Bankrupt Banker

"Malpractice at the Bernanke Federal Reserve" has now turned into billion dollar annuities to the stock holders of the large banks.

"Malpractice at the Bernanke Federal Reserve" has now turned into billion dollar annuities to the stock holders of the large banks. The Bernanke Fed began paying interest on reserves held by the banks in October 2008 when the financial crisis heightened after large financial firms went bankrupt or were bailed out. It was essential policy to safeguard the banking system with loans, but not with incentive payments to reduce their lending and increase their reserves at the expense of businesses and employment. The excess reserves, reserves that banks are not required to keep, exploded: from $1.875 billion on September 1, 2008 to $1.191 trillion on February 2, 2011. The chart of excess reserves from the Federal Reserve is exploding while its chairman, Ben Bernanke, talks about plans to increase the interest on bank reserves. Today in the middle of the Bernanke Fed's continuing purchase of $600 billion in Treasury securities -- its quantitative easing purchases, "QE2," which ends in June 2011 -- where do you think most of the $600 billion is going? Loans to businesses? Purchase of private sector income earning assets? No and No. Since September 2008 -- 25 months -- the Fed has pumped out an average of $49 billion a month. This monetary base of the country (currency, coin and bank reserves) is now $2.210 trillion. Over half (57 percent) of the $2.210 trillion sits in the banks as reserves drawing interest. Now with inflation looming on the horizon and a need to finance huge governments deficits, interest rates will rise unless there is some event that temporarily makes investors rush to buy Treasury securities. What will the Fed do to prevent banks from moving their reserves into private sector assets, as banks make loans and buy other income earning assets. The money supply would spike and add strong fuel to inflation and higher interest rates. To keep the money supply from ballooning Bernanke has advocated, and many other at the Fed probably agree, that more interest on reserves will be needed. As I previously stated, that is the wrong policy. It is long past time to raise the Fed's target interest rate target. The Fed's near zero interest rate policy causes many misallocations of resources. A higher Fed interest rate target would lower the monetary base as the Fed sells its securities. The interest paid to banks could be lowered and eventually eliminated making the banks invest in loans and other income earning assets that benefit the economy and employment. Today the banks receive 0.25 percent interest on their reserves (plus deposits of their reserves that are held for a designated period, The Term Deposits Facility). That cost to the taxpayers was $2.7 billion in 2010. If the interest rate paid to banks increases to 1 percent and reserves are at the present level, the cost to the taxpayers would be around 4 times that amount, $10.8 billion a year. In 2005 I testified in Congress against the payment of interest on bank reserves. I had already helped House Banking Committee Chairman Henry Reuss write a bill that became a law (1980 Monetary Control Act) that allowed the Fed to pay interest on special required reserves in times of emergency. The Fed was evidently not interested in bringing this up at the hearings (although they sent an excellent official, Governor and future Vice Chairman Donald Kohn, to present their case) since they wanted carte blanche on the taxpayers' money to pay banks interest on reserves. The average interest rate over a prior thirty year period used for Fed loans to banks was 5 percent. At today's level of reserves that would cost the taxpayers $60 billion a year. Based on the calculations given below, that level of interest payments would have a present value primarily for bank stockholders of $1.08 trillion.

"Malpractice at the Bernanke Federal Reserve" has now turned into billion dollar annuities to the stock holders of the large banks.

"Malpractice at the Bernanke Federal Reserve" has now turned into billion dollar annuities to the stock holders of the large banks...

'Banks are trying to take my house'

average employee takes home £1,088 a year less than two years ago when the sum is adjusted for inflation, research commissioned by BBC Panor...

Equitable Life’s announcement is a bit of good news for some departing policyholders, it will not benefit the vast majority who are looking at losses of 85pc

Equitable Life’s announcement is a bit of good news for some departing policyholders, it will not benefit the vast majority who are looking at losses of 85pc – despite the compensation due to be paid by the Government. In spite of collective losses in excess of £6bn, the Government is proposing to pay 945,000 victims of the Equitable Life scandal just 15pc of the amount they have actually lost. This means that someone who has lost £50,000 from their pension pot may receive just £7,500 in compensation at some point between now and 2014. It is unclear whether any further interest will be paid to compensate for the delay. The Government has already admitted that victims’ losses exceed £4bn, but the Equitable Members’ Action Group (Emag) reckons they are closer to £6.3bn when maladministration from 1991 and exit penalties are taken into account. The £775m allocated for non with-profits annuitants means that victims can expect to get just 15pc of their losses. Emag will be renewing its campaign to press for full compensation by the end of this parliament. We know from our bulging postbag that our members are furious at what they see as a broken pledge from the coalition.

Equitable Life’s announcement is a bit of good news for some departing policyholders, it will not benefit the vast majority who are looking at losses of 85pc

Equitable Life’s announcement is a bit of good news for some departing policyholders, it will not benefit the vast majority who are looking ...

British bank Northern Rock, nationalised three years ago to avert financial meltdown, said Monday that it will axe almost 700 jobs by the end of 2011 as it looks to return to the private sector.

British bank Northern Rock, nationalised three years ago to avert financial meltdown, said Monday that it will axe almost 700 jobs by the end of 2011 as it looks to return to the private sector. The loss-making bank said in a statement that it planned "a reduction of up to 680 jobs, affecting employees at all grades across the company. The process is expected to conclude by the end of the year." Northern Rock, which will have a workforce of under 2,000 compared with about 6,500 in 2007 according to Britain's main union Unite, was last year broken into two parts -- "good" and "bad" banks. "Economic and trading conditions remain very challenging for a bank like Northern Rock," executive chairman Ron Sandler said in Monday's statement. "In order to meet our agreed objectives, we must continue to manage our cost base, which is too big relative to the size of the company -- regrettably, this will involve job losses." Sandler added: "This is an unsettling time for our employees, who have been through a lot in the last few years. We will keep them well informed throughout the process and provide support to those who are affected." Senior Unite official David Fleming expressed outrage at the latest round of cuts. "This appalling news of 680 job cuts is scandalous. Another round of brutal job cuts is simply a step too far for this workforce that has already lost a third of colleagues," he said in a separate statement. "We are witnessing another move to scale back this already lean organisation, in a desperate bid to find a private buyer." Unite wants Northern Rock turned into a building society, or mutual, whereby it would be owned by the bank's depositors. Earlier this month, Northern Rock Plc -- the lender's "good bank" -- posted a pre-tax loss of £232.4 million (271 million euros, $377 million) in its first set of annual results. The "bad" bank, Northern Rock Asset Management, houses its toxic loans and is to be wound down. This division will unveil its annual results on Thursday. Only Northern Rock Plc -- a mortgage and savings bank -- is to be offered for sale to the private sector. Northern Rock collapsed in mid-September 2007 when its exposure to the credit crunch forced it to seek emergency assistance from the Bank of England, sparking the first run on a British bank in recent history. To prevent a wider system meltdown, the government agreed in December 2007 to guarantee all customer deposits held at the struggling group, before taking the lender over in early 2008.

British bank Northern Rock, nationalised three years ago to avert financial meltdown, said Monday that it will axe almost 700 jobs by the end of 2011 as it looks to return to the private sector.

British bank Northern Rock, nationalised three years ago to avert financial meltdown, said Monday that it will axe almost 700 jobs by the en...

former Sydney bank employee will face court today over an alleged conspiracy to defraud major banks of up to $100 million

. The 34-year-old woman has been charged with offences including money laundering and participating in a criminal group. Police say the scam...

U.S. regulators seized an Illinois bank, the third in that state to fail this year.

<a href="http://online.wsj.com/article/SB10001424052748704517404576223353390013240.html?mod=googlenews_wsj"> </a> The Federal Deposit Insurance Corp. said Friday that the sole office of the Bank of Commerce, of Wood Dale, Ill., was closed. Advantage National Bank Group, of Elk Grove Village, Ill., entered a purchase-and-assumption agreement with the FDIC to assume all of Bank of Commerce's deposits. It brings the total number of U.S. failures this year to 26. The number of banks that failed last year—157—was the highest since the savings-and-loan crisis ended in 1992, although the total assets at 2010's fallen banks were much smaller than the total the year before. Bank of Commerce had about $163.1 million in total assets and $161.4 million in total deposits at year end. Advantage National Bank agreed to pay a 0.1% premium to assume all the deposits and agreed to purchase essentially all of the failed bank's assets. The FDIC estimates that the cost of the failure to the Deposit Insurance Fund will be $41.9 million. Depositors of the failed bank will automatically become depositors of the new bank, and the deposits will continue to be insured by the FDIC. The FDIC insures deposits for up to $250,000 per depositor.

U.S. regulators seized an Illinois bank, the third in that state to fail this year.

The Federal Deposit Insurance Corp. said Friday that the sole office of the Bank of Commerce, of Wood Dale, Ill., was closed. Advantage Nati...

Andy Hornby, the man running HBOS when it had to be rescued by Lloyds bank in 2008, has unexpectedly quit his £1m-a-year job as chief executive of healthcare group Alliance Boots with immediate effect.

Andy Hornby, the man running HBOS when it had to be rescued by Lloyds bank in 2008, has unexpectedly quit his £1m-a-year job as chief executive of healthcare group Alliance Boots with immediate effect. Sources close to Hornby insisted that his surprise departure was his own choice. City analysts suspected a personality clash at the top of the company. Hornby, aged 44, indicated that he needed to step back from the demands of corporate life. "After an intense last five years as CEO of two major companies, I have decided to take a few months' break and, having discussed it with the board of Alliance Boots, to stand down from my post as group chief executive," said Hornby in a statement. He had joined Alliance Boots in June 2009, just months after his tenure at HBOS ended with the stricken bank being rescued by rival LLoyds TSB. Stefano Pessina, the executive chairman of Alliance Boots, said Hornby left "with our very best wishes for the future".

Andy Hornby, the man running HBOS when it had to be rescued by Lloyds bank in 2008, has unexpectedly quit his £1m-a-year job as chief executive of healthcare group Alliance Boots with immediate effect.

Andy Hornby, the man running HBOS when it had to be rescued by Lloyds bank in 2008, has unexpectedly quit his £1m-a-year job as chief execut...

Moody’s warned that the AAA rating was at risk if Mr Osborne’s predictions were not met.

Does anybody remember the rhetoric of Mr Cameron and Mr Osborne in the months before last year’s election? Britain was in danger of losing its coveted AAA credit rating under Labour. All this was said despite the fact that, in February 2010, two of the three ratings agencies, Moody’s and Fitch, were both on record as saying Britain’s economic outlook was stable and there was no danger of a downgrade. This, remember, was when it was assumed Britain’s budget deficit for 2009 had been £178 billion. It later turned out the Treasury had massively overestimated the deficit which was, in fact, £150bn. This week, Mr Osborne announced in his budget speech the budget deficit for 2010 would be £146.5bn – a figure that would have been lower had the economy not contracted by 0.6% in Q4 2010 having previously grown by 1.7% in the previous two quarters as Labour’s stimulus measures took effect. He also revised down the Treasury’s growth forecast for the coming two years, although at 1.7% in 2011 and 2.5% in 2012, the predictions are still highly optimistic. This optimism is clearly evident to the markets. The following day Moody’s warned that the AAA rating was at risk if Mr Osborne’s predictions were not met. As Daily Mail blowhard Richard Littlejohn might say, “you couldn’t make it up”.

Moody’s warned that the AAA rating was at risk if Mr Osborne’s predictions were not met.

Does anybody remember the rhetoric of Mr Cameron and Mr Osborne in the months before last year’s election? Britain was in danger of losing i...

Barclays Plc (BARC) is being investigated by regulators seeking to determine if it broke information- sharing rules when setting the London interbank offered rate,

Barclays Plc (BARC) is being investigated by regulators seeking to determine if it broke information- sharing rules when setting the London interbank offered rate, a person briefed on the probe said. U.S. and U.K. regulators are examining if communications between Barclays’s traders and its treasury broke regulations that stop information being shared across the bank, said the person, who declined to be identified because the details of the investigation are private. The Financial Times reported the inquiry on its website yesterday. Barclays, the U.K.’s third-biggest bank, is among banks including Citigroup Inc. (C) and UBS AG that have received subpoenas from U.S. regulators investigating whether some firms manipulated the Libor rate, two separate people familiar with the probe said yesterday. The U.S. Department of Justice, Securities and Exchange Commission and Commodity Futures Trading Commission are working together with the U.K.’s Financial Services Authority on the probe. Spokesmen for London-based Barclays, the BBA and Financial Services Authority declined to comment when contacted by Bloomberg News. A Citigroup spokesman declined to comment<a href="http://www.bloomberg.com/news/2011-03-25/barclays-said-to-be-investigated-by-regulators-in-libor-probe.html">.</a>

Barclays Plc (BARC) is being investigated by regulators seeking to determine if it broke information- sharing rules when setting the London interbank offered rate,

Barclays Plc (BARC) is being investigated by regulators seeking to determine if it broke information- sharing rules when setting the London ...

Iberian Peninsula faced a slew of downgrades from credit rating agencies

<a href="http://blogs.forbes.com/afontevecchia/2011/03/24/portugals-sovereigns-downgraded-spanish-banks-get-the-guillotine/">I</a>berian Peninsula faced a slew of downgrades from credit rating agencies on Thursday, after Fitch decided to cut its sovereign rating for Portugal by two notches to A- while downgraded 30 Spanish banks by one or more notches. Portugal took center stage late into Wednesday’s session, as Prime Minister Socrates resigned after Parliament failed to pass his fourth round of austerity measures.  Socrates told his fellow lawmakers that failing to accept his austerity plan would lead to a bailout which would count with harsher deficit reduction plans.  Fitch’s director of sovereign ratings, Douglas Renwick, echoed Socrates’ statements, explaining “The downgrade reflects increased risks to policy implementation and fiscal financing in light of the Portuguese parliament’s failure to pass fiscal consolidation measures and the resignation of the Prime Minister on 23 March<a href="http://blogs.forbes.com/afontevecchia/2011/03/24/portugals-sovereigns-downgraded-spanish-banks-get-the-guillotine/">.</a>

Iberian Peninsula faced a slew of downgrades from credit rating agencies

I berian Peninsula faced a slew of downgrades from credit rating agencies on Thursday, after Fitch decided to cut its sovereign rating for P...

Ireland banks are in need of another €27.5 billion ($39 billion), and may need it as soon as two weeks next week,

Ireland banks are in need of another €27.5 billion ($39 billion), and may need it as soon as two weeks next week, according to a Bloomberg s...

TV presenter Anthea Turner’s ‘humiliated’ husband Grant Bovey has been discharged from his bankruptcy.

Just a year after his property company collapsed with debts of £50million, TV presenter Anthea Turner’s ‘humiliated’ husband Grant Bovey has been discharged from his bankruptcy. The 49-year-old entrepreneur received his automatic discharge a week ago, 12 months after his voluntary petition was heard at Guildford County Court, Surrey. Bovey is now freed from debt and has already started the process of trying to turn his fortunes around, opening a new bank account and working on a ‘number of projects’.  Before the crunch: Grant Bovey and Anthea Turner at a friend's wedding in 2006 The former millionaire, who listed his occupation as ‘unemployed’ during his bankruptcy hearing, is working with a group of ex-business associates on ‘new ideas’. But he is believed to want to stay in the shadows, rather than front the new ventures, for fear of putting investors off. A close associate tells me: ‘Grant is delighted his bankruptcy has been discharged as it will allow him to get his life back on track. It has been a nightmare since the property bubble burst and his firm went down. He has been fighting an uphill battle and it put a huge strain on his relationships. ‘He knows he let Anthea down and other investors who lost a lot of money, and is determined to make a new venture a success.’ Despite his financial fall from grace, the one-time property speculator managed to hold on to some of his lavish lifestyle. He lives in a pretty cottage in Hascombe, Surrey, owned by his wife and I can also reveal the couple managed to do a deal to keep their £4million French ski chalet.  Bovey agreed to pay off a substantial sum to a bank, representing his half of the chalet’s value. Anthea owns the other 50 per cent. But the helicopters he used to fly around the UK have been sold. Miss Turner has been the main breadwinner and has spent considerable time working in Canada on a show called Dinner Party Rules. Bovey blamed the credit crunch for ruining his property empire, which was once worth £100million, forcing him to sell their £10million estate. Last year he admitted: ‘It’s humiliating and I feel that I’ve let Anthea down, that I’ve let down my children and everyone who had faith in me.’

TV presenter Anthea Turner’s ‘humiliated’ husband Grant Bovey has been discharged from his bankruptcy.

Just a year after his property company collapsed with debts of £50million, TV presenter Anthea Turner’s ‘humiliated’ husband Grant Bovey has...

Tribune Co. Chairman Sam Zell is battling to avoid legal liability for leading what he called “the deal from hell,” the $8.2 billion buyout of the bankrupt newspaper and television company.

In court papers filed yesterday, Zell asked the judge overseeing Tribune’s bankruptcy for permission to challenge a lawsuit filed against him by creditors. The lawsuit seeks to recover money from him, and other Tribune managers, whom creditors blame for the company’s inability to repay about $13 billion in debt, most of which is tied to the 2007 buyout. “He is the one person who did nothing wrong,” David Bradford, Zell’s bankruptcy attorney, said in court yesterday, a few hours before filing the latest round of court papers in which the Chicago real estate billionaire denied responsibility for Tribune’s insolvency. Two groups of hedge funds have submitted competing plans to reorganize Tribune and resolve billions of dollars worth of legal claims related to the buyout. Both groups would allow a federal lawsuit against Zell and Tribune’s other managers to go forward. Chicago-based Tribune filed bankruptcy in December 2008, one year after the two-stage buyout was completed. The company owns eight newspapers, including the Los Angeles Times and the Chicago Tribune, with a combined daily circulation of 1.9 million last year. The company’s 23 TV stations include sites in New York, Chicago and Los Angeles. The bankruptcy case is In re Tribune Co., 08-bk-13141, U.S. Bankruptcy Court, District of Delaware (Wilmington).

Tribune Co. Chairman Sam Zell is battling to avoid legal liability for leading what he called “the deal from hell,” the $8.2 billion buyout of the bankrupt newspaper and television company.

In court papers filed yesterday, Zell asked the judge overseeing Tribune’s bankruptcy for permission to challenge a lawsuit filed against hi...

Bulgaria's Interior Minister Tsvetan Tsvetanov has revealed that the police are holding negotiations with the armed robber who keeps 7 hostages in Sliven.

Bulgaria's Interior Minister Tsvetan Tsvetanov has revealed that the police are holding negotiations with the armed robber who keeps 7 h...

Ashley Mitchell stole £7 million ($11.4 million) in virtual currency from Zynga Poker and has now been sentenced to two years in jail, the Guardian reports.

Ashley Mitchell stole £7 million ($11.4 million) in virtual currency from Zynga Poker and has now been sentenced to two years in jail, the Guardian reports. "He made determined and repeated efforts to attack Zynga's systems. He succeeded and transferred 400bn chips and sold them to realise a substantial profit." James Taghdissian, representing prosecution said. Mitchell, a 29 year old gambling addict living in Paignton, Devon logged on to Zynga's mainframe, stole the identities of two Zynga employees and transferred the virtual currency to himself. He sold the stolen chips to other Facebook users, over the course of two months ending with a total profit of £53,612. "Gambling had complete control of his life." said Ben Darby, defending Mitchell. The prosecution for the case estimated that the total damages to Zynga were $12m (£7m). "That is what they estimate they would have lost if all the chips were successfully sold on." Taghdissian said. It was clear something nefarious was going on as early as August 2009 when large amounts of virtual chips went missing. Investigators initially suspected the two Zynga employees, but later determined that their account had been hacked. Mitchell was finally identified after using his neighbor's unsecured wifi networks and logging into his own facebook account during one of the hacks. "It was clear there had been a systematic approach adopted in probing and accessing Zynga. Checks on [Mitchell's] bank account showed at this time he bought items including a Rolex watch and was also spending money on online gambling." He had only sold about a third of his total chips before he was caught. Mitchell admitted his crimes and was, today, sentenced. He also has a 30 day suspended sentence for hacking into the computers from where he previously worked

Ashley Mitchell stole £7 million ($11.4 million) in virtual currency from Zynga Poker and has now been sentenced to two years in jail, the Guardian reports.

Ashley Mitchell stole £7 million ($11.4 million) in virtual currency from Zynga Poker and has now been sentenced to two years in jail, the G...

Colonel Gaddafi’s state investment fund came within a whisker of buying Kaupthing Bank Luxembourg in 2009

Colonel Gaddafi’s state investment fund came within a whisker of buying Kaupthing Bank Luxembourg in 2009 in a move that would have made the Libyan dictator banker to some of Europe’s wealthiest individuals. Kaupthing Luxembourg, which specialised in banking services to the super-rich, collapsed along with its Icelandic parent company in late 2008. Pricewaterhouse-Coopers were appointed as administrators to the bank and the Luxembourg government began talks with potential buyers. A report to creditors of the parent Kaupthing Bank in Iceland reported that a provisional agreement to sell the bank to the Libyan Investment Authority had been signed. But the talks failed and Kaupthing Luxembourg was bought by financier David Rowland in July 2009. Mr Rowland reopened the Luxembourg bank as Banque Havilland, inviting Prince Andrew as guest of honour at the relaunch. Kaupthing Luxembourg was the conduit for many of the controversial loans to British entrepreneurs, including Robert Tchenguiz and his brother Vincent, who were recently arrested and questioned, though released without charge, by the Serious Fraud Office as part of their investigation into the collapse of the bank<a href="http://www.dailymail.co.uk/news/article-1368001/Why-did-Prince-Andrew-visit-Gaddafi-Libya-shady-Tory.html">.</a>

Colonel Gaddafi’s state investment fund came within a whisker of buying Kaupthing Bank Luxembourg in 2009

Colonel Gaddafi’s state investment fund came within a whisker of buying Kaupthing Bank Luxembourg in 2009 in a move that would have made the...

US regulator, the Securities and Exchange Commission (SEC) has handed out subpoenas to more banks over alleged manipulation of the LIBOR rate, the wholesale rate at which banks lend to each other.

US regulator, the Securities and Exchange Commission (SEC) has handed out subpoenas to more banks over alleged manipulation of the LIBOR rate, the wholesale rate at which banks lend to each other. Barclays, Citigroup and Bank of America are now being investigated by US regulators - as well as authorities in the UK and Japan. They will assess whether the banks submitted artificially low borrowing costs to the British Banking Association, which calculates LIBOR, between 2006 and 2008. UBS, the Swiss banking giant, revealed yesterday that it was under investigation for its “improper attempts... to manipulate LIBOR rates at certain times”, the lender said in its annual results. To calculate the rate, the BBA pools together data from panel banks received at 1100 daily. The rates are ranked, and the middle two quartiles are then averaged to create the LIBOR for that day. The effectiveness of the LIBOR system has come into question in recent years, as it is thought not to reflect the true lending rates in the market as panel banks could easily report inaccurate data. LIBOR, the London InterBank Offered Rate, is the basis for settlement of interest rate contracts on many of the world’s major futures and options exchanges.

US regulator, the Securities and Exchange Commission (SEC) has handed out subpoenas to more banks over alleged manipulation of the LIBOR rate, the wholesale rate at which banks lend to each other.

US regulator, the Securities and Exchange Commission (SEC) has handed out subpoenas to more banks over alleged manipulation of the LIBOR rat...

UK banks have around £136 billion of exposure to crisis-struck Japan,

UK banks have around £136 billion of exposure to crisis-struck Japan, the City watchdog has said. The estimate from the Financial Services Authority (FSA) comes as the country battles to stave off a nuclear meltdown following its devastating earthquake and tsunami. But the FSA said it was "too soon" to estimate the scale of losses for insurers from the disaster. Its comments follow fears over a mammoth claims bill for insurers, which has sent shares in the sector plunging since last Friday's events. News of the banking exposure also comes at a difficult time for the sector, which has been left reeling on concerns over vulnerability to debt-laden Portugal - which suffered a credit ratings downgrade. The FSA said it was trying to establish the total impact Japan's disaster will have on the UK's financial sector. The £136 billion bank exposure estimate, which is based on Bank of England figures, includes loans to Japanese firms in Britain and holdings in Japanese government debt. David Rule of the FSA's prudential risk team, said: "The risk we think is manageable on the banking side. On the insurance side it's early days." One estimate earlier this week put the potential claims bill from just the earthquake at as much as £22 billion. Reinsurers - which insure insurers - are thought to be most at risk, with concerns 2011 profits could be completely wiped out as the Japanese tragedy adds to a series of recent natural disasters, including the New Zealand earthquake and Australian floods. Shares in Catlin, a Lloyd's insurer, have fallen 8% in the past week, while fellow groups Beazley and Hiscox have slumped 9% and 4% respectively since last Friday.

UK banks have around £136 billion of exposure to crisis-struck Japan,

UK banks have around £136 billion of exposure to crisis-struck Japan, the City watchdog has said. The estimate from the Financial Services A...

Bank of Canada said that while it's aware of the allegations against Securency International

Australian company chosen to help make this country's new plastic-based currency is embroiled in an international scandal that includes allegations of million-dollar kickbacks and even of offering a prostitute to one client. However, the Bank of Canada said that while it's aware of the allegations against Securency International, they won't delay this November's release of the new Canadian currency. "The bank is fully aware of the allegations related to past business practices of Securency International," said Bank of Canada spokeswoman Julie Girard in an email to Postmedia News. Securency International, a company started and partially owned by the Reserve Bank of Australia, that country's central bank, has been tapped to provide the material — a non-porous, plastic film that makes counterfeiting extremely difficult and bills more durable — for the new Canadian currency. Last week, the Bank of Canada announced it is introducing new $100 bank notes, printed on the special polymer base, starting in November, with new $50 bills to follow next March. Securency, however, has been the subject of an investigation by the Australian Federal Police and the British Serious Fraud Office into allegations that agents employed by the company paid millions of dollars in kickbacks to government officials in countries such as Malaysia, Vietnam and Nigeria to encourage them to use their product. Girard said the Bank of Canada is "confident in its business arrangements," and is satisfied that Securency "has taken appropriate steps to strengthen its governance and business practices." "Security is the main consideration for the bank when choosing the materials for Canadian bank notes," she said. "The polymer material and security features chosen are the best option available for Canada's new series of bank notes, and the Bank has put in place robust supply arrangements to ensure that Canadians have the most secure bank notes possible."

Bank of Canada said that while it's aware of the allegations against Securency International

Australian company chosen to help make this country's new plastic-based currency is embroiled in an international scandal that includes ...

Radiation levels in Tokyo, one of the world's most populous cities, rose 10 times above average

Radiation levels in Tokyo, one of the world's most populous cities, rose 10 times above average Tuesday evening, spreading fear among many of the 33 million residents in the metropolitan area. The best advice experts could give them was to stay indoors, close the windows and avoid breathing bad air -- steps very similar to those for handling a smog alert or avoiding influenza. While these steps may sound inconsequential, experts said the danger in Tokyo, while worrisome, is slight - at least for now. "Everything I've seen so far suggests there have been nominal amounts of material released. Therefore, the risks are generally low to the population," Jerrold Bushberg, who directs programs in health physics at the University of California at Davis, said in a telephone interview. "There may be more significant risks for emergency workers on site. They are dealing with the occupational exposure, but not for the population at large." Fresh explosions Tuesday at the Fukushima plant, 180 miles north of Tokyo, released low levels of radiation, escalating a crisis triggered by last week's massive earthquake and tsunami. With cooling systems knocked out, the fear is more blasts within the reactors at the complex could eventually cause a major radiation leak. The levels measured around Tokyo at one point were 40 times above normal but have receded to 10 times. That amounts to roughly the same dose as a chest or abdominal CT scan.

Radiation levels in Tokyo, one of the world's most populous cities, rose 10 times above average

Radiation levels in Tokyo, one of the world's most populous cities, rose 10 times above average Tuesday evening, spreading fear among ma...

Millions of savers are being cheated out of up to £920 a year tax-free interest on their cash Isas, a Money Mail investigation has discovered.

Millions of savers are being cheated out of up to £920 a year tax-free interest on their cash Isas, a Money Mail investigation has discovere...

Financial reforms pushed through by the Labour government allowed Islamic banks to flourish in Britain, amassing assets valued at more than £12 billion.

Financial reforms pushed through by the Labour government allowed Islamic banks to flourish in Britain, amassing assets valued at more than £12 billion. To comply with Islamic law, their financial products do not pay or charge interest, and the banks cannot invest in alcohol, tobacco or gambling firms. But while government officials have promoted Britain's status as the most Islamic-friendly economy in the Western world, cables obtained by WikiLeaks show that the US feared the banks could be used to channel funds to terrorists. The State Department was so concerned that it ordered US diplomats in London to compile a report on the activities of sharia banks in Britain. The cable, sent from the office of Condoleezza Rice, George Bush's then Secretary of State in June 2006, requested information on "Islamic financial institutions' vulnerability to exploitation for illicit or terrorist purposes, such as structuring accounts to mask illicit activity or money laundering". The US had particular suspicions that "charitable donations", which Islamic banks are obliged to make to comply with sharia, could be funnelled to al-Qaeda sympathisers. Washington was also keen to discover whether British regulators and anti-corruption investigators had the "capacity" and "effectiveness" to monitor Islamic banks. Information on the types of customers who have accounts with these banks was also requested. While the report compiled by the US embassy remains secret, a separate cable sent two months later on Aug 17 2006 claims the British Government was aware of "profound shortcomings" in the regulation of charities with links to terrorist groups overseas. Stuart Young, a Home Office official, allegedly told US diplomats that the Charity Commission was "completely out of its depth" in how it dealt with groups suspected of funding terrorists. Its officials would have "already trampled over the crime scene" by the time they contacted police, he was reported to have said. Regulations covering charity financing have since been tightened. The two cables highlight the controversial nature of Labour's policy of promoting London as a hub of Islamic finance. Britain was the only country in western Europe for which the US requested intelligence on the activities of sharia banks. Almost all the 20 other countries to which the cable was sent are Muslim-majority nations in North Africa, the Middle East and Asia. Research in 2009 found that Britain's Islamic banking sector is the biggest in Europe, and larger than many Muslim nations, including Pakistan.

Financial reforms pushed through by the Labour government allowed Islamic banks to flourish in Britain, amassing assets valued at more than £12 billion.

Financial reforms pushed through by the Labour government allowed Islamic banks to flourish in Britain, amassing assets valued at more than ...

The SFO announced it will launch a series of new raids to find more evidence behind the failure of the bank in 2008.

Britain’s Serious Fraud Office said Sunday it is going beyond the arrest of Robert and Vincent Tchenguiz in investigating the collapse of the Icelandic bank Kaupthing. The SFO announced it will launch a series of new raids to find more evidence behind the failure of the bank in 2008. Reports said that aside from zeroing in on the roles of the Tchenguiz brothers and nine other associates in the collapse of the bank, the investigation will also look into the activities of the other friends of Kaupthing. Other prominent businessmen may be included in the arrests, highlighted by the raids on the offices and detention of the Tchenguiz brothers on Wednesday. Among the items seized from the brothers were digital materials from computers and servers, paper files and other documents such as banking paperwork. SFO investigators are also probing whether assets of Robert Tchenguiz totaling $2.55 billion (GBP 1.7 billion) that were pledged as collateral were manipulated. Vincent Tchenguiz was held in custody for about 14 hours, but was questioned for only 45 minutes and released Wednesday at about 8 p.m. The SFO also arrested nine other people on Wednesday, but later released them without charge. Those arrested include two top assistants of the Tchenguiz siblings and former Kaupthing executives.

The SFO announced it will launch a series of new raids to find more evidence behind the failure of the bank in 2008.

Britain’s Serious Fraud Office said Sunday it is going beyond the arrest of Robert and Vincent Tchenguiz in investigating the collapse of th...

alleged £1bn HBOS corporate fraud was known to former directors of the state-rescued bank, but they failed to act on the information, according to sources close to police investigators.

alleged £1bn HBOS corporate fraud was known to former directors of the state-rescued bank, but they failed to act on the information, according to sources close to police investigators. A dossier of evidence to support the claims  has been handed by the police to the Crown Prosecution Service (CPS), the Sunday Herald reports. The dossier of 50 letters has also been sent to FSA chief executive Hector Sants, Treasury Select Committee chairman Andrew Tyrie, other members of the parliamentary committee, and to business secretary Vince Cable, according to police sources. Addressees of the letters are thought to include HBOS directors who were allegedly alerted to the fraud fears by directors of “victimised” corporate customers during 2007 but failed to investigate the claims. Lord Stevenson of Coddenham, the former chairman of HBOS, is thought to be among the names, as well as Andy Hornby, the bank's former chief executive, head of corporate lending Peter Cummings and non-executive directors including Charles Dunstone and Sir Ron Garrick. The HSBOS probe has been called “one of the largest fraud investigations of its type in UK history” by police. Between mid-2002 and late 2007, the main suspects in the case are alleged to have stolen and laundered about £1bn. The money had been lent by HBOS’s Bank of Scotland Corporate division to 200 corporate customer accounts. Physical assets worth scores of millions are also alleged to have been stolen.  Lloyds TSB took over HBOS in a £12.2bn all-share deal in September 2008, three days after Lehman Brothers went bust. The following month the government was forced to bail out the banking sector and pumped £11.5bn into HBOS, £5.5bn into Lloyds and £20bn into Royal Bank of Scotland. An ongoing criminal investigation into the alleged fraud at HBOS, code-named Operation Hornet, has been underway since June

alleged £1bn HBOS corporate fraud was known to former directors of the state-rescued bank, but they failed to act on the information, according to sources close to police investigators.

alleged £1bn HBOS corporate fraud was known to former directors of the state-rescued bank, but they failed to act on the information, accord...

The Bank of Japan has injected a record ¥21.8 trillion (£165bn) into the Japanese economy to limit the financial devastation

The Bank of Japan has injected a record ¥21.8 trillion (£165bn) into the Japanese economy to limit the financial devastation wreaked by the earthquake, tsunami and nuclear power crisis. The unprecedented intervention failed to prevent the country's main stock market index plunging by more than 6%, but is thought to have averted a steeper fall. Tokyo's Nikkei index dragged down shares across the world as investors worried that a decline in the world's third biggest economy would reduce the value of goods and services the country bought from overseas. The FTSE 100 index of leading British shares slumped by nearly 1% and its Europe-wide equivalent fell by 1.06%. In the US, the S&P 500 was down 1.15% in afternoon trading, while Germany's Dax and France's CAC 40 indices ended the day down 1.65% and 1.3% respectively. Analysts said European shares would probably have fallen further, if Brussels had not agreed at the weekend to increase the eurozone's bailout fund from around ¤250bn (£216bn) to ¤440bn, making a repeat of the Irish and Greek meltdowns less likely. As Japanese workers battled to prevent a nuclear meltdown and the unrest continued in the Middle East, the price of oil and gas increased amid concerns that Japan, a country heavily dependent on nuclear energy, may need to significantly step up its consumption of fossil fuels. Japan typically gets about a third of its energy from nuclear power, which has seen its capacity reduced by more than a fifth by the country's worst earthquake and left 11 reactors out of action.

The Bank of Japan has injected a record ¥21.8 trillion (£165bn) into the Japanese economy to limit the financial devastation

The Bank of Japan has injected a record ¥21.8 trillion (£165bn) into the Japanese economy to limit the financial devastation wreaked by the ...

former client and shareholder of Iceland’s Kaupthing Bank claimed Friday that the financial firm used deposits to artificially inflate its share price for a year before the bank collapsed in 2008

former client and shareholder of Iceland’s Kaupthing Bank claimed Friday that the financial firm used deposits to artificially inflate its share price for a year before the bank collapsed in 2008 — allowing senior executives to sell their holdings at a high price. Kevin Stanford, a British retail entrepreneur who co-founded the fashion chain Karen Millen, alleges that the banks used deposits from British customers of its Kaupthing Edge accounts to make loans that would fund acquisitions of Kaupthing shares. The Kaupthing Edge account, which had about 30,000 investors in Britain, is the focus of an ongoing investigation by Britain’s Serious Fraud Office. In a 12-page letter dated March 11, Mr. Stanford’s attorney wrote that Kaupthing loaned Mr. Stanford £81 million, or $130 million, to purchase Kaupthing shares just two months before the bank collapsed. Kaupthing accepted the same shares as collateral for the loan, according to the letter. “During August 2008, our client was approached by the then chairman of Kaupthing Luxembourg, Magnus Gudmundsson,” according to a copy of the letter obtained by DealBook. “Mr. Gudmundsson offered to purchase £81 million worth of shares in Kaupthing Iceland on our client’s behalf.” On August 6, 2008, Mr. Gudmundsson sent an email to Mr. Stanford, saying “Please keep this trade confidential,” the letter said. “Kaupthing Iceland had insufficient liquidity to make loans in 2008 and so began to devise ways in which it could generate sufficient liquidity to make the loans to finance the purchase of its own shares and therefore maintain its share price,” the letter said. It also said that “the shares purchased with these loaned funds were previously owned by senior employees of Kaupthing who were selling down their positions.” The content of the letter was previously reported by The Times of London. Ritchie Irvine, Kaupthing’s lawyer at DWF, could not immediately be reached for comment. A spokesman for DWF at communications firm Bell Pottinger and a spokeswoman for the Serious Fraud Office declined to comment. The Serious Fraud Office and the Icelandic prosecutor’s office arrested nine men in London and Reykjavik on Wednesday to question them in connection with the failure of Kaupthing, once Iceland’s biggest investment bank. Two of them were the well-known London property entrepreneurs Robert and Vincent Tchenguiz, who were released after a few hours of questioning. In a statement published Monday, Robert Tchenguiz called the arrests “disproportionate and aggressive,” saying they were “designed to generate maximum publicity.” He also said that his arrest followed repeated offers to speak to investigators about his business relationship with Kaupthing but that the offers had been ignored. “I hold the SFO responsible for the ensuing loss and damage which my family, my business and my reputation have suffered,” Mr. Tchenguiz said.

former client and shareholder of Iceland’s Kaupthing Bank claimed Friday that the financial firm used deposits to artificially inflate its share price for a year before the bank collapsed in 2008

former client and shareholder of Iceland’s Kaupthing Bank claimed Friday that the financial firm used deposits to artificially inflate its s...

Are financial experts too alarmist about the Spanish banking system or is the central bank over-optimistic?

Are financial experts too alarmist about the Spanish banking system or is the central bank over-optimistic? Analysts say the answer lies in the real value of the banks' vast property assets, something which still remains unclear. In recent weeks financial experts have sought to determine how much capital the banks need to clean up their balances sheets in order to respond to tough new government requirements aimed at shoring up confidence in the banks and the country's battered economy. Ratings agency Moody's put the figure at 40-50 billion euros ($55-70 billion) while Fitch estimated it at between 38 and 96.7 billion, Goldman Sachs at 22 to 59 billion and Morgan Stanley at 40 billion. The government insisted that the final figure would not exceed 20 billion. Late Thursday, the official amount from the Bank of Spain was well below even that ceiling at just 15.152 billion. But the markets, which are looking for more financial stability -- and transparency -- in Spain, were unconvinced. The Madrid stock market closed down 0.36 percent on Friday after falling 1.17 percent the previous day. "This (central bank) figure is based on the principle that the value of the banks' real estate assets is realistic and will not decline in the future," said one broker, who requested anonymity. The calculations by analysts are "more demanding" and "take into account a future decline in the value of the assets." Jurgen Michels, an analyst at Citi, said "the required capital need calculated by the Bank of Spain is much lower than the widely expected need of more than 50 billion euros to recapitalise Spanish banks. "The 15.5 billion euros seems too little to solve the capital problems of Spanish banks which are likely to increase further amid an ongoing deterioration in assets, mainly for domestic real estate." Natixis analyst Jesus Castillo said: "Our work is to foresee risks, so we look at stress scenarios. "I arrived at a figure of 80 billion euros," but "in a scenario in which the default ratios on loans on property and construction doubled" and in which "the property market declines by 50 percent."

Are financial experts too alarmist about the Spanish banking system or is the central bank over-optimistic?

Are financial experts too alarmist about the Spanish banking system or is the central bank over-optimistic? Analysts say the answer lies in ...

The Bank of Japan (BOJ) decided Monday to adopt further monetary measures to minimize the negative impact on economy following Friday's catastrophic earthquake.

The Bank of Japan (BOJ) decided Monday to adopt further monetary measures to minimize the negative impact on economy following Friday's catastrophic earthquake. At a policy meeting, BOJ policymakers agreed to expand its asset purchasing program from 35 trillion yen (426.82 billion U.S. dollars) to 40 trillion yen (487.80 billion dollars) to help stabilize the nation's financial system and aid economic recovery. The policymakers also voted unanimously to keep its key interest rate unchanged at the range of zero to 0.1 percent and pledged to further ease its monetary grip if necessary. The central bank will also inject 18 trillion yen into the money markets to help banks and other financial institutions in quake-hit areas raise necessary funds. The BOJ usually holds two-day policy meetings, but decided to convene a one-day meeting following the great earthquake and ensuing tsunami that have caused heavy casualties and enormous damage in vast areas along Japan's Pacific coast.

The Bank of Japan (BOJ) decided Monday to adopt further monetary measures to minimize the negative impact on economy following Friday's catastrophic earthquake.

The Bank of Japan (BOJ) decided Monday to adopt further monetary measures to minimize the negative impact on economy following Friday's ...

WikiLeaks has a cache of damning evidence comprising internal documents and memos from the Bank of America.

The release follows month of speculation that WikiLeaks has a cache of damning evidence comprising internal documents and memos from the Ban...

British-based banks and subsidiaries have $225bn at stake in Ireland, and $152bn in Spain,

On an "ultimate risk" basis that includes the potential loss on derivatives and credit guarantees of different kinds, the figure rises to $2.51trillion as of September 2010, well above the headline figure of $1.76 trillion in cross-border loans. The sheer scale highlights the systemic dangers if the EU fails to stabilize the debt crisis. Eurozone leaders agreed to boost the lending power of the EU bail-out fund on Friday, but Germany vetoed proposals for a debt buy-back scheme or an activist policy of bond purchases. The BIS, the central bank of central banks, said in its quarterly report that Germany had $569bn of exposure to the quartet, France $380bn, and the UK $431bn. A chunk of British exposure is on behalf of Mid-East and Asian clients banking through London. Italy has just $81bn at risk and seems uniquely insulated from the crisis all around it. The geography of risk varies greatly. British-based banks and subsidiaries have $225bn at stake in Ireland, and $152bn in Spain, but little in Portugal or Greece. France is up to its neck in Greece with $92bn; a Benelux-led group has $180bn in Spain, and Spain itself has exposure of $109bn to Portugal.

British-based banks and subsidiaries have $225bn at stake in Ireland, and $152bn in Spain,

On an "ultimate risk" basis that includes the potential loss on derivatives and credit guarantees of different kinds, the figure r...

Cuba sentenced a US contractor to 15 years in prison

Cuba sentenced a US contractor to 15 years in prison for covertly distributing laptops and cellular phones on the island -- a verdict certain to sour the communist-ruled nation's long-strained ties with the United States. Washington swiftly decried the jailing of American Alan Gross as "another injustice" and called for his immediate release. Cuba's Popular Provincial Tribunal found Gross responsible for "acts against the independence or territorial integrity" of the country, according to a statement read on state-run television. Gross, 61, was working under contract for the US State Department when he was arrested in late 2009 for distributing the electronic devices to members of the communist-run island's small Jewish community. "Today's sentencing adds another injustice to Alan Gross's ordeal," said National Security Council spokesman Tommy Vietor in Washington. "He has already spent too many days in detention and should not spend one more. We urge the immediate release of Mr Gross so that he can return home to his wife and family," Vietor said. In their ruling, the Tribunal considered information showing "direct participation of the US contractor in a subversive project by the United States government to try to destroy the revolution." The Cuban statement also said that during the trial, the defendant "acknowledged that he had been used and manipulated" by the US Agency for International Development, which financed Gross's company, the statement read. Gross, who can appeal the sentence, was originally accused of targeting universities, religious centers and ethnic groups to create "underground communications networks designed to foment provocations against the revolution." His family was devastated, Gross's attorney said. "At this difficult time for Alan and his family, we again call on the Cuban government to release him immediately on humanitarian grounds," said lawyer Peter Kahn. The two-day, closed-door trial in Havana concluded March 5. The case has chilled a brief warming in US-Cuban relations that followed President Barack Obama's taking office.

Cuba sentenced a US contractor to 15 years in prison

Cuba sentenced a US contractor to 15 years in prison for covertly distributing laptops and cellular phones on the island -- a verdict certai...

Shares in the UK's largest insurers fell heavily

Shares in the UK's largest insurers fell heavily as fears mounted their 2011 profits will damaged by catastrophe claims, with companies still absorbing losses from February's earthquake in New Zealand. In the UK, most of the claims will be felt in the Lloyd's of London market, which has expanded its presence in Japan in recent years. In a statement, Lloyd's said it was "far too early" to estimate losses. Analysts at Collins Stewart said Catlin is likely to be highly exposed to the disaster. Others companies facing losses include Amlin, Beazley and Hiscox. Joy Ferneyhough, an analyst at Espirito Santo, described the earthquake as a "one in 30-year event". However, Barrie Cornes, at Panmure Gordon, added that a lot of the costs would be absorbed by the world's largest reinsurers such as Munich Re and Swiss Re. Risk Management Solutions, which produces risk models for insurance companies, said: "It is estimated more than 50pc of households have building insurance and 40pc of vehicle owners hold motor damage policies.

Shares in the UK's largest insurers fell heavily

Shares in the UK's largest insurers fell heavily as fears mounted their 2011 profits will damaged by catastrophe claims, with companies ...

Ana Patricia Botin, the boss’s daughter, has come to the U.K., where she will have the chance to prove she can lead the bank in Spain that her family has run for more than six decades.

Ana Patricia Botin, the boss’s daughter, has come to the U.K., where she will have the chance to prove she can lead the bank in Spain that her family has run for more than six decades. With her appointment as chief executive officer of Banco Santander SA’s U.K. unit in November, Botin became the most powerful woman in London finance. Now, if she can repair the bank’s customer-service reputation and pull off an initial public offering, she will have improved her odds of succeeding her father, 76-year-old Chairman Emilio Botin, who built Santander into the euro region’s most valuable lender through more than $70 billion of acquisitions. “What she wanted, she usually got,” said Jose de Ochoa, who worked with Ana Botin expanding Santander in Latin America, including the 1997 purchase of Colombian lender Bancoquia. London will be the toughest test yet for Botin, 50, whose performance is being closely watched in Spain, where Botins have helped manage Santander for 115 years. She takes charge after former U.K. head Antonio Horta-Osorio defected to lead rival Lloyds Banking Group Plc. An IPO was postponed this year, and Botin will have to explain to investors that Santander’s outlook is solid at a time of doubt about Spain’s banking system, said Simon Maughan, an analyst at MF Global Holdings Ltd. in London.

Ana Patricia Botin, the boss’s daughter, has come to the U.K., where she will have the chance to prove she can lead the bank in Spain that her family has run for more than six decades.

Ana Patricia Botin, the boss’s daughter, has come to the U.K., where she will have the chance to prove she can lead the bank in Spain that h...

Barclays and Deutsche Bank among the lenders that Spain’s central bank said were in need of of extra capital

Among the lenders that Spain’s central bank said were in need of of extra capital were two international names: Barclays and Deutsche Bank. The British bank Barclays was told to put in an additional 552 million euros in order to meet a core capital requirement of 8 percent, Bank of Spain said Thursday. Germany’s Deutsche Bank, whose business in Spain is largely private banking, was told to top up with 182 million euros. Both lenders told the Bank of Spain that they would would take the necessary steps. Those numbers are dwarfed by the capital that Spain’s savings banks have been told to raise by September, with several cajas — Bankia, Civica and Mare Nostrum — planning initial public offerings to cover the gap. Others are seeking large investors to take private stakes. Altogether, financial institutions in Spain including Barclays and other private-sector banks will need to raise 15.2 billion euros to meet the central bank’s requirements, if they are to avoid the injection of public funds, considered partial nationalization. The Spanish subsidiaries of Barclays and Deutsche can simply turn to their parent corporations for the money. A spokesman for Barclays said Friday that the fund-raising was part of the bank’s capital planning, and that it would not need to raise additional money. The domestic savings banks seek more than 14 billion euros, of which Caja Madrid and its affiliates alone must raise 5.8 billion euros. But Barclays led in its category after reporting in its full-year 2010 results last month that loan impairments in the country had experienced “a significant increase,” a symptom of the country’s wider troubles. Corporate loan impairments in Spain more than tripled to 898 million pounds in 2010 from 268 million pounds in 2009, contributing to an overall loss in Barclays corporate loan unit. The bank said at the time that the widening losses were “driven by depressed market conditions in the property and construction sector, including some significant single name cases” in the country. The Financial Times reported this week that Barclays planned to close more than 100 of its 600 branches in Spain. Moody’s lowered Spain’s credit rating on Thursday to Aa2, with a negative outlook, saying the costs of cleaning of the financial sector would surpass current government estimates. The move by the ratings agency may make it more expensive for the banks to raise money at the very moment that they are rushing to look for it. The lenders must notify the central bank of their fund-raising plans by April 1, if they have not already. In the summer, Europe will announce the results of its stress tests, which may lead Spanish regulators to revise their estimates of how much capital should be raised. The banks are expected to have completed their fund-raising by September, although extensions until March of next year are possible.

Barclays and Deutsche Bank among the lenders that Spain’s central bank said were in need of of extra capital

Among the lenders that Spain’s central bank said were in need of of extra capital were two international names: Barclays and Deutsche Bank. ...

Santander's chief executive has been handed a jail sentence and barred from working as a banker for three months by Spain's Supreme Court.

Santander's chief executive has been handed a jail sentence and barred from working as a banker for three months by Spain's Supreme Court. The verdict is an embarrassing blow to the reputation of Alfredo Saenz, whose bank is one of Britain's biggest high street lenders. Mr Saenz will not serve time in prison after the court's judgment in a 14-year case against him. He was found guilty of false accusations against debtors to Banesto in 1994 when he headed the bank which is now part of Santander. He will appeal against the ban and the sentence in a process that Santander said could take up to four years. In any case, he would not have to go to prison because first-time offenders given short sentences are spared jail in Spain. Santander said they supported Mr Saenz, who is the right-hand man to the flamboyant chairman, Emilio Botin. He was originally sentenced to six months in prison in 2009 and has made several appeals.

Santander's chief executive has been handed a jail sentence and barred from working as a banker for three months by Spain's Supreme Court.

Santander's chief executive has been handed a jail sentence and barred from working as a banker for three months by Spain's Supreme ...

Spain saw its sovereign debt rating slashed by one notch to Aa2

Spain saw its sovereign debt rating slashed by one notch to Aa2 on Thursday, as Moody’s, the credit rating agency, cited higher than expected recapitalization costs for the country’s savings banks or cajas, and the central government’s inability to enforce ambitious budget deficit targets, set at 1.3% of GDP throughout the 19 autonomous communities.  Spanish officials were enraged, starting with finance Minister Elena Salgado, who disagreed with Moody’s decision to release the figures hours ahead of the Bank of Spain’s official estimates of restructuring costs. The country’s benchmark index, the IBEX 35, dropped 1.17% through the session, while Spanish government bond spreads over German bunds hit 225 basis points, as yields rose to 5.53%. Moody’s downgraded its rating on Spanish government bonds to the second highest notch on fears that the the cost of re capitalizing the country’s many cajas would probably reach €40 to €50 billion (about $55 to $69 billion).  That would be far more than the €20 billion ($28 billion)estimated by the office of President Jose Luis Rodriguez Zapatero and would substantially increase Spain’s public debt ratio. Spanish officials were infuriated that Moody’s chose to release these numbers only hours ahead of the Bank of Spain’s official estimates, which put banks and cajas’ recapitalization needs at €15.2 billion (about $20.1 billion).  The Iberian country’s central bank announced that 12 institutions, which included 8 cajas, two banks, and two foreign subsidiaries of Deutsche Bank and Barclays, would require funding.  The credit rating agency noted that in “a more stressed scenario, recapitalization needs could increase to approximately €110 – €120 billion” ($152 to $165 billion). While Spanish media sought to discredit Moody’s and its fellow rating agencies, Standard & Poor’s and Fitch, the company’s London office also raised the question of whether the central government’s had the capacity to enforce an unprecedented budget deficit target of 1.3% of GDP.  Praising Zapatero’s government’s resolve in reining in the deficit in 2010, where the budget deficit target was set at 2.4% of GDP, Moody’s noted that 9 of the 17 autonomous communities weren’t able to comply.  Moreover,

Spain saw its sovereign debt rating slashed by one notch to Aa2

Spain saw its sovereign debt rating slashed by one notch to Aa2 on Thursday, as Moody’s, the credit rating agency, cited higher than expecte...

A "super-injunction" was granted to the knighted ex-boss of Royal Bank of Scotland

A "super-injunction" was granted to the knighted ex-boss of Royal Bank of Scotland - bailed out by £20billion from taxpayers.It was exposed in the Commons when Lib Dem MP John Hemming shopped Sir Fred, 52, over his "secret hearing".Mr Hemming demanded: "Is there one law for the rich, such as him, and another law for the poor?"The media had been barred from even reporting the draconian gag - but Mr Hemming dramatically used parliamentary privilege to expose it.MP... Lib Dem John Hemming He bluntly told fellow MPs: "In a secret hearing, Fred Goodwin has obtained a super-injunction preventing him from being identified as a banker." He then asked: "Will the Government have a debate or a statement on the issue of freedom of speech and whether there is one law for the rich, such as Fred Goodwin, and another law for the poor?"Sir Fred was in charge when ailing RBS had to be bailed out with £20billion of taxpayers' cash.A condition of the rescue was that he had to go - but there was then uproar at him getting a payoff of almost £3million plus a £700,000-a-year pension.He eventually agreed to reduce his package to £342,500 a year.Super-injunctions have been slammed as a blow to press freedom.Leader of the House Sir George Young yesterday said a looming Westminster Hall debate would explore freedom of speech.Banker ... Sir Fred Goodwin as RBS boss He said of Mr Hemming's demand: "I will raise with the appropriate minister the issue he has just raised." Sir George warned MPs about addressing legal proceedings and court responsibilities, saying: "I think any minister would be cautious about commenting on that."Sir Fred - knighted thanks to Tony Blair in 2004 for services to banking - revelled in his "Shred" nickname, earned by him wielding the axe.But he went on to be dubbed "the world's worst banker" after his recklessness brought world-famous RBS to its knees in 2008.The bank had to be saved from collapse by the Government.He has since kept his head down - while more than 20,000 RBS staff have lost their jobs.

A "super-injunction" was granted to the knighted ex-boss of Royal Bank of Scotland

A "super-injunction" was granted to the knighted ex-boss of Royal Bank of Scotland - bailed out by £20billion from taxpayers. It w...

Barclays has been ordered to pump £475m into its Spanish arm following a health check of the nation's financial system.

The Bank of Spain has run the rule over every lender in the country and found that Barclays (down 4.1p to 301.4p) is one of just two foreign banks without big enough cash cushions, along with Deutsche Bank. The central bank is battling to quash fears that many lenders operating in Spain do not have enough capital to absorb potential losses on their loan books following a severe property crash. Hard times: There is growing concern over the health of Spain's banking system There is growing concern at European level over the health of the Spanish banking system, particularly the mutually-owned lenders, known as 'cajas'. Moody's yesterday warned that the cost of safeguarding the Spanish banking system could be as much as eight times above Bank of Spain's £13bn estimate. It cut the Spanish government's debt rating to two notches below its pristine triple-A level. Spain's largest bank, Santander, suffered a set-back to its plans to spin off its UK arm after its chief executive Alfredo Saenz was yesterday jailed for three months, banned from the banking industry and barred from working in financial services after he was found guilty of making false claims. Santander is standing by Saenz, who will continuing running the financial giant while he appeals the verdict. however, the charges could complicate Santander's plans to list its fast-growing UK division on the London Stock exchange. Saenz was due to take a place on the board of its British business ahead of one of the most eagerly anticipated floats in years. Following yesterday's ruling, it is unclear whether the City watchdog will allow him to take his seat.

Barclays has been ordered to pump £475m into its Spanish arm following a health check of the nation's financial system.

The Bank of Spain has run the rule over every lender in the country and found that Barclays (down 4.1p to 301.4p) is one of just two foreign...

Former head of the Foreign Office's Middle east section has called for Prince Andrew to be sacked as a trade envoy "as soon as possible".

Stephen Day said in a letter to three Whitehall departments he was causing "serious damage" to the Royal family and to Britain. It comes after the Prince met the Queen to discuss his links with convicted paedophile Jeffrey Epstein, according to Sky sources. US billionaire Epstein was sentenced to 18 months in prison in 2008 for soliciting a minor for prostitution. Sky News understands the Queen and Duke of York met recently and part of that discussion was to deal with the negative issues surrounding him. There is no suggestion at the moment that it was an extraordinary meeting. Prince Andrew has known Epstein since the early 1990s and met as recently as December in New York. The prince has been strongly criticised by Republic, the anti-monarchy group, for a lack of judgment. Republic have called for Andrew to be stripped of his role as the UK's trade envoy as a result. The Duke and Queen are very close and meet several times a week. He values her opinion more than anyone else's. Whatever happens in the near future, whether he decides to stay on as trade envoy or step down, it will on the Queen's advice.

Former head of the Foreign Office's Middle east section has called for Prince Andrew to be sacked as a trade envoy "as soon as possible".

Stephen Day said in a letter to three Whitehall departments he was causing "serious damage" to the Royal family and to Britain. ...

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