The administrators to Lehman Brothers in the UK are close to selling a £900m portfolio of sub-prime mortgages, for a price of about 50p in the pound, The Telegraph reports.
Lehman was one of the largest players in the high-risk end of the mortgage market in the UK.
PricewaterhouseCoopers, which is handling the administration of Lehman in London, set up an auction for one bundle of sub-prime loans as well as other assets including its Capstone servicing business, which employs 450 people.
Second round bids for the portfolio must be tabled before the end of January. Several private equity groups and vulture funds are understood to be interested, including America's Apollo and Blackstone.
THE IRISH BANKING SYSTEM was the latest to receive state assistance over the weekend as the government in Dublin agreed to spend as much as €7bn of taxpayers' money to rescue the country's three biggest banks, The Independent reports.
The move will mean that Anglo Irish Bank, which was caught up in a loans scandal last week, has in effect been nationalised.
Anglo Irish will receive €1bn in return for the government gaining an 80 per cent stake. Allied Irish Bank (AIB) and Bank of Ireland will each get €2bn. Additionally, private investors will be invited to buy €1bn worth of new shares to be issued by AIB and Bank of Ireland, which will be bought by the government if there is insufficient take-up from funds.
CITY REGULATORS ARE TO SCRUTINISE the operations of Madoff Securities International, the London business controlled and chaired by Bernard Madoff, the man behind the $50 billion (£33 billion) alleged fraud that has sent shockwaves round the financial world, reports The Times.
Liquidators from Grant Thornton were appointed on Friday to conduct a "forensic investigation" into the London firm.
Madoff's London business has been described as a personal trading operation for his family and was 88% owned by Madoff himself.
The firm's £117m of net assets could now be seized by American prosecutors as part of their investigations into the alleged "Ponzi" fraud that has hit banks, hedge funds and individual investors across the globe. Grant Thornton said it would cooperate with the inquiries of the Financial Services Authority (FSA), the City regulator, and the US investigation.
THE HEAD OF THE INTERNATIONAL Monetary Fund backed Gordon Brown's recession strategy yesterday by urging governments to pump more money into their economies or face a worsening downturn, reports The Guardian.
Dominique Strauss-Kahn warned that the measures announced by the G20 nations in Washington last month may not be enough to kick-start the global economy. Strauss-Kahn added that the IMF may next month revise down economic growth forecasts for 2009, which have already been cut from 3% to 2.2%
"Our forecast, already very dark ... will be even darker if not enough fiscal stimulus is implemented," he told BBC Radio 4.
In an implicit backing of the British prime minister's £20bn stimulus plan, Strauss-Kahn said he had reversed his view of state borrowing and believed that increasing government debt was the "less bad solution" when faced with the worst downturn in up to 70 years.
Contact: Scott Sinclair, News Editor, 020 7484 9791 - [email protected]IFAonline
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