THE EXECUTIVE at the centre of the split capital investment trust scandal yesterday quit as a direc...
THE EXECUTIVE at the centre of the split capital investment trust scandal yesterday quit as a director of Aberdeen Asset Management as the company's board held crisis talks over a rescue strategy, says the Times.
Chris Fishwick, who oversaw the operation of Aberdeen's split trusts business, the biggest in the industry, will not formally leave the company until the end of the year, when he is thought likely to take a payoff of more than £400,000.
He is also entitled to a £1.4m bonus payment next year. The bonus was due this year, but was delayed because of the disastrous performance of a number of Aberdeen's trusts, which has caused private investors losses running into millions of pounds.
GROWING fears over a potential banking crisis in Germany have caused the high yield bond market to dry up in the past week, pushing many issues off course and sending risk premiums to their highest levels, says the Telegraph.
High yield, or junk, bonds rated BBB minus or below are used as the easiest form of credit raised by companies after bank debt. A slew of venture capital deals have hit turbulence around the world as the junk bonds used to finance them have run into difficulties.
Among those affected are a Eu175m bond to be issued to finance the purchase of Brake Brothers food group by Clayton Dubilier & Rice. The issue was pulled 10 days ago because the high yield market has been in turmoil.
Andrew Mohl, new chief executive of Australia's AMP, yesterday cast doubt over 1,000 British jobs and waded into a major row with the Financial Services Authority about the solvency of British life insurers, says the Daily Telegraph.
Mohl said Pearl Assurance's salesforce of 700 advisers and 300 "second tier" employees cannot continue in the medium term "in its current modus operandi". He also infuriated the FSA by alleging that a dozen life funds have breached Britain's solvency regulations.
The FSA took the unprecedented step last month of publicly declaring that Britain's 20 largest life insurers were able to withstand the plunging stock markets that have depleted their capital.
Barely 10 days ago, John Tiner, the FSA's consumer, investments and insurance head, said that no other major firms other than Pearl were operating below the regulator's solvency margins.
A LEADING member of the Bank of England's monetary policy committee yesterday washed her hands of the housing boom, and said it was not the Bank's job to calm soaring house prices, according to the Telegraph.
Kate Barker said: "There is the question of whether it is the task of monetary policy to protect individuals from the consequences of irrational markets' behaviour. It would not be possible to direct our attention to specific sectors or asset prices without running other risks."
There has been a fierce debate on the MPC and among economists about whether the Bank of England should do anything to cool house prices. Low interest rates at 4% have caused prices to rise by more than 25% in some parts of the country. Charles Goodhart, a former member of the MPC, has said the committee should look at house prices.
BANK OF IRELAND on Tuesday unveiled details of its proposed merger with Abbey National which it said would generate pre-tax synergies of €631m, says the FT.
Ireland's largest bank offered Abbey shareholders 90-95 new BoI shares for every 100 Abbey shares they hold as well as 130p in cash, valuing shares in the UK bank at between 770p-805p.
There was no response from Abbey, though the UK bank is widely expected to reject the proposal.
Holding a euro referendum before the next general election - due in 2006 - "would be the biggest mistake of Tony Blair's career", the editor of The Sun, Britain's largest daily newspaper, has warned.
A story in the Financial Times says David Yelland, editor of the mass-market tabloid for the past four years, claimed many of the prime minister's closest advisers also had reservations over the timing of a referendum.
"Tony Blair is feeling very bold and there is part of his make-up that would really like to go for it before the election," said Yelland. "But I think the people around him don't think he should go for it. If he did it is our readers who will decide.
Yelland, who insisted The Sun was not anti-European, signalled that the tabloid would urge its 10m readers to vote against the single currency if Blair sought a popular mandate in the current parliament.
Clarke replacing Balkham
'Deep-dive analysis of client behaviour'
Ways to mitigate April’s increases
The best equity income funds examined