Weekend economic news round up

Charterbridge

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Weekend economic news round up

Hedge funds force Co-op to consider bank flotation
Aurelius Capital Management and Silver Point Capital, two US hedge funds, have convinced the Cooperative Bank to establish an independent committee to review their plans to turn the mutual into a listed company.
The Guardian, p. 43

Money isn’t everything, even when you’re investing
Terry Smith, boss of Fundsmith, this week urged investors not to put money into ethical funds.
The Times, p. 69

Attack on ethical investment ‘simplistic and naive’
Simon Howard, chief executive of the UK Sustainable Investment and Finance Association, has said during a Guardian interview that it was “ill-informed” and “overly-simplistic” to criticise ethical funds as inefficient and unprofitable. The comments were a response to terry Smith, who said such funds required making moral judgments that were ultimately subjective.
The Guardian, p. 46

Buying ‘saves 10pc’
Buying a home is 10pc or £900 a year cheaper than renting despite the housing market recovery, the mortgage lender Halifax claims.
The Daily Telegraph, p. 36

Nationwide in firing line over Heron Tower
Nationwide is facing criticism for lending more than £30m to the troubled Heron Tower project. Britain’s biggest building society is part of a consortium of firms which has provided £300m finance to property tycoon Gerald Ronson.
Daily Mail, p. 93

We risk housing bubble, says Balls
The Shadow Chancellor Ed Balls has stated that plans to help homebuyers purchase homes worth up to £600,000 with government-backed mortgages need to be reviewed. Last week, Vince Cable, the Business Secretary, questioned whether, in the light of data showing prices for properties in England reaching their 2008 peak, it was right to fuel more demand for high-value properties.
The Times, p. 8-9

RBS closes in on £800m branch sale
A consortium led by US private equity firms Corsair and Centerbridge is in pole position to buy 315 branches from state-owned Royal Bank of Scotland, it has emerged. The group, backed by investors including the Church of England and Standard Life, is thought likely to enter exclusive talks with RBS to buy the branches.
Daily Express, p. 65
Also appeared in : Financial Times, p.13, The Daily Telegraph, p.37, The Guardian, p.43, The Times, p.55

Co-op to look at alternative plan for filling £1.5bn hole
The Co-operative Bank has said that it was setting up an independent committee to examine ideas to fill a £1.5bn capital hole.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 17
Also appeared in : The Independent, p.52, The Daily Telegraph, p.37, The Times, p.55

Barclays’ rate bungle could cost it £100m
Barclays is to pay compensation to around 300,000 customers who took out personal loans through the bank after it admitted it had made mistakes on their paperwork.
The Independent, p. 64
Also appeared in : The Times, p.71

RBS pockets £630m in Direct Line stake sale
Royal Bank of Scotland has raised £630m by selling a 20pc stake in Direct Line.
Daily Mail, p. 93

debt/ten million adults forced to borrow last year
Research by the affordable housing group Circle has shown that around 10m people took out a loan in the past 12 months.
The Independent, p. 60

Times Money victory against a bank and an insurance company
Two British companies – Barclays and Scottish Provident – have agreed to change their practices in response to criticism from Times Money readers.
The Times, p. 72-73

The ‘alternative’ bank is leading the current account switch race
Uswitch.com has reported a 200 per cent surge in customers comparing current accounts in the four days following the launch of a new service designed to improve the process of moving from one bank to another.
The Times, p. 65
Also appeared in : The Times, p.65

Banking &finance
Emmanuel Fievet has stepped down as the head of wealth management for Britain and Europe at Barclays bank ahead of a review of the business.
The Times, p. 56

Eight arrested over £1.3m cyber theft at Barclays branch
Eight men aged between 24 and 47 have been arrested on suspicion of stealing £1. 3m from a branch of Barclays in north London, after one member of a gang gained remote access to the bank’s computers by posing as an IT engineer.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 17
Also appeared in : Daily Mail, p.50, The Daily Telegraph, p.9, The Independent, p.4-5

Osborne beating borrowing forecasts
Government borrowing is on track to undershoot official forecasts after the Exchequer raised more in taxes and spent less last month than in the same month last year. Borrowing in the first five months of the financial year was £3.7bn lower than in 2012, at £48.8bn, once special factors such as the Royal Mail pension scheme transfer and quantitative easing revenues were stripped out, the Office for National Statistics (ONS) said.
The Daily Telegraph, p. 35-36
Also appeared in : The Independent, p.54, The Guardian, p.46

Elliott in legal move over Irish failed bank
The hedge fund Elliott Management is reportedly seeking more details on the opaque emergency wind-down earlier this year of Irish Bank Resolution Corporation.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 5

India raises rates to tackle high inf lation
The governor of the Reserve Bank of India yesterday confounded market predictions and dismayed domestic business groups by raising the main interest rate in an attempt to combat stubbornly high inflation.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 5
Also appeared in : The Times, p.56

Fed official hits back at critics over taper delay
The US Federal Reserve could begin to reduce its asset purchases as early as October if economic data improve, James Bullard, president of the Federal Reserve Bank of St Louis, said as he hit back at critics.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 5

Unitech given leave to countersue
The Indian property company Unitech has received permission to countersue Deutsche Bank over alleged Libor manipulation in a dispute over a loan and swap agreement.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 13

D Bank alert over sluggish debt markets
Deutsche Bank is expected to give an update on trading conditions warning that a slowdown in fixed income trading will dent revenue growth in the third quarter, adding to the gloom among investment banks about conditions in the debt markets.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 13

Monte dei Paschi board set to back restructuring
Italy’s Monte dei Paschi will next week approve a restructuring plan aimed at dispelling the spectre of nationalisation. Italy has struggled to appease international and EU authorities about its bailout of the bank.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 17

Porn sites allowing child access face banking ban
Hard-core pornography websites will face being cut off from the British banking system unless they implement measures to prevent children accessing explicit content under plans from the Authority for Television On Demand.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 4

Younger workers at risk of ‘rip-off’ pension charges
Young workers face a new pension mis-selling threat, according to an investigation. In a damning 175-page report, the Office of Fair Trading said it had uncovered punitive charges on vast numbers of company pension schemes set up before 2001.
The Sunday Telegraph Money, p. 2

Mortgages & Residential Property
Chancellor faces attack over house price boom
Economists have warned that the Help to Buy subsidised mortgage scheme is unnecessary and could create “the conditions for the next bust”.
The Sunday Telegraph Business, p. 3

City sees no bubble as house prices soar
The Nationwide house price index is expected to say that house prices have been rising at their fastest pace in three years jumping 4.5% in the past year.
The Sunday Times Business, p. 2

Property dip ahead of Help to Buy
Estate agents are reporting a quiet September amid speculation that homeowners are waiting for the Help to Buy scheme next year.
The Sunday Times Money, p. 1

‘Bad bank’ RBS plan rejected
The Treasury will release its report on a break-up of Royal Bank of Scotland following the Tory Party conference, and may recommend selling off the bank’s Irish arm in a bid to appease senior members of the Parliamentary Commission on Banking Standards.
The Independent on Sunday, p. 57

RBS to unveil deal with equity group to float branches
The new bank being formed by the spin-off of hundreds of Royal Bank of Scotland and NatWest branches plans to return decision-making over loans to local branches, reversing decades of centralisation in the banking industry.
The Mail on Sunday, p. 80

Private equity firm JC Flowers looks at bid for new TSB business
Lloyds Banking Group has received a number of approaches from private equity firms about buying TSB. The approaches, including one from US-based firm JC Flowers, are believed to have been at an early stage but are understood to have been being taken seriously by Lloyds management.
The Sunday Telegraph Business, p. 1

Leave your cash at home and pay by mobile phone
Barclays is to allow customers to make payments using the camera on their mobile phones. Since last month, customers have been able to pay some utility firms, including Severn Trent Water and First Utility, by scanning the QR code on paper bills. Now retailers and other companies will be able to offer the service.
The Sunday Times Money, p. 5

Four men charged over £1.3m Barclays cyber fraud
Four men appeared in court yesterday in connection with the £1. 3m bank cyber fraud at a Barclays branch in Swiss Cottage, London.
The Independent on Sunday, p. 18

US banks pushed to join new group
Richard Lambert, head of the new banking standards body, has said he does not want it to be “a PR comfort blanket” for the industry.
The Sunday Telegraph Business, p. 2

Fancy borrowing our spare rooms? TSB asks bosses
TSB, the UK’s newest bank, is to provide small firms with space to do business above branches in a pilot scheme set to roll out next month.
The Mail on Sunday, p. 84

Brussels braces for bank chaos
The European Stability Mechanism, the €500bn (£420bn) rescue fund set up last year, is hiring investment banks to advise on potential rescues of lenders across the 17-nation currency bloc as it prepares for a new wave of bank bailouts.
The Sunday Times Business, p. 1

SFO weighs up Whale probe
The Serious Fraud Office is reportedly examining details of the “London Whale” trading scandal at JP Morgan to consider whether there is a case for launching a criminal investigation.
The Sunday Times Business, p. 2

The above articles appeared on 21/09/13 & 22/09/13 reproduced with the kind permission of Kantar Media UK. All rights reserved.

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