Friday newspaper round-up: Bank regulation, US bonuses, Reed Elsevier

31st Jul 2009 06:17

An influential committee of MPs will today launch a stinging attack on planned reforms to Britain's system of financial regulation.The Treasury Select Committee will describe the Government's proposed changes to the "tripartite" system that brings together the Treasury, Bank of England and Financial Services Authority to oversee financial stability as "cosmetic". It will also say that the system remains "a muddle" in the wake of the banking crisis that has rocked the economy, reports the Independent.Citigroup and Merrill Lynch, which lost $55bn in 2008, between them paid 1,400 employees bonuses of $1m or more each, according to a New York state report, released on Thursday, on banks propped up with taxpayer funds, the FT reports. The study, compiled by Andrew Cuomo, New York attorney-general, showed that JPMorgan Chase and Goldman Sachs, which both finished in the black last year, paid the most million-dollar bonuses - 1,626 and 953, respectively.Institutions turned their guns on credit-rating agencies yesterday as Reed Elsevier, the Anglo-Dutch publisher, became the latest company to tap its shareholders for capital in a bid to preserve its creditworthiness. The stance is the latest sign of the new mood of defiance among leading City shareholders, who are so frustrated with the way they are being treated in company fundraisings that they have threatened to take control of the process themselves, the Times writes.Takeover target National Express warned yesterday that there was a "material uncertainty" about the transport group's ability to continue as a going concern, adding to the pressure to sell the business. The heavily indebted company, which is fighting a £500m bid from CVC, the private equity house, and Spain's Cosmen family, must refinance £460m of debt by September next year and faces more stringent covenant tests on its loan from this December, the Times writes.Attempts by eBay to float its Skype internet telephone business in 2010 could be in jeopardy because of a legal dispute surrounding the technology that makes the system work. eBay, best known for its online auction business, has admitted that it has now begun attempting to build new software should it lose the right to use certain software code on which Skype is based, the Telegraph reports.The traditionally reliable dividend of Royal Dutch Shell may be frozen this year after the oil giant revealed an aggressive cost-cutting drive amid slumping profits. Shell will undertake a major restructuring and programme of job cuts under Peter Voser, the new chief executive, after pre-tax profits collapsed, dropping 71pc to $5.8bn (£3.5bn), the Telegraph reports.The International Monetary Fund has delayed handing over the second tranche of Iceland's emergency bail-out loan.It is thought to be linked to the political row over compensation for Britain's Icesave customers, as opposition grows in Iceland to the terms of a loan from Britain to help the country cover the liability, reports the Telegraph.The Financial Services Authority (FSA) failed to warn about the risks in Dunfermline Building Society and did not provide proper supervision in the run up to the collapse of Scotland's biggest mutual, according to a report by an influential parliamentary committee. The House of Commons Scottish Affairs Committee has concluded that the FSA should have identified Dunfermline's aggressive expansion into commercial property as more risky, the Telegraph reports. The High Court has rejected an attempt by Keydata founder Stewart Ford to block the Financial Services Authority (FSA) from accessing a computer server containing personal financial information. Mr Ford had asked the Court to stop the FSA and PricewaterhouseCoopers (PwC), administrators of the collapsed investment firm, from accessing the server, the Telegraph reports. The Financial Services Authority, the UK market regulator, has called a special meeting with major oil companies, banks, hedge funds and oil brokers to review regulation in the oil and commodity market. The meeting, scheduled for August 5, comes as US regulator have said that they intend to clamp down on financial flows into the oil and other commodities markets. The Commodity Futures Trading Commission is currently holding hearings about possible changes to position limits, the FT reports.