Monday newspaper round-up: Bank regulation, Swine flu, Tesco

20th Jul 2009 06:16

The Bank of England would be given sweeping new powers by a Conservative government to prevent another financial crisis, in a regulatory shake-up that would rip up Gordon Brown's 12-year-old tripartite system, the FT reports.George Osborne, shadow chancellor, will retreat from previous suggestions that he would forcibly break up Britain's biggest banks, but would impose capital penalties on retail banks that conduct "casino" investment operations. The plan also includes scrapping the Financial Services Authority.Meanwhile, regulators from the Financial Services Authority are sitting in on bank board meetings, demanding more data and questioning brokers' business plans as part of the harder line they have adopted in the wake of the credit crunch. The City regulator has also expanded its list of strategically important institutions, which it subjects to close supervision, from 50 to 75, the FT reports.A swine flu epidemic would cost the UK economy almost £50bn, according to one of the nation's most respected groups of economic forecasters, the Ernst & Young ITEM Club, which uses the Treasury's economic model to produce its forecasts. Added to the expected shrinkage in the economy this year of 4.5%, a worst-case scenario would see a total drop of 7.5% in GDP - the most for at least 75 years - with another loss of national income to come in 2010, the Independent reports.Sir Adrian Montague and Mike Biggs, the chairmen of Friends Provident and Resolution, will sit down together on Monday to see if they can agree a way of combining the two companies following the unveiling of competing takeover proposals last week, the FT writes.Property prices in England and Wales rose by nearly £1,500 this month while the number of sellers jumped by a fifth, boosting hopes that the housing market may be over the worst. The average home is being put on the market with a price tag of £227,864, up from £226,436 in June, figures from Rightmove, the property website, show. This is the fifth rise in the past six months, prompting Rightmove to say that the market has already bottomed out, reports the Times.Tesco, Britain's biggest retailer, is considering seeking a separate credit rating for its financial services arm to give it more clout for its aggressive assault on banking. The supermarket is planning to launch a current account within the next 18 months, and a mortgage, probably within the next two years, reports the FT. CIT has clinched a two-year, $3bn rescue financing with its creditors that will enable the troubled US finance group to avoid a bankruptcy filing. After round-the-clock weekend talks that included the possibility of a Chapter 11 filing, CIT and its main creditors sealed an agreement on the financial lifeline, according to people close to the situation, the FT reports.Fraud squad detectives have embarked upon a unique attempt to break the stranglehold that a group of suspected fraudsters holds over hundreds of investors. Clients of Business Consulting International (BCI), a Knightsbridge-based investment firm accused of running an £80m Ponzi scheme, are being invited to public meetings by City of London Police to be told how their money was lost, the Times reports.Private sector workers are taking fewer "sickies" in the recession amid rising fears that taking too much time off work might cost them their job, according to new research. The trend to turn up for work even when unwell is also driven by increased policing of absenteeism in the private sector. It stands in sharp contrast to the record of civil servants, according to the Chartered Institute of Personnel and Development, the Times reports.