| CATEGORY: PRESS ROUND-UP SHORT SECTOR: TRAVEL & LEISURE |
Tuesday newspaper round-up: Chancellor's bank meeting, Iceland turmoil, rate cut calls |
|
Tue 07 Oct 2008
|
LONDON (SHARECAST) - The ongoing turmoil in global markets – and governments’ measures to deal with it – dominated the business pages Tuesday morning.
Alistair Darling, the chancellor, met leading bankers Monday night to discuss the possibility of a multi-billion pound taxpayer-funded capital injection into the sector, in an attempt to rebuild the battered balance sheets of Britain’s banks. Mervyn King, the governor of the Bank of England, and Lord Turner, the chairman of the Financial Services Authority, were also at the meeting, where the possibility of extending the guarantee on retail deposits from the current level of £50,000 was also discussed, writes the Financial Times.
The Telegraph reports that the banks are understood to have told Mr Darling that they broadly back a plan for the Government to take equity stakes in return for capital injections.
The Telegraph also writes that critics claimed the Chancellor was dithering over whether to introduce a Government guarantee on savers' deposits in the wake of similar moves by a series of other European governments. He was warned by the Conservatives that "inaction" could lead to a "long and lasting recession".
Iceland risks plunging into national bankruptcy, Geir Haarde, the country’s prime minister, warned Monday as a mounting financial crisis and a 30% dive in the krona forced the government to take emergency action. The ruling alliance and opposition parties united to approve legislation that gives the state sweeping powers over Iceland’s battered banks including the option of nationalising them and sacking executives, reports the FT.
With money markets close to seizing up, the Confederation of British Industry and the British Chambers of Commerce called on the Bank of England to reduce interest rates sharply Thursday, reports the Times.
A little-known 35-year-old engineering graduate, who spent just four years working in finance, was yesterday entrusted with saving the global banking industry from implosion – and handed $700bn (£400bn) of US taxpayer money to play with. Neel Kashkari, a low-ranking official at the US Treasury, is to head the Office of Financial Stability – a body that was invented last week as part of the emergency bailout of Wall Street, writes the Independent.
Citigroup and Wells Fargo agreed a truce until lunchtime Wednesday in their bitter legal battle over the takeover of Wachovia, in an effort to gain more time to agree a deal to carve up the US’s sixth-largest bank, according to the FT.
The merger of British Airways and Iberia will be delayed as the UK airline's managers struggle to cope with a collapse in passenger numbers. Willie Walsh, the chief executive of BA, said that the deal with the Spanish flag carrier would take longer than expected because the economic slowdown in the United States and Britain had hit ticket sales, writes the Times.
Bank of America – the ambitious commercial bank that has snapped up Countrywide Financial, the mortgage lender, and Merrill Lynch, the historic investment bank, since the credit crisis began – is to raise $10bn and slash its dividend to bolster its finances.The company made the surprise announcement last night, alongside disappointing financial results and after saying it had agreed the largest-ever settlement of predatory lending claims which will cost it $8.6bn, the Independent reports.
JJB Sports' survival was under further threat yesterday after credit insurers withdrew cover to its suppliers, sending its shares to a record low. Coface, Britain's third-largest credit insurer, said that it would not protect suppliers to JJB Sports from losses arising from the sportswear chain's collapse, the Times reports.
Traders kept their eye on Woolworths after it emerged the high street chain had cancelled its direct debit payments of business rates. The move triggered fevered speculation about the company’s financial state and raised fresh fears about the troubled retailer’s future. The shares fell 0.65p – or 16.21% – to 3.36p. A spokesman for Woolworths confirmed it was delaying the payment of its business rates, the Telegraph reports.
Away from the turmoil, the Independent reports that Britain's energy industry is working well for most customers but at least 4.3m are being overcharged, the regulator Ofgem said Monday.
|
|
| |
|
 |
Archived Stories |
 |
|
Front Page Stories |
|
|
