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.

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.

 

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.

 

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.

 

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.

 

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.

 

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."

 

 – 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

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 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.

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.

 

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".

 

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."

 

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."

 

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.

 

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.

 

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.

 

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."