Friday paper round-up: BP, Obama, Lloyds Banking

23rd Apr 2010 06:30

A team of engineers using an underwater robot was struggling last night to control one of the world's most challenging oil spills after an explosion ripped apart and sank a rig leased by BP in the Gulf of Mexico. As fears grew for the safety of 11 workers still missing, BP and US officials were tackling what could be a major pollution incident using booms and dispersant chemicals, the Times reports.President Obama took his fight for tougher financial regulation to Wall Street yesterday, where he used a high-stakes speech to scold banks and Republicans opposing his reforms. Speaking at the Cooper Union building, a few blocks from Manhattan's financial district, the President accused the banks of having cultivated a culture of greed in the years leading up to the credit crisis, the Times reports.The Goldman Sachs banker accused of a $1bn fraud, will appear at a Senate sub-committee hearing on Tuesday to defend his complex mortgage investments. Fabrice "Fabulous" Tourre, 31, will give his testimony to a sub-committee on investigations hearing into the mortgage market. Lloyd Blankfein, Goldman's chairman and chief executive; David Viniar, chief financial officer; Craig Broderick chief risk officer and other Goldman mortgages and structured products trading executives will appear with him, the Times reports.Meanwhile, Goldman Sachs was both an underwriter and an investor in Lloyds Banking Group's vast refinancing deal late last year, the FT has learned, highlighting the potential conflicts of interest at the heart of the investment bank's business model. According to four people involved in the capital raising, Goldman - a dealer manager on the debt portion of the £23.5bn transaction - demanded last-minute changes to the structure of a deal it was underwriting. This had the effect of benefiting its position as a bond investor, the FT reports.Lloyds Banking Group has received an "amber top" warning from a key shareholder group over its executive pay policies. The Association of British Insurers' decision to highlight concerns over the bank's pay practices comes after the group's chairman, Win Bischoff, loudly complained that executives at banks should not feel they had to waive bonuses "agreed upon by shareholders," the Independent reports.Greece's debt crisis has reached a dramatic crescendo after the EU revealed that the country's debt and deficit figures are even worse than feared and leading banks began to talk openly of debt-restructuring. With contagion spreading across Southern Europe, spreads on 10-year Greek bonds exploded to almost 600 basis points over German Bunds in panic trading, pushing borrowing costs close to 9pc. Rates on two-year debt rose to 10.6%in a market gone mad, the Telegraph reports.Fitch Ratings has warned that Japan's sovereign debt is rising to ominously high levels as the workforce shrinks and deflation grinds deeper, while the government's reserve assets may prove unusable for defence in a funding crisis, the Telegraph reports.India's Essar Energy has launched its initial public offering (IPO), setting an indicative price range of 450p to 550p a share. The flotation is the largest in London since New World Resources three years ago. Essar Group, the Indian conglomerate, is spinning off its oil and power assets, with between 20% and 25% of the unit's shares sold to institutions, with Essar maintaining a 75% stake, the Telegraph reports.DFS was taken over in a £500m private equity deal yesterday, marking a dramatic U-turn by the furniture chain's owner. The sale to Advent International is the biggest British private equity deal since Pets at Home was sold for £955m in January. It comes only weeks after Lord Kirkham took the company off the market, saying: "I am categorically not interested in selling the business. I don't need the money. I'm loaded," the Times reports.