The Financial Services Authority (FSA) may have deliberately misled the committee over Icelandic banks, MPs have claimed, The Telegraph reports.
In a hard-hitting report the Communities and Local Government Committee, which is investigating why local authorities deposited more than £1bn with Icelandic banks, criticised the regulator.
"Answers from the FSA are unhelpful to the point where we wonder whether they might constitute deliberate obfuscation", MPs on the committee claimed. The public criticism is deeply embarrassing for the FSA.
Alongside the criticism of the FSA's evidence, the MPs also accused the regulator of abrogating its responsibilities to regulate treasury management advisers.
"We strongly suspect that the clear answer to our question of what steps the FSA has actually taken to regulate treasury advisers is "none". Given the large sums which are in stake in local authority treasury management, we consider this to be an abrogation of responsibility," wrote the MPs. See story...
West Bromwich Building Society today stepped back from the brink of collapse after announcing a debt-for-equity swap deal with its bondholders, according to The Times.
The building society, which employs 850 staff and has 350,000 savers, said this morning that it had reached a deal with debt holders that would involve the exchange of its subordinated debt, totalling £182.5 million, for a new instrument, profit participating deferred shares (PPDS).
News of the deal, which is due to complete by the end of July, came as West Bromwich brought forward its full-year results from Monday, showing a post-tax loss of £39.3 million, compared to a profit last year of £33.1 million, after £65.2 million of bad debt provisions.
It said that the capital exchange would "materially strengthen the society's core tier 1 capital ratio from 6.8 per cent to 11.6 per cent", adding: "At this level, the society's core tier 1 capital ratio is amongst, we believe, the highest in the sector." Full story...
Homebuyers are facing their first rise in mortgage rates for a year in a move by banks and building societies that could extinguish the nascent recovery in the housing market, The Guardian says.
Nationwide was one of several leading mortgage lenders that today hiked the cost of its most popular deals, with others likely to follow suit in the coming days.
Banks and building societies are increasing the cost of their fixed-rate mortgages, the type of deal that around 80% of homebuyers are opting for at the moment. Nationwide has upped the cost of its fixed-rate deals by up to 0.86%, and state-owned Northern Rock has raised its five-year fixed rates by 0.2%, both with effect from tomorrow.
Ray Boulger at mortgage broker John Charcol said most, and possibly all, of the part-nationalised Lloyds Banking Group - which includes Halifax, Bank of Scotland, Lloyds TSB and Cheltenham & Gloucester - were expected to increase their fixed rates this weekend or on Monday, "in some cases by quite large amounts". Yorkshire Building Society has already hiked the cost of its deals, and Principality Building Society also made changes to its range today. Full story...IFAonline
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