MEP has been arrested on suspicion of conspiracy to defraud the European parliament. West Midlands MEP Nikki Sinclaire, 43, was arrested along with three of her staff on Wednesday, according to another MEP for the West Midlands, Mike Nattrass of Ukip. West Midlands police confirmed a 43-year-old woman was arrested at a police station in Birmingham along with three other people on suspicion of conspiracy to defraud the European parliament. Two women aged 55 and 39 and a 19-year-old man were arrested at addresses in Solihull, Worcester and Birmingham and were taken to a police station for questioning on Wednesday. Searches were carried out at the addresses of the four people by officers investigating an allegation made in 2010 regarding allowances and expenses, a police spokeswoman said. All four were later released on police bail, she added. On her Twitter account, a spokesman for Sinclaire said the MEP attended the police station in Birmingham voluntarily and co-operated fully with the police. "This is particularly frustrating to Ms Sinclaire who is eager to clear her name and has nothing to hide," said another tweet. The MEP "disputes all allegations put towards her or her staff" the tweets said. Sinclaire and her office would continue to "fully co-operate with the police on this matter". In a statement, Ukip said Sinclaire, who formerly represented the party in the seat, ceased to be an MEP for the party in 2010. "It would be inappropriate for the party to make any comment during the process of an ongoing police inquiry," Ukip's statement said.

 

Oscars organizers have warned flamboyant British actor-comedian Sacha Baron Cohen not to try to pull a stunt at this weekend's Academy Awards show, but said he is not banned from attending. The Hollywood Reporter cited sources as saying the star has told Paramount, the studio behind his latest movie "The Dictator," that he plans to turn up on the Oscars red carpet in full bearded, uniformed character Sunday. Reports suggested that the Academy of Motion Picture Arts and Sciences had banned the "Ali G," "Borat" and "Bruno" star altogether, but a spokeswoman denied this Thursday. "The Academy would love to have Sacha at the show. We've let him know how we feel about using the red carpet for a movie stunt and we're waiting to hear from him," she told AFP. Baron Cohen, who is in Martin Scorsese's 11-times Oscar-nominated movie "Hugo," has a history of colorful stunts: in 2006 he turned up at the Toronto film festival in a cart pulled by a "peasant woman" to promote Borat. At the 2009 MTV Movie Awards, he descended from the ceiling on a harness dressed as an angel, eventually crashing into Eminem's lap, his buttocks in the rapper's face. Eminem voiced outrage, although it later emerged that the two men had organized the stunt in advance. In "The Dictator," due out in May in the United States, Baron Cohen plays the lead role in "the heroic story of a dictator who risks his life to ensure that democracy would never come to the country he so lovingly oppressed." A representative for Baron Cohen did not immediately reply to a request for comment on the story.

 

Rupert Murdoch on Thursday fired the opening shot in his battle to reclaim Britain's Sunday newspaper market by announcing his newly launched publication would be half the price of his previous title. The 80-year-old tycoon took to microblogging website Twitter to reveal: "Regular Sunday price for The Sun only 50p -- and Saturday's Sun going down to 50p too! Great news for readers and the economy." Murdoch's News of the World -- the Sunday tabloid which shut seven months ago over the phone-hacking scandal -- cost one pound ($1.57, 1.18 euros), the same cover price as rivals the Sunday Mirror and The People. The 50 percent price cut announced for The Sun on Sunday, which will hit the stands this weekend, signals the Australian-born businessman's hunger to once again own the top-selling Sunday newspaper. The News of the World dominated the country's Sunday market with sales averaging 2.67 million when Murdoch took the decision to close it in July last year. Publisher News International said the US-based mogul would be in London to oversee the launch this Sunday and confirmed that the editor of the weekday paper, Dominic Mohan, would also edit the Sun on Sunday. Murdoch flew in to Britain last week to announce the creation of the new paper and to promise demoralised staff he would stand by them despite the arrest of senior Sun journalists over bribery allegations.

 

Labour MP Eric Joyce has been suspended from the party after he was arrested over allegations of an assault in a House of Commons bar. Police were called after reports of a disturbance on Wednesday night. Mr Joyce, 51, remains MP for Falkirk but cannot take the Labour whip until the police investigation ends. Speaker John Bercow has said he takes the matter "very seriously". The Conservative MP for Pudsey Stuart Andrew has alleged he was assaulted. The BBC understands officers involved in the investigation returned to the Commons on Thursday evening. The disturbance is believed to have happened in the Strangers Bar, which is reserved for MPs and their guests. Mr Andrew was in the bar following a Commons event organised by his Conservative colleague Andrew Percy, for the Speaker of the Canadian Parliament. 'Extremely serious' A Scotland Yard spokesman said: "We were called at approximately 10.50pm last night to reports of a disturbance at a bar within the House of Commons. "A man aged in his 50s was arrested by officers on suspicion of assault. He remains in custody in a central London police station. Inquiries are continuing." A Labour Party spokesman said: "This is an extremely serious incident. We have suspended Eric Joyce pending the results of the police investigation." In the Commons, Speaker John Bercow said: "Members will be aware of reports of a serious incident in the House last night. I have been informed by the Serjeant at Arms that the honourable member for Falkirk has been detained in police custody. "The matter is being investigated. I take this matter very seriously, as do the House authorities." Mr Joyce was elected in a by-election in December 2000 and has served as a parliamentary private secretary (PPS) to a number of government ministers since 2003. He was PPS to the then defence secretary Bob Ainsworth until 2009, and prior to that had been a parliamentary aide to John Hutton, Mike O'Brien and Margaret Hodge.

 

Emma Harrison, David Cameron's "families tsar", is to stand aside from the role in the wake of revelations that former employees of her firm A4e are subject to police investigations over alleged frauds. She has written to the prime minister saying she believes she should stand aside. Number 10 had been signalling for more than 48 hours that it was extremely concerned by the allegations and would ask her to stand aside from the role. "I have asked to step aside from my voluntary role as Family Champion as I do not want the current media environment to distract from the very important work with troubled families," she said. "I remain passionate about helping troubled families and I am grateful for the opportunity to contribute in an area where I have been active for many years." Her role has always seemed more titular than real with the bulk of the efforts on troubled families now being taken over by Louise Casey at the communities department. Harrison's A4e volunteered details of two investigations as it tried to counter claims that it was involved in "systemic" abuse of taxpayer-funded contracts. The government has said the bulk of the inquiries covered problems with the previous government's back-to-work programmes. The Department for Work and Pensions revealed it had launched nine fraud investigations into the firm in recent years. The prime minister appointed Harrison in 2010 to help get 120,000 "problem families" into work. A4e earned £180m from state contracts last year, when Harrison paid herself a dividend of £8.6m, despite the firm's failure to meet government targets on finding jobs for the unemployed.

 

Barclays has been clocking up over 1,500 complaints a day as its staff share £2.5billion bonuses. The bank had 281,484 customer gripes between July and December – up 12% on the first half of 2011. It blamed the surge on claims for mis-sold payment protection insurance. An ­Independent Banking ­Advisory Service spokesman said: “It’s coming back to bite them – although not quickly enough in our view.” All banks have to report complaints data for the second half of 2011 to the City watchdog the Financial Services Authority by the end of February. Barclays, which published its figures in advance, said PPI complaints hit nearly 123,000 between July and December - up by 67% from the first six months and double the number for the second half of 2010. Excluding PPI, total complaints dropped by 11% to 158,492 in the second half, or 336,363 for 2011 as a whole. Antony Jenkins, chief executive of Barclays Retail, said: “We can and will do more to improve service and go further and faster to drive down complaints. “We are aiming for further reductions in underlying complaints in the first half of 2012 as we continue on our journey to get it right first time, every time.” Eddy Weatherill, of the Independent Banking Advisory Service, said: “Barclays made a lot of profit from selling PPI and now it’s coming back to bite them. although not quickly enough in our view. “But I don’t think any of the banks are doing well on the complaints front, particularly when it comes to small businesses. “They have tried to ring every penny out of customers but, because of a lack of competition, people haven’t got decent choice when it comes to moving account.”

 

According to the Insurance Fraud Bureau, the cost of organised fraud to the industry is approximately £200m per year. While this is only a small portion of the estimated £1.6bn total cost of fraud, it is of particular concern because it is typically carried out by organised gangs, often using the money to fund serious illegal activity, such as people trafficking, arms dealing and terrorism. Although there are isolated examples of fraud rings operating in arson and disability claims, the vast majority of organised fraud involves motor insurance. It is an unfortunate truth that the criminal gangs instigating this type of fraud are rarely identified by insurers or the police, as they operate ‘behind the scenes’ — persuading others to make personal injury claims on the back of accidents that are either staged or entirely fabricated. Historically, those targeted by gangs to take part in fraud have largely followed a well-defined profile, predominantly males in the 25 to 44 age bracket, living in more deprived postcodes. These individuals also tend to have a history of suspect claims or minor criminality. There is mounting evidence, however, that this is changing, as the gangs behind the scams cast their net wider in search of the ideal claimant. This is borne out by analysis of the thousands of fraud ring cases investigated by Keoghs. Case analysis Analysis of cases handled over the past 12 months shows the number of fraudsters within the 18 to 25 age bracket has increased by 10%, compared with the previous year. Meanwhile, the proportion of fraudsters in the 26 to 30 bracket has fallen by 0.5%. This trend is also starting to be recognised across the industry; in a survey of Keoghs' insurer clients compiled in September, 83% of those noticing a change in the average age of fraud claimants said they had seen a marked decrease in their age. Another trend, more difficult to quantify, but suggested by anecdotal evidence, is that organised fraud is becoming a more middle-class pursuit, with the two groups increasingly involved being students and young professionals. The link between youth unemployment and youth crime rates is well established. In 2004, economist Steven Levitt analysed a wide range of data into the relationship and found that, controlling for other factors, almost every study showed a relationship between non-violent crime and the rate of unemployment. Levitt’s estimate was that a 1% increase in unemployment would cause a 1% increase in crime. In 2005, a study by the government’s Social Exclusion Unit found that nearly two-thirds of young offenders were unemployed at the time of arrest compared to 46% of those aged over 25. The latest figures from the Office of National Statistics reveal that youth unemployment is at a 20-year high, with more than one in five — 22.3% of 16 to 24-year-olds — out of work. More than two fifths of those out of work have been unemployed for more than six months. As a result, many are anticipating a sharp increase in the level of crime committed by young people and this appears to be borne out in the increase seen in organised fraud. Strain on finances There is also a suggestion that issues such as a rise in tuition fees for higher education and lack of availability of affordable housing is putting such a strain on young people in jobs and full-time education that many are now willing to take the risk of committing fraud to survive. In many cases, this is a last resort unlikely to be taken under normal economic circumstances, but which is now being used as an opportunity by the criminal gangs who recruit fraudsters. To make significant amounts of money from fraud, the criminals need to recruit willing volunteers to file bogus claims in exchange for a share of the pay-out. The most common scenario — that used by Mohammed Patel, the fraudster jailed in 2009 for causing 93 crashes — is for a fraudster to use a contact’s car, with their permission, to stage a collision on the road, following which the owner of the car can make a large claim for personal injuries. However, as insurers’ risk and fraud managers have increasingly grown wise to this and subjected claims from the most commonly affected postcodes to increased scrutiny, the gangs have shifted their recruitment strategies. There have been a number of cases of active recruitment of fraudsters in universities – with those taking part often studying for high-earning professions such as law or medicine, and coming from stable, middle-class backgrounds. In one case currently under investigation, the ringleader at the centre of the scam was a student who had crashed the cars of a number of fellow students in order for them to benefit from the pay-outs. So, what can insurers do to stop these practices? Rapid shifts In the face of such rapid shifts in the demographics of those involved in fraud rings — and the state of the economy driving people to turn to desperate measures and commit fraud for the first time — it is clear that concentrating on those with a history of suspect claims will not prove an effective deterrent. What is needed are all-encompassing fraud detection tools and techniques, based on a joined-up approach to sharing detailed information both internally in organisations and between insurers. Ideally, as soon as a potential fraud ring is uncovered, investigators should be able to cross-reference the details of the claims involved with all other relevant cases across the industry as a whole in order to identify and investigate any links. Investment in analytical techniques and technology, coupled with an open approach to sharing data on suspected fraud rings, is essential if the industry is to stand any chance of identifying and bringing to justice those at the heart of the problem.

 

Banks have been forced to hand back £1.9billion to customers who were wrongly sold Payment Protection Insurance as part of a 'loan protection racket'. However, consumer groups have accused the finance giants of dragging their feet on refunds which, eventually, could top £8billion. The Financial Ombudsman Service is receiving a staggering 1,000 complaints a day about the mis-selling of PPI. Consumers have a right to take a claim for a refund to the watchdog where they feel they have been unfairly fobbed off by their bank. In total, the ombudsman service has received over a third of a million PPI complaints, with the majority related to policies sold by banks alongside credit cards and loans. The watchdog upholds around three out of four cases in the consumer’s favour, with the average pay-out running at £2,750. The failure to offer speedy refunds has allowed a raft of hard-sell claims management firms, who are looking to cash in on the scandal, to flourish. These firms are spending millions of pounds in advertising to offer to pursue refunds. This involves bombarding the nation with TV advertising and recorded message telephone calls to both landline and mobile phones.

 

Royal Bank of Scotland is to pay out just under £400m in bonuses to its investment banking staff for their work in 2011, according to Sky sources. The day before RBS announces its full-year results, the bank is understood to have agreed with the Government that it can pay out between £390m and £400m in bonuses this year. The bonus pool, revealed exclusively by Sky News City editor Mark Kleinman, is likely to further stoke recent controversy over banker pay. The pot represents a cut of about 60% on last year's investment bank bonuses at RBS, which is 82% owned by the taxpayer. It comes as the bank prepares to report an expected full-year loss of up to £2bn, making the prospect of the taxpayer breaking even on the £45bn investment made in RBS during the 2008 banking crisis as remote as ever. The rewards follow a year in which thousands of employees were made redundant as Stephen Hester, the bank's chief executive, accelerated a restructuring of the business. Despite the reduction in the overall bonus pot, scores of RBS bankers are expected to collect packages worth more than £1m. The biggest payouts will be largely paid in shares and deferred over a three-year period. Ministers have insisted that RBS enforces a £2,000 cap on the cash element of bonuses for the third successive year. Angela Knight, chief executive of the British Bankers Association, defended the latest RBS payouts, saying bonuses for investment bankers were set according to the international market. RBS boss Stephen Hester caved into pressure to waive his 2011 bonus She told Sky News that if UK banks failed to compete with global compensation levels they would lose the best employees, and in the case of RBS this could damage the long-term interest for the taxpayer. The bonus revelation came as Sir Philip Hampton, RBS's chairman, claims in a Sky News documentary with Jeff Randall, that the era of big banking bonuses is over. A YouGov poll for Sky News also showed that three-quarters of people believe that bosses at Britain's state-backed banks should not receive a bonus. Mr Hester waived his £1m bonus several weeks ago, while Antonio Horta-Osorio, chief executive of Lloyds Banking Group, also decided to rule out receiving a bonus. The 2011 pool is the lowest awarded to RBS's investment bankers since the bank was rescued by taxpayers in 2008.

Bailed-out banks worth just HALF the £1,000 it cost each person to save them - as they get ready to admit £6BILLION losses RBS cost £45.5bn to bailout but the stake is now worth just £26bn £20bn paid to bailout Lloyds but shareholding is now worth HALF But executive pay has soared and Lloyds boss Antonio Horta-Osorio entitled to £3.46m a year Comments (14) Share The bailed out banks are now worth just over half the £1,000 per person cost of saving them - and are set to reveal combined losses of £6billion. Royal Bank of Scotland and Lloyds received a total of £65.5bn of taxpayers' money - but the Government stake is now worth just £36bn. Their are fears it will be years before the share price rises and taxpayers can get their money back. Bumper pay: Stephen Hester (left), who hates this picture being used, is paid £1.2million a year and waived a near-£1m bonus. Fred Goodwin, right, received £4.2m in 2007 But despite their poor performance the pay of top bankers like disgraced RBS boss Fred 'the Shred' Goodwin and Stephen Hester has rocketed over the last decade.   More... Three of the UK's five largest banks have lost shareholders' money over past decade while bosses reap rewards £500 for EVERY British household: UK faces added £1billion bill to bail out Greece and save crisis-hit euro Don't tell Sid! How the bank shares wipeout hit the savings of the windfall generation Fred Goodwin saw his total pay rocket from £1.27m in 2000 to £4.2m in 2007 - when he received a £2.86m performance-related bonus. Stress: Antonio Horta-Osorio is entitled to £3.46million this year Since 2000, the value of the bank has fallen by 91 per cent. New boss Stephen Hester enjoys a £1.2m salary and only waived a £963,000 shares bonus after being put intense pressure. However, he is still in line to receive shares worth about £660,000 that were awarded as part of the £2m bonus he was handed for his 2010 performance. But as the bosses receive bumper rewards, RBS has announced that 3,500 jobs will go on top of 2,000 which went last summer. Lloyds has more than tripled the amount it pays its chief executive over the past decade. Over the same period the average UK wage increased by just under 40 per cent, to £26,135. In 2000, they paid £856,000 to former boss Sir Peter Ellwood. New chief-executive Antonio Horta-Osorio is entitled to £3.46m this year, although he waived his £1.06m bonus last month. He had six weeks off work at the end of last year because of stress and fatigue. Tomorrow RBS will announce losses of around £2bn while Lloyds is expected to reveal losses of £3.5 billion on Friday. They will blame the poor figures on the eurozone debt crisis and increased regulation. Plans to give the shares directly to taxpayers to ease some of the public anger about the pay enjoyed by bailed-out bankers are reported to have been ditched because the investments are too shaky. Bailed out: Royal Bank of Scotland is set to announce losses of £3.5bn on Friday. It is worth £26bn - and the Government paid £45.5bn The Government injected £45.5bn to take an 82 per cent stake in RBS but those shares are today worth around £26bn despite a 40 per cent rise in the share price in recent weeks. It needs shares, which are currently trading at about 28p, to rise to 50p before it can break even. Lloyds cost £20bn to bailout - but the Government is currently nursing losses of nearly £10billion. Their shares are valued at around 35p and they must rise to 63p. The bank recoveries have been made more difficult because the Government has announced new regulations in a bid to prevent a repeat of the financial crisis. They will be forced to separate their retail and investment banking arms which will be expensive to implement and hit profits. The current malaise in the world economy and the Greek debt crisis has added to banks’ woes. The Government is paying £500 million a year in interest payments on the money it borrowed to bailout the banks. 'BAILED OUT BANKERS SHOULD NOT RECEIVE A BONUS' Three out of four people think bosses at bailed-out banks should not get a bonus, according to research. And 58 per cent of respondents to the YouGov poll, commissioned by Sky News, said Britain’s business reputation is being damaged by the actions of bankers. Sir Philip Hampton, chairman of the Royal Bank of Scotland, said bonuses cannot continue at the current level. 'Part of the reason for the pay is that the profits were not sustainable,' he told Sky news. 'They were there for a few years but they were not sustainable and the pay moved up to that level of profits and it now needs to be corrected down.' Sir Philip turned down a £1.4 million bonus earlier this month. But Nigel Rudd, former deputy chairman of Barclays, claimed he would have paid more money to Barclays’ former chief executive John Varley. He said: 'Bob Diamond (current chief executive) and John Varley made a huge difference to Barclays as they went through this terrible period. 'You realise Barclays never made a loss throughout all this period? I think John Varley was underpaid actually ... because I think what he did throughout that crisis was phenomenal.' The comments come after weeks of conflict over bankers’ bonuses, in which RBS chief Stephen Hester turned down his £963,000 bonus amid mounting pressure and Lloyds boss Antonio Horta-Osorio waived his payout following a leave of absence.

 

In an era before Twitter, paparazzi, gossip websites and the voracious appetite for the scandal and sex lives of the rich and shameless, Hollywood was swinging with the kind of wild sexual liberation that can still seem shocking today. Post-war Hollywood was churning out the family-friendly, conservative-values movies that chimed with the politics and repressed sexuality of the '40s and '50s. But the unacknowledged irony was that these motion pictures were being made by actors, writers, directors and studio chiefs who were engaged in lifestyles that could not have been more different from those they created on screen. Two decades before the sexual revolution of the 1960s, Los Angeles was already a sexual playground for movie stars and the international jet set, who were protected by a powerful studio system that could keep their more outrageous behaviour out of the public eye. Stars such as Noel Coward, Cole Porter, Katharine Hepburn and Cary Grant -- and non-industry figures like the former King Edward VIII and Mrs Simpson -- had a sexually licentious lifestyle within the closed Hollywood community. And where you have rich, sexually voracious movie stars and powerful men, you will also need pimps, procurers and a steady stream of young men and women. Scotty Bowers, a handsome, bi-sexual, former Marine paratrooper, became a part of this underworld when he relocated to Hollywood following service in the Second World War. The ex-Marine became the go-to guy for those who wanted sexual adventure, building up a network of "friends" who traded in sex with the greatest stars of the era. Now, Bowers has revealed all, in Full Service -- My Adventures in Hollywood and the Secret Sex Lives of the Stars, an autobiography that claims to tell the true story behind the rumours and scandal that have filtered down from the closeted era of sex and the stars. Written with the collaboration of Emmy-winning writer Lionel Friedberg, Full Service is published as Bowers prepares to celebrate his 89th birthday. In Scotty's own words, he became a Hollywood insider, or at least a fixer of sexual liaisons, almost by accident when he moved to Los Angeles immediately after the war and began working in a gas station. A chance encounter with the actor Walter Pidgeon, who stopped by to have his tank filled, led to an afternoon of sex with the then-happily married Pidgeon and a male friend. Handsome, friendly and totally relaxed when it came to sex (Bowers attributes this to his wartime experiences and his Illinois farm-boy background), the ex-Marine quickly gained a reputation for knowing a lot of young men and women who were prepared to "trick" for as little as $20. However, throughout his memoir, Bowers is at pains to point out that he was neither a pimp nor a prostitute. "When it came to my own sexual liaisons, I was always more than happy to pocket the tip that anyone offered me for a night of sex," he says. "But I never charged for my matchmaking services when hooking-up other people. I would set up the trick and then the two of them went off together and money changed hands between them. "It was only fair. My operation -- if you want to call it that -- was not a prostitution ring. I was only providing a service to those who wanted it and, as recorded history has shown, throughout the ages there has always been a need for high-quality sex". To hear Bowers tell it, the '40s and '50s in Los Angeles were golden decades of sexual experimentation, where stars and their willing acolytes enjoyed never-ending pool parties under the Californian sun. Sex was an obsession and a currency for stars young and old. Mae West, even as she was in her late-60s, kept a string of young bodybuilders on call 24 hours a day. Bowers got to know Rock Hudson, whose homosexuality was an open secret in Hollywood, in the mid-'50s and also knew his wife, Phyllis Gates, a lesbian who had been persuaded to marry Rock to quell the gossip magazine whispers about his sexuality. "This phony marriage must have been hell on them both. Rock had a voracious, almost uncontrollable sexual appetite. In later years he cruised the streets every night, picking up vagabonds, strangers and young men all over town," says Bowers. The Los Angeles police vice squad was a constant threat, with LA Confidential-style shakedowns, blackmail rings and the vicious persecution of gay men in particular (or at least those who couldn't afford high-powered lawyers and the protection of the studio bosses). Pay-offs to the right cops, the activities of studio fixers and the complicity of the media ensured that very little scandal leaked out. Bowers' memoirs read like a roll-call of just about every major star in the studio system of the time and he cheerfully dishes the dirt. He claims Katharine Hepburn and Spencer Tracy were never really involved in a great love affair, painting Hepburn as a sexually voracious lesbian who needed Tracy as a cover for her lifestyle. The list of stars who get the Bowers treatment includes Edith Piaf, Vivien Leigh, Cary Grant, Rita Hayworth, Joan Crawford, Bob Hope and William Holden (to name but a very, very few). Non-industry figures like Edward and Wallis Simpson, FBI boss J Edgar Hoover and Beatles manager Brian Epstein, flit in and out of the picture, indulging in a wild array of pan-sexual activities. Bowers had been friendly with the movie star Tyrone Powers since their days together in the Marine Corps and once they met up again in Los Angeles, they "enjoyed quite a few sexual shenanigans together". "Women swooned over him and he bedded quite a few of them, but he much preferred men," says Bowers. "Some of his sexual tastes were rather odd and offbeat, but none of the guys seemed to mind." The sexual exploits of the golden- era stars still fascinate, and readers may never look at classic movies like The Wizard of Oz or Bringing Up Baby in the same way again. It can't all have been glamorous pool parties in the Hollywood Hills and smiling, handsome film stars driving around in Cadillacs and Bentleys. But to hear Bowers tell it, after surviving the Depression and then World War Two, the young Americans who flocked to California in the '40s and '50s had little concern for the kind of sexual puritanism apparently making a comeback in the US.

 

The dangers of daily life for modern men are manifold, it seems. Alongside transfats in foods and oestrogen in drinking water, they must also beware 'Piranha Women'. Or so says divorce lawyer Diane Benussi. In her daily life overseeing the unraveling of families' personal lives, she claims to have observed a new breed of avaricious woman. This lady, according to Ms Benussi, is manipulative and devious to the core -- a romantic mercenary in a mini-skirt. Increasingly, Ms Benussi observed to a tabloid newspaper, beautiful young women, disinclined to make an honest living, are targeting vulnerable wealthy men in a bid to win a share of their assets. Their weapon of choice is their fertility. They lure unsuspecting gentlemen into unprotected sex and then fall pregnant, using the resulting progeny as a siphon on the unsuspecting man's bank account. Poor love. As anyone knows, well-off men in middle age represent one of society's most vulnerable minorities. Not only that, but they are, apparently, completely incapable of taking care of something as simple as contraception. I don't know about you, but personally, in my three decades on earth, I've never met a Piranha Woman. This pantomime trope of a scheming madam who uses sex purely as strategy exists for me only in fairytale. There are women, sure, who find an affluent man who can prove his worth as a provider and an alpha male attractive. But I don't know a single female who has used her womb as a honey trap in order to save herself the bother of buying lottery tickets. I have, on the other hand, met plenty of men who are convinced that they must protect themselves against female strategy and acquisitiveness. One, whom I dated briefly in college, told me outright one evening that he knew as a successful, ambitious guy (at this point he was still a student) he had to beware the advances of ladies with alluring eyes and sinister agendas. His mother, he informed me gravely, had warned him that he was exactly the kind of man that women would try and become pregnant by. Thus, he must be extra careful with contraception. Needless to say, that comment was turn off enough to have me on the next bus home to my own bed. Contrary to what he and his mother thought, I was rather less convinced than they were of the value of his precious sperm. It's possible, of course, that there are a few Piranha Women out there. But I'd guess that they are an extremely rare species. There's a cultural precedent for this belief, of course. (Not to mention a great history of paranoia on the part of many men about the dark arts of female sexuality). That precedent is called a WAG. In an era when we have become more than familiar with women winning fame, wealth, and cultural influence on the strength of their association with rich men, it's not a far stretch to create the myth of the Piranha. We know well that the WAG seeks out partnerships with wealthy footballers, within which a transactional trade-off of beauty for lifestyle and luxury is transparently part of the deal. The notional Piranha simply takes this a step further, by, we are told, using her sex appeal to cut out the romance and go straight for the cash, by way of a baby. This, says Ms Benussi, has become an accepted way for a woman to make a living. One could argue that, as a divorce lawyer, she's likely to know. But I don't believe it. There's a huge leap between falling in love with a fit, rich, attractive young footballer and seducing a wealthy singleton with middle-aged spread to get straight to his bank balance. Sure, there are plenty of women who consider affluence to be an attractive attribute in a man. It bespeaks success, competence and a certain capacity for influence and agency in the world -- all sexy qualities, let's be honest. But outside of a pure sex-for-money transaction -- from which, for most women unlucky enough to have to resort to it, pregnancy as a result is usually the least desirable outcome -- I have never met a woman myself who would put it above sexual desire and a genuine emotional bond. The invention of the storybook villain Piranha Woman seems suspiciously like dredging up bitter old cliches in order to further divide the genders around issues of separation and divorce. Relationships are rarely so simple. And perpetuating these kind of tropes and stereotypes serves no one except the divorce lawyers.

 

It will be the first time a British bank has exercised a “clawback” option on executive pay packages since the financial crisis and will lead to calls for similar moves at other lenders, including the Royal Bank of Scotland. The Daily Telegraph has learned that Lloyds is taking back a bonus from senior bankers over their role in the mis-selling of payment protection insurance (PPI). Eric Daniels, Lloyds’ former chief executive, will lose at least £360,000 of his 2010 bonus. Four other current and former directors will each have to forgo about £250,000. The move comes after weeks of pressure from politicians and consumer groups for the banking sector to answer concerns that some bonus awards do not match individual performances. The Financial Services Authority has also called for Britain’s banks to reflect one of the worst customer mis-selling scandals in recent memory in the pay packages of those responsible.

Greece may be scrambling for revenue, but the French treasury has just banked some 550 million euros for doing nothing — simply letting the French franc, created in 1360, finally perish. Enlarge This Image Thibault Camus/Associated Press People lined up at a bank in Paris on Friday to convert old French francs to euros, the common European currency, before the francs were rendered worthless. Connect With Us on Twitter Follow @nytimesworld for international breaking news and headlines. Twitter List: Reporters and Editors Friday was the last day that French francs could be turned into the Bank of France, the central bank, in exchange for the common European currency, the euro, a little more than a decade after it was introduced as bills and coins. The approximately 550 million euros represents the francs still outstanding, somewhere, which are now worthless, and which will be registered as revenue for the French state. As the franc died, it is the future of the euro that seems at question now, an irony that hardly escaped some of those waiting in line at the bank to exchange the francs they had found stashed away in drawers, coat pockets and old purses. (Only bills were exchangeable; coins went out of circulation in 2005.) Emmanuelle Hamon, 47, said she was dubious about the fate of the euro. “I want to believe in it,” she said. “But I don’t know how, concretely, we’re going to make it.” A former advertising executive and journalist, she said she felt a bit betrayed, as if Europeans had been handed a bill of goods, now that floundering countries like Greece are causing troubles for the entire euro zone. “I was attracted to the notion of community,” she said. “We were all hoodwinked.” And like many, she believes that the euro brought with it higher prices. She had found 220 francs, or 33.54 euros at the fixed rate of 6.55957 francs to the euro. She is planning to give her bonus euros to a charity that fights hunger, she said. As for the franc itself, she said she had no special sentiments. “I thought they were pretty, that’s all I can say.” For some it was a sad day, to be sure. As Ms. Hamon noted, the franc notes and coins were varied and beautiful. The euro, on the other hand, seems like the product of an off-day at the design studio, made worse by the fact that the bills feature no recognizable buildings or portraits. The theory behind keeping some images off was that any European — even Beethoven, whose music was used for the European Union anthem — would be too national. Aurélien Duchene, an 18-year-old student, said that he liked the idea of the euro as a way to gather countries together, but that it meant prices went up. Pulling his earphones out to hear questions, he remembered that when he was 8 or 9 years old and the currency changed, he said, “For one franc you got a big bag of candy, and for one euro, one got less.” The current economic crisis had various causes, Mr. Duchene said. “But I think that changing from the franc to the euro is also a cause.” (Indeed, fixed rates and the common currency have meant countries cannot adjust the value of their currency in response to differing economic circumstances.) Shanel Maklouf, 17, said earnestly, while her friends giggled, that the euro had been “very bad for France,” and had helped cause its economic difficulties, “which grow day by day.” Going back to the franc is impossible, she said, “even if it would be a good thing,” especially for the poorer classes. “My mother waits for only one thing, that the franc returns.” The far-right National Front candidate in the coming presidential election, Marine Le Pen, is the only significant politician calling for France to pull out of the euro zone — and the European Union — and return to the franc. More mainstream politicians and economists regard the idea as folly, even as some Greeks begin to consider returning to the drachma. The Greeks, by the way, have until March 1 to switch their old drachmas into euros. Tania Capo-Chichi, 30, is a hairstylist, currently unemployed. She waited in line at the bank with her 5-month-old son in a stroller and a small windfall — 1,000 francs, worth 152.45 euros — she found digging through various bags, she said. She had no attachment to the old franc, but no idea how the current euro crisis, which she said no one was really explaining to people, would end. “It won’t come to a stop overnight,” she said. But she was sure the euro would endure, one way or another, as Europe evolves. “It’s ours,” she said, “even if we don’t necessarily like it.

 

Britain's banks slashed $50 billion (£31.8 billion) from their exposure to France, Italy and Spain during the summer as financial institutions ran scared from Europe's debt crisis, according to the Bank for International Settlements. The latest figures from the Basel-based BIS, "the central banker's bank", revealed that UK banks' total exposure to the three European strugglers had fallen to $430.4 billion at the end of September, against $479.9 billion at the end of June. UK banks' stocks of French, Spanish and Italian sovereign bonds were unceremoniously dumped as bond markets turned on vulnerable European nations. The BIS figures revealed UK bank holdings of French, Italian and Spanish sovereign debt dived 32% to $55.5 billion over the quarter, with holdings of Italian bonds suffering the biggest sell-off. Banks sought safety in German bunds, boosting their holdings by more than $40 billion during the period. The European Central Bank's December move to pump nearly €500 billion (£420 billion) into ailing financial institutions for three years eased the immediate threat of a damaging credit crunch. However, France was stripped of its triple-A credit rating this month, Italy's debt-laden economy is heading into recession and Spanish unemployment broke through five million.

 

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

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

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

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

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

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

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

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

 

 

 

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

 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.