Friday newspaper round-up: Barclays, Deutsche Bank, Taxes, Portugal

16th Dec 2011 06:50

Christian Noyer, the governor of the Bank of France, said that Britain faced larger national debts, higher inflation and slower growth than France. François Baroin, the finance minister, said Britain was "marginalised" and faced "a very difficult economic situation" because of Coalition policies. The blunt remarks are the latest sign of Anglo-French tension following David Cameron's refusal last week to back a new European treaty drawn up in response to the eurozone crisis. George Osborne, the Chancellor, also provoked anger in France recently by suggesting it could be the next eurozone economy to experience a debt crisis. France and Germany want a new treaty to create a "fiscal union" of eurozone members, to control their deficits and reassure the markets, The Telegraph reports.Some of the world's most powerful investment banks were downgraded by ratings agency Fitch as Germany's cherished European fiscal compact appeared to be unravelling. The banks that were downgraded last night include US banks Bank of America and Goldman Sachs, Barclays and France's BNP Paribas. Switzerland's Credit Suisse and Germany's Deutsche Bank were also cut. The downgrade could raise the cost of borrowing for these banks. Fitch cut the "issuer default ratings" at the banks to "reflect challenges faced by the sector as a whole". The ratings agency said: "These challenges result from both economic developments as well as a myriad of regulatory changes," according to The Telegraph. Tempers are fraying in austerity-racked Portugal. A top socialist politician was taped at a party dinner calling for diplomatic warfare against the EU's northern powers and issuing threats of debt default. "We have an atomic bomb that we can use in the face of the Germans and the French: this atomic bomb is simply that we won't pay," said Pedro Nuno Santos, vice-president of the Socialist Party in the parliament. "Debt is our only weapon and we must use it to impose better conditions, because recession itself is what is stopping us complying with the (EU-IMF Troika) accord. We should make the legs of the German bankers tremble," he said, The Telegraph says. Banks could be slapped with higher taxes unless they show temperance when awarding bonuses this year, according to Business Secretary Vince Cable. The Liberal Democrat MP said his review into executive pay, due for release early next year, could hit banks particularly hard unless they co-operate. 'The Treasury is making it clear that we expect serious restraint,' Cable told the Mail. 'They all know that there is the prospect of significant change as part of this executive pay review that I'm pursuing, and how aggressively it develops will partly depend on the way companies behave. 'There's a link and I hope they understand that,' The Daily Mail reports.Deutsche Bank is putting its global asset management business up for sale with a target price of €2bn as it tries to bridge the gap in its capital reserves following orders from Europe's banking regulator. A source close to the bank confirmed to The Times last night that a strategic review of Deutsche Asset Management, announced late last month, had concluded that the business should be sold early next year. Bids are expected in the spring. The sale comprises Deutsche's international asset management business with the exception of its DWS franchise, its long-standing European fund manager based in Germany and Asia. Collectively the divisions up for sale are believed to have about €400bn of assets under management. The bank said last month that DWS was a core part of its retail offering and would not be sold. A "get well soon" card might have been more appropriate given the struggles of his company, but instead Don Lewin, the founding chief executive of Clinton Cards, was paid £1 m last year even though the retailer dived to an annual operating loss. The payment, the second year running in which he has banked £1m, raised eyebrows among some shareholders, although it was not clear last night whether it would spark a protest at next month's annual meeting. Mr Lewin is a chimney sweep's son from the East End of London who launched the first of his gift shops in 1968.AB