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Friday Papers: UK banks face up to £50bn shortfall

Friday Papers: UK banks face up to £50bn shortfall

Top stories

  • Financial Times: British banks will have to raise £20-£50 billion of new capital or dramatically restructure their businesses after the Bank of England made it clear it did not trust the way they value their books.
  • Financial Times: John Boehner, the Republican speaker of the House of Representatives, warned that there was a “real danger” of the U.S. economy falling over the fiscal cliff as he lamented “no substantive progress” in the past two weeks of talks with the White House.
  • The Daily Telegraph: Britain's security industry is in store for a potential £1 billion boost as a result of a government-to-government agreement between the UK and Kuwait.
  • Daily Mail: Lending by state-backed Royal Bank of Scotland and Lloyds has slumped by £117 billion in less than three years, according to figures from the Bank of England.
  • Financial Times: Steven Cohen, the founder of SAC Capital, said his hedge fund sold $700 million of stocks at the centre of an insider trading investigation because one of his managers said he was “no longer comfortable” with the position, sources said.
  • Financial Times: Rio Tinto is aiming to reduce costs by more than $5 billion over the next two years and lower spending on exploration even though the world’s second-biggest iron producer is “guardedly” optimistic on China’s economic prospects.
  • The Daily Telegraph: Oil will probably be spilt by companies drilling in the Arctic, Shell’s executive in charge of the company’s Alaskan operations has admitted as environmental campaigners oppose the drilling.
  • Financial Times: Gold Fields, the world’s fourth-largest gold producer, said on Thursday it planned to spin off two of its biggest South African assets into a new company as it restructures its business.
  • Daily Mail: Miner First Quantum said it was ‘surprised and disappointed’ after a £3 billion takeover bid for Inmet Mining was rejected.
  • The Daily Telegraph: Royal Bank of Scotland could be forced to explore the sale of businesses considered "core" to its operations after the Bank of England increased the pressure on lenders to raise new capital.
  • Financial Times: James Gorman, Morgan Stanley’s chief executive, wants to use the bank’s excess capital to boost returns for the company’s “long suffering” shareholders.
  • The Daily Telegraph: Facebook could now develop its own games for its platform as part of a new agreement reached with Zynga, the largest publisher of games on Facebook.
  • Financial Times: Microsoft is planning to ape arch-rival Apple by releasing a new version of its Windows operating system every year, as it repositions its core product for the mobile computing revolution.
  • The Guardian: Groupon boss Andrew Mason appears to have survived a fractious board meeting held to discuss his fate at the troubled daily deal website.
  • The Daily Telegraph: Deloitte and KPMG disregarded numerous "red flags" in Autonomy's accounts that led to Hewlett-Packard "grossly" overpaying when it bought the British company, according to a legal claim.
  • The Daily Telegraph: Irish Bank Resolution Corporation, formerly Anglo Irish Bank, has launched legal action against its ex-auditors Ernst & Young, who served the bank in the years running up to a €22.9 billion state bail-out.

Business and economics

  • Financial Times: The US economy grew at a 2.7% annual rate in the July to September quarter, compared with 2% initially estimated last month, data from the commerce department showed.
  • The Guardian: The EU's general court has blocked an attempt to force the European Central Bank to release files showing how Greece used derivatives to hide its debt in the run-up to the financial crisis.
  • Financial Times: The horse-trading over France’s upcoming bank reform law has intensified after a draft text was put out to a consultation committee this week before a final version is presented to cabinet ministers in just under three weeks’ time.
  • The Guardian: The United Nations has laid the finger of blame for food price rises on trading in agricultural commodities, but says it is the trade in futures contracts rather than the actual food stocks that causes the most damage.
  • Financial Times: UPS is promising to sell assets across Europe and guarantee access to its air freight network in an attempt to assuage Brussels’ concerns about its takeover of TNT Express.
  • The Independent: Sports car maker Aston Martin yesterday admitted it is in "advanced" talks with potential investors, but its current owners have ruled out a sale of the business.
  • Financial Times: Time Warner named Jeff Zucker the new president of CNN Worldwide, tapping a veteran television news executive to reinvent the international cable news enterprise.
  • Financial Times: Virgin Media Business has won the UK’s first contract to provide citywide wireless outside London under the British government’s plans to create a series of “super connected” urban hubs.
  • The Independent: Fast-growing mobile payments company, Monitise, plans to tap the London stock market for up to £100 million in fresh funds in its seventh and largest fundraising.
  • Daily Mail: Piano maker Steinway & Sons is being investigated by Swiss authorities over allegations of illegal price fixing.
  • The Guardian: The BT Tower, one of London's best-known landmarks, is to be given a new lease of life as a setting for the telecoms company's sports channels when they go live next summer.
  • Financial Times: LivingSocial has laid off nearly a fifth of its US workforce, following a slow third quarter for the daily deals industry.
  • The Daily Telegraph: Direct Line Group, the insurer spun out of Royal Bank of Scotland, said it could lose another 236 jobs as part of steps to deliver £100 million of cost cuts by the end of 2014.
  • The Guardian: Currys and PC World owner, Dixons Retail, said it expects to benefit from the demise of Comet as its UK operations returned a profit for the first time in five years.

Share tips, comment and bids

  • Financial Times: China’s State Grid, the world’s largest utility by assets, has purchased a 41% stake in ElectraNet, marking the first time a Chinese utility has invested in the Australian grid.
  • The Daily Telegraph: Millionaire businessman David Rowland is in the running to take over The Independent and The Independent on Sunday, it has emerged.
  • The Guardian (Comment): The government's U-turn on payday lending shows what ordinary citizens can achieve when we get organised.
  • The Guardian (Comment): The energy bill, which will frame the investment climate for the next several decades, will fire up the renewables industry.
  • The Daily Telegraph (Comment): Bernie Madoff is a reminder that a strong SEC is worth fighting for.
  • The Daily Telegraph (Comment): Higher interest rates would help bring normality back to the banks.
  • Daily Mail (Comment – Alex Brummer): Paul Tucker's luck hasn't run out; his experience would make him an ideal candidate for a big international post.
  • Financial Times (Lex): Siemens: shareholder rumblings have finally injected a sense of urgency into the German engineering company.
  • Financial Times (Lex): Research In Motion: shares have rallied nearly 90% to about $12, from their lows of just two months ago, as next generation of phones approaches.
  • Financial Times (Lex): Puerto Rico bonds: the island’s ‘triple tax free’ municipal bonds have been so popular with other US states that the threat of a downgrade has sounded alarm bells.
  • Financial Times (Lex): Australian banks: they are among the few that can deliver 15 per cent return on equity – but that does not make them exciting, or particularly good value.

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