Bankrupt Banker

RBS shares fall as insiders claim one Indian technician was cause of meltdown

RBS shares fall as insiders claim one Indian technician was cause of meltdown

Royal Bank of Scotland was the biggest faller in the FTSE 100 yesterday as its computer meltdown played havoc with its share price as well a...

After Barclays, other banks are in our sights over interest rates, warns FSA

<p>The Financial Services Authority has warned the banking industry that the record-breaking £59.5m fine levied on Barclays for attempting to manipulate interest rates might not be the last as an international investigation into the activities of other banks is being continued.  Tracey McDermott, acting director of enforcement and financial crime at the City regulator, said that a "number of other significant cross-border investigations in this area" were under way involving other banks. "The action against Barclays should leave firms in no doubt about the serious consequences of this type of failure," she said.  The bailed-out banks Lloyds Banking Group and Royal Bank of Scotland are among those co-operating with the authorities.  The total fines levied against Barclays reach £290m when penalties to settle actions with the US department of justice and Commodity Futures Trading Commission (CFTC) are included. They follow an investigation of the activities of its traders in London, New York and Tokyo.  Bob Diamond, the chief executive of Barclays, insisted that the events "fell well short of the standards to which Barclays aspires in the conduct of its business".  "When we identified those issues, we took prompt action to fix them and co-operated extensively and proactively with the authorities," Diamond said in a statement. He and the chairman Marcus Agius spoke to shareholders to try to reassure them about the impact of the affair, which could have resulted in an £85m fine from the FSA if the bank had failed to co-operate.  One investor said: "The company needs to urgently convince shareholders that this is not symptomatic of wider ethical business failures." Barclays refuses to disclose how many employees were caught up in the affair and how many have left or face disciplinary action, although it is known that some employees connected to the affair have left.  The account of the long-running saga provided by the CFTC showed that Barclays attempted to manipulate, and made false reports concerning, two global benchmark interest rates "on numerous occasions and sometimes on a daily basis over a four-year period, starting as early as 2005".  The benchmarks referred to are the London interbank offered rate (Libor) and the Euro interbank offered rate (Euribor). They are used by the financial industry to set the rates of interest that households and major companies pay to borrow.  Banks are asked which rate they think they will be able to borrow from each other for periods of time ranging from overnight to 12 months in currencies including sterling, US dollars, euros, yen and Swiss francs. The rates are then submitted to the British Bankers' Association which publishes the "fix" each day.  The actions against Barclays show how crucial the rate became during the financial crisis when the management of the bank was worried about the negative publicity surrounding the higher rates it was submitting compared with its rivals.  In October 2008, in the days before other banks were bailed out, a "submitter" – one of the Barclays traders responsible for submitting rates – remarked that "manager E asked me to put it lower than it was yesterday … to send the message that we're not in the shit".  The FSA admits that a miscommunication may have occurred after a conversation between Barclays management and the Bank of England. "No instruction was given to Barclays to lower its Libor submission during this telephone conversation. However, as the substance of the telephone conversation as relayed down the chain of command at Barclays, a misunderstanding or miscommunication occurred. This meant that Barclays submitters believed mistakenly that they were operating under an instruction from the Bank of England to reduce Barclays' Libor submissions."  The other part of the offence relates to the breakdown in systems controls at Barclays that allowed interest rate traders to work with "submitters" to make the rates suit the traders' and the bank's purposes. It was not until 20 May 2009 that requests to submitters were rebuffed by an email that said: "Sorry I can't do that – compliance would have a real issue with that."  The impact went far beyond London. David Meister, the CFTC's director of enforcement, said: "The American public and our markets rely upon the integrity of benchmark interest rates such as Libor and Euribor because they form the basis for hundreds of trillions of dollars of transactions."  Chris Leslie, the shadow Treasury minister, said that the regulation of Libor arrangements now needed to be reviewed. "We need to know what the government plans to do to prevent traders manipulating the independent interest rates between the banks for their own advantage." said Leslie.</p>

After Barclays, other banks are in our sights over interest rates, warns FSA

The Financial Services Authority has warned the banking industry that the record-breaking £59.5m fine levied on Barclays for attempting to m...

Regulators Fine Barclays £290m For Misconduct

Barclays Bank has been fined £290m by regulators in the United States and Britain - a record sum. The lender agreed to pay the penalty in re...

lingo of a Barclays derivatives trader: dude, this is serious shit.

<p>Let's phrase it in the lingo of a Barclays derivatives trader: dude, this is serious shit.  Barclays tried to manipulate a $550tn market for almost half a decade. Internal controls and risk management functions were inadequate. The compliance department failed to do its job. The bank's actions created the risk that the stability of the UK financial system would be threatened.  Add up that collection of misdemeanours and even £290m of fines, plus a voluntary waiving of boardroom bonuses, is woefully inadequate. The outside world will want to know why no director of Barclays has offered his resignation.  OK, John Varley, chief executive during the saga described in devastating detail by regulators in the UK and the US, has already left the bank. But Bob Diamond, today's chief executive, was running Barclays Capital, the division housing the derivatives dudes seeking to profit by manipulating the Libor rate.  None of the various regulators' reports suggest that Diamond or any other executive director at Barclays knew what was going on – they, we must assume, are not the "senior management" referred to in the FSA report who gave instructions to reduce Libor submissions. But should the top brass have known what was going on? Why doesn't the buck stop at the top when the reputation of the bank has been so badly damaged?  Barclays seems to hope that expressions of "the utmost regret" plus the sacrifice of bonuses by Diamond and three others to reflect "collective responsibilty" will suffice. It may also be hoping that, as this is an industry-wide investigation, revelations elsewhere will show Barclays not to be unique in its dishonesty.  Can Diamond tough this one out? At the moment, that looks a tight call. As for 12-1 odds on Varley being the next governor of the Bank of England, don't risk a penny.</p>

lingo of a Barclays derivatives trader: dude, this is serious shit.

Let's phrase it in the lingo of a Barclays derivatives trader: dude, this is serious shit. Barclays tried to manipulate a $550tn market...

Brussels shames EU countries on tax fraud

<p>fresh report on tax fraud by the European Commission makes several EU countries look like villains in the €1-trillion-a-year racket.  Taxation commissioner Algirdas Semeta put forward the findings in Brussels on Wednesday (27 June) together with ideas on how to clamp down on the practice in future.  He noted that Austria is vetoing EU-level talks with Andorra, Monaco, San Marino and Switzerland on a new agreement to reveal the true owners of front companies and to make the tax havens hand over more data on EU citizens' deposits.  Cyprus, the incoming EU presidency, appeared on his list of countries which have been officially reprimanded by Brussels for not implementing existing laws properly.  The island, an offshore banking centre, also emerged as hosting one of the EU's most pervasive "shadow economies," worth 26 percent of Cypriot GDP (Bulgaria was the worst on over 30%).  Greece, the EU's biggest bailoutee so far, was said to host a black market worth 24 percent of its GDP.  The country's new shipping minister resigned on Tuesday when it came out he owns an offshore firm in violation of Greek law on public officials.  Semeta also named Luxembourg - the home country of Jean-Claude Juncker, a key architect of EU fianancial reforms in his role as president of the Eurogroup - as vetoing the third party tax agreement along with Austria.  The commissioner said he hoped EU leaders at the summit on Thursday would put "strong peer pressure" on the Austrian and Luxembourgish leaders to back down.  His report noted that tax fraud costs the EU €1 trillion a year - more than the five bail-outs so far put together.  It added that the related "shadow economy" in the EU is worth €2 trillion a year.  In another window on the murky world, it said 35 percent of EU countries "non-bank deposits" are held in opaque offshore firms.  It added that Cayman Islands and Swizterland currently host 20 percent of such deposits worldwide, worth $1.4 trillion.  It also noted that the Cayman Islands, a British overseas territory, is among the world's fastest growing non-bank deposit centres. Numbers of deposits in Switzerland have flattened out, while numbers in Jersey, another quasi-British location, are falling.  Semeta's ideas for future actions include: introducing a pan-EU tax-identification number for every cross-border taxpayer; minimum criminal penalties for tax cheats; a new "quick-reaction mechanism" on VAT fraud; and more anti-tax-fraud powers for the EU's joint police body, Europol.  He also plans to publish new "action plans" on how to deal with tax havens and companies which do "aggressive" tax planning.  "Why should teachers, nurses and shop-keepers carry a heavier tax burden just because large companies can employ clever tax planners to avoid paying their share?," he said in his speech.  Details of the new initiatives are due by the end of the year.</p>

Brussels shames EU countries on tax fraud

fresh report on tax fraud by the European Commission makes several EU countries look like villains in the €1-trillion-a-year racket. Taxati...

Tax revenue stalled by tribunals and lack of staff 'in the billions'

<p>Billions in potential revenue is tied up in tax tribunal cases because of a lack of government resources to deal with them, according to HMRC staff.  The potential funds due from more than 20,000 cases that have yet to be resolved, would take about 38 years to clear at the present rate, according to an internal estimate by HM Revenue and Customs.  Interviews with former HMRC staff, lawyers and accountants, and carried out by The Times, suggested the department was struggling to cope under increasing pressure from big companies and the wealthy to avoid tax bills.  Tax officials at HMRC were challenged in the courts by UK Uncut this month following a "sweetheart" deal that absolved banking giant Goldman Sachs frojm paying £10m in back taxes. It was alleged that other companies, including Vodafone, had not been required to pay tax bills of up to £7bn following negotiations with HMRC. The claims also come after comedian Jimmy Carr was heavily criticised this week for his participation in an offshore tax avoidance scheme.  The National Audit Office also published a critical report into processes at HMRC and an investigation on maladministration and bad practice is anticipated. But despite an increasing number of challenges from HMRC over such tax arrangements, the department has been struggling under a lack of resources.  Gareth Black, president of the Association of Revenue and Customs, the union representing senior tax officials at HMRC, has called for more investment in order to collect more tax and has said job losses had contributed to a failure to collect a further £1.1bn in taxes, which was also echoed in a public accounts committee report.  The government has promised to reinvest £917m of savings back into HMRC but Black said cuts to the department – including the further 25% cut in expenditure announced in the spending review – would "further erode staff capacity, staff morale and HMRC's overall ability to close the tax gap".  "The government is shooting itself in the foot", Black has said. "Cutting tax-gathering budgets during a period of economic recovery is grossly counterproductive. It will not save money, it will cost money. Tax avoidance will increase, revenues will diminish ... It is simply not possible to cut tax gathering resources while simultaneously pledging to close the tax gap."  HMRC has a disproportionate number of senior staff close to retirement and the department's elite specialist investigations unit, which handles the most difficult avoidance cases, is not working as well as it should, some have said. Staff numbers have also fallen, from nearly 100,000 in 2004-5 to 68,000 by June 2010, with numbers likely to fall further to 55,000 by 2015. Experts have also said staff were not being properly trained and equipped for the job.  The union called for an additional investment of £260m over the next four years in key areas, including corporate tax avoidance, which would allow it to recoup an extra £6bn in currently lost tax.  However, a senior source at HMRC told the Times that it was the tribunal system itself, rather than cuts, that was to blame for undermining the fight against tax dodgers. "We can't control the tribunal," they said. "It's still finding its way. Two years ago they couldn't find enough cases. Now apparently they've got a backlog."</p>

Tax revenue stalled by tribunals and lack of staff 'in the billions'

Billions in potential revenue is tied up in tax tribunal cases because of a lack of government resources to deal with them, according to HMR...

The computer error that has affected thousands of NatWest customers has been fixed

<p id="story_continues_1">The computer error that has affected thousands of NatWest customers has been fixed, a spokeswoman has said.</p><p>But the company, owned by the RBS group, is still working through a long backlog of accounts, she said.</p><p>The technical fault has disrupted payments to and from NatWest, RBS and Ulster Bank accounts since Thursday.</p><p>Branches at these banks are opening longer this weekend to help customers, who have reported unpaid salaries and rent payments not being processed.</p><p>More than 1,300 branches will stay open until 16:00 or 18:00 on Saturday and some will also open on Sunday.</p><p>Susan Allen, director of customer services at the RBS Group, said the underlying computer failure had been resolved but there was still a lot of accounts to update through the day.</p><div><a href="http://www.bbc.co.uk/news/business-18561426#story_continues_2">Continue reading the main story</a><h2>Analysis</h2><div>Ben ThompsonBBC business correspondent</div><p>There's a strange statistic in the UK banking industry that suggests we're more likely to get divorced than change our bank account. Despite a sharp rise in complaints against banks this year, it seems it's too much trouble to ditch our accounts and take our money elsewhere.</p><p>But competition between our High Street banks is fierce. Hit by the downturn, they're vying for our custom. So the problems at RBS, NatWest and Ulster banks will play into the hands of their rivals.</p><p>In an attempt to defuse the criticism, RBS is fighting back. It's deployed spokespeople to answer queries and opened branches all weekend to clear the backlog. But with the internet alive with complaints, it could take much longer to rebuild the brand.</p><p>Of course, whether it's enough to make customers switch accounts is a question to which RBS and its rivals will be keen to know the answer.</p></div><p id="story_continues_2">"We've made it very clear that nobody would be out of pocket as a result of this error.</p><p>"So we deeply regret the inconvenience caused to our customers and customers of other banks, and if people can get in touch we will make sure that we fix this for them."</p><p>Staff had worked through the night and there would be double the number of people staffing the phones, she said.</p><p>"For those customers affected, please call us, please come into our branches. We can help you, we can get money to you.</p><p>"Yesterday I organised to have some money go in a cab to one of our customers. We know this is terrible and we want to make sure we get money to as many people as possible."</p><p>Some customers have had to delay completing purchases of homes and others reported concerns about getting money for the weekend, with overnight payments still not appearing on balances on Friday.</p><p>Debbie Morphus, in Mansfield, Nottinghamshire, said her daughter was on holiday in Majorca with two children but unable to withdraw any cash from her NatWest account.</p><p>"I can't help her with any funds, as I also bank with NatWest and am in the same boat," said Ms Morphus.</p><p>"They fly back on Tuesday but I don't know what they'll do until then. I think the customer service I got was disgusting and my daughter is quite upset."</p><p>The computer problem is understood to have arisen after staff tried to install a software update on RBS's payment processing system, but ended up corrupting it.</p><div><br /><h2>Customers' rights</h2><ul><li>Anyone out of pocket owing to a technical or systems failure has certain rights</li><li>Banks should put customers back into the position they were in before the problem</li><li>That does not mean extra compensation is a right</li><li>Anyone affected should let the bank know about their situation as soon as possible</li><li>Customers should check to see if any payments due from an account have bounced</li><li>They should also keep a record of how the problem has affected them - just in case a formal complaint is required later</li></ul><p>Source: Financial Ombudsman Service</p></div><p id="story_continues_3">NatWest and Ulster Bank are part of the RBS group, but the problem has not been confined to customers of these banks, because other people whose transactions involve banks in this group have also been affected.</p><p>The Financial Ombudsman Service has said that anyone affected should keep a record of how they were financially disadvantaged.</p><p>Anyone unhappy with how their bank was responding to their concerns could make a complaint to them, a spokesman said.</p><p>Banks are obliged to return affected customers to the position they should have been in had the problem not occurred.</p><p>NatWest has 7.5 million personal banking customers and said a large number had been affected. Ulster Bank said earlier that 100,000 of its customers had been affected.</p>

The computer error that has affected thousands of NatWest customers has been fixed

The computer error that has affected thousands of NatWest customers has been fixed, a spokeswoman has said. But the company, owned by the RB...

Over €1bn of Anglo bonds to be repaid

<p>The former Anglo Irish Bank will repay over €1bn of unguaranteed bonds over the coming week, reigniting the "burn the bondholder" controversy.  Irish Bank Resolution Corporation (IRBC), the new name for Anglo and Irish Nationwide Building Society, will repay more than €1.1bn of debt next week as the controversial policy of paying all unsecured senior liabilities continues.  Four separate bonds fall due over the week, including a €598m bond due on June 26 and £400m (€500m) on June 28. The bonds are held mainly by foreign investors, many of whom bought the debt at steep discounts over the past two years when the original lenders feared the collapsed state-owned bank might renege on the IOUs.  Instead those investors who bought the debt will reap big rewards when the debt is repaid in full and on time.  That's sure to reignite the controversy over whether or not the State should have "burned bondholders" by forcing losses on lenders to failed banks. Yesterday IBRC said it must continue to repay the debt.  "The bank is contractually obliged to repay senior securities on their maturity dates."  Finance Minister Michael Noonan said this week that the ECB has blocked any attempts by Ireland to impose losses on senior bank bondholders. It rejected Ireland's bid to burn senior bondholders, concerned that such a move would undermine confidence in the banking system.  Last night Spanish policy makers were considering forcing losses on junior bond holders in banks in that country.</p>

Over €1bn of Anglo bonds to be repaid

The former Anglo Irish Bank will repay over €1bn of unguaranteed bonds over the coming week, reigniting the "burn the bondholder" ...

Claims Bo's wife admitted killing Briton to silence him

THE wife of Bo Xilai, the disgraced Chinese politician, has confessed to killing Neil Heywood in order to stop him from disclosing her finan...

London luxury home rents fall as bank layoffs bite

<p>Rents in central London's most exclusive neighborhoods have fallen for the first time in two years, hit by deep job cuts among bankers that have curbed demand for high-end housing, according to property consultants Savills.  Average prime rents dropped by 0.4 percent to 60 pounds per square foot for the best homes in the year to mid-June versus the same period last year and were likely to remain subdued for the rest of 2012 as the UK banking sector's difficulties persisted, it said Friday.  "Central London's prime rental market is dominated by tenants from the financial services sector and is a barometer for what's happening in the City of London employment market," Savills' director of research Lucian Cook told Reuters.  The number of jobs in London's finance sector is expected to slump to its lowest level in 16 years this year as the euro zone debt crisis drives firms in the UK capital to cut 25,000 jobs, consultancy Centre for Economics and Business Research said in May.  On Tuesday, state-backed lender Royal Bank of Scotland said it would make 600 staff redundant as a result of new UK rules due to take effect at the end of the year, bringing the total number of layoffs it has made since its 2008 bailout to 36,000.  Hedge fund managers have more money than bankers to spend renting the best homes, Cook said, with bankers' spending power also hit by shrinking bonus pots. In February, Savills said hedge fund managers were likely to outspend bankers on buying London homes this year.</p>

London luxury home rents fall as bank layoffs bite

Rents in central London's most exclusive neighborhoods have fallen for the first time in two years, hit by deep job cuts among bankers t...

Moody's downgrades 15 major banks

<p>The credit ratings agency Moody's has downgraded 15 banks and financial institutions.  UK banks downgraded include Royal Bank of Scotland, Barclays and HSBC.  In the US, Bank of America, Citigroup, Goldman Sachs and JP Morgan are among those marked down.  BBC business editor Robert Peston reported on Tuesday that the downgrades were coming and said that banks were concerned as it may make it harder for them to borrow money commercially.  "All of the banks affected by today's actions have significant exposure to the volatility and risk of outsized losses inherent to capital markets activities," Moody's global banking managing director Greg Bauer said in the agency's statement.  The other institutions that have been downgraded are Credit Suisse, UBS, BNP Paribas, Credit Agricole, Societe Generale, Deutsche Bank, Royal Bank of Canada and Morgan Stanley.  Moody's said it recognised, "the clear intent of governments around the world to reduce support for creditors", but added that they had not yet put the frameworks in place that would allow them to let banks fail.  Some of the banks were put on negative outlook, which is a warning that they could be downgraded again later, on the basis that governments may eventually manage to withdraw their support.  In a statement, RBS responded to its downgrade saying: "The group disagrees with Moody's ratings change which the group feels is backward-looking and does not give adequate credit for the substantial improvements the group has made to its balance sheet, funding and risk profile."  The BBC's Scotland business editor Douglas Fraser tweeted: "Cost of RBS downgrade by Moody's: having to post an estimated extra £9bn in collateral for its debts."  Of the banks downgraded, four were cut by one notch on Moody's ranking scale, 10 by two notches and one, Credit Suisse, by three notches.  "The biggest surprise is the three-notch downgrade of Credit Suisse, which no one was looking for," said Mark Grant, managing director of Southwest Securities.</p>

Moody's downgrades 15 major banks

The credit ratings agency Moody's has downgraded 15 banks and financial institutions. UK banks downgraded include Royal Bank of Scotlan...

G4S chief predicts mass police privatisation

<p>Private companies will be running large parts of the UK's police service within five years, according to the world's biggest security firm.  David Taylor-Smith, the head of G4S for the UK and Africa, said he expected police forces across the country to sign up to similar deals to those on the table in the West Midlands and Surrey, which could result in private companies taking responsibility for duties ranging from investigating crimes to transporting suspects and managing intelligence.  The prediction comes as it emerged that 10 more police forces were considering outsourcing deals that would see services, such as running police cells and operating IT, run by private firms.  Taylor-Smith, whose company is in the running for the £1.5bn contract with West Midlands and Surrey police, said he expected forces across the country to have taken similar steps within five years . "For most members of the public what they will see is the same or better policing and they really don't care who is running the fleet, the payroll or the firearms licensing – they don't really care," he said.  G4S, which is providing security for the Olympics, has 657,000 staff operating in more than 125 countries and is one of the world's biggest private employers. It already runs six prisons in the UK and in April started work on a £200m police contract in Lincolnshire, where it will design, build and run a police station. Under the terms of the deal, 575 public sector police staff transferred to the company.  Taylor-Smith said core policing would remain a public-sector preserve but added: "We have been long-term optimistic about the police and short-to-medium-term pessimistic about the police for many years. Our view was, look, we would never try to take away core policing functions from the police but for a number of years it has been absolutely clear as day to us – and to others – that the configuration of the police in the UK is just simply not as effective and as efficient as it could be."  Concern has grown about the involvement of private firms in policing. In May more than 20,000 officers took to the streets to outline their fears about pay, conditions and police privatisation. The Police Federation has warned that the service is being undermined by creeping privatisation.  Unite, the union that represents many police staff, said the potential scale of private-sector involvement in policing was "a frightening prospect". Peter Allenson, national officer, said: "This is not the back office – we are talking about the privatisation of core parts of the police service right across the country, including crime investigation, forensics, 999 call-handling, custody and detention and a wide range of police services."  Taylor-Smith said "budgetary pressure and political will" were driving the private-sector involvement in policing but insisted that the "public sector ethos" had not been lost.  "I have always found it somewhere between patronising and insulting the notion that the public sector has an exclusive franchise on some ethos, spirit, morality – it is just nonsense," he said. "The thought that everyone in the private sector is primarily motivated by profit and that is why they come to work is just simply not accurate … we employ 675,000 people and they are primarily motivated by pretty much the same as would motivate someone in the public sector."  In the £1.5bn deal being discussed by West Midlands and Surrey police, the list of policing activities up for grabs includes investigating crimes, detaining suspects, developing cases, responding to and investigating incidents, supporting victims and witnesses, managing high-risk individuals, managing intelligence, managing engagement with the public, as well as more traditional back-office functions such as managing forensics, providing legal services, managing the vehicle fleet, finance and human resources.  Chris Sims, West Midlands chief constable, has said his force is a good testing ground for fundamental change as he battled to find £126m of savings. He said the armed forces had embraced a greater role for the private sector more fully than the police without sparking uproar.  But a home affairs select committee report said many of the policing contracts being put up for tender amounted to a "fishing expedition". MPs added that they were not convinced the forces understood what they were doing. The committee chair, Keith Vaz, said: "The Home Office must ensure it knows what services local forces wish to contract out before agreeing to allow expenditure of £5m on what is little more than a fishing expedition."  Cambridgeshire, Bedfordshire and Hertfordshire police announced this month that they were considering privatising some services in an attempt to tackle a £73m funding shortfall created by government cuts. Police authority members in the three counties will be asked to consider how services including HR, finance and IT could be outsourced in line with the G4S contract in Lincolnshire as part of a joint recommendation made by the three chief constables.  It has also emerged that Thames Valley, West Mercia, Warwickshire, Staffordshire, Gloucestershire, Wiltshire and Hampshire forces have begun a tendering process to outsource the running of 30 custody suites and 600 cells.</p>

G4S chief predicts mass police privatisation

Private companies will be running large parts of the UK's police service within five years, according to the world's biggest securit...

Bernie Ecclestone’s position as chief executive of Formula One was the subject of renewed speculation on Wednesday after the German banker he has been accused of paying £28million in bribes sensationally admitted his guilt in a Munich court room.

<p>Ecclestone remained defiant, telling The Daily Telegraph that Gerhard Gribkowsky, formerly the chief risk officer at state-owned bank BayernLB, was merely trying “to save himself” and insisting once again that he has “nothing to hide”. But it is unclear what impact the latest twist in what has been called Germany’s biggest post-War corruption trial may have on the 81 year-old billionaire. Or on Formula One. Gribkowsky has been on trial in Munich since October on charges of tax evasion, breach of trust towards his former employer and being in receipt of corrupt payments relating to the sale of his bank’s 47.2 per cent stake in the sport to current owner CVC Capital Partners six years ago. Prosecutors allege that Ecclestone paid the money to ensure Formula One was sold to CVC, who promptly retained him as chief executive. After a break in the trial earlier this year while his lawyers claimed he was suffering from stress and ill health brought about by his incarceration since Jan 2011, Gribkowsky finally broke his silence on Wednesday, telling a Munich court that the allegations of bribery were “essentially true”.</p>

Bernie Ecclestone’s position as chief executive of Formula One was the subject of renewed speculation on Wednesday after the German banker he has been accused of paying £28million in bribes sensationally admitted his guilt in a Munich court room.

Ecclestone remained defiant, telling The Daily Telegraph that Gerhard Gribkowsky, formerly the chief risk officer at state-owned bank Bayern...

Sumitomo Mitsui Said to Fire Banker Amid Insider Trading Probe

<p>Sumitomo Mitsui Financial Group Inc. (8316)’s lending unit fired a senior banker amid a government investigation into insider trading, two people with knowledge of the matter said. The Securities and Exchange Surveillance Commission is considering asking prosecutors to pursue a criminal case over the trades, said three people, who asked not to be identified because the investigation isn’t public. The person hasn’t been accused of wrongdoing. Enlarge image  As well as Sumitomo Mitsui, Japan’s second-biggest banking group, companies being examined include Nomura Holdings Inc., the country’s largest brokerage, and JPMorgan Chase & Co. Photographer: Kiyoshi Ota/Bloomberg Japanese regulators are cracking down on insider trading after recent cases eroded confidence in the nation’s capital markets. As well as Sumitomo Mitsui, Japan’s second-biggest banking group, companies being examined include Nomura Holdings Inc. (8604), the country’s largest brokerage, and JPMorgan Chase & Co. The banker was seconded to the company’s SMBC Nikko Securities Inc. brokerage unit from Sumitomo Mitsui Banking Corp. when the trades were made, two of the people said. Takashi Morita, a spokesman for Sumitomo Mitsui Banking in Tokyo, declined to comment, as did SMBC Nikko spokesman Tadataka Ishida. SMBC Nikko said on Oct. 6 that it is being investigated by the commission for a possible insider-trading violation by an executive and that it is “fully cooperating” with the probe. The Mainichi newspaper said today that a former SMBC Nikko executive may be indicted by Yokohama prosecutors over a 2011 insider-trading case. A spokeswoman for the Yokohama District Public Prosecutors’ Office, who asked not to be named because of the organization’s policy, declined to comment. Enoteca Sale An SMBC Nikko banker last year allegedly told an acquaintance that managers of Enoteca Co., a wine importer, were preparing to buy the company’s shares in a tender offer, the Asahi newspaper reported in October. The acquaintance traded the stock before the buyout was announced, the newspaper said. SMBC Nikko has already been penalized for a separate information leak. The Financial Services Agency ordered the brokerage in April to improve its business after 23 sales staff were found to disclose information to 34 clients before an unidentified company’s announcement of an equity offering. The firm said on April 20 that it will take proper actions against employees who were involved in the violations. Nomura on June 8 apologized for its employees’ role in leaking information ahead of share sales that the investment bank managed in 2010. The acknowledgment confirmed that it was the unidentified underwriter found by the SESC to have provided information on public offerings by Inpex Corp., Mizuho Financial Group Inc. and Tokyo Electric Power Co. The SESC found that an employee of JPMorgan (JPM) gave information on a 2010 offering by Nippon Sheet Glass Co., according to two people with knowledge of the matter. New York- based JPMorgan said on May 29 that it’s “cooperating fully” with the authorities on the matter.</p>

Sumitomo Mitsui Said to Fire Banker Amid Insider Trading Probe

Sumitomo Mitsui Financial Group Inc. (8316)’s lending unit fired a senior banker amid a government investigation into insider trading, two p...

outgoing head of the World Bank, Robert Zoellick, will warn the G20 summit that Europe runs the risk of sparking a Lehman-style global crisis

<div id="main-content-picture"><img alt="Robert Zoellick, outgoing World Bank president" height="276" src="http://static.guim.co.uk/sys-images/guardian/About/General/2012/6/16/1339866508516/Robert-Zoellick-outgoing--008.jpg" width="460" /><div>World Bank president Robert Zoellick will tell the G20 summit that the euro crisis could hit developing nations. Photograph: Saul Loeb/AFP/Getty Images</div></div><div id="article-body-blocks"><p>The outgoing head of the World Bank, Robert Zoellick, will warn the G20 summit that Europe runs the risk of sparking a Lehman-style global crisis that will have dire consequences for developing nations.</p><p>As Greek voters go to the polls in elections that could determine the future of the eurozone, Zoellick told the Observer he was advising emerging nations to ready themselves for the consequences of events in the single-currency area.The election of an anti-austerity government would spark the most serious crisis for the euro so far, following the apparent failure of a Spanish bank bailout last week. German chancellor Angela Merkel yesterday ruled out renegotiating Greece's bailout, saying the country must stick to its deals with international lenders. Unofficial polls suggest the conservative New Democracy party is ahead of the anti-austerity Syriza by four percentage points — though as much as 15% of the electorate remains undecided.</p><p>As all eyes focus on Athens, Zoellick said: "Europe may be able to muddle through but the risk is rising." He added: "There could be a Lehmans moment if things are not properly handled." The bankruptcy ofLehman Brothers in September 2008 proved to be the trigger for the deepest slump in the global economy since the 1930s, and Zoellick said developing countries needed to "prepare for the uncertainty coming out of the eurozone and the wider financial markets". He added: "It will be better if they can avoid piling up short-term debts that can come due in volatile periods and look to the fundamentals of future growth – infrastructure and human capital."</p><p>Zoellick, whose five years at the bank has coincided with the financial and economic crisis, retires at the end of the month. Fearing that Europe's sovereign debt problems could have spillover effects, he said the bank had been increasing its lending to support Bulgaria's banking system and acting to prevent a credit crunch in south-east Europe. Steps were also being taken to protect countries in north Africa that were vulnerable to Europe's debt crisis and trade finance facilities were being strengthened for francophone west Africa.</p><p>"Uncertainty in markets is now starting to increase costs for developing countries," he said. "The ripple effects are making everybody's life harder." Zoellick said his organisation was concentrating on helping developing countries to prepare projects that could go ahead with the right investment and to protect the most vulnerable if there was a second leg to the global downturn.</p><p>"Given the volatility in the world economy, there is a big emphasis on helping developing countries to develop social safety nets that don't bust the budget," he said. Countries such as Mexico and Brazil, he added, had shown they could do this using low-cost, effective targeting, information technology and the right incentives.</p><p>While the World Bank's sister organisation, the IMF, has been more directly involved in the rescue operations for Greece, Ireland and Portugal, Zoellick said that the bank had been monitoring events in Europe carefully. Higher interest rates for countries such as Spain and Italy, which have announced big structural reform programmes, were the result both of market uncertainty and the failure of other European countries to provide "the right backing" for the governments in Madrid and Rome.</p><p>As the former US trade representative, Zoellick said he was concerned that the prolonged crisis was starting to lead to pressures for protectionism and economic nationalism. "This is not just an economic crisis but a political threat as well," he said. "We must make sure we keep markets open and beware against creeping protectionism. We are starting to see some increase in the use of trade restrictions."</p><p>Several European leaders urged Greeks to stick with the euro, including Spain's prime minister Mariano Rajoy and Jean-Claude Juncker, who is Luxembourg's prime minister and head of the group of eurozone finance ministers.</p><p>"If the radical left wins [in Greece] – which cannot be ruled out – the consequences for the currency union are unforeseeable," Juncker told the Austrian newspaper Kurier. "I can only warn everyone against leaving the currency union. The internal cohesion of the euro zone would be in danger."</p></div>

outgoing head of the World Bank, Robert Zoellick, will warn the G20 summit that Europe runs the risk of sparking a Lehman-style global crisis

World Bank president Robert Zoellick will tell the G20 summit that the euro crisis could hit developing nations. Photograph: Saul Loeb/AFP/G...

Greek vote could unleash seismic shocks for euro

<p>Greece's election on Sunday is too close to call and could push the debt-ridden country out of the European single currency, rocking the euro to its core and sowing turmoil in global financial markets.  The election, a re-run of a May 6 vote that ended in stalemate, amounts to a referendum on the punishing terms set by international lenders as the price of saving Greece from bankruptcy - withering tax hikes, job losses and pay cuts that have helped condemn Greeks to five years of record recession.  Riding a wave of anger to rise from political obscurity to contender for power, radical leftist SYRIZA leader Alexis Tsipras is threatening to tear up the terms of the 130 billion euro ($163.75 billion) bailout.  Tsipras says Europe cannot afford to cut Greece loose and cope with the fallout for the rest of the 17-member euro zone.  On the right, establishment heir and New Democracy leader Antonis Samaras says rejection of the EU/IMF bailout would mean a return to the drachma and even greater economic calamity.  Samaras told supporters on Friday they faced a stark choice - "euro versus drachma."  Neither party is expected to win outright, triggering coalition negotiations with smaller parties. A new government would buy time, but little respite. Whoever comes to power may find their tenure is short-lived.  Greeks say overwhelmingly that they do not want to leave the euro but neither do they want the terms of the bailout, which many believe has amnestied a corrupt, tax-evading elite and heaped an unfair burden on the poorest sections of society.  "I'll vote for SYRIZA," 34-year-old theatre producer Georgia Zoumpa said on Saturday, heat rising from the pavements of the capital Athens. "I don't believe in blackmail: if we leave the euro, other countries will suffer too."  Central banks from Tokyo to London are readying arsenals to defend banks and national currencies against any post-election turmoil. The result will dominate a meeting of the Group of 20 world economic powers on Monday and Tuesday in Mexico.  European leaders weighed in on the eve of the vote, some of them openly urging Greeks to reject SYRIZA or risk undermining the very foundations of the single currency.  Finance officials in the euro zone have discussed limiting the size of withdrawals from ATM machines, imposing border checks and introducing euro zone capital controls as a worst-case scenario.  GERMAN WARNING  A Greek exit from the single currency would heap further pressure on two far larger European economies - Spain has already received up to 100 billion euros to save debt-riddled banks and Italy could be next to seek a bailout.  Euro zone officials have hinted they might give a new Greek government some leeway on how it reaches debt targets set by the EU/IMF bailout package, but there would be no change to the targets themselves.  Euro zone paymaster Germany warned Greeks on Saturday the bailout would not be renegotiated.  "That's why it's so important that the Greek elections preferably lead to a result in which those that will form a future government say: 'Yes, we will stick to the agreements'," Chancellor Angela Merkel told a party conference of her Christian Democrats.  Anger with the establishment parties of New Democracy and the Socialist PASOK propelled SYRIZA and its youthful leader, a former Communist student protest leader, from the obscure radical fringe to shock second place on May 6.  "The memorandum of bankruptcy will belong to the past on Monday," Tsipras, 37, told his final election rally on Thursday, though analysts suggest the SYRIZA leader might temper his stance if confronted with the reality of leaving the euro.  The neo-Nazi Golden Dawn party also won seats in the first election, underscoring the fragmentation of a stressed society wrestling with unemployment of almost 23 percent and plummeting living standards.  Five opinion polls published before a blackout two weeks ago put New Democracy narrowly ahead. Two other polls had SYRIZA leading.  "It's obvious the country is now staring into the abyss," leading Greek daily Kathimerini said in a front-page editorial on Sunday, calling for the creation of a New Democracy-led "unity" coalition to keep the country in the euro.  But analysts say Samaras, 61, will find it hard to govern for long with an empowered SYRIZA protesting at the gates. Tsipras, if he wins, will inherit a country on the verge of bankruptcy. He has ruled out a government of national unity and promised to nationalize banks and halt privatizations.  Some global businesses and banks are already in retreat.  Europe's biggest retailer Carrefour said on Friday it was selling up in Greece, a day after French bank Credit Agricole moved to take direct control of its Albanian, Bulgarian and Romanian units from its Greek bank Emporiki.  Polling stations open at 7 a.m. (0400 GMT) and close at 7 p.m. (1600 GMT). Exit polls will quickly follow.</p>

Greek vote could unleash seismic shocks for euro

Greece's election on Sunday is too close to call and could push the debt-ridden country out of the European single currency, rocking the...

Greek, Spanish savings flee eurozone crisis

<p>Savers across Europe are fleeing the continent's debt crisis. In Europe's most economically stricken countries, people are taking their money out of their banks as a way to protect their savings from the continent's growing financial storm. Worried that their savings could be devalued, or that banks are on the verge of collapse and that governments cannot make good on deposit insurance, people in Greece, Spain and beyond are withdrawing euros by the billions - behavior that is magnifying their countries' financial stresses. The money is being hoarded at home or deposited in banks in more stable economies.  In Greece and Spain, two of the hardest-hit by the debt crisis in the 17 countries that use the euro, savers and businesses are already pulling money out of banks. They are either worried that their money could be converted into a new currency at a much lower value or because their bank might be on the verge of collapse.  It's a steady bank "jog" at the moment than a full-bore run. But it threatens to undermine the finances of those countries' already-stressed lenders. And if it does turn into a full bank run after Greece's crucial election on Sunday, it could hasten financial disaster in Europe and help spread turmoil around the world.  Since the Greek debt crisis broke in late 2009, deposits have fallen by 30 percent cent, as savers have slowly pulled some €72 billion ($90.24 billion) from local lenders, with total household and corporate deposits standing at €165.9 billion ($207.94 billion) in April, according to the latest data from the Bank of Greece.  Spanish deposits have fallen about six percent over the past year. They dipped suddenly in April by about €3.1 billion, or 1.8 percent, to €1.624 trillion as problems with the country's troubled banks stated to grow to alarming proportions.  This is despite the fact that deposits are guaranteed by the government up to €100,000 across the Eurozone.  Spain's financial turmoil quickly worsened in late May, when the country's second-largest lender announced it needed capital of €19 billion to stay afloat. Bankia denied reports of a rush by its customers to withdraw but the bailout scared Spaniards who assumed their money was safe.  Bankia client Rosa Monsivais panicked and decided she had to move her savings from Bankia to one she thought would be safer. She chose a foreign bank with Spanish operations, the Dutch owned ING bank.  It took longer than she thought, leading to anxious days until she knew her money was in her new account.  "It scared me a little. I took all my money out and put it in ING," said Monsivais, a 41-year-old graphic artist, who would not say how much money she moved. "But it took a full week to do this kind of transaction, I was reading the newspaper each day and it worried me."  The money across Europe is headed different places. Some has simply been withdrawn and spent out of urgent need as people lose their jobs due to recessions. Some is winding up in bank accounts or invested in countries that are more stable such as Germany. The rest is being invested in property or bonds being issued by other eurozone countries.  In the U.K., the eurozone crisis was seen as one factor pushing up central London house price, according to Knight Frank, a real estate agency dealing in high-end property.  "While it looks very much that the surge in Greek buyers has fallen off sharply since the beginning of the year - those who had the funds to buy have done so - we are now seeing a noticeable uptick in interest from France, Italy, Spain and even German-based purchasers looking at the prime London market," the company said in its Prime Central London Index report.  Meanwhile, some money appears to be simply hoarded at home, despite the risk of theft. Last month, police in Athens arrested a gang that specialized in breaking into basement storage spaces under apartment blocks, netting a rich haul in stashed cash and valuables.  "What the average Greek has in mind is to secure the euros they currently hold," said Theodore Krintas, managing director at Attica Wealth Management. "That has been going on for a long time, and will continue as long as the uncertainty increases concerning Greece's position in the near future in the eurozone and the European Union."  Sunday's vote could determine whether Greece stays in the euro or leaves in chaos. Since 2010, Greece has been dependent on two bailouts totalling €240 billion in loans to pay its bills. In return, the government had to promise to make deep spending cuts to lower its deficit. That has helped put the country in a deep recession. Leading political figures have called for renegotiating or rejecting the bailout deal, which could lead to a payment cutoff from mistrustful eurozone governments and the IMF.  A bailout cutoff could lead to a complete collapse of government finances. And a euro exit so the country will have to print its own money to pay bills or recapitalize banks.  A large-scale bank run in Greece could further wreck government finances and push the country closer to leaving the euro. The country could either quit the single currency in order to introduce a devalued currency that would improve its economic competitiveness, or because it has no choice but to print its own currency to recapitalize banks or pay government salaries.  So far it's been a trickle rather than a flood in Greece, underlining its slow-motion nature. Many people have kept their deposits because they don't believe Greece will leave the euro.  It's not just in the financially troubled countries that savers are worried. Wealthy Germans are concerned that inflation will surge if Europe's central bank has to step in and spend huge amounts of money propping up the single currency. So they are putting more money into their own country's high-end real-estate in hopes their investment will keep its value.  Well-heeled Spaniards have been moving money to Switzerland and the U.S. for months amid mounting worries about Spain and the safety of the eurozone, said Bruce Goslin, managing director for Europe, the Middle East and Africa for K2 Intelligence consulting group.  "We're not money managers but we deal a lot with clients who are looking for intelligence," Goslin said. "As we are circulating and talking to people, some things are becoming clear. Everyone says 'There is nothing going on in Spain, the economy is contracting so fast we're going to have to go out of Spain.'"  Spain's banking problems come from the collapse of a real estate boom. Banks that made reckless loans are not being paid back and are seeing the value of the properties they invested in tumbling. This is making the country's banking system increasingly financially insecure - heightening savers' fears that their money is not safe.  Fernando Encinar, head of research at real estate website Idealista.com, said some wealthy people who didn't have money to buy during the boom were now taking advantage of prices that have fallen 26 percent in four years, he said.  "Someone who has €200,000 in the bank is looking for property to buy because they prefer property than having it in the bank," he said. "This was happening before Bankia but Bankia and all the trouble in Spain has accelerated it."  Many Spaniards can't move money abroad because times are so tough, said Vincent Forest at the Economist Intelligence Unit. With unemployment now at nearly 25 percent, Spaniards with jobs and savings are increasingly helping out less fortunate relatives.  "Most Spaniards have huge savings, but they have someone in the family who needs money and isn't earning anything. They won't just say I've got a few thousand euros and I will put it in Germany: They can't," Forest said.  Many Italians - some of Europe's most devoted savers - are also moving money. They are worried that their government will be the next to fall victim to the crisis through its heavy debt load. That's even though Italy's banks, government finances and economy are in better shape than Spain's.  Some 60,000 to 70,000 small investors have bought property abroad, mostly in Germany but also on the Spanish islands, in the last three months, for a total investment of €400 million on an annual basis, said Paolo Righi, president of the Italian Federation of Real Estate Professionals. "They are looking for certain investments," Righi said.  Ruth Stirati, who runs a business helping Italians buy property in Berlin, said she gets about 10 emails a day asking about properties.  "Over the last two or three weeks, there has been a new panic," she said. "They have a thousand fears: That the banks won't have money, that the euro will fail. It is without substance, their doubts. But they worry there will be one strong euro in Germany, and one that is weak.'  Wealthy Germans aren't worried about seeing their money disappear due to collapsing banks but they are concerned that their savings will be eaten away through inflation. As a result, they are putting money into real estate - at home.  Even though inflation currently is moderate at 2.2 percent in May, there has been a lot of talk about the risk of rising prices in Germany's media. There is speculation that inflation could jump if the European Central Bank has to take drastic measures to keep the eurozone from breaking up - such as printing large amounts of money to buy government bonds and cover bankrupt governments' financing needs.  The current EU treaty bars that. But that hasn't stopped German newspaper headlines warning about possible inflation to come.  According to the Europace real estate financing platform, German home prices rose 5.46 percent in the first quarter over a year ago.  __</p>

Greek, Spanish savings flee eurozone crisis

Savers across Europe are fleeing the continent's debt crisis. In Europe's most economically stricken countries, people are taking th...

Nokia's survival in question after 10,000 more job are cut |

<p>Nokia's future as an independent company is hanging in the balance and Microsoft could be forced to rescue the business if chief executive Stephen Elop cannot resuscitate the group's smartphone business by the end of the year, analysts have warned. The Finnish mobile phone manufacturer announced 10,000 job cuts on Thursday and issued its second profits warning in nine weeks.  Nokia's shares dropped 18%, falling below the €2 mark for the first time since 1996, as it acted to stem massive losses by cutting a fifth of its handset workforce. A total of 40,000 jobs have gone at the company and its Nokia Siemens Networks joint venture since Elop joined in September 2010.  With Nokia still unable to dent Apple and Samsung's dominance in the smartphone market, Elop all but admitted the date of Nokia's recovery was impossible to forecast, saying in the second profits warning since April that the intention was to return to profit "as soon as possible".  "Stephen Elop is running out of time," said Francisco Jeronimo at telecoms research firm IDC. "If Nokia doesn't grow by the end of this year they will be in a very dangerous position. Many people are saying Microsoft will acquire Nokia."  With smartphones emerging as the personal computers of the future, and Nokia the only company attempting to sell significant numbers of those operated by Microsoft's Windows Phone interface, the US software company's prospects are closely entwined with Nokia's.  "A Microsoft takeover is within the realms of possibility," said analyst Janardan Menon at broker Liberum Capital. "Microsoft needs its Windows strategy on smartphones and tablets to work quite desperately, and desperate requirements could result in desperate moves."  Nokia is pinning its hopes of survival on the Lumia range of phones, its first to use Windows software. But between the lavishly marketed global unveiling last November and March this year, the company had sold just 3m Lumias – a drop in the ocean compared to the 72m Apple iPhones sold since October.  Having lost its position as the world's biggest phone maker to Samsung earlier this year, Nokia is burning through cash. It has spent €2.1bn (£1.7bn) over the past five quarters, meaning that, without cost cuts, its €4.9bn reserves could be gone within a couple of years. The savings announced on Thursday are designed to address that problem. Analysts at JP Morgan forecast that operating losses combined with restructuring outflows will leave Nokia with €1.63bn at the end of 2013.  In what Elop said was a "hard day" for the company, Nokia announced it would turn out the lights at the Salo factory, its last in Finland: Nokia's home country will bear 3,700 of the job losses. Research and development facilities in Germany and Canada are being closed, and Nokia is retreating from non-key markets, so that it can concentrate its firepower on America, China, the UK and larger European economies.  The Vertu luxury phone business, which operates from Hampshire and produces jewel-encrusted handsets for the super-rich, is to be sold to Guernsey-based private equity house EQT, and further disposals of non-core assets are expected.  Asked why his strategy had not yet produced results, Elop said there was "frustration" because so few consumers were aware of Nokia's new products: "We have truly great products but aren't getting the traction that we would prefer."  The marketing department will now report directly to Elop, and a management reshuffle has seen key staff replaced and US executive Chris Weber – who, like Elop, previously worked for Microsoft – promoted to run sales and marketing.  The company is pinning its hopes on Windows Phone 8, the next version of the operating system and the first that Nokia has helped design. Microsoft is expected to unveil a test version next week, and Nokia phones running the system will be on sale for Christmas.  Although other manufacturers, such as HTC, make some Windows handsets, the software's share of the market is currently just 1.5% worldwide, leagues behind Google's Android, which is used on most non-Apple smartphones. Nokia's chief financial officer, Timo Ihamuotila, said Windows needed to reach 10% market share.  "They have got to show meaningful signs of turning the business around by the end of the year or there are going to be some big questions asked in terms of the management team," said Ben Wood, head of research at CCS Insight.  Both the Lumia phones and the Windows software appeal to consumers, said Carolina Milanesi at research firm Gartner. "There's a big party saying Nokia is dead. I'm not one of those. I still think there is a lot of value in Nokia."</p>

Nokia's survival in question after 10,000 more job are cut |

Nokia's future as an independent company is hanging in the balance and Microsoft could be forced to rescue the business if chief executi...

Stanford gets 110 years for role in $7-billion swindle

Stanford gets 110 years for role in $7B swindle

<p>Former jet-setting Texas tycoon R. Allen Stanford, whose financial empire once spanned the Americas, was sentenced Thursday to 110 years in prison for bilking investors out of more than $7 billion over 20 years in one of the largest Ponzi schemes in U.S. history. U.S. District Judge David Hittner handed down the sentence during a court hearing in which two people spoke on behalf of Stanford's investors about how his fraud had affected their lives. Prosecutors had asked that Stanford be sentenced to 230 years in prison, the maximum sentence possible after a jury convicted the one-time billionaire in March on 13 of 14 fraud-related counts. Stanford's convictions on conspiracy, wire and mail fraud charges followed a seven-week trial. Stanford's attorneys had asked for a maximum of 41 months, a sentence he could have completed within about five months because he has been jailed since his arrest in June 2009. During Thursday's sentencing hearing, Stanford gave a rambling statement to the court in which he denied he did anything wrong. Speaking for more than 40 minutes, Stanford said he was a scapegoat and blamed the federal government and a U.S.-appointed receiver who took over his companies for tearing down his business empire and preventing his investors from getting any of their money back. "I'm not here to ask for sympathy or forgiveness or to throw myself at your mercy," Stanford told Hittner. "I did not run a Ponzi scheme. I didn't defraud anybody." Prosecutor William Stellmach chastised Stanford for his lack of remorse for defrauding thousands of people of their life savings. "To the bitter end, he was a con man and a coward," Stellmach said during the hearing. Stanford was once considered one of the richest men in the U.S., with an estimated net worth of more than $2 billion. His financial empire stretched from the U.S. to Latin America and the Caribbean. But after his arrest, all of his assets were seized and he had to rely on court-appointed attorneys to defend him. Calling Stanford arrogant and remorseless, prosecutors said he used the money from investors who bought certificates of deposit, or CDs, from his bank on the Caribbean island nation of Antigua to fund a string of failed businesses, bribe regulators and pay for a lavish lifestyle that included yachts, a fleet of private jets and sponsorship of cricket tournaments. Defense attorneys portrayed Stanford, 62, as a visionary entrepreneur who made money for investors and conducted legitimate business deals. They accused the prosecution's star witness — James M. Davis, the former chief financial officer for Stanford's various companies — of being behind the fraud and tried to discredit him by calling him a liar and tax cheat. Ali Fazel, one of Stanford's attorneys, said he was disappointed with the sentence. "It's a harsh punishment. It's tough on him," he said. "He feels like he didn't do anything." Prosecutors declined to comment after the sentencing. Angela Shaw, a Dallas-area woman who founded the Stanford Victims Coalition and spoke during the hearing, said while she had hoped the financier would receive the maximum sentence, she was more upset that Stanford didn't apologize in court for what he did. "It would have gone a long way to show there is some level of remorse and some measure of humanity," she said. Hittner also ordered Stanford to forfeit $5.9 billion, but that was mostly symbolic because Stanford is penniless. The jury that convicted Stanford also cleared the way for U.S. authorities to go after about $330 million in stolen investor funds sitting in the financier's frozen foreign bank accounts in Canada, England and Switzerland. But due to legal wrangling, it could be years before the more than 21,000 investors recover anything, and whatever they ultimately get will only be a fraction of what they lost. The financier's trial was delayed after he was declared incompetent in January 2011 due to an anti-anxiety drug addiction he developed in jail. He underwent treatment and was declared fit for trial in December. Three other former Stanford executives are scheduled for trial in September. A former Antiguan financial regulator was indicted and awaits extradition to the U.S. Stanford and his former executives also are fighting a lawsuit from the U.S. Securities and Exchange Commission that accuses them of fraud.</p>

Stanford gets 110 years for role in $7B swindle

Former jet-setting Texas tycoon R. Allen Stanford, whose financial empire once spanned the Americas, was sentenced Thursday to 110 years in ...

Spain's borrowing rates have shot to their highest since it joined the euro after 18 banks had their credit ratings downgraded by the Fitch ratings agency.

<h2>Spanish Economy In Numbers</h2><div><div><div><ul><p>:: Unemployment stands at 24.4% - highest rate in EU.</p><p>:: The yield on its 10 year bonds has hit 6.5%.</p><p>:: GDP shrank by 0.3% in first quarter of 2012.</p><p>:: £27bn of Bankia assets are deemed 'toxic'.</p></ul><dl><dt></dt></dl></div><div><img alt="Spain" height="180" src="http://news.sky.com/sky-news/content/StaticFile/jpg/2011/Nov/Week3/16113122.jpg" width="180" /></div></div></div><p>Spain's 10-year bond yield rose to hit 6.81% in late afternoon trading according to data provider FactSet, while stocks began to dip just before markets closed, indicating that investors continued to be unconvinced by Spain's decision to seek help for its ailing bank sector.</p><p>Spain agreed last weekend to take a European bailout for itsdomestic banks, tapping into a €100bn (£80bn) euro area bailout fund, but investors are worried it will not solve the country's problem as the government may have trouble paying the money back.</p><p>Fitch said in a statement that its downgrade of the banks was a result of a previous downgrade of the Spanish sovereign debt on June 7.</p><p> </p><div><img alt="Eurozone-Crisis" src="http://news.sky.com/sky-news/content/StaticFile/jpg/2012/Feb/Week4/16178738.jpg" /></div><p>Fitch said it had conducted stress tests, both on the Spanish banking sector as a whole and on individual banks, updating results from tests done in 2011.</p><p>The ratings agency said the weakness of the Spanish economy would continue to have a negative effect on business volumes "which, together with low interest rates, will place pressure on revenues".</p><p>The rescue package for Spain's crippled lenders was announced on Saturday by finance ministers from the 17-country euro area, but the exact amount the country's banks will receive has not yet been revealed.</p><p> </p><div><div><h3>WORLD BANK FEARS GLOBAL CRISIS</h3></div><object data="http://news.sky.com/sky-news/app/flash/OBU_Player.swf" height="225" id="obuPlayer1" name="obuPlayer1" type="application/x-shockwave-flash" width="400"></object></div><p>Meanwhile, the World Bank, the body responsible for international economic development, has warned that the events unfolding in Greece and Spain are affecting the entire global economy.</p><p>There has been a staggering drop in financial activity, as flows from rich countries to the developing world dropped by 44% between April and May.</p><p>However, it still expects global GDP to rise by 2.5% this year and growth in developing countries should expand by more than 5%.</p><p>Speaking on Jeff Randall Live, Andrew Burns, lead author of the World Bank's Global Economic Prospects report, said: "If there is a significant deterioration in Europe, then we could see all developing countries get hit hard, and growth declining by as much as 4%."</p><p>But he added: "They are more resilient and aren't burdened by some of the structuring difficulties which we see in high income Europe, so we would expect them to respond more quickly."</p>

Spain's borrowing rates have shot to their highest since it joined the euro after 18 banks had their credit ratings downgraded by the Fitch ratings agency.

Spanish Economy In Numbers :: Unemployment stands at 24.4% - highest rate in EU. :: The yield on its 10 year bonds has hit 6.5%. :: GDP shra...

Vodafone paid zero UK corporation tax last year

The company saw its global corporation tax bill go up by £300m to £2.3bn, but none of that money went to the exchequer in the UK, where Voda...

There were long queues outside a state-funded pharmacy in Athens yesterday as people lined up to get life-saving drugs for seriously ill relatives.

<p>The shortages in chemotherapy medicine and other expensive drugs arose when pharmaceutical companies cut credit to the country's largest state-backed heath insurance fund, EOPYY, which provides subsidised medicine to ordinary Greeks.  The problem is yet another reminder of the challenges facing Greece, which goes to the polls for a second time this month after May's elections failed to deliver a government.  Coalition talks between competing parties broke down when the far left demanded a renegotiation of the country's austerity drive – something that is opposed by its European partners, notably Germany. The ratings agency Standard & Poor's said this week that there was a one in three chance that Greece could quit the euro in the months after the elections on 17 June.  Yesterday, the privately run SKAI TV showed scenes of hysteria as hundreds of Greeks queued outside one of the five pharmacies owned by EOPYY. A patient could be heard screaming inside the pharmacy, and a man said he had been waiting hours to get his mother's cancer medication.  The average cost of a cancer patient's prescription is €2,000 (£1,600) but members of the EOPYY healthcare fund got the medicines at a heavy discount. By lunchtime, the morning queues had vanished. "I got my relative's drug a day early," said one woman. "But off course, with this situation, I'm worried we might not be this lucky next time."  The morning frenzy, according to an employee, was due to misinformation. "Thousands came thinking we would provide all sort of medicine when we were ordered to hand out only the most expensive type."  Workers at the EOPYY pharmacy at the Georgios Gennimatas oncological hospital told The Independent they gave out around 1,000 cancer drugs to about 300 patients. However, they still lacked some chemotherapy medicines, as one pharmaceutical company had yet to deliver. "One sufferer started screaming and insulting us because we lacked a medicine," said an employee who refused to give her name. "People are very anxious to get their medication and express their feelings in different ways. You can't blame them."  Kalliopi Metaxa, a retired doctor and volunteer at the KEFI Cancer Society, said its members were desperate. "It's a chaotic situation – a temporary solution was provided to help the seriously ill. But what happens when the government runs out of money again?"  She added that in her years as a state doctor, she had never seen such a health crisis although Greece had a history of being late with its payments to health providers.  It's not just the pharmaceutical companies that are owed money. The EOPYY fund is also in debt to pharmacists. The government had pledged to repay the last outstanding instalment of this year's €270m debt to pharmacists after they cut credit to EOPYY, forcing members to pay for their own medicines, which are normally subsidised by the fund.  But the Prime Minister, Panayotis Pikrammenos, said this week that his caretaker government could not begin repay £6.5bn of outstanding payments to pharmacies until Greece receives its next loan instalment from its international creditors.  Analysts predict a tight race between the pro-bailout conservative New Democracy and the radical left-wing Syriza party, which has vowed to tear up the bailout agreement, putting the country's membership of the euro in question. To complicate matters for the pollsters, while public opinion is increasingly opposed to harsh cuts, most Greeks want to remain in the euro</p>

There were long queues outside a state-funded pharmacy in Athens yesterday as people lined up to get life-saving drugs for seriously ill relatives.

The shortages in chemotherapy medicine and other expensive drugs arose when pharmaceutical companies cut credit to the country's largest...

Banks hit back at PIRC’s £40bn undeclared losses claim

<p>PIRC has taken issue with international accounting standards that prevent banks from reflecting “expected losses” in their profits. The UK’s top five banks had an estimated £27bn of “expected losses” last year, PIRC said, and overstated profits by a further £13bn due to the accounting treatment of deferred bonuses and the value of their own debt. The rules, it said, were “masking the true position by including fictional assets and fictional profits” – allowing banks to award larger bonuses and dividends. The banks disputed the claim, saying that PIRC had over-extended its analysis. They stressed they already declare some “expected losses” under regulatory rules and that those are typically a multiple of eventual write-offs. Standard Chartered said PIRC’s estimate that it had $3.6bn (£2.3bn) of undeclared losses was “fundamentally incorrect”. In its 2010 accounts, it pointed out, the “expected loss” for the following year was $3.19bn, but its write-off in 2011 was just $584m. It added that it was “obliged to report in this way” under the accounting standards and that it “vigorously disputed [PIRC’s] rationale”. Barclays added that PIRC had been "purposely misleading". "Suggesting that those accounting standards have in some way reduced our appetite to lend to creditworthy businesses or individuals is unjustifiable," it said.  PIRC described its £40bn estimate as “conservative” and said its calculations were supported by the losses the Treasury expects at Royal Bank of Scotland, as disclosed in the state-backed Asset Protection Scheme. Including deferred bonuses, fair value of its own debt, de-risking costs and expected losses, PIRC said RBS’s total undeclared losses came to £18bn. PIRC has been campaigning for a change to the accounting rules for banks. Senior regulators have also expressed concerns with the standards and the House of Lords has described them as deeply flawed. The banks said their accounts are transparent and that they “look through” volatile items such as gains made on their own debt.</p>

Banks hit back at PIRC’s £40bn undeclared losses claim

PIRC has taken issue with international accounting standards that prevent banks from reflecting “expected losses” in their profits. The UK’s...

mini-war being fought on Spanish doorsteps

<p>There is a mini-war being fought on Spanish doorsteps, between members of the public who can no longer afford to pay their mortgages and the banks who are threatening to evict them. Last year there were 58,000 evictions in Spain - a 22% percent rise. It means on average there are 159 evictions every day, and four in every five involves families with children. Bankia already owns it. But I still owe them 199,000 euros on the mortgage, and even if I paid it I still would not own the property. Hilda Marisol But protest groups have begun show up at evictees' front doors to try to stop the bailiffs gaining access to properties. With certain banks taking bailouts from the state, the campaign groups say institutions who are looking for support from the taxpayer shouldn't be throwing customers out on to the streets. Sky News went to meet Maclovia Luzmila and her 12 year-old daughter Vivian. The next day they were due to be evicted from their home after failing to make mortgage repayments and Maclovia feared Vivian may be taken into social care. "I'm not going to let her be taken somewhere else," she said. "We don't want to be separated. I only live for her."  More than 300 people attended a meeting set up for those struggling with repayments  Later when we met Maclovia at her work caring for the elderly she added: "I just want to pay what I can afford. "But with this job I don't earn the money to cover the repayments on my 200,000 euro mortgage. So we are going to resist. They will have to pull me out." In another suburb of Madrid, Hilda Marisol lives in a flat with five children. She was also due to be evicted this week but her bank, Bankia has given her till the end of school term to leave. Her sparse flat has no electricity, but she doesn't want to leave. "Bankia already owns it," she says. "But I still owe them 199,000 euros on the mortgage, and even if I paid it I still would not own the property." Bankia is currently asking for a 23.4 billion euro state bailout due to debts caused by the property crash. Which is why some anti-eviction groups feel they should be more sympathetic to people in debt. In response to the growing number of evictions one group has occupied a Bankia owned property in central Madrid, offering rooms for evicted families. Sky News attended a local support meeting for those having problems paying their mortgage, where 300 people turned up - many of them looking for legal advice. At the meeting, Maclovia appealed to the group to help her resist the bailiffs the following morning.</p>

mini-war being fought on Spanish doorsteps

There is a mini-war being fought on Spanish doorsteps, between members of the public who can no longer afford to pay their mortgages and the...

Bank of England meets amid talk of £50bn stimulus

Bank of England policymakers meet today to decide whether to change interest rates or to pump in more money into the ailing economy, with le...

Europe is on the verge of financial chaos.

<p>Global capital markets, now the most powerful force on earth, are rapidly losing confidence in the financial coherence of the 17-nation euro zone. A market implosion there, like that triggered by Lehman Brothers collapse in 2008, may not be far off. Not only would that dismantle the euro zone, but it could also usher in another global economic slump: in effect, a second leg of the Great Recession, analogous to that of 1937.  This risk is evident in the structure of global interest rates. At one level, U.S. Treasury bonds are now carrying the lowest yields in history, as gigantic sums of money seek a safe haven from this crisis. At another level, the weaker euro-zone countries, such as Spain and Italy, are paying stratospheric rates because investors are increasingly questioning their solvency. And there’s Greece, whose even higher rates signify its bankrupt condition. In addition, larger businesses and wealthy individuals are moving all of their cash and securities out of banks in these weakening countries. This undermines their financial systems.  423 Comments Weigh InCorrections?     Personal Post  The reason markets are battering the euro zone is that its hesitant leaders have not developed the tools for countering such pressures. The U.S. response to the 2008 credit market collapse is instructive. The Federal Reserve and Treasury took a series of huge and swift steps to avert a systemic meltdown. The Fed provided an astonishing $13 trillion of support for the credit system, including special facilities for money market funds, consumer finance, commercial paper and other sectors. Treasury implemented the $700 billion Troubled Assets Relief Program, which infused equity into countless banks to stabilize them.  The euro-zone leaders have discussed implementing comparable rescue capabilities. But, as yet, they have not fully designed or structured them. Why they haven’t done this is mystifying. They’d better go on with it right now.  Europe has entered this danger zone because monetary union — covering 17 very different nations with a single currency — works only if fiscal union, banking union and economic policy union accompany it. Otherwise, differences among the member-states in competitiveness, budget deficits, national debt and banking soundness can cause severe financial imbalances. This was widely discussed when the monetary treaty was forged in 1992, but such further integration has not occurred.  How can Europe pull back from this brink? It needs to immediately install a series of emergency financial tools to prevent an implosion; and put forward a detailed, public plan to achieve full integration within six to 12 months.  The required crisis tools are three:  ●First, a larger and instantly available sovereign rescue fund that could temporarily finance Spain, Italy or others if those nations lose access to financing markets. Right now, the proposed European Stability Mechanism is too small and not ready for deployment.  ●Second, a central mechanism to insure all deposits in euro-zone banks. National governments should provide such insurance to their own depositors first. But backup insurance is necessary to prevent a disastrous bank run, which is a serious risk today.  ●Third, a unit like TARP, capable of injecting equity into shaky banks and forcing them to recapitalize.  These are the equivalent of bridge financing to buy time for reform. Permanent stability will come only from full union across the board. And markets will support the simple currency structure only if they see a true plan for promptly achieving this. The 17 member-states must jointly put one forward.  Both the rescue tools and the full integration plan require Germany, Europe’s strongest country, to put its balance sheet squarely behind the euro zone. That is an unpopular idea in Germany today, which is why Chancellor Angela Merkel has been dragging her feet. But Germany will suffer a severe economic blow if this single-currency experiment fails. A restored German mark would soar in value, like the Swiss franc, and damage German exports and employment.  The time for Germany and all euro-zone members to get the emergency measures in place and commit to full integration is now. Global capital markets may not give them another month. The world needs these leaders to step up.</p>

Europe is on the verge of financial chaos.

Global capital markets, now the most powerful force on earth, are rapidly losing confidence in the financial coherence of the 17-nation euro...

Banco Santander scorched by the domestic blowback

<p>Banco Santander's (SAN.MC) red and white flame logo popped up around the world when Spain was booming, but now the country's fortunes have turned, the global bank is being scorched by the domestic blowback.  It has come a long way since it was founded in 1857 in the northern Spanish port from which it takes its name, building a strong presence in mature markets such as the UK, and growth markets including Brazil, Mexico and Poland.  But it seems investors and depositors alike are struggling to see past the turbulence in its home market.  Its shares have dropped about 40 percent in the last year as the bank, along with Spanish rival BBVA (BBVA.MC), has been lumped together with the rest of the country's domestic-focused lenders, which are in urgent need of more capital after a property boom abruptly turned to bust.  This was evident last month when British customers at Santander's UK subsidiary took fright and withdrew about 200 million pounds ($308 million) in deposits, spooked by the misfortune of Spanish lender Bankia (BKIA.MC), which the government in Madrid was obliged to rescue.  COLLATERAL DAMAGE  "Santander and BBVA are in another league. Whatever they do in Spain has a limited impact on their balance sheet, and it (the share price fall) is unjustified collateral damage," a senior Madrid-based financier said.  Dig into its profitability, and from Brazil to Boston, Santander's presence in 10 major markets has kept it relatively insulated from the worst of the Spanish real estate collapse and the euro zone crisis.  Over the past five years, it has made 40.5 billion euros in attributable profit and paid out 24 billion euros to shareholders in dividends, while many of its rivals have cut or stopped their pay-outs.  In its most recent quarterly figures, 56 percent of its profits came from high-growth emerging countries such as Brazil and Mexico, while only 13 percent came from Spain and Portugal.  That has not translated into the bank's price to book ratio Of 0.53 - a measure of its shares against the value of its assets - which lags behind "safe-haven" banks such as HSBC (HSBA.L), on 0.89, and JPMorgan (JPM.N), on 0.66, according to Thomson Reuters data.  Even if Spain's downturn worsens - the economy is forecast to shrink this year and next - the country accounted for only 26 percent of Santander's total assets at the end of March, about the same as it has in Latin America and the United States, and less than the 29 percent held in the UK.  While the bank is likely to set aside more for bad loans in its home market after an external audit of Spanish banks commissioned by the government, few expect it to have to raise more capital.  "Banks like Santander will have to provision more, but Santander won't need more capital," one senior Madrid-based investment banker said.  SUBSIDIARY MODEL  Although British depositors did pull out cash in May when fears about Spanish banks mounted due to a rapidly worsening situation at Bankia, this amounted to just 1 percent of customer deposits.  That was in part due to Santander's move last December to mitigate the perceived risk of being owned by a Spanish bank. The bank's British subsidiary decided to make any transfers out of Britain subject to the consent of the UK regulator, the Financial Services Authority (FSA).  "With the full cooperation of Santander UK, the FSA has in place arrangements which require the FSA to give permission to any transfer of funds out of the UK by Santander UK," an FSA spokesman said.  Santander Chairman Emilio Botin stressed in March at the bank's annual meeting that subsidiaries such as the UK unit were "autonomous in terms of capital and liquidity".  This structure has reassured some.  "You can't completely ignore the contagion from Spain and the headline risk, but Santander UK should be able to operate as a separate entity in a worst-case scenario," said Robert Montague, Senior Investment Analyst, European Credit Management, which manages $9.5 billion invested in European credit markets.  "In the case of Santander's business model, its subsidiaries are fairly independent in terms of funding, and its UK operations also report publicly on a standalone basis," Montague added.  That has not stopped some depositors, notably a handful of local councils, from withdrawing their cash. But such moves are illogical, says Ben Bennett, credit strategist at Legal & General Investment Management, one of the UK's biggest investors.  "It's not something that's specific to its balance sheet that is putting it under pressure; it's just purely an association with a Spanish parent company," said Bennett.  "When you start talking about the worst-case scenario, the whole argument is a systemic one. That's an added reason why it's illogical to target these banks in the UK which have exposure to Spain because actually ... you're probably questioning banks that have nothing to do with Spain," he added.  MEXICAN WAVE  There has been no sign of a depositor flight from Santander in Mexico, where the bank had customer deposits of 26.1 billion euros at the end of the first quarter.  The Mexican banking and securities commission said it was in continuous contact with Spain's central bank as well as with the head offices of banks that have units in Mexico and is confident Mexico's banking system insulates domestic subsidiaries from distress at their foreign parents.  "In Mexico we have worked for more than 15 years to create a regulatory framework for subsidiaries with clear rules on capitalization and limited exposure to their parent banks, which we believe is a strength of our banking system," a spokesman for the regulator said.  It is a similar tale in Brazil, where there has been no sign of any depositor flight. Santander has been overcapitalised in Brazil since it listed publicly there in 2009. In the first quarter, the Basel ratio of Santander Brasil was 24 percent, well above the average of 14-15 pct of its main competitors as well as the regulatory floor of 11 percent.  As such, regulators are not concerned about Santander Brasil's capital position, despite occasional rumours that Santander is repatriating capital to Spain.  Local Santander executives have repeatedly denied this, and Santander Brasil CEO Marcial Portela recently said: "The only way to send money to headquarters is through dividends."  Brazil remains a bright spot for Santander, representing 25 percent of the group's overall profit, surpassing headquarters in Spain last year. The bank expects this number to rise to 30 percent in the next couple of years.</p>

Banco Santander scorched by the domestic blowback

Banco Santander's (SAN.MC) red and white flame logo popped up around the world when Spain was booming, but now the country's fortune...

Prince Philip in hospital

The Duke of Edinburgh has been taken to hospital with a bladder infection and will miss the rest of the Diamond Jubilee celebrations. Bucki...

Luka Rocco Magnotta, the 'Canadian Psycho,' arrested in Berlin

<p>Luka Rocco Magnotta was arrested in Berlin Monday after a four-day international manhunt that spanned three countries.  The 29-year-old Canadian wanted over a horrific Montreal ice pick murder and decapitation of a Chinese student that he allegedly filmed and posted to the Internet, was arrested in or near an Internet cafe, Berlin police said.  Montreal police confirmed they are aware of the reports that Magnotta was arrested, but said they are still in the process of contacting their Berlin counterparts.  The arrest comes after French authorities said they were investigating a tip that Magnotta travelled from Paris to Berlin via bus on the weekend.  “Somebody recognized him and (then) all the police recognized him,” Berlin police spokesperson Stefan Redlich told CP24 Monday.   Handout (Click to enlarge) Magnotta's alleged victim is Lin Jun, a 33-year-old Concordia University student from Wuhan, Hubei, China. He was last seen on May 24, police said, and reported missing on May 29. Redlich said police were called in by a civilian who spotted Magnotta and he was arrested after police asked for his identification at about 2:00 p.m. local time in Berlin.  Reuters is reporting it was an employee of the cafe, Kadir Anlayisli, that recognized Magnotta. The cafe is on Karl Marx Strasse, a busy shopping street filled with Turkish and Lebanese shops and cafes in the Neukoelln district of Berlin.  German television quoted the owner of the cafe saying Magnotta was surfing the Internet for about an hour before his arrest.  Redlich said Magnotta has been taken into custody without incident and will go in front of a judge Tuesday.  Canadian officials are expected to start the extradition process for Magnotta in the near future.</p>

Luka Rocco Magnotta, the 'Canadian Psycho,' arrested in Berlin

Luka Rocco Magnotta was arrested in Berlin Monday after a four-day international manhunt that spanned three countries. The 29-year-old Cana...

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