Friday newspaper round-up: Darling to unveil new Banking Act

26th Jun 2009 06:21

Alistair Darling is planning a new Banking Act this year that will strengthen the role of the Financial Services Authority, in an unexpected move that follows criticism that the Bank of England failed to warn adequately of the impending banking crisis.The chancellor wants to give the FSA a new statutory objective of maintaining financial stability, making it partly responsible for a function currently entrusted to the Bank. The paper could heighten tensions between the chancellor and Mervyn King, Bank governor, who complained on Wednesday: "I have not been consulted on what will be in the white paper," the FT reports. The Bank of England today launched its play for increased powers over the banking system, just days before the Government publishes its own White Paper on banking regulation.The Bank's report, meanwhile, said that "banks should not be too big or too complex" - a view rejected by the Chancellor in his Mansion House speech last Thursday, the Independent reports.The housing market slump is close to ending, with prices set to bottom out later this year and begin rising again by 2011, the City is predicting. A growing majority of economists are calling the end of a housing crash that has so far wiped about a fifth, or more than £40,000 on average, off home values, the Times reports.The company that runs the Channel tunnel is "looking carefully" at bidding for the UK's only dedicated high-speed rail line. The move comes as Groupe Eurotunnel prepares to buy back the last of a series of financial instruments formed during the company's complex 2007 restructuring. Jacques Gounon, executive chairman, told the Financial Times he was undertaking the transaction partly to avoid problems with any bid for High Speed 1, the FT writes.Beleaguered insurance conglomerate American International Group (AIG) is planning to float two of its life insurance businesses in an attempt to repay up to $25bn (£15bn) to the US government, the Telegraph reports.Xstrata's chief executive yesterday met with the South African government as the mining group stepped up its lobbying for a proposed £43.7bn nil-premium merger with rival Anglo American. Mick Davis took his charm offensive to South Africa - one day after Xstrata released a letter to Anglo claiming a merger would generate $1bn (£612m) of cost savings, the Telegraph writes.The Financial Services Authority (FSA) has outlined a radical shake-up of the investment, pension and life assurance industries by spelling out plans to ban independent financial advisers (IFAs) taking commission for selling savings plans. The proposals, contained in the regulator's Retail Distribution Review (RDR), are expected to cost the financial services industry £430m and add an annual £40m to its compliance bill, the Telegraph writes.Ben Bernanke, Chairman of the Federal Reserve, yesterday denied putting pressure on Bank of America (BoA) to buy Merrill Lynch, in testimony to a sceptical congressional committee investigating the $50bn deal, the Times reports.More than half of ITV's bondholders have accepted a bond exchange offer to reduce the broadcaster's debt and refinancing risk. Bondholders holding 54% - or €268m out of ITV's 2011 €500m eurobond - have accepted the chance to swap debt for cash and new notes. ITV debt stands at £730m. The company has estimated that this exchange offer will cut its gross debt by £68.2m, the FT writes.