Tuesday newspaper round-up: BAE Systems, Toxic loan scheme, Snow...

21st Dec 2010 06:35

BAE Systems faces an unlimited fine today for concealing the true purpose of shadowy payments totalling almost £8m to a Tanzanian agent.Europe's largest defence contractor was due to be sentenced at Southwark Crown Court yesterday after admitting that it failed to keep proper accounting records. However, Mr Justice Bean delayed his decision until today after questioning the basis of BAE's plea agreement with the Serious Fraud Office, the Times reports.An extra £4bn could have been extracted from the bailed out banks for their use of the government's toxic loans insurance scheme, the spending watchdog will say today. The National Audit Office says that ministers failed to conduct the necessary "breadth and depth of analysis" on the banks. The watchdog's report also finds the asset protection scheme did not go far enough to achieve its goal of bolstering lending to businesses but concedes it was successful in allowing the Treasury to maintain financial stability, the Guardian reports.Britain could save up to £30bn over the next decade on infrastructure spending if it improves project planning, commissioning and procurement, a Government report has found. A study published on Tuesday by Infrastructure UK, an offshoot of the Treasury, estimates that the cost of building power, water and transport schemes could be cut by at least 15%. The savings equate to £2bn-£3bn a year out of the £15bn-£20bn of annual construction costs on such projects, the Telegraph reports.Ernst & Young faces the prospect of civil fraud charges in New York relating to its alleged role in the collapse of Lehman Brothers in 2008, according to reports. Andrew Cuomo, the New York State attorney-general, may file a lawsuit as early as this week as he seeks to impose fines and other penalties on the British accountant for standing by while Lehman misled investors about its financial condition, The Wall Street Journal reported, citing unnamed sources, the Times reports.Pimco, the world's largest bond fund, has called on Greece, Ireland and Portugal to step outside the eurozone temporarily and restructure their debts unless the currency bloc agrees to a radical change of course. Andrew Bosomworth, head of Pimco's portfolio management in Europe, said current policies are untenable in the absence of fiscal union and will lead to a break-up of the euro. "Greece, Ireland and Portugal cannot get back on their feet without either their own currency or large transfer payments," he told German newspaper Die Welt, the Telegraph reports.Shares in some of the UK's biggest retailers fell sharply on Monday amid fears that the arctic weather sweeping the UK has dented sales in the most important trading week of the year. Analysts believe that there could be some pre-Christmas profit warnings from national store groups as they face the reality of depressed sales. Observers believe that it is sales of small-ticket items - such as books and CDs - that may suffer the most in the run-up to Christmas, the Telegraph reports.The bad weather will "significantly" affect the UK economy and damage a still fragile recovery, according to leading economic researchers - with higher gas and electricity bills likely to follow record wholesale prices as demand for energy surges. Utility firms are likely to pass on these increases, on top of substantial rises already announced. Analysts at HSBC say that, based on the experience of previous bad weather episodes in recent decades, £3bn could be lost in output, the Independent adds.The world's biggest investment banks are to overhaul their pay structures to differentiate between bankers based in Europe and those who work elsewhere, after European regulators' clampdown on bonuses. Many US and Swiss banks are considering paying higher salaries and lower bonuses to top bankers based in the European Union, mostly in London, to ensure they comply with new instructions from the Committee of European Banking Supervisors (CEBS), the pan-EU regulator, limiting cash pay-outs, the FT reports.