The City of London regulator is poised to suspend a series of rules after complaints from investment...
The City of London regulator is poised to suspend a series of rules after complaints from investment banks that they would cost millions of pounds to implement and achieve nothing, reports this morning's Financial Times.
The complex rules were brought in at the start of December by the Financial Services Authority when the nine separate rulebooks of the regulator's precursors were combined into one 18 inch-thick tome.
But differences in wording between the original sets of rules have led to warnings from investment banks that expensive changes to their computer systems would be required.
As a result, the FSA is to offer a waiver of about 30 rules to any company which wants it, leaving them covered by the old rules. The watchdog - which has never offered a mass waiver before - will now review the problematic rules.
The biggest change to be put on hold is the investment banks' compliance with the "polarisation" rules which force financial advisers to be either independent or tied to selling a single company's products. The FSA said these rules would not be applied to investment banks at least until the shake-up of polarisation is finished next summer.
The Lord Mayor of London will tonight urge City regulators to steer clear of a post- Enron clampdown, arguing that the financial system is as good as ever at exposing cheats. In a speech at the Mansion House dinner for merchants and City bankers, Michael Oliver will warn that a regulatory backlash would be a "fatal error", says the Times.
He will claim that the scandals plaguing Wall Street prove that the financial system is capable of policing itself: "What this year really shows . . . is that the competitive market system works. An Enron, a Tyco or an Andersen may cease to operate. But the market sends its business elsewhere. The system didn't fail. It successfully exposed the cheats and those who turned a blind eye."
The dinner will be attended by Gordon Brown, the Chancellor, Sir Howard Davies, chairman of the Financial Services Authority (FSA), and Sir Edward George, Governor of the Bank of England.
ISLE of Man government proposals to slash the rate of business tax on the island to zero have been unveiled by treasury minister Allan Bell, reports the Scotsman.
Bell said the move was designed to attract more businesses to the island after the departure of several companies which had "outsourced" their jobs to lower-pay economies.
He added the government has received preliminary approval for its plans from Whitehall, and he does not expect objections from Brussels.
A spokesman said: "The EU can't really have any objection, because their 'Code of Conduct' on tax regimes calls for exemptions to be abolished, and that's what we're effectively doing." But he added that financial services firms will be asked to pay a tax rate of 10%.
Supporters of European monetary union yesterday seized on the pound's sharp fall against the euro to claim that Britain was within reach of a referendum - and membership of the euro, suggests the Daily Telegraph.
They said the exchange rate between the pound and the euro was fast approaching the rate at which the economy - and British exporters - could withstand the shock of joining. Sterling closed yesterday just under 65p per euro, less than two pence away from the 67p rate deemed by some experts as the Government's target for membership.
Until a few weeks ago the strength of the pound, which stood at 61p per euro in April, was considered an obstacle to joining because it would make British goods more expensive in the eurozone.
Deutsche Bank is poised to axe about 300 staff from its Wall Street offices, equivalent to 15% of its investment banking staff in the United States, continues the Times.
Deutsche has already announced plans to shed more than 9,000 jobs in an attempt to slice €2 billion (£1.3 billion) off the bank's cost base by next year. The latest cuts are likely to target non-performing businesses in Deutsche's US investment banking unit, such as its telecoms and Latin American operations.
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