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 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.

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."

 

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.

 

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.

 

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.

 

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 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.

 

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.

 

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".

 

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".

 

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.”

 

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)

 

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.

 

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

 

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.

 

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.

 

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".

 

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 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

 

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."

 

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.

 

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.

 

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.

 

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 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.

 

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.

 

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.

 

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.

 

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 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."

 

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, 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.

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.