The Treasury came under heavy fire yesterday for allowing Northern Rock to continue to extend 125 per cent mortgages long after the bank was forced to seek Government help, writes The Times.
A National Audit Office report criticised Northern Rock for continuing the use of controversial mortgages, under which customers could borrow up to 25 per cent more than the value of the property they were buying, after the Government rescue.
After the bailout in September 2007, Rock lent a further £800 million to thousands of borrowers through its Together mortgages, many of which have subsequently gone bad, with many more borrowers falling into arrears or being repossessed. Rock finally closed Together to new borrowers in February last year when it was nationalised.
While approving the ultimate decision to nationalise the bank as the best way of protecting taxpayers, the wideranging report criticised the Treasury for a string of other failings going back to 2004.
It accused Mr Brown's then department of being aware of shortcomings in the procedures in place to grapple with a future bank collapse in 2004, but deciding not to make improvements in that area a priority.
SIR FRED GOODWIN HAD BEEN looking forward to enjoying a new luxury jet until just weeks before he was ousted from Royal Bank of Scotland as the bank lurched into nationalisation, The Guardian reports.
RBS confirmed today that it had ordered a new corporate jet from French executive jetmaker Dassault Aviation several years ago, but canned the order last autumn as the financial crisis escalated.
The plane, a Falcon 7X business jet, is a state-of-the-art luxury model which costs up to $50m (£35m). Designed to carry up to 19 passengers, it can fly almost 6,000 nautical miles without having to refuel.
RBS said it had cancelled the order with Dassault as the planemaker blamed the new regime of cost-cutting among financial giants for a drop in profits in 2008.
A FAILURE BY THE G20 SUMMIT on 2 April to tackle the global recession will lead to an even more prolonged downturn, the International Monetary Fund warned yesterday, as it slashed its forecasts for growth, writes The Independent.
The IMF's latest bulletin warned: "Delays in implementing comprehensive polices to stabilise financial conditions would result in a further intensification of negative feedback... leading to an even longer and deeper recession". Stimulus packages would also need to be maintained in 2010, the IMF said.
The fund also issued a stark warning that the collapse of some national economies in central and eastern Europe could still trigger another wave of banking failures.
The IMF's note, prepared for the G20, warns of a sort of domino effect running through the continent via the banking system as problems in nations such as Hungary, Romania, Bulgaria and the Baltic states knock down otherwise relatively healthy advanced economies - including those in Sweden, Austria, Switzerland, Belgium and the Netherlands.
WEAVERING CAPITAL, ON OF LONDON'S oldest hedge funds, was today in the hands of liquidators just a week after it discovered that its flagship fund's main investment was a derivatives trade with an offshore company controlled by its founding chief executive, The Times reports.
PricewaterhouseCoopers, the auditor and consultancy, confirmed this morning that it had been appointed as Weavering Capital's liquidator.
The $637 million fund, set up in 1998, called in PwC this month after discovering a large interest rate swap position at its Macro Fixed Income fund.
It said at the time that it had discovered that the counterparty to the swap contract was "a company controlled by a related party of Weavering".
Weavering was set up by Magnus Peterson, the former head of trading at SEB, the Swedish bank.IFAonline
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