Banker bows to pressure from across the political spectrum to decline 3.6m shares offered to him by bank's board
Financial Services Authority wants banks to speed up PPI payouts
• Barclays sets aside £1bn to cover compensation
• British Bankers Association drops case
• Payment protection insurance wrongly sold to millions
• Barclays sets aside £1bn to cover compensation
• British Bankers Association drops case
• Payment protection insurance wrongly sold to millions
Britain's banks will be forced to re-open thousands of claims over the mis-selling of payment protection insurance (PPI) and pay up to £4.5bn in compensation following a high court ruling.
PPI is insurance typically sold to consumers at the point of sale of personal loans, credit cards and other forms of debt, which is designed to meet their repayments in the event of accident, sickness or unemployment. Many customers have discovered after paying for PPI policies that they would never qualify for a payout due to exclusions in the terms and conditions, while others didn't even realise they had signed up to buy the insurance.
In December the Financial Services Authority introduced rules to stop mis-selling, which required providers to talk customers through the key features of a policy rather than assuming they will read any relevant documentation, and make it clear that the cover is optional.
But the banks, represented by trade body the British Bankers' Association, compained that the rules were unfair because they would be applied retrospectively. In January the BBA launched a high court challenge against the FSA and the Financial Ombudsman – but today's ruling found against them. They could now face a bill of up to £4.5bn – £1.3bn for new complaints received during the coming five years and up to £3.2bn as a result of reviewing previous PPI sales.
The high court judgment endorsed the approach taken by the ombudsman and the FSA, and the banks now have 21 days to appeal.
Several banks had put PPI complaints on hold until the outcome of the judicial review was known. However, the FSA made it clear they should still be dealing with complaints, and anyone whose bank has not dealt with their complaint within eight weeks is entitled to take it to the Financial Ombudsman Service.
The ombudsman service said the lack of cooperation from some financial businesses has made it difficult to progress PPI cases over this period. "However, the clear-cut judgment means that banks and other financial businesses should now be in the position to deal promptly, efficiently and fairly with their customers' PPI complaints," a statement said. ...
PPI is insurance typically sold to consumers at the point of sale of personal loans, credit cards and other forms of debt, which is designed to meet their repayments in the event of accident, sickness or unemployment. Many customers have discovered after paying for PPI policies that they would never qualify for a payout due to exclusions in the terms and conditions, while others didn't even realise they had signed up to buy the insurance.
In December the Financial Services Authority introduced rules to stop mis-selling, which required providers to talk customers through the key features of a policy rather than assuming they will read any relevant documentation, and make it clear that the cover is optional.
But the banks, represented by trade body the British Bankers' Association, compained that the rules were unfair because they would be applied retrospectively. In January the BBA launched a high court challenge against the FSA and the Financial Ombudsman – but today's ruling found against them. They could now face a bill of up to £4.5bn – £1.3bn for new complaints received during the coming five years and up to £3.2bn as a result of reviewing previous PPI sales.
The high court judgment endorsed the approach taken by the ombudsman and the FSA, and the banks now have 21 days to appeal.
Several banks had put PPI complaints on hold until the outcome of the judicial review was known. However, the FSA made it clear they should still be dealing with complaints, and anyone whose bank has not dealt with their complaint within eight weeks is entitled to take it to the Financial Ombudsman Service.
The ombudsman service said the lack of cooperation from some financial businesses has made it difficult to progress PPI cases over this period. "However, the clear-cut judgment means that banks and other financial businesses should now be in the position to deal promptly, efficiently and fairly with their customers' PPI complaints," a statement said. ...
A government commission is to unveil measures aimed at ensuring taxpayers will never again need to bail out Britain's banks, with recommendations that risk splitting the coalition and infuriating the banking sector.
Amid warnings from large banks such as Barclays, HSBC and Standard Chartered that they will leave London if the proposals by Sir John Vickers are too radical, the commission will seek to ringfence savers from riskier banking operations.
The commission has considered the potential impact of its proposals on the City and is expected to counter suggestions that they would encourage banks to move to New York or Hong Kong.
The report, thought to run to 200 pages, was handed to ministers late on Friday to be presented to the banks at 6am on Monday – an hour before its official release. It is expected to back away from proposals such as "narrow banks", which only take savings, and splitting high street banks from their investment banking divisions, which Vince Cable, the business secretary, previously alluded to as "casinos". ...
Amid warnings from large banks such as Barclays, HSBC and Standard Chartered that they will leave London if the proposals by Sir John Vickers are too radical, the commission will seek to ringfence savers from riskier banking operations.
The commission has considered the potential impact of its proposals on the City and is expected to counter suggestions that they would encourage banks to move to New York or Hong Kong.
The report, thought to run to 200 pages, was handed to ministers late on Friday to be presented to the banks at 6am on Monday – an hour before its official release. It is expected to back away from proposals such as "narrow banks", which only take savings, and splitting high street banks from their investment banking divisions, which Vince Cable, the business secretary, previously alluded to as "casinos". ...
JP Morgan head Jamie Dimon pockets 51% pay rise
Wall Street firm gives chief executive a $5m cash bonus and pays for family's move from Chicago
Wall Street firm gives chief executive a $5m cash bonus and pays for family's move from Chicago
Barclays has made it clear to the Treasury that if the government insists on forcing UK banks to split their high street retail operation from their investment banking work, then it could move its headquarters out of London to the United States.
The claim was made by the Sunday Times which said the bank's former chief executive, John Varley, made the "thinly veiled threat" in a private meeting last week with the Treasury.
Varley was one of several senior bankers called in to discuss the work of the Independent Commission on Banking, chaired by Sir John Vickers, which is expected to outline a break-up scheme of some kind when it reports on April 11.
It is believed that Varley stopped short of making an explicit threat to pull out of the UK - but that he made Barclays' feelings very clear. ...
The claim was made by the Sunday Times which said the bank's former chief executive, John Varley, made the "thinly veiled threat" in a private meeting last week with the Treasury.
Varley was one of several senior bankers called in to discuss the work of the Independent Commission on Banking, chaired by Sir John Vickers, which is expected to outline a break-up scheme of some kind when it reports on April 11.
It is believed that Varley stopped short of making an explicit threat to pull out of the UK - but that he made Barclays' feelings very clear. ...
Business digest: Bailed-out bank’s key staff paid £1.1m on average
MARCH 18, 2011
The Royal Bank of Scotland's top five bankers, none of whom are on the board, earned more than £20m in 2010, it was revealed yesterday. RBS was bailed out by the government during the financial crisis.
The news was a result of Project Merlin, an agreement to increase transparency, which was signed by the UK's four biggest banks and announced by the chancellor last month. HSBC had been the first to comply with the agreement by revealing that five of their bankers took home between £2.1m and £2.7m in 2010.
In line with new FSA regulations, RBS also revealed how much their 'code staff' – those deemed crucial to business operations – were paid. The 232 staff members deemed to fit these criteria were paid £1.1m on average in 2010, costing the bank a total of £375m. ...
MARCH 18, 2011
The Royal Bank of Scotland's top five bankers, none of whom are on the board, earned more than £20m in 2010, it was revealed yesterday. RBS was bailed out by the government during the financial crisis.
The news was a result of Project Merlin, an agreement to increase transparency, which was signed by the UK's four biggest banks and announced by the chancellor last month. HSBC had been the first to comply with the agreement by revealing that five of their bankers took home between £2.1m and £2.7m in 2010.
In line with new FSA regulations, RBS also revealed how much their 'code staff' – those deemed crucial to business operations – were paid. The 232 staff members deemed to fit these criteria were paid £1.1m on average in 2010, costing the bank a total of £375m. ...
The controversial former bank chief Sir Fred Goodwin is the latest high profile figure to obtain a superinjunction, it has emerged.
The existence of the measure – which bans the press from reporting that an injunction has been obtained – can be revealed after a backbench Liberal Democrat, John Hemming, raised the issue in the Commons.
"In a secret hearing this week Fred Goodwin has obtained a superinjunction preventing him being identified as a banker," said Hemming, the MP for Birmingham Yardley.
Hemming, who used parliamentary privilege to avoid the legal ban on reporting the use of superinjunctions, asked: "Will the government have a debate or a statement on freedom of speech and whether there's one rule for the rich like Fred Goodwin and one rule for the poor?"
Goodwin, who presided over the near collapse of the Royal Bank of Scotland, was reported to have been angered by press coverage after he became popularly known as "Fred the Shred".
He attracted widespread media attention after he was forced to step down in 2008 as a non-negotiable condition of the bank's £20bn bailout by the taxpayer. Goodwin initially left RBS with a pension of £700,000 a year and a lump sum of nearly £3m. He agreed to reduce the payout following public outcry.
News that Goodwin has obtained a superinjunction – over issues that cannot be reported – has raised further questions about the use of the measures. ...
The existence of the measure – which bans the press from reporting that an injunction has been obtained – can be revealed after a backbench Liberal Democrat, John Hemming, raised the issue in the Commons.
"In a secret hearing this week Fred Goodwin has obtained a superinjunction preventing him being identified as a banker," said Hemming, the MP for Birmingham Yardley.
Hemming, who used parliamentary privilege to avoid the legal ban on reporting the use of superinjunctions, asked: "Will the government have a debate or a statement on freedom of speech and whether there's one rule for the rich like Fred Goodwin and one rule for the poor?"
Goodwin, who presided over the near collapse of the Royal Bank of Scotland, was reported to have been angered by press coverage after he became popularly known as "Fred the Shred".
He attracted widespread media attention after he was forced to step down in 2008 as a non-negotiable condition of the bank's £20bn bailout by the taxpayer. Goodwin initially left RBS with a pension of £700,000 a year and a lump sum of nearly £3m. He agreed to reduce the payout following public outcry.
News that Goodwin has obtained a superinjunction – over issues that cannot be reported – has raised further questions about the use of the measures. ...
Mervyn King has risked reopening the bitter argument over blame for the financial crisis by saying that government spending cuts are the fault of the City and expressing surprise there has not been more public anger.
The governor of the Bank of England said that people made unemployed and businesses bankrupted during the crisis had every reason to be resentful and voice their protest. He told the Treasury select committee that the billions spent bailing out the banks and the need for public spending cuts were the fault of the financial services sector.
"The price of this financial crisis is being borne by people who absolutely did not cause it," he said. "Now is the period when the cost is being paid, I'm surprised that the degree of public anger has not been greater than it has."
King has repeatedly pointed the finger at the City since the crisis erupted in 2007, but this was the first time he blamed bankers for the coalition's spending cuts.
It became clear during the hearing that King and his fellow members of the Bank's monetary policy committee, which sets interest rates, believe the crisis will have a lasting impact on the economy.
Asked when living standards enjoyed before the crisis would return, King said: "The research makes it clear that the impact of these crises lasts for many years. It is not like an ordinary recession, where you lose output and get it back quickly. We may not get the lost output back for very many years, if ever." ...
The governor of the Bank of England said that people made unemployed and businesses bankrupted during the crisis had every reason to be resentful and voice their protest. He told the Treasury select committee that the billions spent bailing out the banks and the need for public spending cuts were the fault of the financial services sector.
"The price of this financial crisis is being borne by people who absolutely did not cause it," he said. "Now is the period when the cost is being paid, I'm surprised that the degree of public anger has not been greater than it has."
King has repeatedly pointed the finger at the City since the crisis erupted in 2007, but this was the first time he blamed bankers for the coalition's spending cuts.
It became clear during the hearing that King and his fellow members of the Bank's monetary policy committee, which sets interest rates, believe the crisis will have a lasting impact on the economy.
Asked when living standards enjoyed before the crisis would return, King said: "The research makes it clear that the impact of these crises lasts for many years. It is not like an ordinary recession, where you lose output and get it back quickly. We may not get the lost output back for very many years, if ever." ...
Muhammad Yunus, the Nobel prizewinning economist and so-called father of microfinance, faces being ousted from the bank that he founded to help poor people in Bangladesh and across the developing world.
Yunus, the managing director of the Grameen Bank, which has lent small sums to millions of deprived people to help them start or run their own businesses as a first step out of poverty since being created in 1983, has been caught in a bitter political battle in his homeland of Bangladesh.
The campaign to remove Yunus, mounted mainly by politicians, is to intensify this week ahead of a key board meeting next Monday, which his supporters believe will involve an attempt to force the 70-year-old to quit as managing director.
Last week, Bangladesh's finance minister said Yunus should stand down following alleged irregularities in operations.
Abul Maal Abdul Muhith called Yunus a "man of high standing and respect" but "now old". The minister, who is 77, said: "We need to redefine the bank's role and bring it under closer regulation."
Supporters of Yunus fear politicians want to bring Grameen under government control. Yunus did not respond directly to the minister's comments but told reporters: "Any transition [would] essentially require a friendly environment and support from the inside and outside stakeholders of the bank to ensure that we continue to be totally committed to our mission for and with the poor."
Other government comments have been less polite. In December, the prime minister, Sheikh Hasina, accused Yunus of treating Grameen as his personal property and claimed the group was "sucking blood from the poor".
Supporters have branded the claim as grotesque, especially as Yunus has won a Nobel prize for his work on reducing poverty. ...
... The attacks on Yunus come at a time when microlending – once hailed as a model that would change the lives of hundreds of millions in the developing roads – faces increasing political hostility.
In India, politicians have accused bankers of profiteering from the poor and, in some places, banned further lending or recovery of debts. ...
Yunus, the managing director of the Grameen Bank, which has lent small sums to millions of deprived people to help them start or run their own businesses as a first step out of poverty since being created in 1983, has been caught in a bitter political battle in his homeland of Bangladesh.
The campaign to remove Yunus, mounted mainly by politicians, is to intensify this week ahead of a key board meeting next Monday, which his supporters believe will involve an attempt to force the 70-year-old to quit as managing director.
Last week, Bangladesh's finance minister said Yunus should stand down following alleged irregularities in operations.
Abul Maal Abdul Muhith called Yunus a "man of high standing and respect" but "now old". The minister, who is 77, said: "We need to redefine the bank's role and bring it under closer regulation."
Supporters of Yunus fear politicians want to bring Grameen under government control. Yunus did not respond directly to the minister's comments but told reporters: "Any transition [would] essentially require a friendly environment and support from the inside and outside stakeholders of the bank to ensure that we continue to be totally committed to our mission for and with the poor."
Other government comments have been less polite. In December, the prime minister, Sheikh Hasina, accused Yunus of treating Grameen as his personal property and claimed the group was "sucking blood from the poor".
Supporters have branded the claim as grotesque, especially as Yunus has won a Nobel prize for his work on reducing poverty. ...
... The attacks on Yunus come at a time when microlending – once hailed as a model that would change the lives of hundreds of millions in the developing roads – faces increasing political hostility.
In India, politicians have accused bankers of profiteering from the poor and, in some places, banned further lending or recovery of debts. ...
Confusion caused by wording in a popular mortgage deal is costing Lloyds £500m as the bank is being forced to write to 600,000 customers and repay up to 300,000 of them.
Payments will range from a few to potentially thousands of pounds per customer.
Just days before it publishes 2010 figures expected to show £2bn of profits, the bank admitted it had reached a voluntary agreement with the Financial Services Authority about the mortgages, which were sold under the Halifax brand.
Lloyds rescued Halifax's parent company, HBOS, at the height of the banking crisis in September 2008 and has already been saddled with billions of pounds of bad debts caused by poor lending decisions in HBOS's corporate banking arm. Lloyds shares were among the largest fallers in the FTSE 100 on Monday.
The latest problem related to 600,000 Halifax customers who were sent a mortgage offer between 20 September 2004 and 16 September 2007 which contained information about the bank's standard variable rate (SVR).
Halifax, the country's biggest mortgage lender, was capping the SVR to customers who were also being locked into the mortgages through early repayment charges. The cap was originally set at 2% above the Bank of England base rate but in October 2008 this was lifted to 3%.
However, the bank did not write to all its customers at the time to tell them of the change, only contacting those who were locked in on mortgage deals.
Halifax hit a problem in January 2009 when the Bank of England cut interest rates by half a percentage point to 1.5% – at the time their lowest level – although they have since been reduced to 0.5%.
As a result of this interest rate cut, Halifax's SVR was more than 2% above the Bank of England's rate – leaving some customers confused, as they believed the rate was capped at 2% not 3%. In reality, the cap may not have applied to them at all if they were locked in through one of the bank's early redemption changes.
Lloyds is now agreeing to made a "goodwill payment" to some 300,000 customers, regardless of whether or not the deal had applied to them. Those who were warned of the change in the cap – customers facing redemption changes – will receive a flat payment of £250, while the others will receive payments based on the difference in repayments caused by the change in the rate. ...
Payments will range from a few to potentially thousands of pounds per customer.
Just days before it publishes 2010 figures expected to show £2bn of profits, the bank admitted it had reached a voluntary agreement with the Financial Services Authority about the mortgages, which were sold under the Halifax brand.
Lloyds rescued Halifax's parent company, HBOS, at the height of the banking crisis in September 2008 and has already been saddled with billions of pounds of bad debts caused by poor lending decisions in HBOS's corporate banking arm. Lloyds shares were among the largest fallers in the FTSE 100 on Monday.
The latest problem related to 600,000 Halifax customers who were sent a mortgage offer between 20 September 2004 and 16 September 2007 which contained information about the bank's standard variable rate (SVR).
Halifax, the country's biggest mortgage lender, was capping the SVR to customers who were also being locked into the mortgages through early repayment charges. The cap was originally set at 2% above the Bank of England base rate but in October 2008 this was lifted to 3%.
However, the bank did not write to all its customers at the time to tell them of the change, only contacting those who were locked in on mortgage deals.
Halifax hit a problem in January 2009 when the Bank of England cut interest rates by half a percentage point to 1.5% – at the time their lowest level – although they have since been reduced to 0.5%.
As a result of this interest rate cut, Halifax's SVR was more than 2% above the Bank of England's rate – leaving some customers confused, as they believed the rate was capped at 2% not 3%. In reality, the cap may not have applied to them at all if they were locked in through one of the bank's early redemption changes.
Lloyds is now agreeing to made a "goodwill payment" to some 300,000 customers, regardless of whether or not the deal had applied to them. Those who were warned of the change in the cap – customers facing redemption changes – will receive a flat payment of £250, while the others will receive payments based on the difference in repayments caused by the change in the rate. ...
Barclays Bank has been forced to admit it paid just £113m in UK corporation tax in 2009 – a year when it rang up a record £11.6bn of profits.
The admission stunned politicians and tax campaigners. It was revealed on the eve of a day of protests planned against the high street banks by activists from UK Uncut, a group set up five months ago to oppose government cuts and corporate tax avoidance.
The Labour MP Chuka Umunna, who lobbied Barclays' chief executive, Bob Diamond, to reveal the tax paid by the bank, described the figure – just 1% of its 2009 profits – as "shocking".
The current rate of corporation tax in the UK is 28%, although global banks such as Barclays – which has hundreds of overseas subsidiaries, including many in tax havens – do not generate all of their profits in their domestic market.
Max Lawson, of the Robin Hood Tax Campaign, said: "This is proof that banks live in a parallel universe to the rest of us, paying billions in bonuses and unhampered by the inconvenience of paying tax.
"If banks paid their fair share we could avoid the worst of the cuts and help those hit hardest by the financial crisis they did nothing to cause."
UK Uncut, which has also campaigned against Vodafone, Boots and Top Shop, intends to take its first national day of action against the banks on Saturday with protesters expected to bring more than 30 high street branches of Barclays to a standstill.
On Tuesday – when Barclays announced 2010 profits of £6.1bn and a 23% rise in average pay in its investment banking arm, Barclays Capital – the tax campaigners turned a London branch of the bank into a library.
The disclosure of the size of Barclays' corporation tax bill was made in a letter by Diamond to Umunna, who had asked the Barclays boss about the tax paid by the bank when he appeared before the Treasury select committee of MPs last month. ...
The admission stunned politicians and tax campaigners. It was revealed on the eve of a day of protests planned against the high street banks by activists from UK Uncut, a group set up five months ago to oppose government cuts and corporate tax avoidance.
The Labour MP Chuka Umunna, who lobbied Barclays' chief executive, Bob Diamond, to reveal the tax paid by the bank, described the figure – just 1% of its 2009 profits – as "shocking".
The current rate of corporation tax in the UK is 28%, although global banks such as Barclays – which has hundreds of overseas subsidiaries, including many in tax havens – do not generate all of their profits in their domestic market.
Max Lawson, of the Robin Hood Tax Campaign, said: "This is proof that banks live in a parallel universe to the rest of us, paying billions in bonuses and unhampered by the inconvenience of paying tax.
"If banks paid their fair share we could avoid the worst of the cuts and help those hit hardest by the financial crisis they did nothing to cause."
UK Uncut, which has also campaigned against Vodafone, Boots and Top Shop, intends to take its first national day of action against the banks on Saturday with protesters expected to bring more than 30 high street branches of Barclays to a standstill.
On Tuesday – when Barclays announced 2010 profits of £6.1bn and a 23% rise in average pay in its investment banking arm, Barclays Capital – the tax campaigners turned a London branch of the bank into a library.
The disclosure of the size of Barclays' corporation tax bill was made in a letter by Diamond to Umunna, who had asked the Barclays boss about the tax paid by the bank when he appeared before the Treasury select committee of MPs last month. ...
An attempt by Barclays to suppress details of its allegedly massive tax avoidance schemes two years ago ended in farce. The high street bank went to court in the middle of the night to gag the Guardian but was outmanoeuvred by free-spirited souls on the internet.
It showed the legal system struggling to keep documents secret even after they were freely available on the web.
The story emerged in March 2009 when a whistleblower leaked internal Barclays memos to the Liberal Democrat MP Vince Cable.
The memos – passed on to the newspaper – described how a 2007 scheme called Project Knight proposed to save tax by manipulating loans totalling more than $16bn (£9.8bn), through a web of firms in the Cayman Islands, Luxembourg and the United States.
The memos also quoted advice from lawyers on how to blunt any challenges from HM Revenue & Customs. The whistleblower alleged: "It is a commonly held view that no agency in the US or the UK has the resources or the commitment to challenge [Barclays]."
Freshfields, Barclays' lawyers, toiled into the night to compel the Guardian to remove the documents from the website. Geraldine Proudler, a solicitor acting for the Guardian, was woken by a high court judge telephoning at 2am and asked to justify their publication. At 2.31am, Mr Justice Ouseley, over the phone, ordered that the documents be removed from the website, by which time 127 people had read them. ...
It showed the legal system struggling to keep documents secret even after they were freely available on the web.
The story emerged in March 2009 when a whistleblower leaked internal Barclays memos to the Liberal Democrat MP Vince Cable.
The memos – passed on to the newspaper – described how a 2007 scheme called Project Knight proposed to save tax by manipulating loans totalling more than $16bn (£9.8bn), through a web of firms in the Cayman Islands, Luxembourg and the United States.
The memos also quoted advice from lawyers on how to blunt any challenges from HM Revenue & Customs. The whistleblower alleged: "It is a commonly held view that no agency in the US or the UK has the resources or the commitment to challenge [Barclays]."
Freshfields, Barclays' lawyers, toiled into the night to compel the Guardian to remove the documents from the website. Geraldine Proudler, a solicitor acting for the Guardian, was woken by a high court judge telephoning at 2am and asked to justify their publication. At 2.31am, Mr Justice Ouseley, over the phone, ordered that the documents be removed from the website, by which time 127 people had read them. ...
Britain's fastest-growing protest movement is to target scores of high street banks in the next stage of its campaign against government cuts and corporate tax avoidance.
Activists from UK Uncut have, over the past five months, caused the temporary closure of more than 100 branches of high street stores accused of avoiding millions of pounds in tax.
The group will stage its first national day of action against UK banks on 19 February.
"The idea this time is not to shut these places down but to open up high street banks, occupying them and using them for things that may be more useful for the community," said Daniel Garvin from the group.
He and other protesters have mobilised thousands of activists using the Twitter hashtag #UKuncut since the group was formed in October.
The protests, which come as banks reveal multimillion-pound bonus packages over the next few weeks, will involve a range of peaceful – and creative – direct actions.
"If libraries are being closed in their area, people may decide to stage a read-in in the bank," said Garvin.
"The housing benefit cap means people are losing their homes, so some groups may opt for a sleep-in. Theatres are being shut, so others have talked about staging a play.
"Health provision is being cut, so what about setting up a walk-in clinic? Education funding is being savaged so how about holding a lecture series?" ...
Activists from UK Uncut have, over the past five months, caused the temporary closure of more than 100 branches of high street stores accused of avoiding millions of pounds in tax.
The group will stage its first national day of action against UK banks on 19 February.
"The idea this time is not to shut these places down but to open up high street banks, occupying them and using them for things that may be more useful for the community," said Daniel Garvin from the group.
He and other protesters have mobilised thousands of activists using the Twitter hashtag #UKuncut since the group was formed in October.
The protests, which come as banks reveal multimillion-pound bonus packages over the next few weeks, will involve a range of peaceful – and creative – direct actions.
"If libraries are being closed in their area, people may decide to stage a read-in in the bank," said Garvin.
"The housing benefit cap means people are losing their homes, so some groups may opt for a sleep-in. Theatres are being shut, so others have talked about staging a play.
"Health provision is being cut, so what about setting up a walk-in clinic? Education funding is being savaged so how about holding a lecture series?" ...
George Osborne's efforts to end the war on bankers were crumbling as Vince Cable, the business secretary, said he was still determined to end "unjustified and outrageous" salaries in the sector and his Liberal Democrat ally Lord Oakeshott left his party's frontbench after damning the government's attempts to curb bonuses.
Oakeshott, who was not in the government but spoke for the junior coalition partner on Treasury matters in the Lords, stood down shortly after he criticised officials working on the government's deal with the bankers and said: "If this is robust action on bank bonuses, my name's Bob Diamond."
Danny Alexander, the Lib Dem chief secretary to the Treasury, said Oakeshott had stood down by mutual consent.
Osborne hailed his deal as the moment to move beyond retribution to economic recovery. ...
Oakeshott, who was not in the government but spoke for the junior coalition partner on Treasury matters in the Lords, stood down shortly after he criticised officials working on the government's deal with the bankers and said: "If this is robust action on bank bonuses, my name's Bob Diamond."
Danny Alexander, the Lib Dem chief secretary to the Treasury, said Oakeshott had stood down by mutual consent.
Osborne hailed his deal as the moment to move beyond retribution to economic recovery. ...
Financiers in the City of London provided more than 50% of the funding for the Tories last year, new research revealed last night, prompting claims that the party is in thrall to the banks.
A study by the Bureau for Investigative Journalism has found that the City accounted for £11.4m of Tory funding – 50.79% of its total haul – in 2010, a general election year. This compared with £2.7m, or 25% of its funding, in 2005, when David Cameron became party leader.
The research also shows that nearly 60 donors gave more than £50,000 to the Tories last year, entitling each of them to a face-to-face meeting with leading members of the party up to and including Cameron.
The study shows the impact that Michael Spencer has had on party funding. He was appointed by Cameron as Tory treasurer in an attempt to reduce the influence of Lord Ashcroft, the party's former deputy chairman. Spencer was asked by Cameron to increase the number of relatively small donations of £50,000 to curb the influence of large donors such as Ashcroft, and for these smaller donations the City was place to look.
But there were still big City donations last year. David "Spotty" Rowland gave more than £4m. Stanley Fink, a hedge fund manager who was appointed the Tory treasurer last year in succession to Spencer, gave £1.9m while George Magan gave £485,000. Magan was also given a peerage. ...
A study by the Bureau for Investigative Journalism has found that the City accounted for £11.4m of Tory funding – 50.79% of its total haul – in 2010, a general election year. This compared with £2.7m, or 25% of its funding, in 2005, when David Cameron became party leader.
The research also shows that nearly 60 donors gave more than £50,000 to the Tories last year, entitling each of them to a face-to-face meeting with leading members of the party up to and including Cameron.
The study shows the impact that Michael Spencer has had on party funding. He was appointed by Cameron as Tory treasurer in an attempt to reduce the influence of Lord Ashcroft, the party's former deputy chairman. Spencer was asked by Cameron to increase the number of relatively small donations of £50,000 to curb the influence of large donors such as Ashcroft, and for these smaller donations the City was place to look.
But there were still big City donations last year. David "Spotty" Rowland gave more than £4m. Stanley Fink, a hedge fund manager who was appointed the Tory treasurer last year in succession to Spencer, gave £1.9m while George Magan gave £485,000. Magan was also given a peerage. ...
It should have been a chance to trumpet recovery in cosy Alpine surroundings. At Davos, David Cameron and George Osborne wanted to sell British austerity, discipline and economic stability to the world's most powerful people. It didn't quite work out like that.
The week started with dismal figures showing that Britain's economy had shrunk by 0.5% in the final quarter of 2010 and that questions were being asked about deficit-cutting without long-term growth. And instead of getting plaudits at the World Economic Forum's annual summit in Switzerland, wherever they went British ministers were confronted by economists casting doubt on British policy.
There was no respite when they met anxious financiers alarmed by "banker bashing". At a closed-door session today as the Alpine jamboree drew to an end, more than 40 bosses of banking and insurance companies met finance ministers from nations including Britain, Canada, France, South Africa, Turkey and Sweden.
A guest list obtained by the Observer reveals that those invited included Bank of America's boss, Brian Moynihan; Standard Chartered's chief, Peter Sands; the Lloyd's of London chairman, Lord Levene; the UK head of Santander, Ana Patricia Botín; and Aviva's chief executive, Andrew Moss.
In emollient form afterwards, Barclays' chief executive, Bob Diamond, said the get-together had been an opportunity to deliver "very heartfelt thanks" to governments for rescuing the banking system.
"We have to recognise, although there is some fatigue, that an awful lot has been achieved over the last few years," said Diamond. "We should say thanks to the central bankers and regulators because we're operating in a much safer system than a couple of years ago."
But France's finance minister, Christine Lagarde, made it clear that the discussion had been robust: "The best way for the banking system to say 'thank you' would be with good financing of the economy, sensible compensation packages and a refinancing of their capital."
Impatient with criticism of bonuses, tax avoidance and lending to small businesses, many banks used the occasion to turn up the volume in protest at what they see as undue punishment. JP Morgan's chief executive, Jamie Dimon, snapped last week that banks were not prepared to simply "bend over and accept it" from regulators. The Goldman Sachs president, Gary Cohn, declared that extra regulations on banks would simply encourage people to put their money into riskier hedge funds. ...
The week started with dismal figures showing that Britain's economy had shrunk by 0.5% in the final quarter of 2010 and that questions were being asked about deficit-cutting without long-term growth. And instead of getting plaudits at the World Economic Forum's annual summit in Switzerland, wherever they went British ministers were confronted by economists casting doubt on British policy.
There was no respite when they met anxious financiers alarmed by "banker bashing". At a closed-door session today as the Alpine jamboree drew to an end, more than 40 bosses of banking and insurance companies met finance ministers from nations including Britain, Canada, France, South Africa, Turkey and Sweden.
A guest list obtained by the Observer reveals that those invited included Bank of America's boss, Brian Moynihan; Standard Chartered's chief, Peter Sands; the Lloyd's of London chairman, Lord Levene; the UK head of Santander, Ana Patricia Botín; and Aviva's chief executive, Andrew Moss.
In emollient form afterwards, Barclays' chief executive, Bob Diamond, said the get-together had been an opportunity to deliver "very heartfelt thanks" to governments for rescuing the banking system.
"We have to recognise, although there is some fatigue, that an awful lot has been achieved over the last few years," said Diamond. "We should say thanks to the central bankers and regulators because we're operating in a much safer system than a couple of years ago."
But France's finance minister, Christine Lagarde, made it clear that the discussion had been robust: "The best way for the banking system to say 'thank you' would be with good financing of the economy, sensible compensation packages and a refinancing of their capital."
Impatient with criticism of bonuses, tax avoidance and lending to small businesses, many banks used the occasion to turn up the volume in protest at what they see as undue punishment. JP Morgan's chief executive, Jamie Dimon, snapped last week that banks were not prepared to simply "bend over and accept it" from regulators. The Goldman Sachs president, Gary Cohn, declared that extra regulations on banks would simply encourage people to put their money into riskier hedge funds. ...
Julian Assange vows to reveal tax details of 2,000 wealthy people
Swiss banker gives WikiLeaks founder data 'to educate society' about amount of potential tax revenues lost to offshore schemes
Esther Addley
Monday 17 January 2011
Julian Assange, the WikiLeaks founder, today pledged to make public the confidential tax details of 2,000 wealthy and prominent individuals, after being passed the data by a Swiss banker who claims the information potentially reveals instances of money-laundering and large-scale illegal tax evasion.
In a carefully choreographed handover in central London, Rudolf Elmer, formerly a senior executive at the Swiss bank Julius Baer, based in the Cayman islands, said he was handing the data to WikiLeaks as part of an attempt "to educate society" about the amount of potential tax revenues lost thanks to offshore schemes and money-laundering.
"As banker, I have the right to stand up if something is wrong," he said. "I am against the system. I know how the system works and I know the day-to-day business. I wanted to let society know how this system works because it's damaging society," he said.
Elmer will appear in a Swiss court on Wednesday charged with breaking Swiss banking secrecy laws, forging documents and sending threatening messages to two officials at his former employer.
He denies the charges. ...
Swiss banker gives WikiLeaks founder data 'to educate society' about amount of potential tax revenues lost to offshore schemes
Esther Addley
Monday 17 January 2011
Julian Assange, the WikiLeaks founder, today pledged to make public the confidential tax details of 2,000 wealthy and prominent individuals, after being passed the data by a Swiss banker who claims the information potentially reveals instances of money-laundering and large-scale illegal tax evasion.
In a carefully choreographed handover in central London, Rudolf Elmer, formerly a senior executive at the Swiss bank Julius Baer, based in the Cayman islands, said he was handing the data to WikiLeaks as part of an attempt "to educate society" about the amount of potential tax revenues lost thanks to offshore schemes and money-laundering.
"As banker, I have the right to stand up if something is wrong," he said. "I am against the system. I know how the system works and I know the day-to-day business. I wanted to let society know how this system works because it's damaging society," he said.
Elmer will appear in a Swiss court on Wednesday charged with breaking Swiss banking secrecy laws, forging documents and sending threatening messages to two officials at his former employer.
He denies the charges. ...
Goldman Sachs has been left red-faced after the investment bank had to scrap plans for its super-rich American clients to become special friends with Facebook.
Earlier this month, Goldman Sachs invested $450m (£283m) in the social network company at a price that valued Facebook at $50bn. It was then reported that the bank was looking to raise $1.5bn for Facebook through an exclusive share offer, known as a private placement, for the bank's top clients.
Facebook is probably the hottest property on the planet at present. The seven-year-old company has more than 500 million users and recently passed Google as the most visited site on the web. The deal was a major coup for Goldman, which appeared to have found a way to get its clients in first.
The bank planned to set up a "special purpose vehicle" to allow its clients to invest in Facebook. The plan was widely seen as a way to circumnavigate rules that restrict to below 500 the number of US shareholders a private company can have. It subsequently transpired that Facebook was planning to address the 500 rule itself by going public or publishing full accounts.
While Goldman never commented on the private placement, the bank's officials believe the "intense media attention" that the deal generated around the world was threatening to scupper the deal in the US.
American law prohibits "general solicitation and advertising" in private offerings, banning banks from promoting an offer by taking out advertisements or communicating with media outlets. ...
Earlier this month, Goldman Sachs invested $450m (£283m) in the social network company at a price that valued Facebook at $50bn. It was then reported that the bank was looking to raise $1.5bn for Facebook through an exclusive share offer, known as a private placement, for the bank's top clients.
Facebook is probably the hottest property on the planet at present. The seven-year-old company has more than 500 million users and recently passed Google as the most visited site on the web. The deal was a major coup for Goldman, which appeared to have found a way to get its clients in first.
The bank planned to set up a "special purpose vehicle" to allow its clients to invest in Facebook. The plan was widely seen as a way to circumnavigate rules that restrict to below 500 the number of US shareholders a private company can have. It subsequently transpired that Facebook was planning to address the 500 rule itself by going public or publishing full accounts.
While Goldman never commented on the private placement, the bank's officials believe the "intense media attention" that the deal generated around the world was threatening to scupper the deal in the US.
American law prohibits "general solicitation and advertising" in private offerings, banning banks from promoting an offer by taking out advertisements or communicating with media outlets. ...
WikiLeaks cables: Julian Assange says his life is 'under threat'
• WikiLeaks founder says Swedish rape case is 'a travesty'
• Bank of America blocks WikiLeaks payments
David Batty
Saturday 18 December 2010
Julian Assange said today his life and the lives of his colleagues at the whistleblowing website WikiLeaks are under threat.
Speaking to reporters outside Ellingham Hall, the Norfolk house at which he is staying following his release on bail from prison, Assange said: "There is a threat to my life. There is a threat to my staff. There are significant risks facing us."
Assange is wanted in Sweden, after he was accused of committing sex offences. He denies the allegations and his lawyers have accused the Swedish authorities of waging a "vendetta".
He was initially remanded in custody but freed from prison on Thursday after a judge granted bail pending a court ruling on extradition to Sweden.
Assange said: "The case in Sweden is a travesty. No person should be exposed to that type of investigation and persecution.
"I have seen a statement from one of the witnesses that she was bamboozled ... I have heard a rumour that one has withdrawn her statement."
Meanwhile, Bank of America has become the latest financial institution to refuse to handle payments for WikiLeaks.
The bank released a statement saying it will no longer process any transactions that it believes are intended for the site, which has released thousands of secret US diplomatic cables.
"This decision is based upon our reasonable belief that WikiLeaks may be engaged in activities that are, among other things, inconsistent with our internal policies for processing payments," the bank said.
The action comes as WikiLeaks says it plans to release information about banks.
Other financial institutions, including MasterCard and PayPal, have also stopped handling payments for the site. ...
• WikiLeaks founder says Swedish rape case is 'a travesty'
• Bank of America blocks WikiLeaks payments
David Batty
Saturday 18 December 2010
Julian Assange said today his life and the lives of his colleagues at the whistleblowing website WikiLeaks are under threat.
Speaking to reporters outside Ellingham Hall, the Norfolk house at which he is staying following his release on bail from prison, Assange said: "There is a threat to my life. There is a threat to my staff. There are significant risks facing us."
Assange is wanted in Sweden, after he was accused of committing sex offences. He denies the allegations and his lawyers have accused the Swedish authorities of waging a "vendetta".
He was initially remanded in custody but freed from prison on Thursday after a judge granted bail pending a court ruling on extradition to Sweden.
Assange said: "The case in Sweden is a travesty. No person should be exposed to that type of investigation and persecution.
"I have seen a statement from one of the witnesses that she was bamboozled ... I have heard a rumour that one has withdrawn her statement."
Meanwhile, Bank of America has become the latest financial institution to refuse to handle payments for WikiLeaks.
The bank released a statement saying it will no longer process any transactions that it believes are intended for the site, which has released thousands of secret US diplomatic cables.
"This decision is based upon our reasonable belief that WikiLeaks may be engaged in activities that are, among other things, inconsistent with our internal policies for processing payments," the bank said.
The action comes as WikiLeaks says it plans to release information about banks.
Other financial institutions, including MasterCard and PayPal, have also stopped handling payments for the site. ...
Vatican bank chief investigated over money laundering claims
In unprecedented move, judge freezes €23m held in account at financial institution with close church links
John Hooper in Rome
Tuesday 21 September 2010
The head of the Vatican bank has formally been placed under investigation in an inquiry into a suspected violation of Italy's money-laundering laws, judicial sources said today.
At the same time, a judge in Rome ordered a freeze on €23m (£19.5m) held in an account opened by the Vatican bank, the Institute for the Works of Religion (IOR), at another financial institution in the Italian capital. It was thought to be the first time such action had been authorised against the IOR in Italy.
Since last September, the Bank of Italy has classified the Vatican bank as a non-EU institution whose dealings with other banks are thus subject to especially close scrutiny.
The sources said that last Wednesday, on the eve of Pope Benedict's departure for Britain, a unit of the Italian revenue guard alerted prosecutors to an anomaly in an account owned by the IOR at the Rome branch of Credito Artigiano, which has close historic ties to the Catholic church. ...
In unprecedented move, judge freezes €23m held in account at financial institution with close church links
John Hooper in Rome
Tuesday 21 September 2010
The head of the Vatican bank has formally been placed under investigation in an inquiry into a suspected violation of Italy's money-laundering laws, judicial sources said today.
At the same time, a judge in Rome ordered a freeze on €23m (£19.5m) held in an account opened by the Vatican bank, the Institute for the Works of Religion (IOR), at another financial institution in the Italian capital. It was thought to be the first time such action had been authorised against the IOR in Italy.
Since last September, the Bank of Italy has classified the Vatican bank as a non-EU institution whose dealings with other banks are thus subject to especially close scrutiny.
The sources said that last Wednesday, on the eve of Pope Benedict's departure for Britain, a unit of the Italian revenue guard alerted prosecutors to an anomaly in an account owned by the IOR at the Rome branch of Credito Artigiano, which has close historic ties to the Catholic church. ...
Audit the Fed: Yes We Can
Our drive to bring transparency to the Fed is closer than ever. Seven Senators from Bernie Sanders and Russ Feingold on the left to Jim DeMint on the right have signed on as cosponsors to the Federal Reserve Transparency Amendment. The full list of cosponsors is in the box on the right.
Our amendment is simple. If we pass it, we will finally know to whom the Fed has lent trillions of dollars of our money. If we don't, we won't.
We're closer than ever before to bringing accountability to the Fed. Time is of the essence - a vote is coming any day now. Contact your Senators NOW and urge them to sponsor the Federal Reserve Transparency Amendment.
Our drive to bring transparency to the Fed is closer than ever. Seven Senators from Bernie Sanders and Russ Feingold on the left to Jim DeMint on the right have signed on as cosponsors to the Federal Reserve Transparency Amendment. The full list of cosponsors is in the box on the right.
Our amendment is simple. If we pass it, we will finally know to whom the Fed has lent trillions of dollars of our money. If we don't, we won't.
We're closer than ever before to bringing accountability to the Fed. Time is of the essence - a vote is coming any day now. Contact your Senators NOW and urge them to sponsor the Federal Reserve Transparency Amendment.
... The shareholders’ claims are scathing of Lloyd Blankfein, the chairman and chief executive of the bank, and Gary Cohen, the president, and the rest of the bank’s 12-strong board, which they said was made up of individuals too interested in their “grossly excessive” compensation and too closely connected to each other to run the bank properly. “The director defendants completely abdicated their oversight duties to the company,” one lawsuit said.
Instead, the bank’s leaders sold $65.4 million of “artificially inflated” Goldman stock while they — but not other shareholders — knew of the SEC’s impending charges, the legal action alleged. Goldman’s credibility had been “devastated” and its corporate image and goodwill “irreparably damaged” by the charges, shareholders asserted.
“For at least the foreseeable future, Goldman will suffer from what is known as the ‘liar’s discount’, a term applied to the stocks of companies who have been implicated in illegal behaviour and have misled the investing public,” one suit said.
Shareholders want Goldman Sachs to pay them damages and make corporate governance reforms. Mr Blankfein went on a public relations offensive at the weekend, doing an interview on The Charlie Rose Show in which he acknowledged that the bank, which is overhauling its internal rules for dealing with clients, “can’t exist in the current state that we are in”. He added: “We have a lot of work to do.”
Warren Buffett, the renowned investor who loaned Goldman $5 billion during the financial crisis in return for an annual return of $500 million, tried to boost the bank’s image at his shareholders’ meeting in Omaha, Nebraska, at the weekend.
“I don’t hold against Goldman Sachs the fact that an allegation’s been made by the SEC,” he said. “If it leads to something more serious, then we’ll think about it if it happens.”
Mr Buffett did not convince at least some of his own shareholders. “I hope they nail Goldman,” John Buckley, an Omaha native, told The Times. “It ain’t right, doing that to people.”
Shares in Goldman Sachs dropped by 9.4 per cent last Friday after the bank was downgraded by two analysts who cited the difficulty of predicting the outcome of the bank’s legal problems. The stock made a comparatively small rebound yesterday, rising by $4.37, or 3 per cent, to close at $149.57. ...
Instead, the bank’s leaders sold $65.4 million of “artificially inflated” Goldman stock while they — but not other shareholders — knew of the SEC’s impending charges, the legal action alleged. Goldman’s credibility had been “devastated” and its corporate image and goodwill “irreparably damaged” by the charges, shareholders asserted.
“For at least the foreseeable future, Goldman will suffer from what is known as the ‘liar’s discount’, a term applied to the stocks of companies who have been implicated in illegal behaviour and have misled the investing public,” one suit said.
Shareholders want Goldman Sachs to pay them damages and make corporate governance reforms. Mr Blankfein went on a public relations offensive at the weekend, doing an interview on The Charlie Rose Show in which he acknowledged that the bank, which is overhauling its internal rules for dealing with clients, “can’t exist in the current state that we are in”. He added: “We have a lot of work to do.”
Warren Buffett, the renowned investor who loaned Goldman $5 billion during the financial crisis in return for an annual return of $500 million, tried to boost the bank’s image at his shareholders’ meeting in Omaha, Nebraska, at the weekend.
“I don’t hold against Goldman Sachs the fact that an allegation’s been made by the SEC,” he said. “If it leads to something more serious, then we’ll think about it if it happens.”
Mr Buffett did not convince at least some of his own shareholders. “I hope they nail Goldman,” John Buckley, an Omaha native, told The Times. “It ain’t right, doing that to people.”
Shares in Goldman Sachs dropped by 9.4 per cent last Friday after the bank was downgraded by two analysts who cited the difficulty of predicting the outcome of the bank’s legal problems. The stock made a comparatively small rebound yesterday, rising by $4.37, or 3 per cent, to close at $149.57. ...
... In a hefty dossier circulated to media, the bank produced charts showing it never controlled more than 6% of the market for residential mortgage-backed securities or 9% of trade in collateralised debt obligations (CDOs). Mortgage-related products never exceeded 2% of group revenues between 2003-2008, the bank said. It denied engaging "in some type of massive 'bet' against our clients".
Correspondence in the dossier shows a discussion raging within the firm about appropriate exposure and the direction of the housing market. At one point in late 2006, a Goldman banker emailed colleagues bemoaning: "Sub-prime market getting hit hard – hedge funds hitting street, Wall Street Journal article. At this point we are down $20m today."
In another exchange, one trading executive writes that "the market in general underestimated how bad it could get", continuing: "While undoubtedly there will be some continued spillover, I'm not so convinced this is a total death spiral. In fact we may have terrific opportunities."
For Goldman's 30,500 staff worldwide, the next few weeks are crucial. Insiders say clients, so far, have been supportive in spite of the SEC's accusations that Goldman misled investors with Abacus, a mortgage derivative allegedly designed to fail. If the SEC's prosecution is successful, Goldman risks huge damage to its reputation and could suffer an exodus of customers and staff.
The bank's defence has been hindered by the release of a batch of emails sent by Fabrice Tourre, who refers to himself as the 'Fabulous Fab', to his girlfriend, Marine Serres. In the emails, the originator of the Abacus deal intersperses expressions of love and affection with banter about CDOs. In the messages, Tourre jokes that he has been selling Abacus to "widows and orphans" at an airport and he is scornful about the financial package, describing it as "a product of pure intellectual masturbation" that has "no purpose" and is "absolutely conceptual".
Correspondence in the dossier shows a discussion raging within the firm about appropriate exposure and the direction of the housing market. At one point in late 2006, a Goldman banker emailed colleagues bemoaning: "Sub-prime market getting hit hard – hedge funds hitting street, Wall Street Journal article. At this point we are down $20m today."
In another exchange, one trading executive writes that "the market in general underestimated how bad it could get", continuing: "While undoubtedly there will be some continued spillover, I'm not so convinced this is a total death spiral. In fact we may have terrific opportunities."
For Goldman's 30,500 staff worldwide, the next few weeks are crucial. Insiders say clients, so far, have been supportive in spite of the SEC's accusations that Goldman misled investors with Abacus, a mortgage derivative allegedly designed to fail. If the SEC's prosecution is successful, Goldman risks huge damage to its reputation and could suffer an exodus of customers and staff.
The bank's defence has been hindered by the release of a batch of emails sent by Fabrice Tourre, who refers to himself as the 'Fabulous Fab', to his girlfriend, Marine Serres. In the emails, the originator of the Abacus deal intersperses expressions of love and affection with banter about CDOs. In the messages, Tourre jokes that he has been selling Abacus to "widows and orphans" at an airport and he is scornful about the financial package, describing it as "a product of pure intellectual masturbation" that has "no purpose" and is "absolutely conceptual".
FABRICE TOURRE, the 31-year-old trader at the centre of the Goldman Sachs fraud allegations, dismissed the complex debt products he created for the bank as “pure intellectual masturbation”.
In a series of damaging emails released yesterday, Tourre also compared the products to a “Frankenstein” monster that had “turned against his own inventor”.
Other emails that emerged yesterday showed Lloyd Blankfein, Goldman’s chief executive, boasting about the money the bank made from the housing market collapse. “Of course we didn’t dodge the mortgage mess,” Blankfein wrote in November 2007. “We lost money, then made more than we lost because of shorts (bets against housing).”
The Blankfein emails were released by a Senate committee that will take evidence from him and Tourre this week. The committee is investigation the firm’s role in selling sub-prime mortgage products. The probe has been triggered by a lawsuit from the Securities and Exchange Commission (SEC) that alleges Goldman defrauded investors of $1 billion (£650m).
Senator Carl Levin, the committee’s chairman, described the bank and its Wall Street peers yesterday as “self-interested promoters of risky and complex financial schemes that helped trigger the crisis”.
Levin also accused the bank of making “enormous” profits by betting that house prices would fall — a claim rejected by Goldman. ...
In a series of damaging emails released yesterday, Tourre also compared the products to a “Frankenstein” monster that had “turned against his own inventor”.
Other emails that emerged yesterday showed Lloyd Blankfein, Goldman’s chief executive, boasting about the money the bank made from the housing market collapse. “Of course we didn’t dodge the mortgage mess,” Blankfein wrote in November 2007. “We lost money, then made more than we lost because of shorts (bets against housing).”
The Blankfein emails were released by a Senate committee that will take evidence from him and Tourre this week. The committee is investigation the firm’s role in selling sub-prime mortgage products. The probe has been triggered by a lawsuit from the Securities and Exchange Commission (SEC) that alleges Goldman defrauded investors of $1 billion (£650m).
Senator Carl Levin, the committee’s chairman, described the bank and its Wall Street peers yesterday as “self-interested promoters of risky and complex financial schemes that helped trigger the crisis”.
Levin also accused the bank of making “enormous” profits by betting that house prices would fall — a claim rejected by Goldman. ...
Alistair Darling: the world will back IMF bank taxes
UK chancellor says that Britain, the US and the eurozone countries agree that banks need to be cut down to size
Larry Elliott and Jill Treanor
Wednesday 21 April 2010
The G20 group of rich and poor countries is likely to make rapid progress on a radical IMF plan to tax the world's financial institutions in the hope of reaching a deal by the end of the year, the chancellor, Alistair Darling, said today.
Speaking to the Guardian, the chancellor said that Britain, the US and the eurozone countries were agreed that action needed to be taken to cut banks down to size and to prevent another crisis putting pressure on public finances.
Despite opposition from Canada, which will host the next G20 meeting this summer, Darling said pressure from those countries with major financial centres would keep the issue high on the agenda. The resilience of Canada's banks during the three-year financial crisis has made Ottawa reluctant to discuss taxes on finance at the G20, but the chancellor said: "If everybody else wants to discuss it, nobody is going to keep it off the agenda."
Prospects for an international deal have improved since the Obama administration adopted a more aggressive approach towards Wall Street banks earlier this year. Darling said: "I hope that we will have the principles agreed by the end of the year, and convert them into practice later."
He added, however, that there would be no sudden introduction of either of the two charges proposed by the IMF this week: a financial stability contribution to fund any future bailout; and a financial activities tax on bank profits and pay. ...
UK chancellor says that Britain, the US and the eurozone countries agree that banks need to be cut down to size
Larry Elliott and Jill Treanor
Wednesday 21 April 2010
The G20 group of rich and poor countries is likely to make rapid progress on a radical IMF plan to tax the world's financial institutions in the hope of reaching a deal by the end of the year, the chancellor, Alistair Darling, said today.
Speaking to the Guardian, the chancellor said that Britain, the US and the eurozone countries were agreed that action needed to be taken to cut banks down to size and to prevent another crisis putting pressure on public finances.
Despite opposition from Canada, which will host the next G20 meeting this summer, Darling said pressure from those countries with major financial centres would keep the issue high on the agenda. The resilience of Canada's banks during the three-year financial crisis has made Ottawa reluctant to discuss taxes on finance at the G20, but the chancellor said: "If everybody else wants to discuss it, nobody is going to keep it off the agenda."
Prospects for an international deal have improved since the Obama administration adopted a more aggressive approach towards Wall Street banks earlier this year. Darling said: "I hope that we will have the principles agreed by the end of the year, and convert them into practice later."
He added, however, that there would be no sudden introduction of either of the two charges proposed by the IMF this week: a financial stability contribution to fund any future bailout; and a financial activities tax on bank profits and pay. ...
Why we must break up the banks
Paul Krugman says it isn't necessary – but breaking up financial giants would at least give us hope that things can change
Dean Baker
Wednesday 7 April 2010
It's not often that I disagree with Paul Krugman, but there are occasions where at least one of us is wrong. And the treatment of too big to fail (TBTF) banks is one of them.
Krugman argued in a column last week that breaking up the TBTF banks is not a necessary part of financial reform. Krugman pointed to the example of Canada as a country with a well-regulated financial system. Canada did not experience a financial crisis in 2008 in spite of the fact that five big banks essentially account for the whole of the Canadian banking system. On the other side, Krugman noted that the collapse of large numbers of small banks can also create a crisis, pointing to the chain of bank collapses at the start of the Great Depression.
These are valid points, but to paraphrase Dorothy in the Wizard of Oz: "we're not in Canada anymore." While Canadian banking regulation appears to have been effective thus far (we may want to see how they cope with a yet to deflate housing bubble before pronouncing it a success), Canada is a very different country from the United States. In Canada, they have had universal Medicare for 40 years. As the first President Bush used to say, it is a kinder, gentler, country.
This matters for financial regulation, because there is a level of independence and integrity on the part of the regulators in Canada that does not exist in the United States. The line in Washington is that if you want to talk to someone from Goldman Sachs, call the treasury department. ...
Paul Krugman says it isn't necessary – but breaking up financial giants would at least give us hope that things can change
Dean Baker
Wednesday 7 April 2010
It's not often that I disagree with Paul Krugman, but there are occasions where at least one of us is wrong. And the treatment of too big to fail (TBTF) banks is one of them.
Krugman argued in a column last week that breaking up the TBTF banks is not a necessary part of financial reform. Krugman pointed to the example of Canada as a country with a well-regulated financial system. Canada did not experience a financial crisis in 2008 in spite of the fact that five big banks essentially account for the whole of the Canadian banking system. On the other side, Krugman noted that the collapse of large numbers of small banks can also create a crisis, pointing to the chain of bank collapses at the start of the Great Depression.
These are valid points, but to paraphrase Dorothy in the Wizard of Oz: "we're not in Canada anymore." While Canadian banking regulation appears to have been effective thus far (we may want to see how they cope with a yet to deflate housing bubble before pronouncing it a success), Canada is a very different country from the United States. In Canada, they have had universal Medicare for 40 years. As the first President Bush used to say, it is a kinder, gentler, country.
This matters for financial regulation, because there is a level of independence and integrity on the part of the regulators in Canada that does not exist in the United States. The line in Washington is that if you want to talk to someone from Goldman Sachs, call the treasury department. ...
A tax break created by Gordon Brown to encourage millions of people to save has degenerated into a £3 billion a year rip-off that enriches the banks, according to a damning verdict from the statutory consumer watchdog.
Consumer Focus has made a formal complaint to the Office of Fair Trading alleging that cash Isas pay derisory rates of interest and that banks use unfair obstacles to stop people from switching to better deals. The OFT has 90 days to respond.
“It beggars belief that in 21st century Britain it takes a month to transfer information and funds from one bank to another,” said Mike O’Connor, chief executive of Consumer Focus. “The average Isa saver is getting a poor deal.” ...
Consumer Focus has made a formal complaint to the Office of Fair Trading alleging that cash Isas pay derisory rates of interest and that banks use unfair obstacles to stop people from switching to better deals. The OFT has 90 days to respond.
“It beggars belief that in 21st century Britain it takes a month to transfer information and funds from one bank to another,” said Mike O’Connor, chief executive of Consumer Focus. “The average Isa saver is getting a poor deal.” ...
One of the biggest bonuses seen this year for any London-based banker was revealed today as HSBC announced it had given Stuart Gulliver, its head of investment banking, a £9.8 million package.
Mr Gulliver was awarded a £9 million bonus on top of his £800,000 base pay for his "exceptional performance" in trebling the profits of his division to $10.5 billion, HSBC said.
The payment came as Michael Geoghegan, HSBC chief executive, confirmed that he will give his £4 million bonus to charity.
HSBC disappointed investors after full-year profits fell by 24 per cent to $7.1 billion (£4.7 billion) following a big write down of the value of its own bonds. Its shares lost more than 5 per cent, down 37.1p, to 682.46p. ...
Mr Gulliver was awarded a £9 million bonus on top of his £800,000 base pay for his "exceptional performance" in trebling the profits of his division to $10.5 billion, HSBC said.
The payment came as Michael Geoghegan, HSBC chief executive, confirmed that he will give his £4 million bonus to charity.
HSBC disappointed investors after full-year profits fell by 24 per cent to $7.1 billion (£4.7 billion) following a big write down of the value of its own bonds. Its shares lost more than 5 per cent, down 37.1p, to 682.46p. ...
... Buffett has been criticizing overreaching corporate managers and complaisant directors for decades. But the question of how to motivate good corporate behavior has taken on new weight as Washington debates reining in the financial giants whose missteps brought the economy to its knees two years ago.
The Obama administration last month proposed separating banks' proprietary trading activities from their federally subsidized deposit-gathering and lending ones. Other proposed rules would increase the amount of capital banks hold against losses and how much cash they carry to deal with a surge of withdrawals.
But Buffett said there's a simpler way to cap risk-taking: Forcing lavishly compensated CEOs to take responsibility for assessing the risks at their firms -- and putting their own wealth at stake, to boot.
"It is the behavior of these CEOs and directors that needs to be changed," he wrote. "They have long benefitted from oversized financial carrots; some meaningful sticks now need to be employed as well."
The comment reflects a theme that has run through Buffett's letters to investors over the years: Shareholders are best served by managers who think like owners. More often, he has said, they are ill served by executives who instead pursue value-destroying mergers or pile up debt in a bid to boost returns. ...
The Obama administration last month proposed separating banks' proprietary trading activities from their federally subsidized deposit-gathering and lending ones. Other proposed rules would increase the amount of capital banks hold against losses and how much cash they carry to deal with a surge of withdrawals.
But Buffett said there's a simpler way to cap risk-taking: Forcing lavishly compensated CEOs to take responsibility for assessing the risks at their firms -- and putting their own wealth at stake, to boot.
"It is the behavior of these CEOs and directors that needs to be changed," he wrote. "They have long benefitted from oversized financial carrots; some meaningful sticks now need to be employed as well."
The comment reflects a theme that has run through Buffett's letters to investors over the years: Shareholders are best served by managers who think like owners. More often, he has said, they are ill served by executives who instead pursue value-destroying mergers or pile up debt in a bid to boost returns. ...
A “financial crisis responsibility fee” - I like it.
I like it very much, thank you.
I like it very much, thank you.
Drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis, the United Nations' drugs and crime tsar has told the Observer.
Antonio Maria Costa, head of the UN Office on Drugs and Crime, said he has seen evidence that the proceeds of organised crime were "the only liquid investment capital" available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result.
This will raise questions about crime's influence on the economic system at times of crisis. It will also prompt further examination of the banking sector as world leaders, including Barack Obama and Gordon Brown, call for new International Monetary Fund regulations. Speaking from his office in Vienna, Costa said evidence that illegal money was being absorbed into the financial system was first drawn to his attention by intelligence agencies and prosecutors around 18 months ago. "In many instances, the money from drugs was the only liquid investment capital. In the second half of 2008, liquidity was the banking system's main problem and hence liquid capital became an important factor," he said.
Some of the evidence put before his office indicated that gang money was used to save some banks from collapse when lending seized up, he said.
"Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities... There were signs that some banks were rescued that way." Costa declined to identify countries or banks that may have received any drugs money, saying that would be inappropriate because his office is supposed to address the problem, not apportion blame. But he said the money is now a part of the official system and had been effectively laundered. ...
Antonio Maria Costa, head of the UN Office on Drugs and Crime, said he has seen evidence that the proceeds of organised crime were "the only liquid investment capital" available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result.
This will raise questions about crime's influence on the economic system at times of crisis. It will also prompt further examination of the banking sector as world leaders, including Barack Obama and Gordon Brown, call for new International Monetary Fund regulations. Speaking from his office in Vienna, Costa said evidence that illegal money was being absorbed into the financial system was first drawn to his attention by intelligence agencies and prosecutors around 18 months ago. "In many instances, the money from drugs was the only liquid investment capital. In the second half of 2008, liquidity was the banking system's main problem and hence liquid capital became an important factor," he said.
Some of the evidence put before his office indicated that gang money was used to save some banks from collapse when lending seized up, he said.
"Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities... There were signs that some banks were rescued that way." Costa declined to identify countries or banks that may have received any drugs money, saying that would be inappropriate because his office is supposed to address the problem, not apportion blame. But he said the money is now a part of the official system and had been effectively laundered. ...
The banks' defence of Fortress Bonus is starting to crumble. Their claim that unilateral action against excessive rewards by the UK would damage the City has been a key plank of their case against bonus reform, but that has been demolished by the chancellor's bank levy in the pre-budget report.
In this column I have repeatedly argued that action by the UK, where the financial sector is so dominant, would send a powerful signal to the rest of the world and embolden other countries to follow suit.
So it has proved: Nicolas Sarkozy is introducing a similar tax, with one French official saying "There is no obstacle to doing it now if it has been done in London." Angela Merkel is making warm noises; the hope is that the rest of the EU and the United States will join in.
Politically, the tax surcharge was a clever move. By sparking international action, the sting has been drawn from the Conservatives' cry of "class war"; George Osborne and David Cameron could not oppose the measure without alienating an angry public. ...
In this column I have repeatedly argued that action by the UK, where the financial sector is so dominant, would send a powerful signal to the rest of the world and embolden other countries to follow suit.
So it has proved: Nicolas Sarkozy is introducing a similar tax, with one French official saying "There is no obstacle to doing it now if it has been done in London." Angela Merkel is making warm noises; the hope is that the rest of the EU and the United States will join in.
Politically, the tax surcharge was a clever move. By sparking international action, the sting has been drawn from the Conservatives' cry of "class war"; George Osborne and David Cameron could not oppose the measure without alienating an angry public. ...
Wall Street bank Goldman Sachs has blinked in the face of a public outcry over its multimillion-dollar pay packages by suspending cash bonuses for its top 30 executives, in a concession to critics delivered as political momentum mounts for a crackdown on rewards in the financial sector.
Goldman is typically the biggest payer of any leading US bank, with a policy of distributing more than 40% of its revenue to employees, and it has faced furious protests over an anticipated handout of $23bn (£14.1bn) this year, an average of more than $700,000 per employee.
The bank yesterday announced that its senior staff, including six London-based executives, would receive shares vesting over a five-year period instead of cash bonuses. Under enhanced "clawback" powers, it will be able to reclaim shares from any employees found to have inflicted "material financial harm" on its businesses. In an unprecedented move for a major US bank, Goldman will put its remuneration policies before a yearly "say on pay" vote by shareholders at its annual meetings.
A Goldman spokesman said the bank had taken public opinion into consideration: "The motivation was that these are extraordinary times, that the firm has done well and that that has excited a great deal of comment and not a little criticism." ...
Goldman is typically the biggest payer of any leading US bank, with a policy of distributing more than 40% of its revenue to employees, and it has faced furious protests over an anticipated handout of $23bn (£14.1bn) this year, an average of more than $700,000 per employee.
The bank yesterday announced that its senior staff, including six London-based executives, would receive shares vesting over a five-year period instead of cash bonuses. Under enhanced "clawback" powers, it will be able to reclaim shares from any employees found to have inflicted "material financial harm" on its businesses. In an unprecedented move for a major US bank, Goldman will put its remuneration policies before a yearly "say on pay" vote by shareholders at its annual meetings.
A Goldman spokesman said the bank had taken public opinion into consideration: "The motivation was that these are extraordinary times, that the firm has done well and that that has excited a great deal of comment and not a little criticism." ...
Cash please; small bills.
Judge wipes out couple's mortgage after bank's 'repulsive' behaviour
A New York judge was so angry with a bank's "harsh, repugnant, shocking and repulsive" behaviour towards a financially struggling couple that he wiped out their $525,000 (£316,000) mortgage.
By Tom Leonard in New York
Published: 12:06AM GMT 26 Nov 2009
In an unusual legal decision that may cheer ordinary homeowners but dismay lenders, Judge Jeffrey Spinner took a tough line on a California-based bank that he considered had been determined to foreclose on the couple's home in Suffolk County, Long Island.
His ruling against OneWest and its IndyMac mortgage division has relieved Greg Horoski and his wife, Diane Yano-Horoski, of the $291,000 they owed on the original loan as well as $235,000 in interest.
OneWest took $814 million in federal bailout money but has a reputation for foreclosing quickly on property owners who falls into arrears. ...
... The judge attacked the bank for repeatedly refusing to work out a deal, for misleading him about the sums in the case and for its treatment of the couple.
He wrote that OneWest's conduct was "inequitable, unconscionable, vexatious and opprobrious", cancelling the debt to deter it from "imposing further mortifying abuse" against the couple. ...
... Mr Horoski...told the New York Post, "I think the judge felt it was almost a personal vendetta. It was like dealing with organised crime."
A New York judge was so angry with a bank's "harsh, repugnant, shocking and repulsive" behaviour towards a financially struggling couple that he wiped out their $525,000 (£316,000) mortgage.
By Tom Leonard in New York
Published: 12:06AM GMT 26 Nov 2009
In an unusual legal decision that may cheer ordinary homeowners but dismay lenders, Judge Jeffrey Spinner took a tough line on a California-based bank that he considered had been determined to foreclose on the couple's home in Suffolk County, Long Island.
His ruling against OneWest and its IndyMac mortgage division has relieved Greg Horoski and his wife, Diane Yano-Horoski, of the $291,000 they owed on the original loan as well as $235,000 in interest.
OneWest took $814 million in federal bailout money but has a reputation for foreclosing quickly on property owners who falls into arrears. ...
... The judge attacked the bank for repeatedly refusing to work out a deal, for misleading him about the sums in the case and for its treatment of the couple.
He wrote that OneWest's conduct was "inequitable, unconscionable, vexatious and opprobrious", cancelling the debt to deter it from "imposing further mortifying abuse" against the couple. ...
... Mr Horoski...told the New York Post, "I think the judge felt it was almost a personal vendetta. It was like dealing with organised crime."
Britain's retail banks should be banned from paying out "significant" cash bonuses as part of a drive to plough profits back into new lending, the shadow chancellor, George Osborne, will declare tomorrow.
In the strongest attack by the Tories on banks, Osborne will say that bonuses should be paid in shares, which cannot be cashed in for at least three years, as he warns that billions of pounds in "subsidised profits" are threatening to worsen the credit crunch.
In a speech to Thomson Reuters in Canary Wharf, east London, Osborne will tell financiers: "We cannot wait for the promised land of a new responsible bonus culture which looks more remote than ever. We need to take emergency steps to support bank lending and move the economy forward.
"I am today calling on the Treasury and the Financial Services Authority to combine forces and stop retail banks paying out profits in significant cash bonuses. Full stop. Then the cash that would have been paid out should be put on to banks' balance sheets explicitly to support new lending. This should be a condition of continuing to receive taxpayer guarantees and liquidity support." ...
In the strongest attack by the Tories on banks, Osborne will say that bonuses should be paid in shares, which cannot be cashed in for at least three years, as he warns that billions of pounds in "subsidised profits" are threatening to worsen the credit crunch.
In a speech to Thomson Reuters in Canary Wharf, east London, Osborne will tell financiers: "We cannot wait for the promised land of a new responsible bonus culture which looks more remote than ever. We need to take emergency steps to support bank lending and move the economy forward.
"I am today calling on the Treasury and the Financial Services Authority to combine forces and stop retail banks paying out profits in significant cash bonuses. Full stop. Then the cash that would have been paid out should be put on to banks' balance sheets explicitly to support new lending. This should be a condition of continuing to receive taxpayer guarantees and liquidity support." ...
Alistair Darling has openly criticised Goldman Sachs over its plan to pay huge staff bonuses so soon after the financial crisis nearly crushed the banking sector.
Speaking at an event in London this lunchtime, the chancellor cited the Wall Street giant as an example of a bank that "manifestly" failed to appreciate how the City landscape had changed.
"What happened with Goldman Sachs last week sends the wrong signals," said Darling, who was attending an event at Canary Wharf. "I've spoken to all our banks and none of them would be standing here today if the taxpayer hadn't put their hand into their pocket."
Goldman Sachs itself does not appear to share Darling's concerns. Last night, Lord Griffiths, vice-chairman of Goldman Sachs International, claimed that huge salaries were a price worth paying.
"I believe that we should be thinking about the medium-term common good, not the short-term common good ... we should not, therefore, be ashamed of offering compensation in an internationally competitive market which ensures the bank businesses here and employs British people," said Griffiths. ...
I think you should fuck off, mr griffiths. I don't think any boss anywhere deserves pay that's more than 100 times what the lowest paid employees receive. I very much like the Japanese idea of bosses' getting no more than up to ten times what the lowest paid employees get.
Speaking at an event in London this lunchtime, the chancellor cited the Wall Street giant as an example of a bank that "manifestly" failed to appreciate how the City landscape had changed.
"What happened with Goldman Sachs last week sends the wrong signals," said Darling, who was attending an event at Canary Wharf. "I've spoken to all our banks and none of them would be standing here today if the taxpayer hadn't put their hand into their pocket."
Goldman Sachs itself does not appear to share Darling's concerns. Last night, Lord Griffiths, vice-chairman of Goldman Sachs International, claimed that huge salaries were a price worth paying.
"I believe that we should be thinking about the medium-term common good, not the short-term common good ... we should not, therefore, be ashamed of offering compensation in an internationally competitive market which ensures the bank businesses here and employs British people," said Griffiths. ...
I think you should fuck off, mr griffiths. I don't think any boss anywhere deserves pay that's more than 100 times what the lowest paid employees receive. I very much like the Japanese idea of bosses' getting no more than up to ten times what the lowest paid employees get.
THE state-owned Royal Bank of Scotland is planning to hand out record bonuses of up to £5m each in a snub to struggling taxpayers.
The move would see the average employee in its high-risk investment banking arm take home £240,000, with the top 20 staff in line for payments of between £1m and £5m.
The payouts by the investment banking division — from a total pay and bonus pot of £4 billion — would top the deals awarded at the peak of the financial boom in 2007 and are 66% higher than those paid last year.
RBS, then headed by Sir Fred Goodwin, had to be rescued from collapse by the Treasury last October with an initial injection of £20 billion. The taxpayer now has a 70% stake in the bank. ...
The move would see the average employee in its high-risk investment banking arm take home £240,000, with the top 20 staff in line for payments of between £1m and £5m.
The payouts by the investment banking division — from a total pay and bonus pot of £4 billion — would top the deals awarded at the peak of the financial boom in 2007 and are 66% higher than those paid last year.
RBS, then headed by Sir Fred Goodwin, had to be rescued from collapse by the Treasury last October with an initial injection of £20 billion. The taxpayer now has a 70% stake in the bank. ...
The International Monetary Fund today threw its weight behind a new tax on the global financial sector designed to limit risky speculative behaviour and help the world's poorest countries.
Dominique Strauss-Kahn, the IMF's managing director, said banks and other big financial institutions were responsible for systemic risk and it was only right that they provided resources to mitigate those threats to the world economy.
While ruling out a so-called Tobin tax – a levy on foreign currency transactions proposed by the American economist James Tobin in the early 1970s – Strauss-Kahn said a high-level IMF team would work on proposals in the coming months.
"The very simple idea of putting a tax on transactions won't work for many technical reasons," Strauss-Kahn said at a press conference held in the run-up to the IMF's annual meeting in Istanbul next week.
"On the other hand, considering the financial sector is creating a lot of systemic risks for the global economy, it is fair that the sector pay some part of its resources to mitigate risks it is creating itself." ...
Hmmm. This is a lot like seeing Lucifer giving orders to Beelzebub, innit.
Dominique Strauss-Kahn, the IMF's managing director, said banks and other big financial institutions were responsible for systemic risk and it was only right that they provided resources to mitigate those threats to the world economy.
While ruling out a so-called Tobin tax – a levy on foreign currency transactions proposed by the American economist James Tobin in the early 1970s – Strauss-Kahn said a high-level IMF team would work on proposals in the coming months.
"The very simple idea of putting a tax on transactions won't work for many technical reasons," Strauss-Kahn said at a press conference held in the run-up to the IMF's annual meeting in Istanbul next week.
"On the other hand, considering the financial sector is creating a lot of systemic risks for the global economy, it is fair that the sector pay some part of its resources to mitigate risks it is creating itself." ...
Hmmm. This is a lot like seeing Lucifer giving orders to Beelzebub, innit.
Brown intervenes in bank charges standoff
PM tells bankers to settle long-running court battle over refunds for excessive charges 'without further delay' ...
PM tells bankers to settle long-running court battle over refunds for excessive charges 'without further delay' ...
The European Union will seek a global deal on clawing back or cancelling bankers’ bonuses at the G20 summit in Pittsburgh next week after agreement among the 27 European leaders last night.
Supervisory bodies should be given the power to “reduce compensations” for bankers if their bank performs badly, while “the major part” of bonuses should be deferred over time and “could be cancelled” in the light of poor outcomes, the EU leaders agreed at a pre-G20 summit in Brussels.
The leaders agreed a united front on bankers’ bonuses after Nicolas Sarkozy of France relaxed his call for a ceiling on bonuses in return for the tough-sounding general threat of bonus cancellation “in case of a negative development in the bank’s performance.” What this means in detail has yet to be thrashed out.
“The bonus bubble bursts tonight,” said Fredrik Reinfeldt, the Swedish Prime Minister and current holder of the EU presidency. “We particularly want to focus on the link between performance and compensation.” ...
Supervisory bodies should be given the power to “reduce compensations” for bankers if their bank performs badly, while “the major part” of bonuses should be deferred over time and “could be cancelled” in the light of poor outcomes, the EU leaders agreed at a pre-G20 summit in Brussels.
The leaders agreed a united front on bankers’ bonuses after Nicolas Sarkozy of France relaxed his call for a ceiling on bonuses in return for the tough-sounding general threat of bonus cancellation “in case of a negative development in the bank’s performance.” What this means in detail has yet to be thrashed out.
“The bonus bubble bursts tonight,” said Fredrik Reinfeldt, the Swedish Prime Minister and current holder of the EU presidency. “We particularly want to focus on the link between performance and compensation.” ...
Walfamstow Cockney cash machine daffy ducked
No sausage and mash, me old china
By Lester Haines
25th August 2009
Expert analysis, debate and answers – The Register Agile Data Center Summit
The wheels appear to have slightly come off the roll-out of Blighty's first Cockney cash machines - five dispensers of sausage and mash deployed from Spitalfields to Barnet via Walthamstow by ATM operator Bank Machine.
According to the Waltham Forest Guardian, E17 boasts one of the brand spanking new Dick Van Dyke emulator devices, which at the touch of a button allow users to enjoy the full East London experience.
This includes being asked for your Huckleberry Finn (or PIN, as the machine helpfully clarifies) and thereafter offered, for example, the chance to view your balance on the Charlie Sheen or get straight down to trousering a speckled hen.
Sadly, however, the Waltham Forest Guardian notes that the Walthamstow ATM - located in the High Street - immediately went tits up and is "out of service", or daffy ducked, to use the correct expression. ...
No sausage and mash, me old china
By Lester Haines
25th August 2009
Expert analysis, debate and answers – The Register Agile Data Center Summit
The wheels appear to have slightly come off the roll-out of Blighty's first Cockney cash machines - five dispensers of sausage and mash deployed from Spitalfields to Barnet via Walthamstow by ATM operator Bank Machine.
According to the Waltham Forest Guardian, E17 boasts one of the brand spanking new Dick Van Dyke emulator devices, which at the touch of a button allow users to enjoy the full East London experience.
This includes being asked for your Huckleberry Finn (or PIN, as the machine helpfully clarifies) and thereafter offered, for example, the chance to view your balance on the Charlie Sheen or get straight down to trousering a speckled hen.
Sadly, however, the Waltham Forest Guardian notes that the Walthamstow ATM - located in the High Street - immediately went tits up and is "out of service", or daffy ducked, to use the correct expression. ...
Cor blimey guv'nor, cockney cash machines? You're 'avin a giraffe!
If the rhyming slang ATMs are a hit, next up could be Brummie, Geordie and Scouse. Genius, or a load of Watford Gap?
A cockney cash machine on Commercial Street, close to Spitalfields market in east London. Photograph: Johnny Green/PA
Feeling brassic? Run out of bees? Don't worry, help is at hand. Take your Jimmy Shands out of your Davey, and take a bowl of chalk to one of five cash dispensers in east London where, thanks to a new range of cockney cash machines, you can withdraw some Crosby, Stills and Nash.
Or, for those of you not fluent in David Hockney: Bank Machine, which runs 2,500 ATMs across the country, has set up five cash dispensers in locations from Spittalfields to Barnet that offer customers the option either to request cash in English, or "moolah for ya sky rocket" in cockney.
Ask for cockney and the machine tells you it is "Readin' your bladder of lard" before asking for your "Huckleberry Finn". Then the hard decisions start. Do you want to see your balance on the Charlie Sheen? Or withdraw sausage and mash?
If the Chitty Chitty Bang Bang cash machines are a success, the company hopes to follow them up with Brummie, Geordie, Scouse and Scots ATMs (suggestions for these much welcomed – the British Library's Sounds Familiar website, which tracks accents and dialects, was not a huge amount of help in coming up with the Brummie for cash).
It is not simply about client satisfaction, says the company – and anyway, anyone who claims there are more than a brass band full of pure-bred cockneys in trendy Spitalfields is having a giraffe. Its laudable aim is to keep dialects alive in Britain.
Genius, or a load of Watford Gap? Well, the company gets a bit of publicity, its users a bit of a bubble bath. Surely, everyone's a chicken dinner?
• Those seeking to translate this post can find help at "The biggest dictionary of Cockney Rhyming Slang on the Internet", built by "real" cockneys all over the world.
If the rhyming slang ATMs are a hit, next up could be Brummie, Geordie and Scouse. Genius, or a load of Watford Gap?
A cockney cash machine on Commercial Street, close to Spitalfields market in east London. Photograph: Johnny Green/PA
Feeling brassic? Run out of bees? Don't worry, help is at hand. Take your Jimmy Shands out of your Davey, and take a bowl of chalk to one of five cash dispensers in east London where, thanks to a new range of cockney cash machines, you can withdraw some Crosby, Stills and Nash.
Or, for those of you not fluent in David Hockney: Bank Machine, which runs 2,500 ATMs across the country, has set up five cash dispensers in locations from Spittalfields to Barnet that offer customers the option either to request cash in English, or "moolah for ya sky rocket" in cockney.
Ask for cockney and the machine tells you it is "Readin' your bladder of lard" before asking for your "Huckleberry Finn". Then the hard decisions start. Do you want to see your balance on the Charlie Sheen? Or withdraw sausage and mash?
If the Chitty Chitty Bang Bang cash machines are a success, the company hopes to follow them up with Brummie, Geordie, Scouse and Scots ATMs (suggestions for these much welcomed – the British Library's Sounds Familiar website, which tracks accents and dialects, was not a huge amount of help in coming up with the Brummie for cash).
It is not simply about client satisfaction, says the company – and anyway, anyone who claims there are more than a brass band full of pure-bred cockneys in trendy Spitalfields is having a giraffe. Its laudable aim is to keep dialects alive in Britain.
Genius, or a load of Watford Gap? Well, the company gets a bit of publicity, its users a bit of a bubble bath. Surely, everyone's a chicken dinner?
• Those seeking to translate this post can find help at "The biggest dictionary of Cockney Rhyming Slang on the Internet", built by "real" cockneys all over the world.
Sexism in the City and pay inequalities faced by women working in financial firms are to be investigated by the Treasury select committee of MPs as part of its attempt to prevent another financial crisis.
The committee, which includes just one woman, is calling for evidence on the role of women in the City and information about the proportion of women occupying senior positions in leading financial firms.
John McFall, chairman of the committee, intends to hold two hearings in the autumn. The investigation has been born out of the committee's work looking into the banking meltdown.
The government is expected to respond to the 45 conclusions reached by the committee following its high-profile hearings into the banking crisis. Among the conclusions were that the review of the future of regulation by the Financial Services Authority chairman, Lord Turner, was too complacent about the role of City pay in the current crisis. ...
The committee, which includes just one woman, is calling for evidence on the role of women in the City and information about the proportion of women occupying senior positions in leading financial firms.
John McFall, chairman of the committee, intends to hold two hearings in the autumn. The investigation has been born out of the committee's work looking into the banking meltdown.
The government is expected to respond to the 45 conclusions reached by the committee following its high-profile hearings into the banking crisis. Among the conclusions were that the review of the future of regulation by the Financial Services Authority chairman, Lord Turner, was too complacent about the role of City pay in the current crisis. ...
July 9, 2009
Banks to be 'named and shamed' over complaints
Patrick Hosking, Financial Editor
Banks, insurers and other financial services businesses with the worst record for customer complaints are to be officially named and shamed for the first time.
The Financial Services Authority (FSA), the City watchdog, today released proposals forcing all firms to publish complaints data and for the worst offenders to give additional information on their success rate in responding to complaints.
Businesses will be compelled to publish their own complaints data twice a year. The FSA will use the data to compile and publish its own statistics twice a year. The data will be manipulatable so that league tables of the worst offenders can be created.
The financial services industry has fought a long battle to avoid having to disclose complaints data, arguing that it could be unfairly interpreted. ...
One might draw the conclusion that a bank which receives many customer complaints is sucky, which would be so unfair. Yankistanis need bank complaints data which we can also unfairly interpret.
Banks to be 'named and shamed' over complaints
Patrick Hosking, Financial Editor
Banks, insurers and other financial services businesses with the worst record for customer complaints are to be officially named and shamed for the first time.
The Financial Services Authority (FSA), the City watchdog, today released proposals forcing all firms to publish complaints data and for the worst offenders to give additional information on their success rate in responding to complaints.
Businesses will be compelled to publish their own complaints data twice a year. The FSA will use the data to compile and publish its own statistics twice a year. The data will be manipulatable so that league tables of the worst offenders can be created.
The financial services industry has fought a long battle to avoid having to disclose complaints data, arguing that it could be unfairly interpreted. ...
One might draw the conclusion that a bank which receives many customer complaints is sucky, which would be so unfair. Yankistanis need bank complaints data which we can also unfairly interpret.
July 8, 2009
Bankers to face draconian pay veto
Suzy Jagger, Politics and Business Correspondent
City regulators will be able to veto the pay deals of bank executives under new proposals set out today by Alistair Darling.
Addressing MPs in the House of Commons, the Chancellor said that the Financial Services Authority (FSA) will monitor the structure of bankers' remuneration packages and produce a report on them every year.
Should the City watchdog find that an executive's pay encourages the financier to take risky investment decisions, it can order the lender to put aside more capital in reserve. Any such requirement would reduce a bank's profitability and, the Treasury believes, act as an effective veto.
"We need a change of culture in the banks and their boardrooms, with pay practices that are focused on long-term stability and not short-term profit," Mr Darling said. ...
Bankers to face draconian pay veto
Suzy Jagger, Politics and Business Correspondent
City regulators will be able to veto the pay deals of bank executives under new proposals set out today by Alistair Darling.
Addressing MPs in the House of Commons, the Chancellor said that the Financial Services Authority (FSA) will monitor the structure of bankers' remuneration packages and produce a report on them every year.
Should the City watchdog find that an executive's pay encourages the financier to take risky investment decisions, it can order the lender to put aside more capital in reserve. Any such requirement would reduce a bank's profitability and, the Treasury believes, act as an effective veto.
"We need a change of culture in the banks and their boardrooms, with pay practices that are focused on long-term stability and not short-term profit," Mr Darling said. ...
Dear MSiegel sent this.
I saw the headline at Reuters yesterday and just sadly shook my head; I didn't even read let alone blog it.
The poor saps. Interpol is like the goddam Mounties FFS. These gas-station owners don't stand a chance!
What they should have done was pointed out the error, then sued them - for NZ$10M plus whatever the taxes would be on NZ$10M plus potential court costs - for criminal negligence, and freaking their balls so bad, esp given the economy.
Then again I live in Yankistan AKA Litigatistan, where people sue hell outta each other at the drop of a chapeau, so my having that kinda strategy's not unnatural.
Been runnin'
Police on my back
I been hidin'
Police on my back...
...I been runnin' Monday Tuesday Wednesday Thursday Friday Saturday Sunday
Runnin' Monday Tuesday Wednesday Thursday Friday Saturday Sunday
What have I done?
What have I done?!
Yes, I'm running down the railway track
Could you help me?
Police on my back
They will catch me if I dare drop back
Won't you give me all the speed I lack...
My daddy was a bank robber
but he never hurt nobody
He just loved to live that way
and he loved to steal your money...
I saw the headline at Reuters yesterday and just sadly shook my head; I didn't even read let alone blog it.
The poor saps. Interpol is like the goddam Mounties FFS. These gas-station owners don't stand a chance!
What they should have done was pointed out the error, then sued them - for NZ$10M plus whatever the taxes would be on NZ$10M plus potential court costs - for criminal negligence, and freaking their balls so bad, esp given the economy.
Then again I live in Yankistan AKA Litigatistan, where people sue hell outta each other at the drop of a chapeau, so my having that kinda strategy's not unnatural.
Been runnin'
Police on my back
I been hidin'
Police on my back...
...I been runnin' Monday Tuesday Wednesday Thursday Friday Saturday Sunday
Runnin' Monday Tuesday Wednesday Thursday Friday Saturday Sunday
What have I done?
What have I done?!
Yes, I'm running down the railway track
Could you help me?
Police on my back
They will catch me if I dare drop back
Won't you give me all the speed I lack...
My daddy was a bank robber
but he never hurt nobody
He just loved to live that way
and he loved to steal your money...
Go get 'em, Hopey!
Offshore tax shelters much too inviting
American companies, especially those receiving federal aid, should be expected to pay a fair share of U.S. taxes
BY RON DZWONKOWSKI
FREE PRESS COLUMNIST
January 25, 2009
Pretty well buried under all the hoopla of President Barack Obama's inaugural was a report last week that could help the U.S. Treasury tame its way-out-of-whack balance sheet. The Government Accountability Office report looked at U.S. companies that stash money in foreign countries to shelter them from U.S. taxes.
U.S. Sen. Carl Levin, D-Mich., who requested the report along with fellow Democratic Sen. Byron Dorgan of North Dakota, estimates that such companies are avoiding $100 billion in U.S. taxes. And many of them -- including Bank of America and Citigroup -- have lately been on the receiving end of billions of dollars in federal bailout money or fat federal government contracts.
Now, $100 billion may seem like pocket change when you're running a trillion-dollar budget deficit and carrying a $10.4-trillion national debt. But you know, every billion counts when you are trying to spend your way out of a recession. Unfortunately, this offshoring of taxable assets is entirely legal, which Levin and Dorgan hope to do something about.
Common sense, not to mention common decency, would seem to dictate that if you take tax dollars you also pay your full share of tax bills.
According to the report by the GAO, which is the congressional watchdog agency on government programs and spending, 83 of the 100 largest publicly traded U.S. corporations and 63 of the 100 largest publicly traded companies with government contracts have subsidiaries in places that are regarded as tax havens. There is no official definition of such places, but they have common characteristics, such as no or low local taxes, political stability, laws that keep financial dealings secret, and a tendency to promote themselves in the right circles as great places to keep your money out of reach of Uncle Sam or other tax-grabbing governments. ...
American companies, especially those receiving federal aid, should be expected to pay a fair share of U.S. taxes
BY RON DZWONKOWSKI
FREE PRESS COLUMNIST
January 25, 2009
Pretty well buried under all the hoopla of President Barack Obama's inaugural was a report last week that could help the U.S. Treasury tame its way-out-of-whack balance sheet. The Government Accountability Office report looked at U.S. companies that stash money in foreign countries to shelter them from U.S. taxes.
U.S. Sen. Carl Levin, D-Mich., who requested the report along with fellow Democratic Sen. Byron Dorgan of North Dakota, estimates that such companies are avoiding $100 billion in U.S. taxes. And many of them -- including Bank of America and Citigroup -- have lately been on the receiving end of billions of dollars in federal bailout money or fat federal government contracts.
Now, $100 billion may seem like pocket change when you're running a trillion-dollar budget deficit and carrying a $10.4-trillion national debt. But you know, every billion counts when you are trying to spend your way out of a recession. Unfortunately, this offshoring of taxable assets is entirely legal, which Levin and Dorgan hope to do something about.
Common sense, not to mention common decency, would seem to dictate that if you take tax dollars you also pay your full share of tax bills.
According to the report by the GAO, which is the congressional watchdog agency on government programs and spending, 83 of the 100 largest publicly traded U.S. corporations and 63 of the 100 largest publicly traded companies with government contracts have subsidiaries in places that are regarded as tax havens. There is no official definition of such places, but they have common characteristics, such as no or low local taxes, political stability, laws that keep financial dealings secret, and a tendency to promote themselves in the right circles as great places to keep your money out of reach of Uncle Sam or other tax-grabbing governments. ...
Lehman's Fuld sold Florida mansion to wife for $100
Mon Jan 26, 2009
NEW YORK (Reuters) - Fallen Lehman Brothers Chief Executive Richard Fuld sold his $13.3 million (£9.8 million) mansion to his wife for just $100 (£73) last November, according to Florida real estate records.
The 62-year old executive, who could face civil lawsuits after overseeing the storied investment bank's collapse into Chapter 11 proceedings last September, transferred ownership of the 3.3 acres seaside home to Kathleen Fuld on November 10, records show.
The couple had jointly bought the home for $13.75 million in March 2004, as first reported by Cityfile.com.
Fuld has been blamed for Lehman's collapse on September 15 after it was weighed down by bad assets leading to the largest-ever U.S. bankruptcy when it was unable to find a buyer to come to its rescue.
He was widely criticized for not acting quickly enough to save the 158-year old bank. ...
Mon Jan 26, 2009
NEW YORK (Reuters) - Fallen Lehman Brothers Chief Executive Richard Fuld sold his $13.3 million (£9.8 million) mansion to his wife for just $100 (£73) last November, according to Florida real estate records.
The 62-year old executive, who could face civil lawsuits after overseeing the storied investment bank's collapse into Chapter 11 proceedings last September, transferred ownership of the 3.3 acres seaside home to Kathleen Fuld on November 10, records show.
The couple had jointly bought the home for $13.75 million in March 2004, as first reported by Cityfile.com.
Fuld has been blamed for Lehman's collapse on September 15 after it was weighed down by bad assets leading to the largest-ever U.S. bankruptcy when it was unable to find a buyer to come to its rescue.
He was widely criticized for not acting quickly enough to save the 158-year old bank. ...
January 25, 2009
MPs probe bank auditors
Iain Dey
THE government was under pressure last night to investigate the role of auditors in the collapse of British banks, after a Sunday Times investigation into fees paid to the “big four” accountancy firms.
The four banks that are expected to sign up to the government’s controversial toxic-asset-protection scheme have paid almost £650m in fees to their auditors since 2000.
Royal Bank of Scotland, HBOS, Lloyds TSB and Barclays have paid their auditors almost as much for “other services” as they have for their official role in checking the books.
The findings resurrected cross-party calls for a probe into the relationships between auditors and their clients. ...
MPs probe bank auditors
Iain Dey
THE government was under pressure last night to investigate the role of auditors in the collapse of British banks, after a Sunday Times investigation into fees paid to the “big four” accountancy firms.
The four banks that are expected to sign up to the government’s controversial toxic-asset-protection scheme have paid almost £650m in fees to their auditors since 2000.
Royal Bank of Scotland, HBOS, Lloyds TSB and Barclays have paid their auditors almost as much for “other services” as they have for their official role in checking the books.
The findings resurrected cross-party calls for a probe into the relationships between auditors and their clients. ...
The savings and loan crisis of the 1980s and 1990s (commonly referred to as the S&L crisis) was the failure of 747 savings and loan associations (S&Ls) in the United States. The ultimate cost of the crisis is estimated to have totaled around USD$160.1 billion, about $124.6 billion of which was directly paid for by the U.S. government -- that is, the U.S. taxpayer, either directly or through charges on their savings and loan accounts -- which contributed to the large budget deficits of the early 1990s. ...
I expected their family crest to have lizards in; I'm quite surprised it doesn't.
Trade loss message to SocGen: read the fine print
Mon Feb 11, 2008
PARIS (Reuters) - Scandal-hit Societe Generale shares the plight of people who take out an insurance policy to cover the remotest eventuality only to find it pays out a pittance, the French bank disclosed on Monday.
The bank, which last month announced rogue trading losses of €4.9 billion (3.5 billion) and blamed a lone junior trader, was insured against fraud but the amount it can receive is negligible.
"There is an insurance in the case of fraud but its amounts are capped and completely marginal compared with the amount of the fraud," finance director Frederic Oudea told analysts.
He was speaking in a conference call on a €5.5 billion rights issue designed to plug a hole in the bank's finances after 31-year-old trader Jerome Kerviel built up unauthorised stock futures bets which had to be sold off at a loss.
SocGen has accused the trader of fraud and said he acted alone to defeat the bank's control systems. Bank of France Christian Noyer called Kerviel a "genius of fraud" when the world's biggest rogue trading scandal erupted on January 24. ...
Mon Feb 11, 2008
PARIS (Reuters) - Scandal-hit Societe Generale shares the plight of people who take out an insurance policy to cover the remotest eventuality only to find it pays out a pittance, the French bank disclosed on Monday.
The bank, which last month announced rogue trading losses of €4.9 billion (3.5 billion) and blamed a lone junior trader, was insured against fraud but the amount it can receive is negligible.
"There is an insurance in the case of fraud but its amounts are capped and completely marginal compared with the amount of the fraud," finance director Frederic Oudea told analysts.
He was speaking in a conference call on a €5.5 billion rights issue designed to plug a hole in the bank's finances after 31-year-old trader Jerome Kerviel built up unauthorised stock futures bets which had to be sold off at a loss.
SocGen has accused the trader of fraud and said he acted alone to defeat the bank's control systems. Bank of France Christian Noyer called Kerviel a "genius of fraud" when the world's biggest rogue trading scandal erupted on January 24. ...
Single mum wins back 23,000 in bank charges for friends and family
By JAMES TOZER
7th February 2007
A single mother has personally reclaimed more that 23,000 in bank charges for herself and her friends despite having no financial or legal training.
Tracy MacInnes, a 36-year-old supermarket security guard, tried using a do-it-yourself website after becoming fed up at the penalties she incurred for bounced cheques and returned direct debits.
She quickly recovered more than 500 from her own bank, Halifax, and nine months on has reclaimed thousands of pounds on behalf of friends and relatives who don't have access to the internet.
The mother-of-four, from Corby, Northamptonshire, is the just the latest winner in a consumer fightback against bank charges which has already yielded an estimated 200 million.
The Daily Mail's Fair Play on Charges campaign has helped thousands to get their money back, and the penalties are now being investigated by the Office of Fair Trading. ...
By JAMES TOZER
7th February 2007
A single mother has personally reclaimed more that 23,000 in bank charges for herself and her friends despite having no financial or legal training.
Tracy MacInnes, a 36-year-old supermarket security guard, tried using a do-it-yourself website after becoming fed up at the penalties she incurred for bounced cheques and returned direct debits.
She quickly recovered more than 500 from her own bank, Halifax, and nine months on has reclaimed thousands of pounds on behalf of friends and relatives who don't have access to the internet.
The mother-of-four, from Corby, Northamptonshire, is the just the latest winner in a consumer fightback against bank charges which has already yielded an estimated 200 million.
The Daily Mail's Fair Play on Charges campaign has helped thousands to get their money back, and the penalties are now being investigated by the Office of Fair Trading. ...