Citywire for Financial Professionals

View the article online at http://citywire.co.uk/money/article/a602532

Saturday Papers: Osborne set to fight for bank bonuses

And the US equities extended losses on Friday after worse-than-expected payrolls data for June.

 
Saturday Papers: Osborne set to fight for bank bonuses

Top stories

  • Financial Times: George Osborne is preparing to fight for the right of British banks to pay big bonuses when he attends a European finance ministers meeting next week.
  • The Guardian: The US economy added just 80,000 new jobs in June, signifying an increasingly stagnant recovery as the unemployment rate remained stuck at 8.2%.
  • Financial Times: US equities extended losses on Friday after worse-than-expected payrolls data for June; the S&P 500 fell 0.9% to 1,355, the Dow Jones declined 1% to 12,772 and the Nasdaq lost 1.3% to 2,937.
  • The Daily Telegraph: The International Monetary Fund is poised to downgrade its forecasts for global growth because of a "more worrisome" outlook, according to Christine Lagarde.
  • The Daily Telegraph: Spanish and Italian borrowing costs soared back into the danger zone as traders bet that the policy action by central banks was inadequate defence against the continued political and financial chaos in the eurozone.
  • The Daily Telegraph: Britain's banks do not have enough capital to withstand an escalation in the eurozone crisis, the Bank of England has warned.
  • The Independent: The Government has chosen Ian McCafferty, the chief economic adviser of the CBI, the employers' body, to replace Adam Posen on the Bank of England's Monetary Policy Committee.
  • The Guardian: Former Conservative party treasurer Michael Spencer could become the next target of the shareholder spring next week after a leading investor body issued a warning about the pay policies of the Icap broking business he founded and runs.

Business and economics

  • Financial Times: JP Morgan Chase, BlackRock and Goldman Sachs have restricted access to some money market funds after the European Central Bank cut interest rates to historic lows.
  • The Daily Telegraph: One of the world's biggest tobacco companies, JTI, has hit out at government plans to ban branded cigarette packaging, claiming a consultation on the proposals is "fundamentally flawed".
  • Financial Times: SkyePharma was among the week’s top small-cap performers after the group’s asthma treatment Flutiform received a long-awaited green light from the European Commission.
  • Financial Times: Peugeot’s shares dropped nearly 8% on Friday after the company said that it had sold 1.62 million new vehicles in the first half, 13% fewer than a year ago.
  • The Daily Telegraph: The Serious Fraud Office has formally opened an investigation on the Libor scandal that will probe individuals and banks for evidence of criminal activity.
  • Financial Times: Yahoo has settled the patent battle with Facebook that its ousted chief executive Scott Thompson began in March, but without any of the direct financial reward he had hoped for.
  • The Daily Telegraph: Centrica has criticised conflicting Government policies after ministers blocked plans for a wind farm to power 400,000 homes because of concerns about seabirds.
  • Daily Mail: Building societies could see funding rules relaxed in order to boost their appeal as an alternative to High Street banks, under proposals revealed by the Government today.
  • The Guardian: Future of Barclays Capital in doubt as Libor-setting scandal could force bank to become more risk-averse, say analysts.
  • The Daily Telegraph: Thomas Cook investors were dealt a blow after Standard & Poor's downgraded the holiday company's credit rating and warned that it could have to push through a debt restructuring given its "unsustainable" capital position.
  • Daily Express: Booming sales of its Galaxy smartphone have dialled up record profits for Samsung Electronics and put enormous pressure on rival Apple.
  • Daily Mail: Sterling rose by nearly half a cent to €1.2606 after a lacklustre U.S. jobs report stoked worries of a global slowdown.
  • Financial Times: Aga Rangemaster, the maker of the iconic cast-iron cookers, has delivered a profit warning ahead of its interim results.
  • Financial Times: Banks and building societies including Nationwide, the Co-operative Group and Metro said current account openings or inquiries had risen at least 30% this week compared to last week.
  • Financial Times: US natural gas prices hit a six-month high, boosted by demand from the heatwave that has hit North America.

Share tips, comment and bids

  • The Guardian: Global miner Anglo American has secured the final regulatory approval for its $5.1 billion acquisition of the Oppenheimer family's stake in diamond producer De Beers, paving the way for the deal to close within the coming months.
  • The Independent: AAR, the consortium of Russian billionaires that owns half the TNK-BP oil joint venture, said it was preparing to bid for a further 25% stake after BP put its 50% holding up for sale last month.
  • Financial Times: Gerard Lopez and Eric Lux, the owners of the Lotus F1 racing team, are branching into the hazardous financial world of football by setting up an investment vehicle to spend as much as €500 million on “the beautiful game”.
  • The Daily Telegraph: Theo Paphitis, the owner of the stationery retailer Ryman and star of Dragons' Den, is on the brink of buying the ironmonger Robert Dyas for about £10 million.
  • Financial Times: Publicis took full control of Bartle Bogle Hegarty, a 30 year-old agency responsible for memorable campaigns for Levi’s, Audi, Johnnie Walker and others.
  • Daily Express: Aviva is kicking off a major disposal programme by off-loading part of its stake in financial services group Delta Lloyd for £318 million.
  • The Guardian: News International has paid £30 million to terminate its printing contract with Johnston Press.
  • Daily Express: Premier Foods is offloading ethnic flour brand Elephant Atta to Primark owner Associated British Foods for £34 million.
  • The Independent: Lloyds bank has bowed to pressure from the judiciary and politicians and made an £8 million payment to the distress fund set up after more than 116,000 Christmas savers lost their money when Farepak collapsed in 2006.
  • Financial Times: Moleskine, the Italian maker of the eponymous notebooks, will test a volatile market as it seeks to turn rapid growth and high profit margins into an initial public offering in the fourth quarter.
  • The Guardian (Comment): The private sector wants a smaller state, but refuses to accept that the only way to do this is to take on some responsibility itself.
  • The Guardian (Comment): With a risk of rising unemployment, the Fed may launch QE3. But where's the outrage that so little's done to cut joblessness?
  • Daily Mail (Comment): Until the Barclays disclosures of this week, the Bank's deputy governor Paul Tucker was favourite to succeed Sir Mervyn King. Now Tucker must face the Treasury Select Committee over his role in the Libor scandal.
  • Daily Mail (Comment): It is a shame for Barclays that John McFarlane, Aviva's new chairman, is fully occupied with sorting out the insurer. The Scot's approach could not be a greater contrast with the puerile wriggling of Bob Diamond.
  • Financial Times (Lex): With the UK experiencing a very wet summer, retailers have been forced to discount. Next week’s results will see who is coping best with the adverse weather.
  • Financial Times (Lex): Since the end of its nineteenth summit, the eurozone has been in a good mood, but there are still many pressing problems to solve.
  • Financial Times (Lex): Samsung: despite a record operating profit in the second quarter at the world’s biggest technology group, investors dragged down the share price.

4 comments so far. Why not have your say?

Alan Tonks

Jul 07, 2012 at 13:59

“George Osborne is preparing to fight for the right of British banks to pay big bonuses when he attends a European finance ministers meeting next week. “

Well that’s brilliant, he obviously wants to be in banking when he gives up his part time job of totally ruining the economy.

It really beggars belief that a so-called Chancellor of the Exchequer, in is jolly to the European “finance ministers” meeting, would fight to give bankers big bonuses.

I do believe the Chancellor thinks that his funny money will pay the bankers, not the banks.

This is fantasyland Britain, where reality doesn’t exist apart from trash television programming.

report this

LouisV-W4

Jul 07, 2012 at 14:22

I hate the bonus and reward for failure culture (not just bankers, but also useless private & public sector, quango and union bosses & footballers) just as much as anyone. Throughout my career, I have been reasonably well rewarded if I did well, but the risk has always been that I could lose my job if I didn't, and I would'nt get a big fat golden goodbye.

So, before jumping to conclusions based on media and Labour hype, understand what the EU is asking for and why.

If they cap bonuses at 1:1 with basic pay, then we will see the banks simply increase basic salaries, which will drive up fixed costs, and there will be nothing the EU or Government can do about it.

"Earlier this year it emerged that global investment banks had increased fixed salaries by 37% over four years in order to retain staff in the face of falling bonuses."

I would rather the Government enforce bonuses tied to longer term company performance rather than the short term 'casino' culture that has brought the world to its knees. Also, I want the Government to strengthen the ability of shareholders to govern pay and bonuses, although that's unlikely to work when the majority of shares tend to be held by institutions, which is rather like turkeys voting for Christmas!

report this

mo khan

Jul 07, 2012 at 20:10

Which Banker has performed well, in which bank.?

Will the Chancellor include as reward, for incompetence and failed governance damage to economy, and lively hoods, acts of civil crime, with jail penalties for Bankers as a bonuses.

With out attention to Bank Sector, confidence retrieval, he can say good bye to any signs for growth , a downward.trend at best stagnant.

Where are Bankers incompetence, penalty bonuses.?

report this

Anonymous 1 needed this 'off the record'

Jul 07, 2012 at 21:22

Other consideration are keeping up with the Joneses on executive pay. My CEO is better than yours because he is higher paid. But in reality is he, or occasionally she ?

The musical chairs department in which politicians walk into top jobs, and in which people in top jobs finance the Conservative Party funds, who in turn on winning the election allow/support increases in top pay and returns. Talk about an inflationary spiral. Nothing to do with greed is good for you.

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

The Citywire guide to investment trusts

In association with Aberdeen Asset Management

Fund managers from Standard Life Investments quizzed on investment trusts


What can SLI bring to the table for those who want to put their money into investment trusts?

Today's articles

Tools from Citywire Money

From the Forums

+ Start a new discussion

Weekly email from The Lolly

Get simple, easy ways to make more from your money. Just enter your email address below

An error occured while subscribing your email. Please try again later.

Thank you for registering for your weekly newsletter from The Lolly.

Keep an eye out for us in your inbox, and please add noreply@emails.citywire.co.uk to your safe senders list so we don't get junked.

Sorry, this link is not
quite ready yet