Monday Papers: Lloyds has most risky loans; 'Economic growth must slow'

Financial Times

* Global economic growth must slow to curb inflationary pressure around the world, the Bank for International Settlements has warned, saying that there was little or no slack left for rapid non-inflationary expansion; central banks need to begin raising interest rates quickly to ensure that an inflationary spiral does not emerge, the BIS said in its annual report.

* Lloyds Banking Group’s exposure to the riskiest kind of mortgages is more than double that of any of its top five rivals, data published last week by the Bank of England showed. The state-backed bank has more than a quarter of its its mortgages lent out at 90% loan to value or above. By contrast RBS and Santander have just 12% of these loans.

* Central bankers and regulators have agreed to impose an extra capital charge of 1% to 2.5% of risk-adjusted assets on the largest banks in a bid to protect them from the big losses that could trigger another financial meltdown.

* The former HSBC chairman Stephen Green broke his silence to urge the banks to honour their pledge to increase lending to small and medium-sized businesses.

* British Sky Broadcasting’s earnings are set to double in five years.

* The European Union’s executive body is set to propose expanding its revenue-raising powers – including the introduction of EU-wide taxes – in its budget to be unveiled this week.

* Investors in the US government bond market could face losses of up to $100 billion if the largest economy loses its triple A rating, according to a research arm of McGraw-Hill, the parent of Standard & Poor’s.

* José Graziano da Silva, the father of Brazil’s much-praised Zero Hunger programme, has been elected the next head of the UN’s Food and Agriculture Organisation.

* Banca Popolare di Milano shareholders approve a €1.2 billion capital increase demanded by the central bank but denied its request for a governance overhaul.

* High-tech manufacturing businesses are in a position to expand, but economic concerns and a lack of funds or skilled staff are deterring many from doing so, says General Electric.

* Mid-sized hedge funds experienced the largest net asset growth in 2010, at 37%, according to a Citigroup survey.