No wonder the banks cheer: Basel III is business as usual

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No wonder the banks cheer: Basel III is business as usual

No wonder the banks cheer: Basel III is business as usual
Nick Goodway comments on the heavily watered down Basel III “liquidity coverage ratio” rules. Stock markets across Europe welcomed the new softer rules: bank shares soared across the Continent. But should investors be so joyful? And will the watered down rules prompt the banks to lend more?
Evening Standard London, p. 39

Savings mess
James Coney comments on Work and Pensions Secretary Iain Duncan-¬Smith’s appearance on the BBC’s Today programme on Tuesday morning where he promptly declared how this Government was incentivising saving.
Daily Mail, p. 43

Pensions ‘hit a six-year low’
Workers retiring this year will be living off the lowest pensions for the past six years, a report has claimed. Someone who retired in 2012 would have needed £21,400 annually to have the spending power of an average person who retired in 2008 on an income of £18,700, according to Prudential.
Daily Express, p. 2

Pension fury
Ministry of Defence police and firefighters have called on ministers to think again over plans to make them work up to 8 years longer than civilian counterparts. Reforms to public sector pensions will allow domestic police officers and firefighters to retire at 60. However those serving on the frontline and protecting our nuclear weapon facilities are in a different pension scheme and will have to work on until they’re 68.
The Sun, p. 2

Fidelity hits top of sales rankings
Fidelity Worldwide Investments has climbed to the top of the sales rankings in November figures out from the Investment Management Association.
City AM London, p. 16

First-time buyers boost
More first-time buyers are expected to return to the housing market this year, builder Persimmon said as its sales rose in 2012. Persimmon completed 6pc more home deals in the year to December 31 than it did a year ago. Average selling prices rose to about £173,000 from £164,000, while revenue increased 12pc to £1.72bn.
Daily Express, p. 51

Eurozone faces growing threat of property defaults
Fitch Ratings has warned that house prices in Ireland could fall a further 20pc and inflict serious losses on holders of mortgage bonds.
The Daily Telegraph Business, p. 5

Goldman and HSBC next to pay up
Goldman Sachs and HSBC are expected to settle with the US authorities over allegations that they improperly foreclosed on mortgages.
The Daily Telegraph Business, p. 1

Ex-HBOS staff charged over £35m of loans
Two senior bankers at Halifax Bank of Scotland (HBOS) were yesterday charged with corruption over £35m of loans made while they were at the bank.
City AM London, p. 3

Advisory lull hits Houlihan
Investment bank Houlihan Lokey has reported a fresh slump in annual profits for its European business, with corporate restructuring work thin on the ground.
City AM London, p. 13

Funding threat to $10bn HSBC insurance sale
The sale of HSBC’s stake in a major Chinese insurer could be at risk of collapsing, it emerged yesterday, as the bank funding the purchaser could pull out of the deal.
City AM London, p. 4

HBOS eight facing corruption charges
It has emerged that eight people who worked at the Reading branch of Halifax Bank of Scotland before it was taken over by Lloyds have been charged in a ‘large-scale’ corruption probe. Thames Valley police said the charges include conspiracy to corrupt, fraudulent trading and money laundering. The alleged offences took place at the Reading branch of HBOS, in the bank’s impaired assets division.
Daily Mail, p. 57

RBS investors in showdown with Goodwin
Within weeks a £4bn lawsuit by RBS shareholders against the bank and former directors including Fred Goodwin will kick off, after campaigners secured insurance against losing the case. The RBoS Shareholder Action Group told members it had reached an ‘important milestone’ by securing litigation cover, which would pay the other side’s legal costs if the claim is unsuccessful.
Daily Mail, p. 59

HIT THE BANKS WHERE IT HURTS
Confidence in the big banks is continuing to collapse as scandal after scandal unfolds. Hundreds of thousands of customers moved their current accounts from the big five banks – Barclays, Lloyds, HSBC, RBS and Santander – last year. And a recent YouGov poll showed 14 million customers could join them this year. About 500,000 people switched accounts in the first six months of 2012, according to Move Your Money – a campaign to encourage people to take their cash away from the banks that are the biggest offenders and put it elsewhere.
Daily Mirror, p. 35

Cards that can take the sting out of festive debt
Moving seasonal debt onto a zero interest deal can be a real saving, writes Lucy Tobin. Consumer group Which? says that half of all Britons used credit cards, overdrafts, store cards or payday loans to cover festive spending this year.
Evening Standard London, p. 42

Walters waits for upturn
Robert Walters, boss of the eponymous City jobs firm, has commented on recruitment in the banking sector, saying “London is in limbo.” He also said: “The relaxation of [banking regulation] Basel III means there could be a bit more movement. and we want to be there for the upturn.”
Evening Standard London, p. 35

‘London in limbo’ but Walters climbs
Robert Walters, boss of the eponymous City jobs firm, commented on recruitment in the banking sector as the firm he founded in 1985 posted a “solid” fourth quarter, saying: “It can only get better. London is in limbo.”
Evening Standard London, p. 34

UK urges Berlin to adopt banking reforms
The British government yesterday urged Germany and other European nations to implement an EU-commissioned report on banking that recommended erecting ring-fences to separate banks’ high-street operations from riskier investment banking.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 6

Fed reviews rules on foreign banks’ derivatives trading
The US Federal Reserve is considering a plan that would allow big foreign banks to avoid costly regulatory changes that were meant to prevent derivatives trading from being subsidised by US taxpayers.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Companies and Markets, p. 15

HSBC’s Ping An stake sale in doubt
HSBC’s $9.4bn sale of its stake in China’s Ping An Insurance is in doubt after Thai buyer CP Group lost funding for some of the 15.6 per cent shareholding.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Companies and Markets, p. 15

Calm down, dear
A Deutsche Bank prediction that international investment banks will cut 7 per cent of their staff this year has been described as proof of a “bloodbath” in City employment.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Companies and Markets, p. 16

Fortress sweet on sour debt servicer
Fortress Investment Group is reportedly buying a servicer of soured debts and distressed assets in China ahead of an expected surge in nonperforming loans in the second-largest economy.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Companies and Markets, p. 19

Asian banks must adapt or face the consequences
Focus Media, a Chinese advertising company listed in New York, has disclosed details of the financing that will facilitate a deal to take it private.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Companies and Markets, p. 18

More capital would serve Deutsche Bank well
A rights issue U-turn would be a bitter bill for Anshu Jain and Jürgen Fitschen, Deutsche Bank’s co-chief executives, to swallow.
International Herald Tribune, p. 18

Put a ring fence in place, Osborne tells the Germans
George Osborne is urging the German government to force German lenders to implement a ring fence separating retail and investment banking, referring to proposals by Erkki Liikanen that all EU all member states should ring-fence their major banks as an interesting prospect.
The Daily Telegraph Business, p. 5

Hundreds of thousands of customers […]
Hundreds of thousands of customers have moved their current accounts out of the big 5 banks in 2012 amid anger over a string of scandals. The Co-operative Bank was the biggest winner with 43pc more new accounts.
The Sun, p. 38-39

Former HBOS staff charged over lending
Two former branch managers at HBOS have been accused of a multimillion-pound fraud.
The Times, p. 39

AIG could join case against US
AIG may now join a lawsuit against the US government alleging the terms of the deal were unfair, the company said yesterday.
City AM London, p. 8

Fundamentally weak economy to punish pound
Sterling weakness will be exposed by better global sentiment, writes Yogesh Chandarana.
City AM London, p. 23

Export revolution
The UK will again become a competitive location to create wealth and export when we do five key things. We must radically reduce pointless regulation that impedes investment, employment and growth. We then need to cut taxes to a level at which incentives for risk-taking and hard work are restored. We must drop the anti-business rhetoric, particularly with regard to the financial sector.
City AM London, p. 21

Should you bet on a new gold rush?
It has been reported that the FTSE 100, the index of Britain’s biggest companies, shot past the 6,000 mark last week and hit its highest level for 23 months. Analysts such as Jonathan Jackson, of stockbroker Killik & Co, expect it to reach 6,500 by next Christmas. But a breakout year is far from certain. John Higgins, senior markets economist at consultancy Capital Economics, expects the FTSE to dive back towards 5,000 if the debt crisis in Europe erupts again.
Daily Mail, p. 41

Wealth gap and debts ‘biggest risks’ to the global economy
Severe wealth gaps between the rich and poor, as well as chronic levels of government debt, pose the biggest threats to the global economy, a major report from the World Economic Forum warned yesterday.
Daily Mail, p. 58

Data show bumpy ride for Germany
In spite of signs that German economic output shrank in the fourth quarter, the consensus among economists is that the ECB will keep its main interest rate on hold at 0.75 per cent, rather than cut it further. .
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 6

Fed eyes derivatives
The US Federal Reserve is weighing a plan that would allow big foreign banks to avoid regulatory changes meant to prevent derivatives trading by such institutions from being subsidised by US taxpayers.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 1

Irish issue shows way back for the periphery
Robin Wigglesworth reports that Greece, Ireland and Portugal’s bond yields have tumbled to levels last seen before the eurozone debt crisis erupted.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Companies and Markets, p. 30

Yen gains despite bonds plan
The euro and dollar fell against the Japanese currency after Taro Aso, Japan’s new finance minister, announced plans to buy bonds issued by the European Stability Mechanism, Europe’s bailout fund.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Companies and Markets, p. 32

Stocks suffer more losses as risk rally fades
Global equities suffered further losses in the wake of their strong start to the year as investors awaited fresh impetus from corporate results.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Companies and Markets, p. 32

AIG to consider joining lawsuit on US bailout
AIG, the US insurer that received the biggest of all the government bailouts during the financial crisis, is considering suing the US government over the terms of the deal.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Companies and Markets, p. 16

Egypt: pound at fresh lows as Qatar doubles up beyondbrics, the FT’s emerging markets hub
The Egyptian currency has continued its nosedive to fresh record lows as a senior IMF official visiting Egypt to discuss the country’s stalled $4.8bn loan agreement said the organisation remained committed to helping Egypt through its financial woes, writes Andrew Bowman.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Companies and Markets, p. 31

Yankee sales take off as foreign companies rush to tap US pool
Vivianne Rodrigues reports that global borrowers are rushing to tap the US debt capital markets, taking advantage of ample liquidity and America’s deep pool of bond investors.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Companies and Markets, p. 31

Euro zone unemployment hits record high
Unemployment in the euro zone rose to a new high in November, according to data released Tuesday that also showed that the troubles in the 17-nation currency bloc were straining its strongest member, Germany.
International Herald Tribune, p. 14

A rise in the cost of borrowing could be a return to normality
Economic comment on the beginning, seemingly, of a rise in longer-term interest rates.
The Independent, p. 18

Eurozone jobless rate reaches all-time high of 18.8 million
Unemployment in the eurozone hit another record high in November as the gap between more prosperous nations and struggling southern states yawned even further. Tim Ohlenburg, an economist at the Centre for Economics and Business Research, said of the figures: “The overall level isn’t the problem. It’s the widening gulf between core and periphery. The labour market also exposes just how far the eurozone has moved away from the founding ideal of synchronised economic cycles.”
The Independent, p. 47

Investors slake thirst as Irish set out on road to recovery …
Ireland swept past a key milestone on its journey towards rehabilitation with international lenders yesterday when its first mainstream debt offering since the 2010 bailout was lapped up enthusiastically.
The Times, p. 31

Keep interest rates low and say you are going to do it, Bank told
The Bank of England should follow the US Federal Reserve by giving explicit guidance on interest rates, members of the Times Shadow Monetary Policy Committee said yesterday.
The Times, p. 35

The above articles appeared on 09/01/13 reproduced with the kind permission of Kantar Media UK. All rights reserved.

Charterbridge Private Financial Planning, Independent Financial Advice, Thornbury, Bristol.