Police warn they may not be able to afford Tesco's £3m riot compensation bill

 

In total, the retailer has asked for nearly £3m in compensation from police forces around the country, following the riots that tore through some high streets in August. It is likely that this is the biggest request from a single retailer. The company is claiming under the Riot Damages Act, a piece of Victorian legislation that allows businesses and individuals affected by riot damage to claim directly from the police, rather than their own insurer. In the immediate aftermath of the civil disturbances, the British Retail Consortium urged small retailers to put in their claims to make sure their businesses were not harmed. However, the Greater Manchester Police Authority, which has been hit with 280 claims totalling £4.4m, has criticised Tesco for using the Act, saying there was no guarantee the police force would be able to afford all of the compensation. The force faces £134m budget cuts in the next five years. It added that J Sainsbury was one of a number of large companies that had chosen not to submit any compensation claims. Tesco has submitted more than 20 claims for compensation to Manchester police, including one for £40-worth of looted stock.

Brussels threatens to sue Britain to let in 'benefit tourists'

 

Ministers fear the move could leave taxpayers handing out as much as £2.5  billion to EU nationals, including out-of-work “benefit tourists”, a new cost that could wreck Coalition plans for welfare reform. The commission’s threat, on the eve of the Conservative Party conference, has raised the political temperature on Europe still further. In an outspoken attack today, Iain Duncan Smith, the Work and Pensions Secretary, says the commission’s move is part of a “wider movement” by the “unelected and unaccountable” European authorities to extend their power over the UK. “This kind of land grab from the EU has the potential to cause mayhem to nation states, and we will fight it,” he writes in The Daily Telegraph. The commission is objecting to Britain’s rules on welfare, claiming they discriminate unfairly against foreigners. To claim benefits in Britain, EU nationals must pass a “right to reside” test. The commission says the test is too tough, and wants Britain to apply more generous EU-wide rules.

Murdoch Sons’ Re-Election to News Corp. Opposed

 

James Murdoch and his brother Lachlan, sons of billionaire Rupert Murdoch, should be replaced on the News Corp. board to improve accountability at the company, an Australian pension fund group said. The brothers and four other board members shouldn’t be re- elected because the company needs “credible skilled outside directors,” the Australian Council of Superannuation Investors, whose members manage more than A$250 billion ($244 billion) in pension assets, said on its website. The pension funds also want a “genuinely independent” chairman, rather than have Rupert Murdoch continuing to hold the role while also serving as chief executive officer. News Corp. has been embroiled in a scandal since July amid revelations its News of the World newspaper hacked a murdered girl’s voice mail, forcing the closure of the U.K. tabloid, executive resignations and the scrapping of a bid for full control of British Sky Broadcasting Group Plc. “Responsibility for this, as well as setting the ethical tone throughout News Corp. and affiliated organizations, rests with the News Corp. board,” the pension fund group’s Chief Executive Officer, Ann Byrne, said in the statement. “The whole board is responsible for failures of oversight, however we regard it as impractical to recommend against the election of the whole board.” Greg Baxter, a spokesman for News Corp.’s Australian operations in Sydney, directed calls seeking comment to the company’s New York headquarters. Other Directors Teri Everett , a New York-based company spokeswoman, didn’t return a voice-mail message left on her mobile phone outside of normal business hours. Reed Nolte, senior vice president of investor relations at the company, didn’t respond to a phone message and e-mail from Bloomberg News. Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information. The pension fund also recommends opposing Andrew Knight, Arthur Siskind and David Devoe, who have all been on the News Corp. board for at least 20 years. The sixth director whose re-election is opposed is Natalie Bancroft, who has been on the board since her family agreed to sell Dow Jones & Co. to News Corp. in 2007. News Corp. has already said directors Tom Perkins and Ken Cowley won’t be seeking re-election.

Legal warning to UK over benefits for EU nationals

 

The European Commission has threatened legal action against the UK, saying a test of eligibility for benefits discriminates against foreigners. It says it is easier for UK citizens to prove their "right to reside" - a test imposed by the UK for certain benefits - than EU nationals. The commission says it may refer the case to the European Court of Justice. Ministers say it is a "fundamental challenge" to the UK's right to decide its own social security arrangements. The Commission says it has been in talks with the UK for several years over the issue and is responding to a "huge number" of complaints from EU citizens living in the UK. Residence tests On Thursday it announced that it was giving the UK two months to explain how it was going to bring its legislation into line with EU law - prompting UK Work and Pensions Secretary Iain Duncan Smith to accuse it of a "land grab" and to pledge to fight it. A range of entitlements - including child benefit, child tax credit, state pension credit, jobseekers' allowance and employment and support allowance - are given only to those with a "right to reside" in the UK. Continue reading the main story WHAT BENEFITS ARE INVOLVED Child benefit Child tax credit State pension credit Jobseekers' allowance The Commission says there are already an EU-wide "habitual residence" rules which are strict enough and the UK is imposing an additional test, which indirectly discriminates against non-UK EU nationals. While UK nationals can easily prove their "right to reside" based on their UK citizenship, other EU nationals have their applications heard on a case-by-case basis, which it says breaches EU social security co-ordination rules giving all citizens equal rights. The Commission gives the example of a woman who moved to the UK and worked from April 2007 to April 2009 when she was made redundant. It says she had paid taxes and National Insurance but was refused claims for jobseekers' allowance. 'Very sound' It says UK citizens in other EU states do not have to meet similar tests and get non-contributory benefits. Laszlo Andor, Commissioner for Employment and Social Affairs, said the EU's legal position was "very sound". Continue reading the main story “ Start Quote We are talking here.. about people who are inactive, people who are looking to come to the UK who are not going to work here” Chris Grayling Employment minister "The EU insists on the right of mobile workers to move from one country to another and, in certain places, they are entitled to benefits," he told the BBC. "We want to protect the rights of all EU citizens." Most people moving abroad already had offers of work or were looking for it, he said, rather than primarily wanting to take advantage of more generous benefits. "It may happen that some of them do not a find a job immediately. It is very important that, in these cases, the rights should be respected." He added that some people might choose to move to a country where benefits were higher but "since we have a European Labour market we have to accept this as a fact". But UK ministers fear taxpayers could be forced into handing out more than £2bn to EU nationals - including so-called "benefits tourists" - if the UK has to comply. 'Difference of opinion' Employment minister Chris Grayling, who met EU officials this week to discuss the issue, said there was a "very definite difference of opinion" between the UK and the Commission. "We are talking here, not about active citizens, not about people who are working but people who are inactive, people who are looking to come to the UK who are not going to work here." He said European law was "all over the place at the moment" and the UK had separately been told by the European courts to make disability benefit payments to a British citizen living in Spain. He said 13 EU states had proposed a "comprehensive review" of policy in the area in June and talks were continuing. Nigel Farage, leader of the UK Independence Party, which campaigns for Britain's exit from the EU, said: "It is not discrimination but simply a system to ensure that benefits are only paid to those who are entitled to them."

Fake death pensioner 'was greedy'

 

Anthony McErlean, 66, was jailed for six years for faking his own death in Honduras in 2009 to get a life insurance claim worth £520,000. He also admitted two counts of theft from a pension fund from the Port of London Authority of £27,000 pounds and £40,658 pounds from the Department of Work and Pensions. The pensioner had impersonated his wife to claim he himself had died after being hit by a truck as he was changing a tyre on a road in the Central American country. A fake witness statement was produced to back up story which said farm workers took his body away to the village of Santa Rosa De Aguan. Suspicious officials at the insurance company contacted the Insurance Fraud Bureau, who alerted the Police.

Thurlbeck to fight sacking claim

 

The News of the World's former chief reporter has broken his silence over the phone-hacking scandal to insist he played "no part" in the matter that led to his sacking. Neville Thurlbeck, 49, was fired by News International earlier this month after being arrested in April on suspicion of conspiring to intercept voicemails while working at the now-defunct Sunday tabloid. He issued a strongly-worded statement in which he vowed to fight his unfair dismissal claim against his former employers "to the end". Mr Thurlbeck's alleged role in the scandal has been closely scrutinised since details emerged of a June 2005 email headed "for Neville" which contained transcripts of illegally intercepted voicemail messages. The email, which surfaced in April 2008, appeared to contradict News International's previous stance that phone hacking was confined to a single "rogue reporter". Speaking out for the first time since his name was linked to the scandal through the "for Neville" email, Mr Thurlbeck said: "At the length, truth will out. I await that time with patience, but with a determination to fight my case to the end." The Sunderland-born journalist alleged that his former employers withheld the reason for his dismissal for nearly a month. He said he found out why he was sacked from Scotland Yard but did not reveal any details for legal reasons. In a statement issued by his law firm DWF, he went on: "I took no part in the matter which has led to my dismissal after 21 years of service. I say this most emphatically and with certainty and confidence that the allegation which led to my dismissal will eventually be shown to be false. "And those responsible for the action, for which I have been unfairly dismissed, will eventually be revealed." Mr Thurlbeck has lodged employment tribunal papers against his former employers. A hearing in his case planned to take place at the East London Tribunal Service was cancelled on Friday.

Ferronats, a company formed by Spanish construction firm, Ferrovial and British air traffic controllers, Nats, has won 10 of the 13 tenders to run control towers at Spanish airports

 

Ferronats, a company formed by Spanish construction firm, Ferrovial and British air traffic controllers, Nats, has won 10 of the 13 tenders to run control towers at Spanish airports as AENA privatises 49% of the company. It will control Alicante, Valencia, Ibiza, Sabadell, Sevilla, Jerez, Melilla, Cuatro Vientos, Vigo and A Coruña. The remaining three towers on the Canary Islands at Lanzarote, Fuerteventura and La Palma have been awarded to the Sacerco company. AENA estimates savings of 46.6% as a result, with Ferronats bidding 70.4 million, and Sacerco bidding 20 million.

Iberia to launch new low cost airline next week

 

Iberia is planning to launch a new low cost airline next week. The Iberia board is expected to approve the project on Tuesday 4 October, to launch the low cost airline for the company’s short and medium distance services. The new airline is expected to take up 37 of the 69 A-320 aircraft the airline currently has in service. Iberia is now merged with British Airways to create the IAG, the International Airline Group, and the IAG board would have to ratify the decision on Thursday. Iberia has been holding talks with the pilots’ union SEPLA on the conditions for them in the new airline. The airline contends that it needs a structural reorganisation, but the union considers that all the flights should remain under the Iberia brand, and considers maintenance would be cheaper with a single company. An earlier leasing of six planes to Vueling, the budget airline with a 45.85% Iberia shareholding, proved unsuccessful with Iberia passengers complaining they were being put on Vueling flights. Five of those six planes are now back with Iberia. The expected name for the new airline, Iberia Express, was first mentioned back in October 2009.

Pound to stay weak 'for some time'

 

The newest policymaker at the Bank of England warned today that the pound will have to remain weak for some time to rebalance the economy towards exports. Ben Broadbent, who joined the Bank's Monetary Policy Committee (MPC) in June, added he was "reasonably close" to voting for increasing the Bank's quantitative easing programme, a move which in itself would lower the value of the pound. Related articles Stuttering FTSE 100 recovers after fall New approach in euro crisis buoys markets Greece is bullish but the markets brace for a major default Protests and strikes rock Greece Schäuble: Austerity is essential to solve crisis Leading article: Battered from within and without Ben Chu: The challenge for the eurozone? It must find its Abraham Lincoln Search the news archive for more stories Sterling has lost around 30% of its value against the US dollar since the financial crisis as the impact of recession, low interest rates and quantitative easing all depreciated the currency. A weak pound can hit households as the cost of imports are relatively higher and travelling abroad becomes more expensive, however UK exporters will benefit as the value of their products becomes more attractive to overseas buyers. The pound dropped against the US dollar and euro following Mr Broadbent's speech at Canary Wharf in London before recovering to stand at 1.55 and 1.14 respectively. Mr Broadbent, a former economist at investment bank Goldman Sachs, said export growth and overall productivity will remain sluggish for as long as the banking system is in "poor health" so the pound's exchange rate will have to "remain weak for some time to come". In comments which support an argument in favour of further QE, Mr Broadbent said the international environment was "clearly disinflationary" which would offset the impact a weak pound has on inflation. He said the rate of inflation would be held back by "slow growth in the United States, the sovereign debt crisis in the Eurozone and its knock-on effects on the cost of finance for UK and European banks". A dismal economic outlook and moderating price pressures have seen the monetary policy debate shift away in recent months from interest rates and back to increasing QE - injecting cash into the economy to stimulate growth - from its current level of £200 billion. Global growth fears are being fuelled by the ongoing euro-zone debt crisis, cracks emerging in the US economy and soft manufacturing, services and trade figures in the UK. Howard Archer, chief UK and European economist at IHS Global Insight, said Mr Broadbent's speech supported mounting expectations that the Bank will fire up the money-printing presses in the near future. Mr Archer said the Bank could boost its QE stock as early as October but a November move is more likely. He said: "While we currently favour a move in November, it is very possible that the Bank could act at the conclusion of the October MPC meeting if UK data over the next couple of weeks show further weakness and the global economic environment fails to show any signs of improvement."

EasyJet founder Stelios setting up new airline

 

EasyJet PLC (EZJ.L) said founder Stelios Haji-Ioannou plans to set up another airline and call it Fastjet, stoking tensions between the budget airline's management and its top shareholder. EasyJet, which resolved a dispute with Stelios over the easyJet brand licence in 2010, said on Monday that it was ready to act should rights established under previous agreements between him and the airline be infringed. Relations between Stelios, whose family owns about 38 percent of easyJet, and the company looked to be improving on Friday when Stelios dropped a request for an extraordinary shareholder meeting to remove a board member. He backed down a day after easyJet moved to return 190 million pounds to shareholders. Luton, southern England-based easyJet said Stelios had alleged that the company has breached the terms of an agreement the two had over the brand. EasyJet said it rejects the claims. Under the agreement, which according to easyJet, Stelios has said is no longer in force, Stelios agreed not to use his own name or a derivation of it to brand any other airline within Europe for five years. Shares in easyJet, which have gained 11 percent in the last month, were up 0.6 percent to 353.9 pence at 1424 GMT. A spokesman for Stelios declined to comment on the nature of the new airline or on the status of any agreements between him and easjJet. A website dedicated to Fastjet was displaying a single red page without click through options and the words: "Fastjet.com by Stelios. Coming soon!"

Tony Blair is unaccountable over business interests, adviser says

 

More questions have been raised over Tony Blair's lucrative business activities after an adviser in his role as a Middle East peace envoy said the former Prime Minister continued to operate outside a defined code of conduct. Channel 4's Dispatches, due to be broadcast tonight, claims that Mr Blair is not required publicly to disclose his commercial interests as he would if he were an MP. Mr Blair combines a £2m-a-year consultancy with the US investment bank JP Morgan with his unpaid post in Jerusalem, where he is heading international efforts in preparation for a future Palestinian state. He also advises the insurance group Zurich Financial, while his company Tony Blair Associates signed a reported £27m-deal advising the Kuwaiti government. They are among a string of globetrotting business interests that have seen him build an estimated personal fortune of £20m since leaving office in 2007. But a senior French diplomat Anis Nacrour, who advised Mr Blair on security for three years, has fuelled doubts over the former Labour leader's public accountability.

El Hierro prepares for a possible volcanic eruption

 

Canary Island of El Hierro is preparing for a possible volcanic eruption as the Canaries have lifted the alert level to yellow for the first time in the recent history of the archipelago following a group of ever-stronger earthquakes. Saturday night saw a 3.4 quake among a total of 48 seen over the weekend. The fear is that there could be a possible volcanic eruption on the island of El Hierro, but the Councillor for Security, María del Carmen Morales, called for calm. ‘These seismic movements are normal given that we are on a yellow alert and we have never seen a similar crisis’. She said that more movements were expected over the next few days given that the magma has been estimated to be active 15 kms below the surface. They estimate the possibility of a volcanic eruption to be 15%. Despite the low possibility the regional government are carrying out an information campaign in case evacuation of the island is needed. They say there will be plenty of time, in the case of an eruption, to evacuate the population to a safe place.

Canadian gold diggers look to Coruña

 

Canadian company, Edgewater Exploration, are to reopen an old gold mine in Coruña and say they will employ 100 people in Cabanas de Bergantiños in the efforts to extract a million ounces of the metal. An ounce of gold is currently 1,800 € on the market. The Las Médulas mines have a long and distinguished past, and were responsible for ten percent of the Roman empire, as 96,000 kilos of gold was taken over 250 years as the Romans used thousands of slaves to find the metal. The new gold fever is the first in the area for 2,000 years. Despite their advanced plans the company is still waiting for a licence to proceed from the Xunta de Galicia.

Banks have pulled the plug on dozens of cheap buy-to-let mortgages after a flood of applications from landlords.

Banks have pulled the plug on dozens of cheap buy-to-let mortgages after a flood of applications from landlords.

More than 50 deals have disappeared recently at a time when investors are seeking to cash in on the strong demand for rented property. 

More than 2,600 mortgages were granted a week to landlords between April and June. There are now 1.3 million outstanding buy-to-let loans – a new high.

Rentals: But the buy-to-let boom is now set to end

But this week a number of big name mortgage lenders were forced to pull their best rates.

On Wednesday, The Post Office withdrew all its buy-to-let mortgages, and Skipton Building Society has stopped offering its ultra-cheap tracker deals

UBS CEO Gruebel resigns over rogue trading loss

 

UBS chief executive Oswald Gruebel has resigned over a $2.3 billion loss caused by rogue trading at its investment division, which is to be restructured now to prevent similar incidents in future, the Swiss bank said Saturday. Gruebel, who had come under heavy pressure from shareholders over the scandal, said he hoped his resignation would allow the bank to restore its reputation in the eyes of clients and investors. Article Controls EMAIL REPRINT NEWSLETTER SHARE "As CEO, I bear full responsibility for what occurs at UBS ( UBS - news - people )," he said in a memo to staff. "From my first day on the job I placed the reputation of the bank above all else. That is why I want to and must act according to my convictions." UBS Europe chief Sergio P. Ermotti will take over immediately as interim chief executive until Gruebel's replacement is appointed. Gruebel's departure caps 10 days of speculation over his future following the bank's announcement that a single London-based trader had evaded internal control systems and gambled away $2.3 billion. The trader, 31-year-old Kweku Adoboli, was arrested Sept. 15 and charged with fraud and false accounting. A judge ordered him Thursday to be held in jail until a hearing next month.

Palestinian leader Mahmoud Abbas makes UN statehood bid

 

Palestinian leader Mahmoud Abbas has submitted his bid to the UN for recognition of a Palestinian state. To rapturous applause in the General Assembly, he urged the Security Council to back a state with pre-1967 borders. He said the Palestinians had entered negotiations with Israel with sincere intentions, but blamed the building of Jewish settlements for their failure. Israeli PM Benjamin Netanyahu said he was reaching out to Palestinians and blamed them for refusing to negotiate. "I continue to hope that President Abbas will be my partner in peace," he said in his speech in New York. "Let's meet here today in the United Nations. Who's there to stop us?" Mr Netanyahu added that the core of the conflict was not settlements but the refusal of the Palestinians to recognise Israel as a Jewish state. Hours after receiving it, UN Secretary-General Ban Ki-moon transmitted the Palestinian request to the Security Council. Israel and the US say a Palestinian state can only be achieved through talks with Israel - not through UN resolutions. 'Come to peace' President Barack Obama told Mr Abbas on Thursday that the US would use its UN Security Council veto to block the move. Continue reading the main story Analysis Jeremy Bowen BBC Middle East editor, New York Some delegations here at the UN in New York gave Palestinian Authority leader Mahmoud Abbas a standing ovation - they were clapping and even whistling in support. That is significant because if it comes to a vote in the Security Council - and if the Americans veto it - Palestinians have a Plan B. That Plan B is to go to the General Assembly - where there are no vetoes - and get enhanced status, not full membership but something better than they have now. The Palestinians say they want to negotiate but not in the way they have negotiated before - there has to be clear parameters and a timetable. The Palestinian point is that since 18 years of negotiation has not worked, let's try something new. "I call upon the distinguished members of the Security Council to vote in favour of our full membership," he told the General Assembly, in what was for him an unusually impassioned speech. He added that he hoped for swift backing. Many delegates gave him a standing ovation. "I also appeal to the states that have not yet recognised the State of Palestine to do so." "The time has come for my courageous and proud people, after decades of displacement and colonial occupation and ceaseless suffering, to live like other peoples of the earth, free in a sovereign and independent homeland," he said. He urged Israel to "come to peace". And he said the building of Jewish settlements was "the primary cause for the failure of the peace process". A spokesman for the Islamist movement Hamas, which controls the Gaza Strip, criticised the speech. Salah Bardawil said Mr Abbas had deviated from the aspirations of the Palestinian people by accepting the 1967 borders, which he said left 80% of Palestinian land inside Israel. 'Future and destiny' Meanwhile in the West Bank, crowds roared their approval as Mr Abbas demanded UN acceptance of a Palestinian state within pre-1967 borders. Continue reading the main story Middle East viewpoints Analyst Yezid Sayigh argues that US and Israeli policies have forced the Palestinians to resort to requesting full UN membership. Israeli commentator Yossi Klein Halevi argues that the Palestinians need to convince the Israelis that any state would not be a threat. "With our souls, with our blood, we will defend Palestine," they said. Mr Abbas had called for peaceful marches in support of his initiative, but some clashes were reported: One Palestinian was shot dead by Israeli troops during clashes in the village of Qusra, south of Nablus, Palestinian sources say At the Qalandiya checkpoint, Israeli troops fired tear gas on stone-throwing Palestinian youths In the village of Nabi Saleh, protesters burned Israeli flags and pictures of President Obama The process began with Mr Abbas presenting a written request for a State of Palestine to be admitted as a full UN member state to the UN secretary general. The BBC's Kim Ghattas at the UN says that until the last minute Western diplomats tried and failed to stop the Palestinians making the request. Even now, efforts are under way to restart direct talks between the Israelis and Palestinians in an attempt to defuse tensions, our correspondent says. The Security Council will examine it and vote on the request. In order to pass, it would need the backing of nine out of 15 council members, with no vetoes from the permanent members. A Security Council vote could take weeks to come about and the US may not even need to exercise its veto - Washington and Israel have been lobbying council members to either vote against the Palestinian plan or abstain. Continue reading the main story Palestinian UN membership bid Palestinians currently have permanent observer entity status at the UN They are represented by the Palestine Liberation Organisation (PLO) Officials now want an upgrade so a state of Palestine has full member status at the UN They seek recognition on 1967 borders - in the West Bank, including East Jerusalem, and Gaza Enhanced observer member status could be an interim option Q&A: Palestinians' UN statehood plans Why Obama has turned towards Israel French President Nicolas Sarkozy has urged a compromise, suggesting the General Assembly give the Palestinians enhanced status as a non-member state to allow a clear timeline for talks - a month to start negotiations, six months to deal with borders and security and a year to finalise a "definitive agreement". A vote on enhanced status - enjoyed by others such as the Vatican - would not require a Security Council recommendation but a simple majority in the General Assembly, where no veto is possible. Currently the Palestinians have observer status at the UN. The "Quartet" of US, European, Russian and UN mediators has been working on reaching a framework agreement to restart talks, based on Mr Obama's vision of borders fashioned from Israel's pre-1967 boundary, with agreed land swaps.

Hawi trial nears end

 

THE four-month trial of former bikie leader Mahmoud "Mick" Hawi, who is charged with murdering a man at Sydney Airport in 2009, entered its closing phase on Wednesday. Mr Justice Robert Allan Hulme began summing up the case to the jury in Sydney West Trial Courts, Parramatta. Hawi, 31, of Bexley, once one of the heads of this area's Comanchero Motorcycle Club, has pleaded not guilty to murdering Anthony Zervas, whose brother was a Hells Angels member. Justice Hulme was expected to continue his summation of the case until Friday, after which the jury will retire to consider its verdict. Five other Comanchero members or associates are also standing trial co-accused of the same murder. During the trial, medical experts gave evidence that bollards, a pair of scissors and a knife found in a drain might have played a part in the death of Mr Zervas. The court heard the injuries he suffered included internal bleeding, stab wounds and a fractured skull and that his head might have been stomped on or hit by a bollard. Justice Hulme said most of the available closed-circuit video footage of the attack was "average" and "quite poor". The jury should not draw any inference from the fact that a particular camera was not working during crucial moments, he said. Justice Hulme said part of the Crown case was that the Comancheros intended to inflict grievous bodily harm on Mr Zervas, who was one of five Hells Angels or associates at the airport. The jury had to decide if there was a joint criminal enterprise. The trial continues. Hire-car driver was drunk A CRONULLA father-of-six who pleaded guilty to a mid-range drink-driving offence allegedly told police who pulled him over for a random breath-test he knew he had had too much to drink. Graeme John Purcell, 58, of Cronulla, was stopped by police in August after attending Cronulla Bowling Club with his wife. His solicitor said the couple had four children still at home and his client relied on the success of a Cronulla car hire business to get "the whole family out of a financial quagmire".

Dowler lawyer pursues US legal action against News Corp

 

The solicitor who represented the family of Milly Dowler in their phone-hacking claims against News Corporation on Friday announced he has teamed up with US lawyers with a view to initiating proceedings targetting Rupert Murdoch and his son James. Mark Lewis of Taylor Hampton has instructed Norman Siegel, a New York-based lawyer who represents 20 9/11 families to seek witness statements from News Corp and directors including the Murdochs in relation to allegations that News of the World staff may have bribed police. He says he intends to assess whether he can launch a class action against News Corp using American foreign corruption laws, which make it illegal for US companies to pay bribes to government officials abroad. "There is a provision within US law, before you start an action to seek depositions from individuals, in this case, such as James Murdoch and Rupert Murdoch and other directors of News Corp," said Lewis. He added Siegel would examine allegations of not just police bribery but also phone hacking and "foreign malpractices." The move will be a fresh setback for News Corp which has been trying to insulate itself against contagion from the UK phone-hacking scandal that has engulfed its British publishing empire. Separately, it emerged that this week US prosecutors at the Department of Justice have written to Murdoch's News Corporation requesting information on alleged payments made to the British police by the News of the World. The DoJ is looking into whether the company may have violated the Foreign Corrupt Practices Act (FCPA). Under FCPA laws, American companies are banned from paying representatives of a foreign government to gain a commercial advantage. The decision to co-ordinate legal efforts on both sides of the Atlantic comes just days after News International confirmed it was in settlement talks with the parents of the murdered 13-year-old schoolgirl. News International is discussing a total package of around £3m including a personal donation from Rupert Murdoch of £1m to a charity of the Dowler's choice. News Corp declined to comment but it is understood that senior executives question whether there is any basis for Lewis's actions.

Spain’s central bank reported this week that things were getting worse for that country’s banks

 

Spain’s central bank reported this week that things were getting worse for that country’s banks — but not because they held a lot of Greek debt or bonds issued by other troubled European economies. The problem, instead, is the same old one. With Spain’s economy weak and home prices falling, bad loans are growing. And the central bank thinks things are getting worse. In a surprisingly frank presentation to investors in London on Tuesday, José María Roldán, the Bank of Spain’s director general of banking regulation, said that Spanish land prices had fallen about 30 percent from the 2007 peak, adjusted for inflation, and that home prices were off about 22 percent. “In both cases, we expect further corrections in the years to come,” he said. For land prices, he said, the bank’s “baseline scenario” was that prices would fall to little more than half of the peak level. The “adverse scenario” indicated that the decline could be significantly worse. That was a significant change from a presentation he made in February. Then, with home prices down about 18 percent from the peak, he argued that the decline was similar to past cyclical downturns and that prices were likely to begin rising soon. Remarkably enough, collapsing home prices have not left Spanish banks holding large amounts of bad mortgage loans, thanks largely to the fact the Spanish mortgage market operated during the boom in far different ways than the American market. But if lending to home buyers was conducted in a far more prudent manner than it was in the United States, lending to real estate developers and construction companies was, if anything, more irresponsible. The higher land prices went, the more eager the banks were to push out loans. The story of how Spain’s banks got into the mess — and the way its mess differs from that of American banks — show that it is impossible for banks to walk away from a collapsing bubble in real estate. It also shows that the structure of mortgage markets can make a major difference in how a collapse plays out. The figures released by the central bank this week showed that by the middle of this year, 17 percent of Spanish bank loans to construction companies and real estate developers were troubled — or “doubtful,” the term favored by the central bank. That figure has been rising rapidly, reflecting the deterioration in real estate values. When the financial crisis first broke out, in 2008 and 2009, it appeared that Spanish banks were in a better position than most, in part because of regulation that had kept the big banks from making some of the mistakes others made. But it turned out that smaller Spanish savings banks were heavily exposed to a real estate market that had outpaced even the United States’ market for a time during the first decade of this century. That market continued to rise after the American housing market stopped climbing. The Bank of Spain has created a program to force mergers of the smaller banks and to bring in better management. It has put about 11 billion euros into the banks to recapitalize them, and is putting in another 15 billion euros in a process that is supposed to be completed by the end of this month, said Antonio Garcia Pascual, the chief Southern European economist for Barclays Capital. But, he added, “our estimate is that the overall number needed is closer to 50 billion euros.” The banks are bleeding from loans secured by raw real estate, and from loans for construction. The pain is made worse because such lending soared during the property boom. It is those loans that are now devastating bank balance sheets, as developers who borrowed to build offices, stores and neighborhoods saw demand dry up and now cannot pay the banks back. Other corporate loans are also showing weakness, as would be expected when unemployment is above 20 percent and not expected to improve for at least two years, but less than 5 percent of those loans are said to be doubtful. There are also signs of trouble in car loans and other loans to individuals.

European banks head towards another meltdown

 

Shares in some of Europe's largest banks fell by 10pc as the cost of insuring European lenders' senior bonds rose to record levels, according to credit default swap prices. The Markit iTraxx Financial Index of contracts on the senior debt of 25 banks and insurers climbed to an all-time high 315.5 basis points. The last banking crisis was regarded by most eurozone members as an Anglo-Saxon phenomenon caused by lax lending controls that resulted in major UK and US institutions either collapsing or having to take costly state-funded bail-outs. To offset the threat of another crisis spreading across the eurozone, European regulators ordered their banks to increase their liquidity buffers. Government bonds were generally viewed as the most liquid and least risky assets to hold. However, this policy has come back to haunt them, leaving many lenders across the region seriously exposed to the eurozone sovereign debt crisis. French banking giants BNP Paribas and Société Générale are among the hardest hit. Recent estimates suggest BNP has eurozone sovereign debt exposure of about €75bn (£65bn), amounting to roughly 6pc of total assets, including €14bn of Greek debt and €21bn of Italian government bonds. The other two major French banks, SocGen and Credit Agricole, each have exposures of a similar size. Between them, France's banks have about €56bn of Greek sovereign bonds alone, and have so far taken 20pc writedowns on this.

signs of an institutional run on French banks

 

Christine Lagarde, the managing director of the International Monetary Fund, urged Europe's leaders to bail out their fragile banks, as the boss of the eurozone's biggest bank, BNP Paribas, rejected fears that the financial sector was "in peril". Addressing journalists in Washington at the opening of the IMF's annual meeting, Lagarde said that Europe must tackle "this twin problem of sovereign debt and the need to strengthen capital buffers". She said: "It is critical that to fuel growth, banks be in a position to finance the economy, to finance enterprises, to finance households, to finance local governments. To do that they need to have the balance sheet that will actually support credit to the economy." Despite the recent stress tests carried out by the European Banking Authority, which suggested that most of the banks were well-placed to cope with the sovereign debt crisis, the IMF estimates that banks have taken a €300bn (£260bn) hit in the past year as a result of the growing risk of default by Greece and other vulnerable eurozone countries. Lagarde's call came as Baudouin Prot, BNP's chief executive, emphatically denied reports that it was in talks with Middle Eastern investors about securing a capital injection. "I formally deny this," he said. "We have no particular contact because we don't need a capital increase." But French bank shares – which have lost 50% of their value in three months – continued to fall as markets endured one of their worst trading days since 2009. BNP was off more than 5% and close rival Société Générale fell almost 10%. In the UK, bailed-out Lloyds Banking Group was down more than 10%, bearing the brunt of anxiety about a slowdown in economic growth. The FTSE 100 closed down 4.7% with large falls from mining companies, which make up a large part of the index and whose fortunes are closely tied to global economic prospects. Out of the 100 stocks, only technology company Autonomy – supported by a bid from Hewlett-Packard – fell by less than 1%. A survey from the crucial manufacturing sector, which chancellor George Osborne had hoped would lead an economic recovery, exacerbated the nervous mood by suggesting industry had been hit hard by the collapse of confidence around the world. The CBI's monthly industrial trades survey showed declining orders, both at home and abroad, and a rising backlog of finished goods, in the latest evidence that the recovery has stalled. Minutes from the latest meeting of the Bank of England's monetary policy committee revealed on Wednesday policymakers were preparing a new round of quantitative easing to respond to the worsening outlook. The gloom was echoed in the eurozone, where the early, "flash estimates" from the closely watched purchasing managers surveys signalled a sharp downturn in both manufacturing and services growth, adding to fears that Europe could be heading for a new recession. The Greek government announced new austerity measures this week to persuade investors that it is committed to tackling its debts. But investors are still fretting about the potentially devastating impact of a default on the region's banks. BNP insisted on Thursday that it could maintain a core tier one ratio – an important measure of financial strength – of 9% by January 2013 even if it sustained losses through the eurozone crisis. But Mohamed El-Erian, boss of the world's biggest bond investor Pimco, warned in a blog on the FT's website that there were "signs of an institutional run on French banks".

Cloud-Based OnLive Gaming Makes UK Debute

 

Today is a big day for UK gamers, as online gaming system OnLive - which requires no expensive console or high-end computer - is coming to our shores, and is bringing with it a whole heap of special offers. London OnLive lets gamers play over an internet connection no matter what hardware they have, as all of the processing is done on the company' servers, with the gameplay beamed to players as a streaming video. The system requires no expensive console, high-end controller, discs or huge downloads. OnLive lets gamers play without the need for a console or computer CEO and founder Steve Perlman said: "For the first time ever, UK gamers can take advantage of OnLive's powerful cloud gaming technology to play the latest top-tier games on demand, with gameplay delivered instantly over the internet wherever and whenever they want. For the cost of a single-platform game purchase, UK gamers can play on their HDTV, PC and Mac, regardless of performance capabilities." Must Read First Yahoo, Now HP: Why are Technology Boards So Bad? Nouriel 'Dr. Doom' Roubini: Economic Recovery Reaching 'Stall Speed' Starting today UK OnLive customers will have access to around 150 premium games, such as "Deus Ex: Human Revolution", "DiRT 3", "Assassin's Creed: Brotherhood" and "F.E.A.R. 3"; game prices start at £1.99, or subscribing to the PlayPack Bundle - offering more than 100 games - is £6.99 per month . "To prove how excited we are, we're also offering our new UK members all kinds of launch promotions to welcome them onto the service. First-time game purchasers get their first OnLive PlayPass Game for just £1" OnLive is offering a wide range of free offers, including free OnLive Game Systems to attendees of the Eurogamer Expo in London, which starts today and continues over the weekend. OnLive has teamed up with BT to offer 100 PlayPack Games for free for three months. In addition to these offers, PC Gamer Magazine readers get one month of free gaming. Gamers will be able to by OnLive today from GAME's online store, with the console and controller to be available soon in GAME's 615 UK stores. Demos and social features can be accessed at no cost by creating an account at onlive.co.uk. CEO Perlman concluded his blog post: "For gamers throughout the rest of the world, hang tight: Now that we've made our first major international expansion to the UK, we'll be moving quickly to expand worldwide, we'll be seeing you soon. OnLive is the future of gaming, everywhere

Scottish supermarkets face extra tax on selling alcohol

 

Plans to hike business rates for major retailers of alcohol and tobacco in Scotland could see supermarkets pay around £110 million in tax over the next three years.   Finance Secretary John Swinney announced the new levy yesterday, as part of the Scottish government’s Spending Review.   Swinney said the review contained “tough choices, because of the cuts from Westminster that go too far, too fast”.   “We have had to restrict pay costs, reluctantly implement pensions increases on public sector staff, and maximise the income gained from asset sales,” he said.   He outlined that part of the extra revenue brought in would come from a tax on major retailers who sell alcohol and tobacco.   The measure was a surprise announcement, as during the last parliament a proposal to introduce a “Tesco tax” was voted down and it was not included the SNP’s manifesto.   Scottish Retail Consortium director Ian Shearer said: “This new tax is a blatant fund-raising exercise which is illogical and discriminatory. It targets a part of the retail sector which funds Drinkaware, rigorously prevents under-age sales with Challenge 25 and has led the way on clear alcohol labelling, giving it an exemplary record on the sale of alcohol and tobacco.   “Supermarket margins are already cut to the bone as stores compete to offer the best deals to cash-strapped consumers. The UK already has some of the highest alcohol taxes in Europe. This tax would make it harder for food retailers to keep prices down for customers, and makes Scotland a less attractive place to do business, invest and create jobs.”   The WSTA's Jeremy Beadles said he was "disappointed" the meaure had been announced with no consultation.   "The tax on large retailers will place an additional burden on Scottish businesses and push the price up for all consumers regardless of whether they consume alcohol at all,” he added.   “At a time of financial constraint, when many businesses in Scotland are already feeling the pinch and paying increase rates, we do not believe that punishing responsible consumers in Scotland with another tax is either fair or justified.”     Minimum alcohol unit pricing could become as reality north of the border by next summer, although the price has not yet been set. The Scottish government claims it is the “most effective and efficient way” of reducing consumption and alcohol related harm.

banks hit back at currency rip-off suggestions

 

A spokesman for the British Bankers Association (BBA) said that he was "disappointed" that Consumer Focus "chose not to engage with the industry before it issued this complaint". "The UK's banks have invested heavily in recent years to ensure customers can use their financial services virtually anywhere in the world," he added. "Competition in the holiday money market is not simply between high street banks: it also involves companies which do not usually provide financial services. The report acknowledges only 15 per cent of holidaymakers get their foreign currency from a bank. "Any analysis of this market needs to take full account of the costs to businesses of providing these services – for instance, the cost charged by foreign ATM providers every time a UK card is used. Transaction costs abroad are driven by the costs of overseas payment systems, often in countries where free banking does not exist. "We are disappointed Consumer Focus chose not to engage with the industry before it issued this complaint. The banks will now work with the Office of Fair Trading to scrutinise the points raised."

French bank retreat raises aircraft finance fears

 

The global aviation industry faces growing uncertainty over financing due to Europe's debt crisis and worries surrounding French banks, lenders and airlines were warned on Tuesday. Despite record numbers of aircraft leaving the production lines at Airbus (EAD.PA) and Boeing (BA.N) to fuel ever-growing demand from rising economies, doubts are spreading as to how the growth will be financed. French banks play a key role in the global aircraft financing market and represented about 31 percent of transactions in 2010 followed by Germany, Ryanair finance director Howard Millar said. "The French banks have scaled back significantly. There will be less finance available and any finance will be more expensive," he told an ISTAT aircraft financing conference. French banks Societe Generale (SOGN.PA) and BNP (BNPP.PA) announced plans to scale back lending in the aircraft market last week as French banks moved to sell assets and reduce lending. "In the past few months things have got worse. French banks are effectively closed for new clients," Millar said. "We are in an ivory tower -- we are heading for a little bit of a car crash in terms of financing." French banks are fighting to restore confidence after suffering a sharp summer sell-off, driven by fears they are too dependent on wholesale market funding and would be ill equipped to cope with the fallout from a Greek debt default. Some banks are finding it hard to obtain dollar funding for periods of longer than a few days as U.S. money market funds and other traditional dollar lenders become increasingly nervous about the threat of a Greek debt default, which could destabilise markets throughout the region. European bank stocks have lost a third of their value since July. Aircraft are sold in dollars and their second-hand value is tied to the U.S. currency, so participants rely on dollars to grease the wheels of one of the world's most capital-intensive export industries. Banks are also grappling with wider problems which have a knock-on effect on the availability of financing for aircraft , Ron Wainshal, Chief Executive Officer of U.S. lessor Aircastle, said. "I think it will get worse before it gets better. There is a short-term challenge, particularly in Europe," he said. Banks are also squeezed by tougher capital adequacy regulations under the Basel III accord. Boeing, Airbus and smaller manufacturers deliver a total of up to $80 billion in new aircraft a year. Production is rising to meet demand from emerging markets and most recently a wave of orders to renew ageing and inefficient fleets in the United States. Airlines order aircraft years ahead and pay upfront deposits but nearly all the value is paid on delivery. A great deal of that is financed shortly before the handover. French bankers have been squeezed by a shortage of dollar deposits from U.S. investors due to fears concerning their exposure to Greece, but they sought to allay concerns about liquidity. "We'll be here. We'll do our share the best we can," said Christian McCormick, Chief Executive Officer, Natixis Transport Finance, adding German banks were not hampered by the same dollar funding concerns. Of the $73 billion of aircraft to be delivered next year, about $41 billion need to be financed by banks in dollars, he said. In the 2008 credit crunch, U.S. and European credit agencies stepped into the breach as funding dried up by providing guarantees to assist aircraft exports at lean financing rates. But the export/import agencies have significantly hiked their fees and their room for manoeuvre may be constrained as the debt crisis spreads to sovereign assets and ratings, bankers said. The shortage of bank financing has created uncertainty over 2012 deliveries but so far there is no serious evidence of a funding gap, several lessors and bankers said. "It is more difficult from a pricing and availability standpoint. Banks are willing to do business but are reluctant to lock in for the long term," said Madhu Vijay, senior vice president of U.S. lessor Aviation Capital Group ACG.L, part of mutual insurer Pacific Life. There are fewer doubts over the financing for new aircraft deliveries than over the market for second-hand aircraft, he said. Second-hand values are important to the industry because they influence the appetite of lessors to buy aircraft. Lessors control about a quarter of the world fleet. The market uncertainty comes at a time when U.S. insurer AIG (AIG.N) is preparing to float its ILFC leasing unit and Royal Bank of Scotland (RBS.L) seeks buyers for its RBS Aviation business, but is not expected to scupper the sales, sector bankers said.

BBC Worldwide to sue Silvio Berlusconi's TV network

 

BBC Worldwide is suing an Italian television network owned by Silvio Berlusconi over claims that it has copied Strictly Come Dancing. A hearing is due to take place on Friday about a new show called Baila!, which is set to debut on Mediaset's Canale 5 later this month. BBC Worldwide contends it copies Strictly's concept, which has been called the most successful reality format in the world. Mediaset has denied the accusations. In a statement to BBC News, Mediaset said: "This is perhaps the first time in the history of television that an accusation of plagiarism is levelled against a programme that hasn't even yet been broadcast. "It will be the judge to make the final decision, but Mediaset remains convinced that Baila! is a different programme to the BBC's format and that of Rai's Dancing With The Stars. "We simply want the opportunity to show this to the public as well." Strictly Come Dancing, which pits celebrity amateurs against each other in a weekly ballroom dancing competition, has been sold to more than 35 countries. In many of them, including the US version, it is known as Dancing With The Stars. An authorised Italian version is already run by another broadcaster, Rai, which took Mediaset to court in Rome over the format earlier this year. A separate hearing for that case has been scheduled to take place on 23 September. Mediaset contends it based its programme on a different format - Mexican show Dancing For A Dream - which has become renowned for its racy, sexualised dance routines. As well as Mediaset, BBC Worldwide has also accused Televisa Mexico and Endemol, the company producing Baila!, of being in breach of copyright. "It is very important to BBC Worldwide and its international licensees that the format is protected from infringement," a BBC Worldwide statement said. Baila! features celebrities partnered with members of the public, while Dancing With The Stars features celebrities paired with professional dancers. Mediaset's deputy chairman and son of the Italian prime minister, Pier Silvio Berlusconi, has said the show was a unique format.

Fed Shifts Bond Portfolio

 

The Federal Reserve Wednesday took another unconventional step to boost an economy flirting with recession, saying it would increase its share of longer-term Treasurys by $400 billion by June 2012 in an effort to make credit cheaper and spur spending and investment. More Economists React: Fed 'Doing What It Can' Why Was Statement Late? 20th Century Technology Parsing the Fed: How statement changed Full statement following September meeting Journal Community To help keep mortgage rates low, the Fed also said it would reinvest the proceeds from maturing agency debt and mortgage-backed securities into mortgage-related debt. Seven out of 10 voting officials supported the action at the conclusion of a two-day meeting of the Fed's policy making body - the Federal Open Market Committee -- highlighting continued divisions within the central bank as it tries unorthodox new ways to provide support to the economy. WSJ's Kelly Evans and Dow Jones Newswires Managing Editor Neal Lipschutz discuss the Fed's decision to maintain interest rates and purchase long-terms. They also discuss what the move means in relation to the overall economy. REUTERS/Lee Jae-Won/Files The moves came just a day after Republicans leaders in Congress took the unusual step of urging the Fed to do nothing in a letter to Fed Chairman Ben Bernanke, fearing any action could do more harm than good. Worried about inflation, Richard Fisher of the Dallas Fed, Narayana Kocherlakota of Minneapolis and Charles Plosser of Philadelphia dissented Wednesday -- the same officials who opposed the FOMC's August 9 decision that made a conditional pledge to keep short-term interest rates near zero until mid-2013. EXPERIENCE WSJ PROFESSIONAL Editors' Deep Dive: Central Bank Watch TREASURY AND RISK Central Banks More Open to Inflation FUND STRATEGY Banks Cut Rates in Fear of Contagion from Rich Nations MARKETWATCH Fed Getting More Worried about Europe Access thousands of business sources not available on the free web. Learn More Right now, however, worries inside the central bank about high unemployment and weak economic growth are trumping fears that inflation may take root or that the dollar could fall further as a result of the Fed's easy-money policies. Fed officials said in a statement that "recent indicators point to continuing weakness in overall labor market conditions" and that the unemployment rate is expected to decline only gradually. No jobs were created in August and the unemployment rate was stuck at 9.1%. The Fed said inflation seems to have moderated as the effects of high commodity prices and supply-chain disruptions from Japan's earthquake earlier this year have waned. The central bank also noted that inflation expectations have remained stable. As part of its plan to purchase more long-term securities, the Fed said it would reduce its holdings of short-term Treasury bills and notes and increase its holdings of Treasury securities with longer maturities. The move should increase the average maturity of its Treasury securities portfolio to just over eight years by the end of 2012 from a little over six years now. While the Fed acknowledged the sale of short-term securities could put upward pressure on short-term rates, it said the impact is expected to be small because of the conditional pledge it made last month that near-term rates will stay near zero until mid-2013. The idea behind the plan is that holding more long-term debt will put downward pressure on long-term rates, allowing people to get cheaper mortgages and companies to finance their operations at better rates. It's been dubbed "Operation Twist", a reference to a similar program tried with mixed results by the Fed and the U.S. Treasury in 1961. The Fed is trying to ease financial conditions without taking the more controversial step of increasing the amount of money that it's pumping into the financial system, since it will be using money already generated from other programs. A bond buying program the Fed completed in June was widely criticized internally and externally because it pumped $600 billion of newly printed money into the financial system, sparking fears of inflation. House Speaker John Boehner (R., Ohio), Senate Minority Leader Mitch McConnell (R., Ky.), and two other Republican leaders Tuesday warned Fed officials that "further extraordinary intervention" could be damaging for the economy. Their comments follow criticism of Bernanke and the Fed's policies by several Republican presidential candidates. The more potent step of launching a new round of bond purchases that would further expand the Fed's $2.867 trillion balance sheet remains a possibility, but inflation likely would need to slow much further to spur Fed officials to take that step. The Fed moves come at a pivotal time for the economy, which slowed to a crawl in the summer. It's now being threatened by spillovers from Europe's deepening debt troubles, lingering woes in the U.S. housing market and the U.S. government's inability to craft a fiscal policy that reduces deficits in the long-run while supporting the recovery in the short-run. Enlarge Image Getty Images Federal Reserve Board Chairman Ben Bernanke Economists polled by the Wall Street Journal see a one in three chance the U.S. will slip into recession again over the next year, the highest odds since the recovery began in mid-2009. The Fed said there are "significant downside risks to the economic outlook, including strains in global financial markets." The International Monetary Fund Tuesday slashed its 2012 growth forecast for the U.S. to 1.8%, from a 2.7% prediction made in June report. In a report kicking off its annual fall meetings, the global lender warned the U.S. economy could remain weak for years, describing a stalled recovery in need of another push from government. Economists aren't so sure that the Fed's latest gambit will do much to spur growth. "The odds are 'Operation Twist' won't work," Anthony Sanders, a real-estate finance professor at George Mason University, said before the Fed action. The housing market has shown no reaction to interest rates that are already at record-low levels, he said. Freddie Mac's latest survey finds the average rate on 30-year, fixed-rate mortgages at 4.09%, the lowest level in more than 50 years.

Spain Examines Long Hidden Swiss Account

 

Emilio Botín is a billionaire Spanish banker renowned for running a tight ship. He asks that his top credit officers at Santander — one of Europe’s largest banks — make a trek to his vacation home each summer to report on loan exposures. And he queries the head of his charitable foundation, euro for euro, on its smallest donations. Enlarge This Image Daniel Ochoa De Olza/Associated Press A Spanish court is investigating whether the family of Emilio Botín, the head of Banco Santander, paid too little taxes. Add to Portfolio HSBC Holdings PLC Barclays PLC Go to your Portfolio » Enlarge This Image Nacho Cubero/Reuters Emilio Botín is head of Banco Santander, which is based in Madrid. Readers’ Comments Share your thoughts. Post a Comment » Read All Comments (30) » Yet, there is one not-so-small matter that Mr. Botín (pronounced bo-TEEN) has failed to keep tabs on: a Swiss bank account secretly opened long ago by his father that grew to such a size that when Spanish authorities discovered its existence last year, Mr. Botín and other family members paid 200 million euros (about $273 million currently) in taxes to avoid tax evasion charges. At the request of tax fraud inspectors, a Spanish national court is investigating whether the payment is enough, given the amount that was stashed abroad; tax experts in Spain say that the account could reach two billion euros. The court has also said that officials need more time to sift through the blizzard of documents that the family submitted and will consider whether a criminal charge of document fraud should be brought. A lawyer for the Botíns, Jesús Remón, said the family was cooperating with the investigation and was “fully in compliance with its tax obligations following their voluntary filing” last year. He added that no family member had been charged with wrongdoing. Mr. Botín’s tax problems come as debate intensifies over whether struggling governments should demand more tax revenue from the rich. On Monday, President Obama called to end some tax breaks for the wealthiest taxpayers in the United States. Last Friday, the Spanish government reintroduced a wealth tax that it had abolished three years earlier, hoping to collect an estimated 1.08 billion euros from taxpayers with more than 700,000 euros in declared assets. Spain’s wealthiest have so far not publicly endorsed calls for higher taxes, and Mr. Botín on Friday told reporters that “it seems to me very bad to reintroduce” the wealth tax. More so than in other European countries, where bankers are largely anonymous figures, Mr. Botín holds sway in Spain. Although he avoids social events and his public utterances are few, his influence is seen as wide-ranging. And he has been able to retain control of Santander despite his family’s controlling just 2 percent of its shares. Neither the judiciary nor the family has provided details about how much money the Swiss bank account contained or how the amount grew over time. Nor would Mr. Remón, the lawyer, comment on whether Mr. Botín had been aware of the account. What is known is that Mr. Botín’s father, also called Emilio, left Spain with part of his wealth in late 1936, after the start of the Spanish Civil War, fearing, like many other Spaniards, what might come. The elder Mr. Botín spent a few months in London before moving to Basel, Switzerland, and eventually returning to Spain to resume leadership of the bank that he had run since 1933. But while he returned to Spain, the money he salted away in Switzerland did not. The senior Botín died in 1993. Last year, the French government passed on to Spain data that it had obtained from Hervé Falciani, a former employee in HSBC’s Swiss subsidiary, naming almost 600 Spanish holders of secret bank accounts. Among those was one belonging to the estate of Mr. Botín’s father. In his opening summary, the judge in charge of the case, Fernando Andreu, highlighted “the complexity of the hereditary structures” of trusts, foundations and other companies set up to oversee the account. The closest he came to explaining what was in the account was to say that it also included a 12 percent stake in Bankinter, a midsize bank in which Jaime Botín, Emilio’s brother, is a leading shareholder. That holding, at current stock market value, would be worth about $310 million.

Manchester airport reopens after bomb scare

 

Manchester Airport’s main terminal has reopened after bomb disposal experts were called in to check a suspicious package on Wednesday, police said. A man was being questioned, although police said earlier reports that he was being held under the Terrorism Act were inaccurate. The package, a bag, was found to be safe. The airport’s operators had earlier said 11 flights leaving Terminal 1 would be affected. Incoming flights are operating normally and the airport’s two other terminals remained open. Manchester Airport is Britain’s fourth biggest and handles around 20 million passengers each year.

Imperial sees Spain cut sales growth to 2 pct

 

Imperial Tobacco Plc , the world's fourth largest cigarette group, said it expects just a 2 percent rise in annual sales after being hurt by a savage price war in Spain, while it added recent price rise may ease the pain there. Spain is Imperial's third most profitable market after Britain and Germany and the outlook for 2012 has improved as all major players have increased cigarette prices after a round of price cuts earlier this year as they struggled for growth. Imperial is the market leader in Spain with a near-30 percent market share from cigarette brands like Fortuna, Ducados and Nobel, but suffered from a market depressed by economic woes and a ban on smoking in public places from the start of 2011. The Bristol-based group, which also makes Gauloises, West and Lambert & Butler cigarettes said on Wednesday it expects annual sales, excluding Spain and the impact of a change in the timing of a UK price increase, to rise around 3 percent compared to overall annual sales seen up 2 percent. Group total cigarette volumes are seen declined in the 12-month period by around 2 percent but excluded Spain and the UK price effect then volumes are see down by less than 1 percent. Imperial increased its cigarette prices in Spain in early July with the world's three biggest players -- Philip Morris International , British American Tobacco and Japan Tobacco - also increasing their prices. The group was giving a trading statement towards the end of its financial year on Sept. 30 and ahead of its annual results on Nov. 1

IMF cuts growth forecast for UK for 2011 and 2012

 

The International Monetary Fund has cut its growth forecasts for the UK, in a report warning that the global economy is in a "dangerous new phase". UK gross domestic product is predicted to grow 1.1% in 2011, down from the 1.5% forecast in the IMF's previous World Economic Outlook report in June. The growth forecast for 2012 has been slashed from 2.3% to 1.6%. Foreign Secretary William Hague said the UK had the "discipline and determination" to tackle its deficit. But shadow chancellor Ed Balls called them "deeply concerning forecasts for both the UK and world economy". Independent economists are currently forecasting average UK growth of 1.3% in 2011, slower than the IMF, and 2% in 2012, ahead of the IMF figure. The IMF's UK forecast for 2011 falls behind projections for Germany, France, the US and Canada. Germany is forecast to grow 2.7% in 2011 while France is expected to show 1.7% growth. The US should advance 1.5% and Canada 2.1%. However, UK growth in 2012 should surpass both Germany and France, whose forecasts have been cut to 1.3% and 1.4% respectively. A spokesman for the Treasury said the Government remains committed to its deficit cutting plan. He said: "It is welcome that the IMF have forecast that the UK will grow more strongly than Germany, France and the euro-zone next year. "But it is clear that the UK is not immune to what is going on in our biggest export markets, with every major economy seeing lower forecasts for growth this year and next. "The Government remains committed to implementing the deficit reduction plan which has delivered stability, a policy stance that Christine Lagarde described as 'appropriate' earlier this month." Mrs Lagarde, head of the IMF, said the UK's budget deficit stance remained "appropriate" but "the heightened risk" meant a need for a "heightened readiness to respond".

Debt Crisis Infects Companies via Bank Loan Costs

 

Banks in Spain and Italy are curbing loans and charging customers more as aftershocks from the sovereign debt crisis drive their own borrowing cost higher. “They can’t lend what they don’t have, I suppose,” said Francesc Elias, the owner of Bomba Elias, a pumps and filters maker near Barcelona, which shelved a 100,000-euro ($144,000) plan to open a Bahrain office when it couldn’t get an affordable bank loan. “The banks are very clever about finding new ways to charge us more.” Spanish and Italian government bond yields surged to euro- era records this quarter as Greece struggled to avoid default, driving the cost of insuring against nonpayment by the region’s banks to a record and making it harder for them to sell bonds. Spain pays 5.35 percent for 10-year money, up from an average of 4.07 percent in the first half of 2010, while Italy pays 5.65 percent compared with a 4.05 percent average last year. As a result, banks such as Banco Santander SA, Spain’s biggest lender, are passing higher funding costs on to their customers. Santander’s return on Spanish loans rose to 3.63 percent in June from 3.37 percent in December, as the yield it pays on deposits fell to 1.32 percent from 1.54 percent. UniCredit SpA, Italy’s biggest lender, said on Aug. 3 it’s being more selective about who it lends to and levying higher rates. One out of three companies asking for credit in the second quarter period didn’t get it or obtained less than they asked for, according to Confcommercio, an Italian retailers’ lobby group. ‘Increasingly Stringent’ “The cost of financing our current activities has increased significantly,” said Riccardo Illy, chairman of Italian coffee maker Gruppo Illy SpA. “We don’t have any problems accessing credit because we’re large enough, but we know many businesses that are having trouble because banks’ requirements have become increasingly stringent.” Spanish banks including Santander and Bankia SA are shrinking their loan books after being pummeled by a collapse in credit demand for real-estate and surging loan defaults. Santander’s Spanish lending shrank an annual 7 percent through June, mirroring a trend in the Bank of Spain’s data that show a 1.9 percent annual drop in lending to companies and individuals. Lending at Bankia, the third-biggest lender formed from a merger of seven savings banks, was down 2.3 percent from December. The average interest rate on new company loans of as much as 1 million euros rose to 4.70 percent in July from 4.57 percent in June and 3.88 percent in December, according to the Bank of Spain. Companies took out 15.9 billion euros of those loans in July, down from 18.7 billion euros in the same month a year ago and 39.2 billion euros in July 2007, according to the central bank. ‘The Bottom Line’ “In our case, it’s not so much the issue of access to credit that’s the problem, it’s the fact that it costs more,” said Luis Zapatero, chairman of Bodegas Riojanas, a Spanish winemaker, which needs to finance putting wine aside to create reserve vintages that may not go on sale until several years after bottling. “Our financial costs have increased 15 percent and that goes straight to the bottom line.” Banks face a dilemma when trying to pass on increased funding costs in full because they risk driving more borrowers into default, said Barclays Capital’s Pascual. Bad loans in the Spanish banking system are near 7 percent of total lending, the highest since 1995. Increased Caution “Banks are more cautious in giving long-term loans because it has become more difficult to transfer increasing funding costs to customers,” said Giovanni Bossi, chief executive officer of Banca Ifis SpA, an Italian bank specializing in short-term loans to companies. As lending slides in Spain and banks struggle to finance themselves, the outlook for growth is worsening, said Antonio Ramirez, an analyst at Keefe Bruyette & Woods in London. Prime Minister Jose Luis Rodriguez Zapatero said Sept. 14 that Spain might miss its 1.3 percent growth target this year because of the “situation of financial tension and economic uncertainty, mainly because of Greece.” Banks, meantime, are struggling to sell bonds. The last benchmark-sized issue of 1 billion euros or more of debt by a Spanish bank was a sale of public-sector covered bonds by Santander in June. UniCredit paid a record spread for Italian covered bonds when it raised 1 billion euros from a sale of 10- year notes that yielded 215 basis points more than the benchmark mid-swap rate. ‘Negative Feedback Loop’ “It’s the negative feedback loop between what’s happening to the sovereign and the effect on banks and the economy,” said Antonio Garcia Pascual, chief southern European economist at Barclays Capital in London. “To a large extent, the problems facing Spanish lenders also apply to Italy.” As financing costs rise in Italy, analysts have started revising down their growth estimates for that country. Nomura International Plc economists revised their Italian gross domestic product growth estimate for 2012 last month to 0.5 percent from 0.8 percent previously. “The increased financial costs will become more evident in the dynamics of the economy,” said Giada Giani, an economist at Citigroup Inc. in London. “I definitely think that the deterioration of financial conditions is a key factor in the macro-economic picture.” A survey by Spain’s national statistics institute published in May showed that one in every four companies that sought loans in 2010 failed in the attempt, compared with 10 percent in 2007. Half of the companies surveyed said they’d been able to line up the credit needed, compared with 80 percent in 2007, according to the survey. Meanwhile, Spanish banks are also demanding higher fees from customers, Bank of Spain data show. The average six-month charge for a retail customer current account jumped 15 percent to 25.80 euros at the end of August from 22.36 euros in December, according to the regulator. “There’s a double effect because commissions have also increased dramatically,” said Elias, the owner of the pumps and filter maker, who has cut his workforce to 12 from 20 in the past year. “It affects any kind of investment plan.”