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Thursday Papers: Banks snap up €489bn in ECB loan offer

Thursday Papers: Banks snap up €489bn in ECB loan offer

Top stories

  • Financial Times: The European Central Bank has stepped up its response to the eurozone crisis by providing €489 billion in unprecedented three-year loans to more than 500 banks across the region.
  • The Guardian: The ratings agency Fitch has warned that it may downgrade America's triple-A credit rating unless action was taken to reduce federal debt.
  • The Daily Telegraph: Business is poised to deal the British chancellor a devastating blow over his hopes for growth after a survey from the Bank of England showed corporate spending will account for 0.6% of the 0.7% growth predicted for 2012.
  • Daily Mail: A fresh round of money printing is on the cards for early next year, the minutes of the Bank of England's latest rate-setting meeting reveal; the £275billion quantitative easing programme was put on hold by the central bank's Monetary Policy Committee earlier this month.
  • The Guardian: British public sector borrowing, excluding financial interventions such as bank bailouts, fell to £18.1 billion in November, which is £2.3 billion lower than the previous year, as Chancellor George Osborne inched closer to meeting his deficit reduction targets despite mounting fears over the strength of the economy.

Business and economics

  • Financial Times: Airlines based outside the European Union must abide by EU legislation requiring them to pay for their carbon pollution, Europe’s highest court has ruled.
  • Financial Times: Fourth-quarter M&A volumes fell 32% to $375.3 billion from the previous three months, led by a 41% decline in Europe; the drop, combined with a pullback in equity issuance amid turbulent markets, contributed to an 8% fall in investment banking fees to $72.6 billion for 2011, against 2010.
  • Financial Times: Research from Evolution Securities estimates that primary issuance of retail corporate bonds will exceed £3 billion in 2012 – building on 2011’s “watershed year”, in which just over £1 billion-worth of bonds were offered via brokers using the London Stock Exchange’s Order Book for Retail Bonds.
  • Financial Times: Yahoo is considering a complex plan to shed a large part of its Asian investments that could put a value of as much as $17 billion on the holdings, according to people familiar with the proposal.
  • The Daily Telegraph: Bank of England's Monetary Policy Committee voted unanimously in favour of a Bank Rate freeze; the Bank could keep interest rates down at 0.50% through to 2014.
  • Financial Times: Bank of America will pay $335 million to resolve US allegations that the lender discriminated against African-American and Hispanic borrowers; from 2004 to 2008, the bank allegedly overcharged more than 200,000 minority borrowers for home loans compared with similar white borrowers.
  • The Daily Telegraph: Royal Dutch Shell has been forced to shut its 200,000 barrel-a-day Bonga oil field off the coast of Nigeria after up to 40,000 barrels of crude oil leaked into the ocean.
  • The Independent: The British government has fired the starting gun on its £2 billion train-franchising programme, asking operators to bid to run the Thameslink, Great Western and Essex Thameside routes for up to 15 years; the Thameslink contract from Bedford to Luton via St Pancras is at present operated by FirstGroup.
  • Financial Times: Ranbaxy of India has set aside $500 million to cover liabilities to settle potential claims in an extended legal dispute in the US, as the generic drugmaker seeks to draw a line under years of problems in its most important market.
  • Daily Mail: AstraZeneca on Wednesday unveiled a global deal to develop a cancer treatment with Hutchison China MediTech and bought options on a potential new class of diabetes pills from Astellas Pharma.
  • Financial Times: Mitsui Fudosan, the Japanese property company, has made a move into the City of London office market with plans to build a £100 million development close to Tower Bridge.
  • Financial Times: Barratts Priceless, the struggling footwear retailer, will close 18 stores before Christmas with the loss of 170 jobs as its administrator battles to find a buyer for the chain.
  • The Independent: Private security firm G4S has won a £200 million contract to provide "middle and back office functions" for Lincolnshire Police.
  • Financial Times: Seymour Pierce, the UK investment bank, has been fined £400,000 by Aim for breaching rules in its work on behalf of two clients, neither of which were named; this is the most severe penalty to date issued to a nominated adviser by London’s secondary market.
  • The Daily Telegraph: The price of sacking someone unfairly is to get more costly in the New Year as the maximum payout for unfair dismissal will rise by 5.6% to £72,300, officials have confirmed.
  • Financial Times: National Grid’s subsidiary, NGG, which is responsible for four of the eight networks that deliver gas to UK domestic and business users, has been fined £4.3 million for creating delays in tackling gas escapes last winter.
  • The Guardian: Japanese prosecutors raided the headquarters of Olympus and the home of its former president Wednesday as part of an investigation into the cover-up of massive losses at the camera and medical equipment maker.
  • Financial Times: Research in Motion’s shares rose 10% on the Nasdaq on Wednesday amid a fresh round of reports that potential acquirers, including Amazon, had expressed interest in buying the struggling Canadian maker of BlackBerry smartphones and PlayBook tablet computers.
  • The Independent: Medical pioneers and researchers are set to receive £3 billion over the next five years from the country's largest health research charity, the Wellcome Trust, as it said it expects its investment arm to continue outperforming.
  • Financial Times: TripAdvisor shares fell on the first day of trading on Wednesday, closing with a market value of $3.69 billion compared with the $3.72 billion value of Expedia, the travel booking website.
  • Financial Times: Daniel Mudd, chief executive of Fortress, is to take a leave of absence from the investment company after he was charged with securities fraud in a civil case brought by the US Securities and Exchange Commission related to his previous role at Fannie Mae.
  • The Daily Telegraph: South African tycoon Nathan Kirsh has completed a deal to buy one of London's most distinctive skyscrapers, Tower 42, for £282.5 million.
  • Financial Times: John Duffield, founder of New Star Asset Management, has claimed a right to reply to allegations made in a London employment tribunal last month by Patrick Evershed, a former New Star fund manager, who sued New Star for an unlimited amount in a constructive dismissal and “whistleblowing” claim in November.
  • Daily Mail: Shares in Travelzest, one of Britain’s biggest naturist holiday operators, plunged 25% after Canadian rival Red Label Vacations walked away after making an offer that was described as ‘undervaluing the company’.
  • Financial Times: Solar power companies have won a victory against government cuts to taxpayer subsidies after a High Court judgment that will prompt embarrassment in Westminster.
  • Financial Times: Mulberry has appointed a director from French luxury goods group Hermès to become its chief executive and lead the British group’s expansion into Asia and the US.
  • The Daily Telegraph: Thorntons on Wednesday issued its fifth profit warning in 20 months, as a costly store closure programme saw 180 outlets shut and the high street spending slump bit; the company previously forecast a pre-tax profit of £4.5 million for the full year.

Share tips, comment and bids

  • Financial Times: Credit Suisse has made a first push in its plans to increase earnings from its core private banking operations by agreeing to buy a Japanese division of HSBC, which had about $2.7 billion in client assets under management at the end of October.
  • Financial Times: Tokio Marine is adding to its string of overseas acquisitions with the $2.7 billion purchase of Delphi, a US insurance group, in a deal that gives it an entry into the world’s largest life insurance market; Japan’s largest non-life insurance group is paying a 59% premium to Delphi’s average share price.
  • Financial Times: The US Department of Justice on Wednesday said it would require Exelon, the US power company, to divest three power plants in Maryland before approving its $7.9 billion acquisition of rival Constellation Energy.
  • The Independent: The Scottish clothing group Edinburgh Woollen Mill is among the retailers that will Thursday submit bids to acquire Blacks Leisure, the troubled outdoor specialist which has debts of £36 million.
  • The Daily Telegraph: Beazley has confirmed that it is considering a fresh bid for Hardy Underwriting, the Lloyd's of London insurance group; the news comes more than 12 months after Hardy last rejected a £181 million bid from Beazley.
  • Financial Times (Comment): Oil traders today worry mostly about Iran and its relations with Western countries but Iraq, Iran’s neighbour, could be a negative surprise to watch for as far as oil supply is concerned into the new year.
  • The Daily Telegraph (Comment): Mario Draghi donned his plague suit on Wednesday and urged European banks to "Bring out your dead". But rather than financial corpses it was €489 billion of zombie debt from zombie banks that emerged blinking into the daylight.
  • Financial Times (The Lex Column): Oracle: cause for concern for businesses and investors that have hitched their financial wagons to the fortunes of the world’s largest companies.
  • Financial Times (The Lex Column): Jefferies: the broker-dealer has managed to defy sceptics and escape the perils of guilt by association, but at a price.
  • Financial Times (The Lex Column): Investment banks: after a very bad year for fee income in a rapidly changing environment, the lesson to banks to stark: get real

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