Lloyds 'Risks Criminal Action' In Rigging Case

The Bank of England (BoE) governor has warned Lloyds Banking Group that "clearly unlawful" conduct over fee manipulation may amount to criminal behaviour as it was fined more than £200m.

Some £70m of the penalty related to efforts by Lloyds to rig fees payable to the BoE under a taxpayer-backed government programme aimed at supporting banks during the financial crisis.

In a letter dated July 15, Mark Carney told Lloyds chairman Lord Blackwell that attempts to reduce payments under this special liquidity scheme (SLS) were "reprehensible".

Mr Carney criticised attempts to reduce Lloyds' payments to the SLS scheme

Lloyds was fined a total of £218m by UK and US regulators over manipulation of the critical global interest rate Libor benchmark and the repo rate - used to calculate fees due to the BoE for its support.

It has also paid a £7.76m compensation figure to the BoE over the now-defunct SLS.

The UK regulator, the Financial Conduct Authority (FCA), fined Lloyds £105m, while the US Commodity Futures Trading Commission (CFTC) fined Lloyds £62m and the US Department of Justice penalty was £51m.

Lloyds apologised for the "unacceptable" actions of individuals involved in the conduct and said the bank's previously lax operating culture was to blame.

MPs pursued the issue of Libor-fixing with BoE officials in 2012

It said: "The manipulation of submissions covered by the settlements took place between May 2006 and 2009 and the individuals involved have either left the group, been suspended or are subject to disciplinary proceedings."

The CFTC said the "unlawful conduct of Lloyds" undermined the integrity of Libor, which is the basis of trillions of dollars of financial instruments.

The FCA said the SLS manipulation happened between April 2008 and September 2009.

The regulator said more than a dozen individuals at Lloyds, including seven managers, were directly involved in or were aware of, the Libor manipulation.

Barclays was the first bank implicated in rate-fixing of Libor

Lloyds would have been hit by a 30% larger FCA fine if it did not settle at an early stage.

More than £2bn has now been paid by banks globally to regulators over alleged manipulation, including £290m by Barclays and £390m by RBS.

FCA director of enforcement and financial crime Tracey McDermott said: "Colluding to benefit the firms at the expense, ultimately, of the UK taxpayer was unacceptable."

On Friday, Sky News City Editor Mark Kleinman revealed the 25% taxpayer-owned group would seek to clawback bonuses paid to at least 15 former employees implicated in the inter-bank rate scandal.

The BoE said the latest case demonstrated the need for the Fair and Effective Markets Review, launched last month, which aims to restore public confidence in financial markets.

11.46 | 0 komentar | Read More

Bankers Should Be Made To Take 'Moral Oath'

A think tank believes bankers should be expected to swear an oath in which they promise to behave properly, in the same way as doctors.

ResPublica has drawn up a statement that it says people who work at major financial institutions should agree to adhere to.

The oath includes a promise to "prioritise the needs of customers", to "provide a quality of service" and to "confront impropriety".

The call for a code of ethics comes after a series of scandals such as the mis-selling of payment protection insurance, Libor rate rigging, mis-selling of interest swaps to small businesses and even money laundering.

The British Bankers Association says an oath could be part of an answer

ResPublica's full report, Virtuous Banking: Placing ethos and purpose at the heart of banking, is being launched by the chairman of the Banking Standards Review Council, Sir Richard Lambert.

The think tank says it would be up to banking's trade bodies, the British Bankers' Association (BBA), the Building Societies Association and the new Banking Standards Review Council to get the oath adopted and rolled out.

ResPublica director Phillip Blond said: "As countless scandals demonstrate, virtue is distinctly absent from our banking institutions.

"Britain's bankers lack a sense of ethos and the institutions they work for lack a clearly defined social purpose.

"The bankers' oath represents a remarkable opportunity to fulfil their proper moral and economic purpose, and finally place bankers on the road to absolution."

The Hippocratic Oath of doctors, on which the bankers' oath is based, dates back 2,500 years to Greek medical pioneer Hippocrates.

Doctors are traditionally required to take the hippocratic oath before they can practise. If they are found to have broken the oath, they can face consequences.

Banks in Britain employ just under 440,000 staff, equivalent to around 1.4% of the UK workforce.

BBA executive director for financial policy and operations Paul Chisnall said: "Restoring trust and confidence is the banking industry's number one priority."

He accepted that a wide-ranging banking oath "very well could be part of the answer".

As part of an ongoing probe into Libor interest rate fixing, Lloyds Banking Group has been fined £218m by UK and US authorities.

11.46 | 0 komentar | Read More

Former CBI Chief To Aid Osborne Markets Probe

By Mark Kleinman, City Editor

A trio of heavyweight figures including a former head of the CBI will this week be appointed to scrutinise a Government-led probe into financial markets launched in the wake of a string of major trading scandals.

Sky News can reveal that Sir Richard Lambert, who ran Britain's biggest employers' group until 2011, is to be an independent member of the Fair and Effective Markets Review, which was disclosed by George Osborne, the Chancellor, in June.

Sir Richard will be one of three independent members of a practitioners' panel to be chaired by Elizabeth Corley, chief executive of Allianz Global Investors, one of the world's biggest fund managers.

The other independent members, who will examine the panel's work, will be Gay Huey Evans, a former Barclays executive and one-time chairman of the International Swaps and Derivatives Association; and Jonathan Moulds, who previously ran the European operations of Bank of America Merrill Lynch.

The Bank of England is expected to announce their involvement in the next few days, according to a person close to the situation.

Sir Richard's involvement comes just weeks after he recommended the creation of a new body to improve standards in the UK banking industry in an attempt to restore trust in it.

He and the other independent members will oversee the work of a group of serving City executives whose input is seen by the Treasury as crucial to restoring the international reputation of London's financial markets.

Mark Carney and George Osborne at the Mansion House in June

A number of sub-groups will be formed to examine different areas of financial sector activity, with the international competitiveness of the UK likely to be an important preoccupation for those involved.

Major banking groups have been hit by massive fines during the last two years, dealing a blow to the industry's efforts to rehabilitate its image in the aftermath of the global financial crisis.

Lloyds Banking Group, which is part-owned by UK taxpayers, is expected to announce on Monday that it is to pay more than £200m for its role in the Libor rate-rigging affair.

Banks and other financial institutions have also faced penalties for misconduct in setting benchmark prices for commodities and product mis-selling, while a major inquiry into fraud in foreign exchange markets is expected to result in huge fines later this year.

Among the objectives of the new investigation will be to inform the broader international debate about trading practices.

The Chancellor is determined to be viewed as a hardliner on City miscreants, and has already said that he wants to make the manipulation of financial benchmarks a criminal offence.

In his Mansion House speech in June, Mr Osborne said the Fair and Effective Markets Review would form an important element of moves to improve conduct in banking.

"The integrity of the City matters to the economy of Britain. Markets here set the interest rates for people's mortgages, the exchange rates for our exports and holidays, and the commodity prices for the goods we buy.

"I am going to deal with abuses, tackle the unacceptable behaviour of the few and ensure that markets are fair for the many who depend on them."

Mark Carney, the Governor of the Bank of England, said the probe would help the City to "build true markets...that are open and transparent, where access extends beyond a privileged few, and where all who wish to trade have common information and commonly accessible prices".

The review will also be jointly led by the Financial Conduct Authority, whose chief executive, Martin Wheatley, said: "Confidence and trust are critical to financial markets – and robust, reliable benchmarks are the bedrock of market integrity.

"I welcome this review, which will ensure that key markets operate with the highest standards of integrity."

The Treasury and Bank of England declined to comment on the names of those involved in the review.

None of the independent members of the practitioners' panel could be reached for comment.

The review is expected to report back by the end of summer next year.

11.46 | 0 komentar | Read More

Fracking Rules As Push For Drilling Heats Up

Fracking will be only be allowed in national parks and areas of outstanding beauty in "exceptional circumstances", ministers say, as new bidding for shale exploration licences opens.

The policy is part of new guidance published today by Government which is aiming to offer up vast swathes of Britain for fracking.

The Government has committed to going "all out for shale", claiming development of the gas and oil resource is needed to improve energy security, boost jobs and the economy.

But opponents say the high-pressure injection of water risks polluting water supplies, damaging the environment and causing minor earthquakes, and argue further fossil fuels should not be extracted due to climate change.

Business and energy minister Matthew Hancock said: "The new guidance will protect Britain's great National Parks and outstanding landscapes, building on the existing rules that ensure operational best practices are implemented and robustly enforced.

"Ultimately, done right, speeding up shale will mean more jobs and opportunities for people and help ensure long-term economic and energy security for our country."

Where an application in National Parks is refused and the developer launches an appeal, Communities Secretary Eric Pickles will consider whether to make the final decision himself to ensure the policy is being properly applied.

But Greenpeace campaigner Louise Hutchins warned: "Eric Pickles' supposed veto power over drilling in National Parks will do nothing to quell the disquiet of fracking opponents across Britain.

"Ministers waited until the parliamentary recess to make their move, no doubt aware of the political headache this will cause to MPs whose constituencies will be affected."

Friends of the Earth's energy campaigner Tony Bosworth said: "Today the risk of fracking has spread. This threat to the environment and public health could now affect millions more people.

"Those who thought that fracking would only happen in other places will now worry about it happening on their doorstep.

The shale exploration licences which can be applied for from today provide the first step to start drilling but do not give an absolute agreement to drill.

Planning permission, permits from the Environment Agency and agreement from the Health and Safety Executive will be required for further drilling.

11.46 | 0 komentar | Read More

UK Economy Emerges From Six-Year Downturn

Official figures show the UK economy has emerged from six years of lost growth to return to its pre-crisis peak.

The Office for National Statistics (ONS) said Britain's economy was now bigger than it was before the financial crisis as gross domestic product (GDP) expanded by 0.8% in the second quarter of the year.

The performance matched that of the previous quarter, although today's figure is only a first estimate and subject to revision.

It meant that on an annual basis, growth was 3.1% higher than was measured in the same period last year, leaving total output 0.2% higher than in the first quarter of 2008 - its previous peak.

Consumer spending is still driving growth

The measure of GDP per head - taking account of a growing population and weaker productivity - remains below the peak.

In its April to June calculations, the ONS charted 1% quarter-on-quarter growth in the service sector - which accounts for 75% of total UK GDP - while industrial production rose 0.4%.

However both construction and agriculture made negative contributions of 0.5% and 0.2% respectively. Both were hit by the effects of a very wet winter and spring.

The construction sector was damaged by a weak May

The ONS said only the service industry was now bigger than it was before the crisis, with industrial output and construction still 10% smaller.

Chancellor George Osborne said: "Thanks to the hard work of the British people, today we reach a major milestone in our long-term economic plan."

He tweeted: "We owe it to hardworking taxpayers not to repeat the mistakes of the past.

"Economy bigger than previous peak in 2008 but long way to go - the Great Recession was one of deepest of any major economy & cost UK 6 years."

However many people reacted to the news with scepticism. Posts of Sky News' Facebook page suggested not everyone feels Britain is out of the economic doldrums.

Ed Balls accuses ministers of creating a cost of living crisis

:: Robert Futsal Brassett: "They may declare it. But it don't feel like it."

:: Dorothy Dougan "Just in time for the General Election how fortuitous. So do we all get pay rise now?"

:: Jax Bell - "So NOW can we all get a decent pay rise,MPs 11% everyone who is on benefits/pension 2.5% Working people in North East 1%. Worst Government Leaders in British History"

:: Josephine Hargreaves - "Really? Come out into the real world & talk to the ordinary people to see if its over!"

:: Kerry Livesey - "Good news but let's hope the low paid workers benefit"

The pace of the recovery will feed into expectations about the timing of an interest rate rise by the Bank of England though its governor Mark Carney recently suggested it would be tied to improved data on wage growth.

While employment has soared in recent months, salary growth has fallen to 0.3% year-on-year and continues to lag inflation - last measured at 1.9%.

The scenario that has left the Bank fearing the impact of any rate rise on consumers, whose spending remains the biggest driver of economic growth.

Labour's shadow chancellor, Ed Balls, said of the latest GDP figures: "At long last our economy is back to the size it was before the global banking crisis - three years after the US reached the same point.

"But with GDP per head not set to recover for three more years and most people still seeing their living standards squeezed, this is no time for complacent claims that the economy is fixed.

"Wages after inflation are down over £1,600 a year since 2010, housebuilding under this government is at its lowest level since the 1920s and business investment is lagging behind our competitors.

"Labour's economic plan will make Britain better off and fairer for the future."

11.46 | 0 komentar | Read More

Housing Shortage Sees More Tenants Evicted

By Mark White, Home Affairs Correspondent

Increasing numbers of private tenants are being evicted or exploited by landlords cashing in on the increase in house prices and the shortage of rented accommodation, according to latest figures.

Citizens Advice (CAB) saw a 38% rise in the number of people turning to the charity for help with eviction notices served on them, despite being up to date with their rent.

CAB recorded 5,000 cases across the country in 2013/2014 where tenants complained about being forced from their homes, even though they were not in arrears. That figure is up from 3,750 the previous year.

Problems in London and the South East are particularly acute, the charity said, where many house prices are the highest in the country.

Private tenant Ryan Herran told Sky News he was being forced from his Muswell Hill home of five years, because he complained about damp and mould in the property and demanded his landlord fix the problem.

After months of wrangling with the owner, he was eventually served with a section 21 eviction order.

"I was actually in shock for a couple of days because I've always been a good tenant and always paid my rent and never engaged in anti-social behaviour," he said.

"I did ring up the property management company and they told me they don't have to give a reason under the section 21 eviction notice. They said they felt they were doing me a favour by at least giving me two months notice."

Mr Herran believes his eviction is motivated by spite and certainty on the part of the landlord that he would easily be able to find another tenant.

The number of tenants seeking help over eviction has nearly doubled

Roger Harding from the homelessness charity Shelter said: "Sadly landlords can evict for no reason, even if you've been keeping up with the rent. 

"We've found many worrying examples where landlords have evicted people simply because they don't want to have to deal with repair issues and that's something we want to see outlawed."

During January to March 2014 house prices rose by 18% in London and 10% in the South East, compared to the same period the previous year.

CAB's figures reveal those rises were mirrored by an increase in private tenants reporting they had been served with eviction notices, despite being up to date with their rent.

The charity said the number of tenants in London and the South East seeking help over eviction notices between January and March 2014 was 900, compared with 400 over the first quarter of the year before.

Landlord Richard Blanco rents out properties across six London boroughs and is also a member of National Landlords Association. He said private landlords are often unfairly maligned.

"There's a small minority of rogue landlords who might try and increase rents but really the most sensible business model for landlords is to maintain the property well and to have a good relationship with tenants and to try to ensure tenants stay as long as possible," he said.

Mr Blanco said, contrary to widespread belief, more than three quarters of private tenants have not faced an increase in rents over the past 12 months.

The Government is in the process of introducing new legislation which it hopes will strengthen the rights of private tenants and help protect them from exploitation, or unjustified eviction.

11.46 | 0 komentar | Read More

UK Economy Emerges From Six-Year Downturn

Official figures show the UK economy has emerged from six years of lost growth to return to its pre-crisis peak.

The Office for National Statistics (ONS) said Britain's economy was now bigger than it was before the financial crisis as gross domestic product (GDP) expanded by 0.8% in the second quarter of the year.

The performance matched that of the previous quarter, although today's figure is only a first estimate and subject to revision.

It meant that on an annual basis, growth was 3.1% higher than was measured in the same period last year, leaving total output 0.2% higher than in the first quarter of 2008 - its previous peak.

Consumer spending is still driving growth

The measure of GDP per head - taking account of a growing population and weaker productivity - remains below the peak.

In its April to June calculations, the ONS charted 1% quarter-on-quarter growth in the service sector - which accounts for 75% of total UK GDP - while industrial production rose 0.4%.

However both construction and agriculture made negative contributions of 0.5% and 0.2% respectively. Both were hit by the effects of a very wet winter and spring.

The construction sector was damaged by a weak May

The ONS said only the service industry was now bigger than it was before the crisis, with industrial output and construction still 10% smaller.

Chancellor George Osborne said: "Thanks to the hard work of the British people, today we reach a major milestone in our long-term economic plan."

He tweeted: "We owe it to hardworking taxpayers not to repeat the mistakes of the past.

"Economy bigger than previous peak in 2008 but long way to go - the Great Recession was one of deepest of any major economy & cost UK 6 years."

However many people reacted to the news with scepticism. Posts of Sky News' Facebook page suggested not everyone feels Britain is out of the economic doldrums.

Ed Balls accuses ministers of creating a cost of living crisis

:: Robert Futsal Brassett: "They may declare it. But it don't feel like it."

:: Dorothy Dougan "Just in time for the General Election how fortuitous. So do we all get pay rise now?"

:: Jax Bell - "So NOW can we all get a decent pay rise,MPs 11% everyone who is on benefits/pension 2.5% Working people in North East 1%. Worst Government Leaders in British History"

:: Josephine Hargreaves - "Really? Come out into the real world & talk to the ordinary people to see if its over!"

:: Kerry Livesey - "Good news but let's hope the low paid workers benefit"

The pace of the recovery will feed into expectations about the timing of an interest rate rise by the Bank of England though its governor Mark Carney recently suggested it would be tied to improved data on wage growth.

While employment has soared in recent months, salary growth has fallen to 0.3% year-on-year and continues to lag inflation - last measured at 1.9%.

The scenario that has left the Bank fearing the impact of any rate rise on consumers, whose spending remains the biggest driver of economic growth.

Labour's shadow chancellor, Ed Balls, said of the latest GDP figures: "At long last our economy is back to the size it was before the global banking crisis - three years after the US reached the same point.

"But with GDP per head not set to recover for three more years and most people still seeing their living standards squeezed, this is no time for complacent claims that the economy is fixed.

"Wages after inflation are down over £1,600 a year since 2010, housebuilding under this government is at its lowest level since the 1920s and business investment is lagging behind our competitors.

"Labour's economic plan will make Britain better off and fairer for the future."

11.46 | 0 komentar | Read More

Housing Shortage Sees More Tenants Evicted

By Mark White, Home Affairs Correspondent

Increasing numbers of private tenants are being evicted or exploited by landlords cashing in on the increase in house prices and the shortage of rented accommodation, according to latest figures.

Citizens Advice (CAB) saw a 38% rise in the number of people turning to the charity for help with eviction notices served on them, despite being up to date with their rent.

CAB recorded 5,000 cases across the country in 2013/2014 where tenants complained about being forced from their homes, even though they were not in arrears. That figure is up from 3,750 the previous year.

Problems in London and the South East are particularly acute, the charity said, where many house prices are the highest in the country.

Private tenant Ryan Herran told Sky News he was being forced from his Muswell Hill home of five years, because he complained about damp and mould in the property and demanded his landlord fix the problem.

After months of wrangling with the owner, he was eventually served with a section 21 eviction order.

"I was actually in shock for a couple of days because I've always been a good tenant and always paid my rent and never engaged in anti-social behaviour," he said.

"I did ring up the property management company and they told me they don't have to give a reason under the section 21 eviction notice. They said they felt they were doing me a favour by at least giving me two months notice."

Mr Herran believes his eviction is motivated by spite and certainty on the part of the landlord that he would easily be able to find another tenant.

The number of tenants seeking help over eviction has nearly doubled

Roger Harding from the homelessness charity Shelter said: "Sadly landlords can evict for no reason, even if you've been keeping up with the rent. 

"We've found many worrying examples where landlords have evicted people simply because they don't want to have to deal with repair issues and that's something we want to see outlawed."

During January to March 2014 house prices rose by 18% in London and 10% in the South East, compared to the same period the previous year.

CAB's figures reveal those rises were mirrored by an increase in private tenants reporting they had been served with eviction notices, despite being up to date with their rent .

The charity said the number of tenants in London and the South East seeking help over eviction notices between January and March 2014 was 900, compared with 400 over the first quarter of the year before.

Landlord Richard Blanco rents out properties across six London boroughs and is also a member of National Landlords Association. He said private landlords are often unfairly maligned.

"There's a small minority of rogue landlords who might try and increase rents but really the most sensible business model for landlords is to maintain the property well and to have a good relationship with tenants and to try to ensure tenants stay as long as possible," he said.

Mr Blanco said, contrary to widespread belief, more than three quarters of private tenants have not faced an increase in rents over the past 12 months.

The Government is in the process of introducing new legislation which it hopes will strengthen the rights of private tenants and help protect them from exploitation, or unjustified eviction.

11.46 | 0 komentar | Read More

IMF Upgrade For UK As Russian Growth Shrinks

The International Monetary Fund (IMF) has revised upwards, for a fourth consecutive time, its forecast for UK economic growth while sharply lowering expectations for the US and sanctions-hit Russia.

In its latest World Economic Outlook (WEO), the IMF upgraded its estimate for UK growth by 0.4% to 3.2% this year.

It represented the biggest upwards revision among major economies and confirmed its earlier projection that the UK would grow this year by more than any other advanced economy.

The IMF's expectations for 2015 also rose - with GDP growth of 2.7% now forecast.

The Chancellor George Osborne, who was accused by the IMF 15 months ago of "playing with fire" over his austerity programme, responded: "Today the IMF has upgraded their 2014 forecast for the UK by more than any other major economy.

"The Government's long term economic plan is working but the job is not yet done and so we will go on making the assessment of what needs to be done to secure a brighter economic future".

The update was released just a day before official figures are due to give the first estimate of second quarter GDP growth - expected by economists to remain in line with that measured in the previous quarter, of 0.8%.

The UK's economic recovery has been helped by wider employment compared to previous recoveries, the housing market recovery, improved manufacturing output but also particularly strong consumer spending despite weak wage growth.

The IMF charted the effects of a harsh winter on the recovery in the US, citing first quarter weakness across the Atlantic as a component behind its decision to downgrade its global growth projection by 0.3% to 3.4%.

It said the move also reflected slowing growth in many emerging markets and softer domestic demand in China.

But it was its latest forecast for the effects of the crisis over Ukraine on Russia that caught the eye.

Its expectations for Russian GDP growth in 2014 were slashed by 1.1% to a paltry 0.2%, with the effects of western sanctions biting into activity.

The IMF said downside risks to global growth included the possibility of higher oil prices arising from global conflicts - with Russia a major supplier of gas and oil to mainland Europe.

11.46 | 0 komentar | Read More

UK Economic Depression To Be Declared 'Over'

By Ed Conway, Economics Editor

The longest economic depression in British history will be declared over today, with the Office for National Statistics expected to confirm that the recovery is strengthening.

The ONS is expected to report that the economy grew by around 0.8% or 0.9% in the second quarter of the year.

George Osborne has been boosted by recent figures on growth

The increase in gross domestic product (GDP) will mean that the economy finally surpasses the size it was at the beginning of the recession in 2008.

The news will come as an added bonus for the Chancellor, who yesterday celebrated as the International Monetary Fund (IMF) upgraded Britain's growth forecast for this year and the next.

The IMF also said that UK growth this year will be stronger than in any other major economy.

However, this strong growth belies the fact that Britain's depression - the period for which GDP is below the pre-crisis peak - lasted longer than any other G7 economy.

But while there are concerns about the nature of recent economic growth in the UK and the possibility of a housing bubble in London, George Osborne is likely to emphasise the fact that all major sectors of the economy have been growing recently.

The Chancellor is currently on a tour of northern cities to underline the efforts the Government is taking to attempt to narrow Britain's regional economic divide.

Although overall GDP is back at pre-crisis levels, the natural increase in the population since 2008 means that GDP per capita remains around 6% lower than before the recession.

This, in turn, has contributed to lower wages and the squeeze on incomes felt in recent years.

Economists have also warned that while the services sector is bigger than before the crisis, the manufacturing and construction sectors are significantly smaller.

11.46 | 0 komentar | Read More