Shares in Barclays soared today on reports the FSA had given the bank's balance sheet a clean bill of health, which will allow it avoid seeking funds from the Government, reports The Times .
The FSA has been stress-testing Barclays' balance sheet over the past week to ensure there are no major holes in its finances. The bank's stock rose by 10.85 per cent to 155.3p in early trading today.
The all-clear means it will not have to return to investors for more capital immediately. It will also strengthen its hand in negotiations with the Treasury over costs for making use of the Government's asset protection scheme to insure its toxic debt.
However, many analysts think that after the investments of two Middle Eastern backers convert to equity in June, the bank may consider making a cash call to shareholders to give it further capital to see it through the next two or three years, when loans are expected to turn sour. Full story...
THE CHANCELLOR OF THE Exchequer Alistair Darling has dismissed fears the failure of a gilt auction this week heralded in a new era of instability for Britain's public finances, The Telegraph reports.
Speaking in Parliament, Darling pointed out that an issue of government bonds on Thursday was fully covered and said: "You always have to be careful about reading too much into one particular auction."
It came after the Debt Management Office admitted on Wednesday that for the first time since 1995 it had failed to sell all the government debt it offered in a conventional auction. The news sent shudders through money markets, since some suspect there may be similar incidents in the future given the scale of debt Britain is set to issue.
However, in comments which will reinforce suspicions that the Treasury is quietly lobbying Number 10 to avoid a big Budget giveaway next month, he insisted that he and the Bank of England Governor Mervyn King were at one in their positions on the outlook for the Government's accounts. Full story...
THE OBAMA ADMINISTRATION is promising to "rewrite the rules of the game" for the finance industry, with a clampdown on unfettered trading, new oversight of hedge funds and additional powers to shut down large firms that threaten to destabilise the global economy, writes The Independent.
Tim Geithner, the US Treasury Secretary, yesterday published the outline of a plan to reform financial regulation, tightening the government's grip on an industry whose excesses are blamed for the credit crisis.
But Wall Street lobbyists and Republican leaders immediately began massing their forces for a battle over the proposals, promising at least to slow down the push for more federal involvement.
The plan, Mr Geithner said, was a once-in-a-lifetime shot at rebuilding a system which, under current rules, "has proved too unstable and fragile, subject to significant crises every few years, periodic booms in real estate markets and in credit, followed by busts and contraction". Full story...
WHITE, BLUE-EYED BANKERS are entirely to blame for the world financial crisis that has ended up hitting black and indigenous people disproportionately, the president of Brazil declared.
According to The Guardian, in an outspoken intervention as Gordon Brown stood alongside him, Luiz Inacio "Lula" da Silva pledged to make next week's G20 summit "spicy" as he accused the rich of forcing the poor into greater hardship.
"This crisis was caused by no black man or woman or by no indigenous person or by no poor person," Lula said after talks with the prime minister in Brasilia to discuss next week's G20 summit in London.
"This crisis was fostered and boosted by irrational behaviour of some people that are white, blue-eyed. Before the crisis they looked like they knew everything about economics, and they have demonstrated they know nothing about economics."
Challenged about his claims, Lula responded: "I only record what I see in the press. I am not acquainted with a single black banker." Full story...IFAonline
Despite improved risk appetite
FOS award limit increase
Relates to 136 million transaction reports
Ceremony will take place 13 November