Financial Policy Committee says banks might need to eat into capital cushions to keep credit flowing The Bank of England has warned of “severe strains” in financial markets and appeared to concede that banks might need to eat into their capital cushions to keep credit flowing into the stagnating economy. The second report by the new Financial Policy Committee – set up by the coalition inside the Bank to be responsible for financial stability – indicated that it had considered the need for “short-term measures” to try to prevent a re-run of the 2007 credit crunch. In a two-page update of its latest meeting – which took place on 20 September – the FPC said: “The committee had advised UK banks in June that, if their earnings were strong, they should seek to build capital levels further, given the risks to the economic and financial environment. But events had lowered the likelihood that banks would be able to strengthen their balance sheets in this way over the short term.” Even so, the committee said it was recommending banks take “any opportunity” to strengthen their capital and stock of liquid assets to “absorb flexibly any future shocks without constraining lending to the wider economy”. This could be done by raising long-term funds on the markets and reducing dividends and bonuses in line with any fall in profits. The Bank’s quarterly credit conditions survey , issued alongside the committee’s report, said lenders were warning that the shaky state of financial markets could constrain credit in the coming months. The FPC, which is chaired by Bank governor Sir Mervyn King, also advised the Financial Services Authority to encourage banks “to manage their balance sheets in such a way that would not exacerbate market or economic fragility”. “For example, at the present time, some actions taken to raise capital or liquidity ratios could potentially worsen the feedback loop between the financial sector and the wider economy and so should be avoided. Moreover, the committee recognised that, in the event that severe risks crystallised, it would be natural for banks’ capital and liquidity ratios to be run down to ensure that lending to the non-financial economy was not impaired,” the committee said. After its first meeting in June , King described the eurozone as posing the “most serious and immediate” single threat to financial stability and the committee acknowledged that since then there had been “severe strains” in financial markets. But given the scale of current risks, the committee also discussed the need for shorter-term measures to reduce the risk of a significant disruption to financial stability, and so to the supply of credit to UK households and firms, which could feed back through the economy to increase the pressure on the financial system. “The committee recognised that dealing with the problems facing the international financial system as a whole would require long-term reforms to tackle unsustainable debt positions and the cumulative and persistent loss of competitiveness in a number of euro-area countries. But given the scale of current risks, the committee also discussed the need for shorter-term measures to reduce the risk of a significant disruption to financial stability, and so to the supply of credit to UK households and firms, which could feed back through the economy to increase the pressure on the financial system.” The credit conditions survey showed that the supply of loans to households increased modestly in the third quarter of the year, while the availability of lending to businesses was flat; but, “lenders pointed to adverse wholesale funding conditions as a key factor which might constrain future lending”. Some banks are heavily reliant on funding in the wholesale money markets, which are at risk of drying up as the eurozone crisis rocks confidence. The Bank added: “More recent discussions with some of the major lenders suggested that although these factors had not yet led to reduced credit availability, a period of sustained tight funding conditions could act to constrain their ability to extend loans going forward.” Lenders also told the Bank that many of their business customers are reluctant to take on new borrowing against the background of a deteriorating economic outlook. “Lenders expected a fall in demand across firms of all sizes in Q4. Lenders commented that companies are reluctant to hold increased levels of debt against a backdrop of a more uncertain economic outlook and a fall in consumer confidence,” the Bank said. The FPC does not yet have powers to intervene in markets but is calling for powers that allow it to intervene on bank balance sheets, the terms of market transactions and trading systems to help spot and tackle potential financial crises. Financial policy committee Banking Bank of England Banking reform Financial sector Jill Treanor Heather Stewart guardian.co.uk
Continue reading …
Web retailer to take on Apple with launch of Android-based tablet Amazon is set to join the tablet wars as it launches a rival to Apple’s best-selling iPad, a device that has made digital tombstones of all the competition so far. The online retailer has released no details ahead of Wednesday’s press conference in New York, but the device is reportedly called Kindle Fire, to tie in with its existing ebook reader. If the Fire does prove to be an iPad rival it will pitch the brainchildren of Steve Jobs and Jeff Bezos, two of Silicon Valley’s most innovative tech giants, against each other in a battle analysts say will present the biggest challenge yet to Apple’s dominance of the tablet market. With so little detail available Gartner analyst Michael Gartenberg said he was reluctant to speculate too much. “But it feels like something big is about to happen,” he said. Apple has increasingly encroached on Amazon’s business in recent years as its iTunes store has poached more music, movie and now books and magazine sales. Amazon has been building its online presence, too, and entered the hardware business with the launch of Kindle. The retailer is the biggest online books seller and the US’s second largest seller of music online after Apple’s iTunes, and it has been increasingly building up its online movies and TV sales and rentals business. The company signed a deal with Fox this week that it said means it now offers more than 11,000 movies and TV shows available via its Amazon Prime service. Amazon is also competing with Apple to offer a cloud-based media storage service that would allow customers to access anything they buy on any device connected to the internet. Amazon has its own app store already and access to the purchasing habits of its millions of customers and their credit card accounts. “Amazon has tremendous reach. That makes a huge difference,” says Gartenberg. The retailer has a very different approach to Apple, he said, but that is what may make them Apple’s biggest threat to date. “The Kindle for Amazon was about selling books and magazines. Apple’s business is about selling devices. You are looking at very different approaches,” he said. Amazon hopes its brand recognition and loyal book-buying customer base will enable it to do battle with Apple, which produced 75% of the tablets sold this year. Research firm Forrester reckons the Kindle tablet could sell between 3m and 5m units in its first year. But for all Amazon’s muscle, Apple has so far proved a tough competitor. Rival products from Dell, Hewlett Packard and Blackberry maker RIM have all bombed. According to reports from technology website TechCrunch, the Kindle Fire looks like the BlackBerry PlayBook. RIM said recently it had sold 200,000 of its PlayBooks in the last three months — about what Apple sells in three days. TechCrunch says Kindle Fire will be a 7in tablet with a $250 price tag. The initial version will offer wireless functionality but no 3G; it will also have a USB port and speakers, but no camera. A bigger, more expensive model will launch next year. For Colin Gillis, analyst at of BGC Financial, the Kindle Fire sounds more iPod than iPad. Its slimmed-down design sounds like it will be aimed a mass market of people who want a device to watch movies on, read books, listen to music and don’t need all the bells and whistles of a fully functioning iPad, he said. The Kindle Fire is expected to receive a full release in the second week of November seeking to target the important Christmas market. Apple, too, is said to be working on a new iPad for imminent release – and will be watching very carefully for any signs of new gaps in the market. Gillis this to be a vicious fight. “The tablet is the new store front,” he said. Of all the tech giants to enter the tablet wars so far, Amazon is the one with the most to offer and the most to lose. Amazon.com Tablet computers Apple iPad United States Dominic Rushe Lisa O’Carroll guardian.co.uk
Continue reading …
Shaima Jastaina sentenced to 10 lashes after being found guilty of driving without permission A Saudi woman has been sentenced to be lashed 10 times with a whip for defying the kingdom’s prohibition on female drivers. It is the first time a legal punishment has been handed down for a violation of the longtime ban in the ultraconservative Muslim nation. Police usually stop female drivers, question them and let them go after they sign a pledge not to drive again. But dozens of women have continued to take to the roads since June in a campaign to break the taboo. The sentence comes two days after King Abdullah promised to protect women’s rights and decreed women would be allowed to participate in municipal elections in 2015. Abdullah also promised to appoint women to the all-male shura council advisory body. The mixed signals highlight the challenge for Abdullah, known as a reformer, in pushing gently for change without antagonising the powerful clergy and a conservative segment of the population. Abdullah said he had the backing of the official clerical council. But activists saw Tuesday’s sentencing as a retaliation from the hardline Saudi religious establishment that controls the courts and oversees the intrusive religious police. “Our king doesn’t deserve that,” said Sohila Zein el-Abydeen, a prominent female member of the governmental National Society for Human Rights. She burst into tears in a phone interview and said: “The verdict is shocking to me, but we were expecting this kind of reaction.” The driver, Shaima Jastaina, who is in her 30s, was found guilty of driving without permission, activist Samar Badawi said. The punishment is usually carried out within a month. It was not possible to reach Jastaina, but Badawi, in touch with Jastaina’s family, said she had appealed against the verdict. Saudi Arabia is the only country in the world that bans women – both Saudi and foreign – from driving. The prohibition forces families to hire live-in drivers, and those who cannot afford the $300 to $400 (£190 to £255) a month for a driver must rely on male relatives to drive them to work, school, shopping or the doctor. There are no written laws that restrict women from driving. Rather, the ban is rooted in conservative traditions and religious views that hold giving freedom of movement to women would make them vulnerable to sins. Activists say the religious justification is irrelevant. “How come women get flogged for driving, while the maximum penalty for a traffic violation is a fine, not lashes?” Zein el-Abydeen said. “Even the prophet [Muhammad's] wives were riding camels and horses because these were the only means of transportation.” Since June, dozens of women have led a campaign to try to break the taboo and impose a new status quo. The campaign’s founder, Manal al-Sherif, who posted a video of herself driving on Facebook, was detained for more than 10 days. She was released after signing a pledge not to drive or speak to media. Since then, women have been appearing in the streets driving their cars once or twice a week. Until Tuesday, none had been sentenced by the courts. But recently, several women have been summoned for questioning by the prosecutor general and referred to trial. Najalaa al-Harriri, a housewife, drove twice, not out of defiance, but out of need, she said. “I don’t have a driver. I needed to drop my son off at school and pick up my daughter from work.” “The day the king gave his speech, I was sitting at the prosecutor’s office and was asked why I needed to drive, how many times I drove and where,” she said. She is to stand trial in a month. After the king’s announcement about voting rights for women, Saudi Arabia’s Grand Mufti Abdel Aziz Al Sheik blessed the move and said: “It’s for women’s good.” Al-Harriri, who is one of the founders of a women’s rights campaign called My Right My Dignity, said: “It is strange that I was questioned at a time the mufti himself blessed the king’s move.” Asked if the sentencing would stop women from driving, Maha al-Qahtani, another female activist, said: “This is our right, whether they like it or not.” Saudi Arabia Middle East Women Gender Feminism Equality guardian.co.uk
Continue reading …
Former Metropolitan police commissioner to head party’s ‘independent review’ into the future of policing in Britain Lord Stevens, the former Metropolitan police commissioner, is to chair Labour’s “independent review” into the future of policing, the shadow home secretary, Yvette Cooper, is to announce. The appointment is a boost for the credibility of the review, which risks being seen as a Labour party operation. Stevens is reported to have been courted by David Cameron to run as the Tory candidate for London mayor in 2006 and has in the past advocated the return of the death penalty. Cooper will tell the Labour conference on Wednesday that the review is to “bring some coherence and vision to the ideologically motivated, chaotic and piecemeal approach to police reform undertaken by this government.” Kathleen O’Toole, a former Boston police commissioner, and Tim Brain, the former Gloucestershire chief constable and an expert on police finance, are also to serve on the review. Although the timetable has yet to be decided it is expected to report before Labour draws up its next general election manifesto. The review follows repeated calls from the main police organisations for a royal commission to examine the fundamental purposes of policing in Britain. Both Sir Hugh Orde of the Association of Chief Police Officers and Paul McKeever, the chairman of the Police Federation, renewed their calls at a Labour fringe meeting yesterday and observed that when the last had reported in 1961 it was before the advent of colour television. McKeever revealed the home secretary, Theresa May, had refused to meet them since she addressed their annual conference in May. The federation warned her that the cuts would lead to riots on the streets and demanded to know how she slept at night. Cooper is to tell the conference that the time had come to set up a heavyweight independent review: “The government has refused to do so. So we will.” She says the inquiry would work with the police and take evidence from experts at home and abroad and look at how policing needs to change to respond to the crime challenges of the 21st century. “It will be led by someone who started as a beat officer in Tottenham and rose to be commissioner of the Metropolitan police. I am grateful to the much respected Lord John Stevens for agreeing to chair this important independent review.” Stevens has presided over several major inquiries since he retired as Met Commissioner in 2005 including into collusion between the British army and loyalist terrorists, into the death of Princess Diana and allegations of corruption in football. Stevens was appointed by Gordon Brown as his adviser on international security issues in 2007 as part of his policy of bringing non-Labour outsiders into Whitehall. The shadow justice secretary, Sadiq Khan, is also to announce that a Labour government would introduce a “victim’s law” along the lines advocated by the victims’ commissioner, Louise Casey, to honour the rights of families of homicide victims. “We are committed to delivering effective justice, and treating victims with respect and dignity, supporting victims through all stages of the process, including the deeply traumatic experience of when a case reaches court,” says Khan. Police Labour Metropolitan police Yvette Cooper Alan Travis Sandra Laville guardian.co.uk
Continue reading …Health officials say at least 13 people have died from possible listeria illnesses traced to Colorado cantaloupes, making it the deadliest food outbreak in more than a decade. The CDC said today that 72 illnesses and 13 deaths are linked to the tainted fruit. Most of the victims were age…
Continue reading …Today’s weirdest political brouhaha: North Carolina Gov. Bev Perdue spoke to the Rotary Club today and said this: “I think we ought to suspend, perhaps, elections for Congress for two years and just tell them we won’t hold it against them, whatever decisions they make, to just let them help…
Continue reading …This might be the end of the road for fugitive George Wright, but what a road it’s been. Authorities arrested the 68-year-old in Portugal yesterday after 41 years on the lam. Even the bare bones of his rap sheet nearly defy belief, as CNN and AP recount: In 1962, he…
Continue reading …
• Furious reaction by stunned Mancini at Tevez’s behaviour • Troubled striker refuses to play as Bayern deliver defeat Roberto Mancini has declared Carlos Tevez is “finished” at Manchester City after an incredible night of controversy in which the Argentinian refused to come on as a second-half substitute in the 2-0 defeat by Bayern Munich . Mancini will hold emergency talks with City’s owners from the Abu Dhabi United Group on Thursday and the manager made it clear he wants them to agree that the striker never plays for the club again. Asked if he will ever pick Tevez again, he replied: “No. If we want to improve like a team, like a squad, Carlos cannot play with us. With me, no – it is finished. “It may not be my decision but if I’m deciding then, yes, he goes. For me, if a player earns a lot of money playing for Manchester City in the Champions League and he behaves like this – he cannot play again. Never. He has wanted to leave for the last two years. For two years I have helped him, and now he has refused to play. Never again.” City were so concerned about the prospect of angry supporter reaction to Tevez that they made the extraordinary move of asking for extra security to greet the team on arrival at Manchester airport in the early hours of the morning. Before leaving Munich Tevez had emerged from the City dressing room and made it clear he wanted to offer his version of events, denying that he had done anything wrong. “I didn’t feel right to play, so I didn’t,” he said. Informed that Mancini had said he would never wear City’s colours again, he replied: “I was top goalscorer here last season, I always act professionally so it is up to him.” Mancini, however, was adamant. “This can never happen at a top club that one player can refuse to help his team-mates in an important match like tonight. “In the next day I’m sure I will speak with Khaldoon [al-Mubarak] because he is the chairman and he will decide everything but let me ask a question: Do you think at Bayern Munich a player would ever behave like this. At Milan? At Manchester United? No. That is the answer. It is the same for everyone.” The controversy erupted after Mancini made his first substitution, replacing Edin Dzeko with Nigel de Jong. Dzeko reacted badly to the decision and Mancini was fiercely critical of him, too, saying the Bosnian would be dropped from Saturday’s game at Blackburn Rovers. The plan, according to Mancini, was to introduce Tevez “three or four minutes later” but the former Manchester United striker refused to leave the dugout for his warm-up. “I make the decision [about substitutions], not Carlos,” Mancini said. “I think he was disappointed because he didn’t go out for the first change – maybe. But when I said ‘Carlos, go, for 35 minutes to the end,’ he refused. I think that in 35 minutes we can change every result. For me, it’s a bad situation because it’s impossible if a player decides he will not help the team. It’s impossible. We have 11 players and I can’t accept that one player refused to go on to the pitch. I can’t accept this.” Mancini was asked whether a club with City’s immense wealth could effectively sack Tevez by terminating his contract. “I don’t know,” he replied. The striker has submitted two transfer requests in the past year but a proposed summer move to Corinthians fell through. Dzeko had directed a sarcastic thumbs-up at Mancini after his 55th-minute substitution before exchanging angry words with his manager and throwing down his tracksuit top. “He played a bad game, a poor game,” Mancini said. “Next time, maybe if he plays better he can stay on the pitch. He needs to improve his behaviour. I should be unhappy with his performance – not Edin.” The manager continued: “This is the last time that one of our players leaves the pitch and moves his head like this [shaking head]. I can understand why a player is disappointed but I am furious with Dzeko and he will sit the next game next to me. This is the last time he has this behaviour. He is disappointed. But the manager can do what he thinks. We play every three days and one player can’t play in every game.” Mancini had also confronted Pablo Zabaleta in the dugout after mistakenly believing that he heard him say something in Tevez’s favour. “With Pablo, I made a mistake,” he said. “I have spoken with Pablo now and it’s nothing.” Mancini’s anger extended to the rest of his team. “We played well for only 30 minutes and we conceded stupid goals. We have another four games and in my opinion we can still go into the second stage. If we win the next three games we will go through. But a situation like tonight? Never.” Carlos Tevez Roberto Mancini Manchester City Champions League 2011-12 Champions League Bayern Munich Daniel Taylor guardian.co.uk
Continue reading …Rick Santorum may not have Mike Huckabee’s charm, but he’s hoping he can repeat the ex-governor’s performance in Iowa. The former Pennsylvania senator has “essentially moved” to the state, where he aims to win over onetime supporters of Michele Bachmann and Rick Perry, writes Shushannah Walshe at ABC News . “Doubts…
Continue reading …New numbers on health insurance costs probably won’t have employers tripping over themselves to make new hires: The average annual cost of a family premium paid by employers spiked 9% this year to $15,073, reports the New York Times . For single workers, the figure rose 8% to $5,429,…
Continue reading …