Tuesday newspaper round-up: Key plank of bank reform may be delayed

7th Jul 2009 06:16

The centrepiece of the Government's plan to overhaul financial regulation has been delayed, perhaps until after the election, it has emerged, the Telegraph writes.The long-awaited White Paper on financial regulation, due to be published on Wednesday, will offer no firm proposals on how authorities will control banks' balance sheets to avoid future crises. Although it will indicate that the Government needs so-called macro-prudential tools to control the financial system, it will present topics for discussion rather than hard-and-fast new laws.The worst of the recession is over, according to the British Chambers of Commerce's (BCC) latest economic survey, but the business body warned that recovery was fragile and cautioned against complacency. The results of the BCC's survey of 5,600 businesses, released today, showed progress in the manufacturing and service sectors during the second quarter of the year as well as a marked improvement in confidence, reports the Telegraph.The adoption of tough European restrictions on hedge funds would provoke a transatlantic regulatory war, one of the sector's leading figures has warned. Stanley Fink, the former chief executive of Man Group known as the "godfather" of the British hedge fund industry, said that the European Commission's proposed regulation would be "very restrictive" for non-EU funds and some styles of investing, the FT reports.New European Union laws to drive banks to strengthen capital cushions will be unveiled in October, the Financial Times has learnt, as EU member states intensify a regulatory assault aimed at preventing a repeat of the global financial crisis. A draft report expected to be backed by EU finance ministers in Brussels on Tuesday says that there is a "strong case" for curbing existing rules on banks' funding needs, which critics say exacerbate the ups and downs of economic cycles, the FT reports.Shares on Indian stock markets plunged yesterday by almost 6% - the biggest fall in six months - as investors digested a disappointing Budget from the re-elected administration of Manmohan Singh. Yields on government securities spiked and bank shares were also off; the 30-share BSE Index closed 5.8% lower, the sharpest correction in six months, the Independent reports.The bitter state of relations between Iceland and Britain over the collapse of Icesave has emerged in official documents warning the UK that it was inflicting damage equal to the Treaty of Versailles. A diplomatic row erupted between the two nations after Landsbanki, the parent bank of Icesave, failed last October affecting 300,000 British savers, the Telegraph reports.The BBC will be forced to cut millions of pounds from its programme budgets to plug an estimated £2bn black hole in its pensions scheme. The public broadcaster warned its pension scheme members that in April last year the fund was £470m in the red. Industry experts said that the plunging stock markets around the world since then would have increased the deficit by a further £1.6bn, the Times reports.The multimillion-pound failures of three of Sir Richard Branson's highest-profile companies have been revealed for the first time. Accounts filed with Companies House show that Sir Richard accumulated operating losses of more than £300m from the Virgin Megastores retail business, the Times reports.The Qatari rescue investment in Barclays at the height of last autumn's financial crisis saw the Arab emirate sitting yesterday on paper profits of more than £700m. The Qatar Investment Authority (QIA), the sovereign wealth fund, and Challenger, a vehicle backed by the Qatari Royal Family, bought £800 million of convertible notes that could be changed into Barclays shares at 153p last October. Under the terms of the agreement these notes converted into Barclay's shares at the end of last month, the Times reports. Independent News & Media, publisher of The Independent newspaper, has positioned Deloitte, one of its advisers, as standby administrator in case its debt-restructuring talks collapse. The move ? described as "a statement of the bleeding obvious" ? came as talks to restructure Independent News & Media's debt dragged on without agreement, the Times reports.