian gang that apparently just thought the name sounded tough). But in recent years, the Mungiki, whose name means “multitude” in the Kikuyu language, have become a political force. Most recently, they played a central role in the violence and chaos that wracked Kenya for months before and after its last presidential election. Seven months before the December vote, severed heads began appearing mounted on poles in Nairobi, marking the worst of a spike in Mungiki violence that analysts attribute to rising distrust between gang leaders and Kikuyu politicians. Kenyan police responded to the violent outbreaks by arresting or killing many gang members. But after the hotly contested election on Dec. 27, in which Mwai Kibaki, the Kikuyu incumbent, claimed a dubious win over challenger Raila Odinga, the Mungiki reemerged in full force, brutally killing women and children from rival, pro-opposition ethnic groups. For now, Kenya is at peace after Kibaki and Odinga agreed upon a power-sharing deal. But if instability returns, the Mungiki could help throw the country back into a sea of violence.

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Membership: 6,000 dues-paying members and 140,000 inmates and other fellow travelers
Stronghold: São Paulo’s state prison system and its citywide favelas
Known for: its brutal control of prison life, widespread kidnapping, and bringing São Paulo to its knees for four straight days in May 2006
Why they’re dangerous: The gang got its start as a prison-league soccer team, but today the PCC’s word is law in São Paulo prisons, and if an inmate thinks otherwise, he might just lose his head—literally. But the gang’s influence extends far beyond the prison gates. In addition to orchestrating drug deals with illicit trade networks such as Rio’s Red Command and Colombia’s FARC, the PCC let the world know in spring of 2006 that it was more than a bunch of disgruntled inmates. On Friday, May 12, the city of São Paulo came under siege as anonymous attackers burned buses, banks, and public buildings, gunning down police and instilling chaos as they went. Simultaneously, 73 prisons around the state erupted in rebellion. For days, the city and the prisons were at a standstill while local leaders floundered, unsure how to respond. By the end, at least 150 people were dead, and the secretary of prisons was out of a job. Then, almost a year later, the PCC spread rumors of possible deadly attacks, a power play that Brazilian President Luiz Inácio Lula da Silva called “terrorism” that “must be dealt with by the strong hand of the Brazilian state.” But with the PCC’s decentralized power structure, the “strong hand” might not find much to grab onto.

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Jose CABEZAS/AFP/Getty Images Mara Salvatrucha (MS-13), United States and Central America

Membership: 70,000 worldwide (60,000 in El Salvador, Honduras, Guatemala, and Mexico, plus 10,000 in 42 U.S. states and Washington, D.C.)
Stronghold: Central America and U.S. suburbs
Known for: elaborate tattoos (which makes ending gang membership almost impossible), suburban bloodshed, and a loose but widespread network of subsidiary groups, perfect for disseminating drugs and brutal violence
Why they’re dangerous: The MS-13 grew out of a posse (mara) of street-tough Salvadorans (Salvatruchas) who fled to Southern California in the 1980s in the wake of El Salvador’s bloody civil war. With each new wave of vulnerable immigrants from Central America, MS-13 grew in strength and breadth, forming a lose cohort of semiautonomous subsidiary gangs across the United States and Central America. Though their hallmark tattoos and violent outbursts dot North America, analysts are still uncertain just how interconnected the maras really are. In the United States, the strongest maras are based in Southern California, the northeast, and the mid-Atlantic, including the Washington, D.C., metro area. Just last spring, Salvatruchas hacked away at a rival gang member in the D.C. suburb of Alexandria, Virginia. But U.S. maras are nothing compared with their counterparts further south. Fueled by gang members deported from the States, maras in El Salvador, Honduras, and Guatemala terrorize police and residents in hundreds of communities across the region.

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Membership: 10,000 mainly ethnic Chinese members and associates living in Taiwan
Stronghold: Taiwan
Known for: Drug smuggling, human trafficking, and “silencing” journalists as far away as Northern California. A good rule of thumb: If it’s illegal, they do it.
Why they’re dangerous: United Bamboo emerged as the largest of several Beijing-backed assassination machines in the wake of the Communist takeover of mainland China. In 1984, their dissident hunt took them as far as suburban San Francisco where they murdered Chinese-American journalist Henry Liu in his own garage. Two decades later, United Bamboo’s gangsters are just as international but now have their hands in “virtually every facet of illegal activity imaginable,” including human trafficking, gunrunning, and the drug trade, according to the Asia Times. The scale of its illicit trade is only magnified by its shady, wide-reaching networks, with direct links to fellow illicit groups such as the Chinese triads, the Japanese yakuza, and gang members active from the United States to Europe to Australia. Taiwan’s National Security Bureau even thinks United Bamboo’s drug trade has reached North Korea with direct approval from Kim Jong Il’s regime. A well-structured, underground mob, United Bamboo and its wheelings and dealings usually fly below the radar. But in May 2005, when a 10-km procession of men in black shirts turned out for the funeral of one-time gang leader Hsu Hai-ching (at 93, Hsu had met his end choking on a piece of nigiri sushi), Taipei was reminded that United Bamboo and its yakuza counterparts were still a force to be reckoned with.

Mongols Motorcycle Club, considered one of the nation's most violent biker gangs

2008-04-20T07:55:00.000-07:00

The Mongols Motorcycle Club, considered one of the nation's most violent biker gangs, astonished authorities last fall when it quietly chartered the first of what it now claims are four chapters in Oregon. Flying its colors in Portland, Eugene, Medford and Bend without permission of the state's other outlaw motorcycle clubs defies a long-held code of biker conduct, an insult that police worry will provoke a turf war. Oregon's five other outlaw motorcycle clubs, classified as gangs by the state's attorney general, have enjoyed a recent lull in their long conflict with police. Some of those bikers have spent the past few years on the offensive, suing police when they feel their civil rights have been trampled.
The Mongols' reputation preceded them. For 30 years, the California-based club has fought a bloody war with the Hells Angels Motorcycle Club. The public got a glimpse in 2002, when surveillance cameras caught bikers clashing with knives, guns and hand tools at Harrah's Casino in Laughlin, Nev., leaving two Angels and a Mongol dead.
Retired federal agent Billy Queen, who rode undercover with the Mongols for two years leading up to the Laughlin riot, said the club's sudden appearance in Oregon means trouble. "The Mongols want to be No. 1; they want to be known as the baddest biker club rollin' out there," said Queen, whose work helped convict 53 Mongols of crimes ranging from motorcycle theft to murder. The club's leadership has combed the barrios of East L.A., Queen said, recruiting members of street gangs -- even those without motorcycles -- "to beef the numbers up and take on the Hells Angels."
Although Oregon's Mongols claim more than two dozen members, criminal intelligence experts have counted fewer than 20 -- and that number includes associates. The club's North American membership has swelled from about 350 to 750 in the past six years, according to Queen. By comparison, police say the Hells Angels number about 3,600 worldwide.

MS-13 Teclas Locos Salvatruchos is the biggest and fastest-growing of the Latin American street gangs.

2008-04-20T07:02:00.000-07:00

Vicious street gangs, committed to violence, have spread throughout the Americas and are now a significant threat in the US. The groups spread to Central American states after being born in the US MS-13 - or Mara Salvatrucha - is the biggest and fastest-growing of the Latin American street gangs. In Maryland alone, MS-13 members are accused of being responsible for a long series of violent crimes including murder. Favoured tactics include decapitation by machete. MS-13 started life as a group of young immigrants on the streets of California in the 1980s. After nearly a million Salvadorans fled their civil war for the US, many of them settled in Los Angeles where gang violence was rife. In the 1990s, the "maras" spread to Central America after many of their leaders were deported from the United States. Those countries, struggling to get back on their feet after years of devastating civil conflict, were a perfect setting in which gangs could proliferate. There's evidence that the model of the gang is rape, kill, control. They're really about gaining control over other immigrants from their community Rod J Rosenstein, US attorney for Maryland
Today, some estimates put up to 60,000 maras active in El Salvador, Honduras, Guatemala, Mexico and - according to the FBI - in more than 40 US states. Rod J Rosenstein is Maryland's US Attorney. His office is currently prosecuting a series of cases against MS-13. He told us the gang's motives are more about mayhem than money. "There's evidence that the model of the gang is rape, kill, control," he said. "They're really about gaining control over other immigrants from their community, intimidating people and asserting some degree of threat which enables them to control their neighbourhoods." Rosenstein's prosecutors have moved on from charging individual gang members with discrete crimes. Instead, they are now targeting MS-13 with federal racketeering laws - the same legislation used against the Mafia and other organised crime. For this tactic to be successful, they must prove that MS-13 is indeed an organised network.
The prosecutors spend much of their time talking about gang meetings; about the clothes - blue and white for MS-13 - and the tattoos. And, most damningly, an alleged firm link between gang leaders in El Salvador and their proteges in the US.
In June 2007, the then US Attorney-General, Alberto Gonzales held a press conference to announce charges against MS-13 leaders in El Salvador. Police seem unable to crack the strength of the gangs The indictment alleged that Saul Antonios Turcos Angel communicated with members of the "Teclas Locos Salvatruchos" clique in Maryland via mobile phone and ordered them to commit two murders.
Later that day gang members in Maryland killed two people and wounded a juvenile.
The links between the countries are clear. The court in Greenbelt was shown a home video made by the gang in a Salvadoran prison.
In it, maras send greetings to their "homies" in Maryland and other parts of the US.
They talk of killing and controlling others and display their full-body tattoos in a show of allegiance to MS-13. Mindful of these trans-national links, the FBI last year made the decision to open an office in El Salvador. Aaron Escorza heads the FBI's National Gang Task Force. He told us the gangs move freely around the region. "They don't recognise borders. They commit crimes in El Salvador, flee El Salvador to come to the US and you have MS-ers who are committing crimes in the US and fleeing down to El Salvador to evade arrest." But once in El Salvador, the challenge to authorities is immense. Entire swathes of the capital are virtually under the control of MS-13 and its rival, Mara 18. Local police patrol warily, tending when possible to avoid those parts of the city. The region's homicide rates are among the highest in the world - 58 per 100,000 of population in El Salvador. The past decade has seen politicians rise to power on the back of promises to declare war against the gangs. The "Mano Dura" - or Hard Fist - policy introduced by Honduras at the start of the decade was closely followed by "Super Mano Dura" in El Salvador. The legislation meant police could round up gang members at will, throwing young men in prison for any suspicious behaviour, including associating with likely gang members or sporting tattoos. The result was thousands of gang members in prison.But courts were not able to process such numbers and many lingered in prison without charge. The prisons themselves have become strongholds of the gangs, many of them controlled by the Maras themselves, the authorities guard only from the outside. The "Mano Dura" policies are now largely discredited. On patrol in San Salvador, the police told us the laws had been counter-productive, driving the gangs underground and leading to more clever tactics from the likes of MS-13. They pointed out men who could be Maras, but who now wear long t-shirts to cover their tattoos. The graffiti that used to be ubiquitous, identifying each gang's territory, is no longer so obvious. Mano Dura made the prisons into virtual headquarters for the gangs. And the US deportation policy added to the problem, with the result that the gangs have become ever more organised and powerful. Jose Miguel Cruz, of the University of Central America, who has studied the Maras for over a decade, says these approaches have led to a "revolving door" effect. "MS-13 has spread across the US and is a major security problem in Central America. We haven't tried any more preventative measures." He draws a comparison with Nicaragua. "They also are poor, they also have weak institutions." If we can lock them away we will but if we can't, they should be deported Julie Myers, US assistant secretary of state for homeland security But Nicaragua has so far managed to avoid any large-scale gang problem. Why? "The police concentrate on more preventative measures," says Mr Cruz. Former gang member Edgar Ramirez backed this up. When he arrived back from the US, deported after a three-year prison sentence, he said there were no opportunities, no way back into normal society.
"I had tattoos so everyone treated me like a criminal," he tells us.
"And if you speak English, they know you're a deportee."
For now, US policy remains focused on law-enforcement.
The US Assistant Secretary of State for Homeland Security, Julie Myers, says it must remain the priority. "If we can lock them away we will, but if we can't, they should be deported," she told us.
"We have to think about stopping young people going into gangs; but I believe the American public is safer when we remove these individuals from the streets of our communities and deport them wherever possible."
In the 1980s, when Ronald Reagan was fighting a proxy war against the Soviet Union in Central America, he promised to rebuild a new, better, El Salvador.
But after spending so much on the war, there was little appetite in Washington for the reconstruction project. Two decades later, the US is reaping the consequences. And in Central America, a region still struggling with poverty and crime, MS-13 has thrived. Law enforcement alone does not seem to be enough to contain it.

“dirty money” raids.

2008-04-19T09:30:00.000-07:00

“dirty money” raids.More than £500,000-worth of cash and property was seized in strikes this week following a major investigation into suspected organised crime.
Porsche came under scrutiny in a secure compound along with two seized Range Rovers and other cars.The Northumbria police canines were brought in to uncover potential signs of drugs trafficking and other offences.Officers swooped on 24 addresses in the region identified from intelligence work gathered over an 18-months period.The vehicles being held included an Aston Martin, a Porsche, and several Range Rovers.
The operation, carried out by North Tyneside command area, supported by the Serious Organised Crime Agency (SOCA) also netted around £35,000 in cash.There were 16 arrests during early-morning raids in North Tyneside, Newcastle, Northumberland and Durham, all of whom await their fate on bail.Det Chief Insp Ian Bentham, of North Tyneside command area, said: “We are looking for traces of substances or other material which may be hidden in small spaces.“The evidence gathering process will continue.”False passports and other documentation, firearms, computers and small amounts of cannabis, cocaine and amphetamines were also seized.
Northumbria Police Crime Operations Department also took part in the investigation.The suspects were arrested on suspicion of financial offences, including money laundering.Police have served orders on six solicitors to preserve conveyancing documents relating to property transactions. The Chronicle understands some of the homes also under scrutiny are based in Thailand in the Far East.Around 200 officers were involved in the raids, which centred on prime locations in some upmarket areas of Tynemouth, Newcastle and Northumberland.
Under the Proceeds of Crime Act, police can seize any cash or goods if they are believed to be criminal property or being used to commit crime.Supt Peter Farrell, of the area command, said: “The arrests are not the end of this operation.“The process will continue to assess and collate the evidence.“Work will continue in the community with the assistance of neighbourhood teams.”

Merrill Lynch is already a breakup target, and those who haven't thought about it surely will after this week's first-quarter loss of nearly $2-billio

2008-04-19T09:12:00.000-07:00

UBS's former chief, Luqman Arnold, thinks it's time to hack away at the massive Swiss bank. The old marriage of smooth, German-speaking private bankers in suspenders with Harvard MBAs might never have really worked. But after $37-billion (U.S.) in writeoffs, the relationship may finally rupture and Mr. Arnold believes that may be a good thing.John Reed, the banker who helped pull off the $80-billion deal that created Citigroup in 1998, admitted last week that he has regrets. Give him points for honesty but not for originality: In 2006, a year before the Epidemic of Mortgage Despair, it wasn't hard to find investors who believed the bank would be worth a lot more carved in pieces than the $50 stock price (since cut in half) would indicate.Is this the end of the so-called financial supermarket, one of the biggest business concepts to come out of the 1990s? It seemed like a good idea at the time. If you can sell mortgages, business loans and financial advice, why not home insurance and mutual funds, too? Why not online trading, loans for hedge funds, private investments in Asia? Health coverage for the family cat?That was then. Now, more equals morass. Any big bank that runs into losses immediately finds itself in a debate about whether complexity is to blame. CIBC dropped $3-billion on U.S. mortgage securities and before you knew it, Bay Street was chattering (albeit not that seriously) about whether CIBC World Markets could be divested. This is one of the two or three best investment-banking franchises in Canada. In the blogosphere, Merrill Lynch is already a breakup target, and those who haven't thought about it surely will after this week's first-quarter loss of nearly $2-billion, its third successive quarter in the red.Merrill seems the epitome of the problems with growth gone wild. The firm is in Uruguay. It's in Indonesia. It's in Lebanon. The sun never sets on Mother Merrill's empire, and the building of it is one reason the market capitalization has risen from $32-billion to $45-billion in 10 years. But look closer: The share price is still where it was a decade ago. All of the "growth" has come from a rising share count.But is it really time to bust apart the world's great financial conglomerates? Don't count on it. If anything, the supermarket idea may emerge from the current mess looking better than before. That's not to say that Citi or UBS or Merrill or Morgan Stanley will carry on as they are. But they didn't falter because they're too big. That's just an excuse for inept management.The breakup crowd has scored some points lately. Diversified banks, like all conglomerates, often trade for less than the sum of their parts. But the bigger problem, and one that is apparent only in rough times, is the risk that rot in one part of the business harms another. Mr. Arnold calls UBS's reputation "comprehensively destroyed" by its trading blunders in mortgage securities that had nothing to do with customers. If you were, say, a Belgian multimillionaire, would you hesitate now before handing your money over to UBS? Mr. Reed wonders whether Citi, in trying to straddle the globe, became unmanageable.
But - for all their problems - UBS and Citi are still here. The biggest failures of this crisis are not the conglomerates but the specialists: Countrywide Financial, mortgage "originators," monoline bond insurers. Bear Stearns had a few different lines of business, but for its size, it was overly reliant on prime brokerage customers - hedge funds - which is one reason its liquidity dried up so suddenly in mid-March. But when they needed billions in fresh capital, Citigroup, UBS, CIBC and other diversified banks were all able to get it. Why? Because the supermarket model has its benefits, too. Each of those banks has something on which to rebuild. Few noticed, but the truly Swiss part of UBS, business banking and wealth management, had a crackerjack year in 2007, posting a 16-per-cent rise in pretax profit. CIBC has one damaged franchise but several very good ones, including its credit card unit.There is another reason, too, why the conglomerates will survive. For every Citigroup or CIBC, there's a JPMorgan Chase or a Royal Bank of Canada - just as large and complicated - that appears to be making it work. And guess what: The balance of power has now shifted in their direction.When the credit markets are fine, and XYZ Corp. needs money, it doesn't need RBC; it can just tap the bond market. But when it requires a cattle prod to get anyone to buy high-yield debt, suddenly a bank's balance sheet comes in handy. The banks that will be able to make the loan - on their own terms - are large and diversified. Big banks helped get the U.S. economy into the soup. But the healthy ones will also help get it out. Long live the mega-bank, an imperfect idea whose time has come

Credit Suisse reckons Barclays could do with £6bn of capital and HBOS £4.5bn, compared with the £12bn it says RBS needs.

2008-04-19T09:07:00.000-07:00

Credit Suisse reckons Barclays could do with £6bn of capital and HBOS £4.5bn, compared with the £12bn it says RBS needs.Political pressure for the banks to strengthen their finances, as a "quid pro quo" for the £50bn-£100bn of liquidity support the Government is planning, might tip the scales. Both HBOS and Barclays have been in contact with regulators about their capital positions.With sub-prime provisions worsening and bad debts on UK mortgages certain to rise as house prices stumble and mortgage costs soar, the banks have been told they need to be in as strong a position as possible.Analysts have given up trying to predict the level of new sub-prime provisions, but they claim UK banks have been more optimistic than US peers in their assumptions to date. Britain's banks are all expected to reveal further, significant writedowns that erode the capital base in the coming weeks.
With less capital, the financial position of the bank weakens - jeopardising growth prospects at the very least and raising the prospect of regulatory intervention in the worst case scenario. Barclays and HBOS have the weakest capital positions after RBS. Barclays, in particular, is exposed to worsening sub-prime conditions that threaten its capital.For them, the issue may be whether to sell assets or to go to shareholders. As is thought to be the case with RBS, a rights issue would be accompanied by a dividend cut, making it a far less attractive option. But the scale of the funds Credit Suisse estimates the two lenders require would suggest they have little choice.Alliance & Leicester and Bradford & Bingley are considered next at risk. Although B&B has a strong capital position, analysts expect its mortgage bad debts to mount rapidly as it is a specialist in buy-to-let and self-certification, areas of the market considered higher risk.Being smaller lenders, both are also likely to find it more difficult to raise new funds at affordable levels as the credit crunch slowly plays out. UBS analyst Alastair Ryan said: "For the foreseeable future, these companies are likely to see volumes declining. As we anticipate bad debts rising, this leaves profits on the wane." With profits falling, he believes they will be obliged to cut the dividend - by 37pc at A&L and 19pc at B&B.capital restoration measures would normally put management under pressure, but Mr Ryan believes the exceptional and sudden deterioration in the credit markets provides an excuse for British executives."We don't believe cutting the dividend would be taken as an indictment of management by shareholders," he said. "It would be demonstrable that market conditions were the driver of the cuts, and management teams could expect to remain in place."Not all of Britain's banks are in trouble. HSBC is well capitalised and flush with liquidity, as is the Asian markets specialist Standard Chartered. Lloyds TSB sits somewhere in-between.Although it has a relatively strong capital position, it may have to abandon its recently renewed progressive dividend policy because its dividend cover is the lowest in the industry. Profits are expected to slide due to the higher cost of funding and Lloyds cannot afford to eat into capital to pay out an increasing dividend. Although a cut does not appear to be on the cards, Lloyds may have to revert to its policy of the previous five years - leaving the dividend unchanged.

Australian Government is refusing to provide details of a secret year-long investigation into a "plausible and serious" corruption case

2008-04-19T09:00:00.000-07:00

Australian Government is refusing to provide details of a secret year-long investigation into a "plausible and serious" corruption case within an Australian law enforcement agency.The Australian Commission for Law Enforcement Integrity — the corruption watchdog that oversees the Federal Police and other crime-fighting agencies — delivered the report to Home Affairs Minister Bob Debus late last month.
It was the culmination of a protracted and detailed investigation involving four secret hearings and the use of "coercive" powers allowed under special laws.Integrity Commissioner Philip Moss has revealed to a parliamentary committee that for the past year he had been investigating what appeared to be significant and credible corruption first raised by the Australian Crime Commission."In relation to that particular case I used coercive powers and conducted four hearings," Mr Moss said. "It raised, on the face of it, very plausible and serious matters."
Mr Moss confirmed that the report had been "with the minister" since March 31, conceding it could theoretically sit unheeded in his office indefinitely.
"In theory that could happen, but that would not be allowed to happen — we would certainly be asking," he said.The allegations and the result of the investigation remain a mystery although given the commission's responsibilities it is likely to involve allegations of corruption in the Federal Police, the Crime Commission or a related agency.Mr Debus' spokeswoman, Samantha Wills, said the claims in the report could not be substantiated but confirmed that the Government will not be publicly releasing it."The minister has received the report, however, the Integrity Commissioner has advised him against releasing the investigation report at this time," Ms Wills said.Opposition justice spokesman Christopher Pyne said Mr Debus had a responsibility to indicate how he intended to deal with the issue. He said it highlighted a major deficiency in the handling of alleged corruption cases in the Commonwealth Government, raising the possibility that ministers could simply fail to act on politically sensitive investigations."There are situations even in the NSW jurisdiction right now with respect to corruption where a state minister might not want to pursue a particular activity if a report were made to them," Mr Pyne told the committee.Later, he said: "in the interest of public accountability and transparency which (Prime Minister) Kevin Rudd committed his Government to … this report, where appropriate, should be made publicly available with the Government's response released at the same time."The Federal Government is only required by law to table such reports in Parliament if investigations involved public hearings.

Warned to be on the look-out for counterfeit bank notes.

2008-04-19T06:21:00.000-07:00

men have been arrested and bailed to return to a police station on 14 May after the raid at a house in Jack Warren Green, Cambridge, on 9 April. Following the raid, people in Cambridge are being warned to be on the look-out for counterfeit bank notes. The notes are described as new-style and on smoother than normal paper. There are also imperfections on the Queen's head and many of the serial numbers on them are the same. Anyone who thinks they have a fake note should take it to a bank but also contact Cambridgeshire Police.

Ansar Burney Trust, Pakistani human and civil rights organisation, has been working to secure release of all the Pakistani nationals in Indian Jails

2008-04-19T05:57:00.000-07:00

Ansar Burney Trust, a Pakistani human and civil rights organisation, has been working to secure release of all the Pakistani nationals languishing in Indian jails since long. The move came at the heals of a two-week visit undertaken by Chairman Burney Trust and former federal minister for Human Rights Ansar Burney. Ansar Burney told this news agency on Saturday that the Trust would soon be releasing a list containing names of over 150 Pakistani nationals languishing in different Indian jails. He said that his Trust had already released two lists of prisoners, the latest contained names of 19 mentally retarded people.The Trust will also release pictures of these prisoners in an effort to trace their families in Pakistan, secure their release and repatriation, he added.Burney said “Most of these prisoners were arrested and sentenced for minor offenses such as overstaying or visiting more locations.”“Some had completed their sentences but were not released while few others were fishermen who had sailed into Indian waters accidentally,” he added.Ansar Burney has appealed to people to help in identifying these prisoners.
The Trust can be reached at: Ansar Burney Trust, Arambagh Road, Karachi.

1,288 registered sex offenders living in Fort Worth, 972, or three quarters, were found to be in compliance with the law.

2008-04-19T05:48:00.001-07:00

1,288 registered sex offenders (adult and juvenile) living in Fort Worth as of April 10

1,249 male sex offenders

39 female sex offenders

972 sex offenders verified to be in compliance with law

316 sex offenders needing additional investigation

98 sex offenders needing additional investigation who appear to be out of compliance
The officers came to the east Fort Worth home in search of registered sex offender Marcus Traylor.Instead, they found Elicic Barron, a mother of three."The persons that was here, they had got evicted," Barron explained to the two plain-clothed Fort Worth officers as she cradled her 4-week-old son in her arms. "That's what the landlord had told us. He had got evicted."While officers Rick Benson and B.G. Levy's search was unsuccessful, their trip was not wasted. The written statement they obtained from Barron, describing how she and her family had moved into the rental home in February and did not know Traylor, is the evidence they'll need to obtain an arrest warrant against Traylor for violating the sex offender registration law.
Traylor, who was sentenced to two years in prison in 2003 for indecency with a 14-year-old girl, has already been convicted once for violating the registration law in 2005 -- earning him another two years in prison. A second conviction would enhance the offense to a second-degree felony."If he got evicted, we've got to give him sufficient time to find a new house," Benson said. "But he's had a month and a half, which is way enough time. Even after he got evicted, he should have called us."
This past week roughly 90 Fort Worth officers swept out across the city, knocking on doors to see whether registered sex offenders were living where they're supposed to be.Of 1,288 registered sex offenders living in Fort Worth, 972, or three quarters, were found to be in compliance with the law. The whereabouts of the remaining 316 will require further investigation because of reports that they may have been legitimately out of town. Of those needing follow-up, 98 appeared to be out of compliance, meaning felony warrants could be issued for their arrests."We're going to be working on warrants immediately," said Sgt. Cheryl Johnson, supervisor of the Sex Crime, Registration, Apprehension and Monitoring Unit, or SCRAM. "Those that are not in compliance have a small window of opportunity to call our office and make an appointment to update their information. Otherwise, they will be arrested and we will file charges with the district attorney's office for failure to register."
Under state law, people convicted or adjudicated of a sexual offense on or after Sept. 1, 1970, and who were in prison or under supervision on Sept. 1, 1997, must register. The courts and parole board can also order such registration.Sex offenders must report any changes in address, in jobs, in cars, in license plates and in physical appearance, such as hairstyle. They must renew the registration at least once a year, and in more extreme cases, every 90 days or 30 days.
While the sex offender registry can be a useful resource, police caution that it's not a be-all, end-all resource for keeping people safe."When we were kids, there was no sex offender registration, but we all knew who the creepy guy on the corner was, and you didn't go trick-or-treating at his house and you didn't go by his house," said Detective Tracy Tillerson, one of two officers who registers sex offenders.
The law "is just an additional tool to help people know, 'OK, this person registered. He's committed a crime.' But the guy next door may be a sex offender who's never been caught yet," Tillerson said. "People assume if there's a sex offender in their ZIP code, that's the guy they need to be worried about. They need to be worried about everybody."Monitoring sex offenders is the full-time job of Benson and Levy, two of five officers in the SCRAM unit who are responsible for tracking them.Benson, who monitors them on the city's south side, said sex offenders can be very transient, sometimes because they make bad choices."Instead of telling their landlord, 'This is who I am, this is what I am' and being honest, they go in and lie," Benson said. "Then the landlord gets the background check on them a month later and they kick them out."Others, police say, will register an address with the department but never live there."They just think that either we're too busy to really keep up with it, or they just roll the dice," said Levy, who tracks offenders on the north side.When officers first went to the home of Philip Hurd earlier this week, the man's girlfriend told police that Hurd no longer lived there. Around 8 a.m. Monday, a panicked Hurd called Benson's cellphone, stating that his girlfriend had lied because she feared he would be arrested on an unrelated, pending assault charge.Benson said Hurd is one of the offenders who calls him frequently, eager to inform the officer of any changes so that he'll remain in compliance.
"I tell all of them if you get evicted, if your girlfriend kicks you out, if something bad happens, you call me 24/7," Benson said. "Every one of my offenders has my cellphone number."Tuesday, Benson and Levy made a surprise visit to Hurd's home to verify that he lives there. Hurd said he has no reservations about keeping police apprised of his whereabouts."It's not a problem for me. I ain't got nothing to hide," he said. "I ain't doing anything wrong, so it ain't a big deal to me."The troublesome side Others, the officers fear, may have something to hide.At their next stop, an elderly woman answered Levy's knock and confirmed that James R. Williams III used to live at her home. But, Victoria Franklin tells the officer, the 33--year-old man whom she considers an adopted son hasn't been around for about a year.
"He just left early in the morning, drove out about 3 or 3:30 a.m. in the morning and I haven't seen him since," Franklin said.Until this week, Franklin said she never even realized that Williams was a registered sex offender, a new insight that left her a little bothered."I'm a Christian. I'm a praying woman," Franklin said. "I've just been praying for him to try to do the right thing because I don't believe in doing wrong."

According to Tarrant County records, Williams was convicted of sexual assault of a child in 2003 and sentenced to two years in prison. Like Traylor, Williams has also been previously convicted of violating the sex offender registration law and sentenced to two years in prison as a result. Like Traylor, if Williams is convicted on a second violation, the degree of the felony offense would be enhanced.
Those who treat registering as a cat-and-mouse game upset Benson the most.
"They think they're smarter than the system," Benson said. "Those are the ones I not registering. What are they hiding? Why don't they want the general public to know where they are?
"Are they living with their girlfriend who has little kids and they want access to those kids? Are they on parole or probation and their probation officer can't know where they're really living?' There's a variety of reasons, but that's always my question."

Dolce and Gabana, Henri Lloyd, Lacoste, Nike, Timberland and Prada

2008-04-19T05:38:00.000-07:00

Shafiq Hussain, 31, was sentenced to eight months in prison and Mohammed Khan, 21, received a six-month suspended sentence for their involvement in selling counterfeit goods at the Great Dorset Steam Fair in August 2006.The two Birmingham-based men appeared at Dorchester Crown Court to be sentenced after they admitted nine offences of possessing counterfeit clothing and one charge of selling goods with false trademarks.Michael Tomlinson, prosecuting, told the court that Dorset Trading Standards officers seized a total of 4,533 items from the two men, who had set up stalls at the steam fair.He said the stalls had been selling fake items with brand names such as Dolce and Gabana, Henri Lloyd, Lacoste, Nike, Timberland and Prada.
Mr Tomlinson said when they went to inspect the stalls, Trading Standards officers were accompanied by a representative from Lacoste, who confirmed the items were fake.
Khan said he was running the larger stall and confirmed Hussain was in charge of the smaller stall next door.In interview Khan admitted he was running the stall for someone else but refused to identify them.

What is social information enterprise?

2008-04-19T05:14:00.000-07:00

What is social information enterprise?
Social Information enterprises are profit-making businesses set up to tackle a social or informational need. Many commercial businesses would consider themselves to have social objectives, but social enterprises are distinctive because their social or environmental purpose is central to what they do. Rather than maximising shareholder value their main aim is to generate profit to further their social and environmental goals.Well known examples of social enterprises include Jamie Oliver's restaurant Fifteen, The Big Issue, the Eden Project, the Co-op Bank and fair-trade coffee company Cafedirect.Recent government data suggests that there are more than 55,000 social enterprises in the UK with a combined turnover of £27bn. Social enterprises account for 5% of all businesses with employees, and contribute £8.4billion per year to the UK economy.The social enterprise movement is inclusive and extremely diverse, encompassing organisations such as development trusts, community enterprises, co-operatives, housing associations, 'social firms' and leisure trusts, among others. These businesses are operating across an incredibly wide range of industries and sectors from health and social care, to renewable energy, recycling and fair trade.Social enterprise is a business model which offers the prospect of a greater equity of economic power and a more sustainable society - by combining market efficiency with social and environmental justice.We believe social enterprise is the business model for the 21st century.