Tuesday newspaper round-up: UK banks, Obama, RSA

15th Sep 2009 06:16

Alistair Darling is planning legislation this autumn to force British banks to draw up "living wills" so that they can be dismantled more easily in any future financial crisis.The proposal to set out a timetable for banks to simplify their corporate structures and plan for dissolution will be included in a financial services bill in the Queen's speech in November. The bill will also give the Financial Services Authority statutory responsibility for financial stability, the FT reports.Meanwhile, the troubles of UK banks are from over, Moody's warned on Monday as the ratings agency forecast further losses of £130bn for the industry in the next few years as bad debts rise and pressure builds on profitability. Moody's said that the UK banking sector had already absorbed losses on loans of around £110bn by the end of 2008 and it raised or arranged around £120bn of new capital by mid-2009, the FT reports.The end of Andy Duncan's five-year reign as chief executive of Channel 4 is expected to be announced within days, ending a bloody and longrunning boardroom dispute at the broadcaster behind Big Brother. Mr Duncan's resignation and subsequent rapid departure was to be announced "imminently", according to Channel 4 insiders last night, confirming one of the worst-kept secrets in British television, the Times writes.A year after the collapse of Lehman Brothers, President Obama told an audience of bankers that their industry could drag the United States into another recession if it did not submit to sweeping regulatory reform that would discourage bloated bonuses and end the era of banks that were "too big to fail". In a speech symbolising Washington's new role as Wall Street's policeman and underwriter, Mr Obama scolded companies that he said were ignoring the lessons of the financial crisis, and set out a four-point plan to prevent it happening again, the Times reports.Both bank credit and the M3 money supply in the United States have been contracting at rates comparable to the onset of the Great Depression since early summer, raising fears of a double-dip recession in 2010 and a slide into debt-deflation. Professor Tim Congdon from International Monetary Research said US bank loans have fallen at an annual pace of almost 14% in the three months to August (from $7,147bn to $6,886bn), the Telegraph reports.For the first time in more than two years, the closely watched monthly survey from the Royal Institution of Chartered Surveyors (RICS) said that more agents had reported a rise, rather than a fall in values, in August. A net balance of 11% of agents noted a rise, up from minus 6% in July and the highest proportion since May 2007. Expectations over the direction of prices in the next three months also improved, with 17% of agents saying that they expected a rise rather than a fall, up from 7% reported in July, the Times reports.Citigroup has asked its investment bankers to study options to facilitate a sale of the government's 34% stake in the troubled financial giant. People close to the situation said Citi's bankers are looking at ways the company could raise capital through a stock offering as well as enabling the government to sell part of its stake, which was acquired as part of a capital injection to support the bank, the FT reports. Employers face an "administrative nightmare" under plans to be announced on Tuesday to give fathers the right to up to three months' paid paternity leave, business representatives have warned. The new right would allow mothers, who go back to work after six months, to transfer their unused six months of maternity leave to their partner, the FT reports.A quango that was invoiced for a £100,000 alleged "bribe" relating to the redevelopment of MG Rover's Longbridge site has launched an investigation into the payment. Taxpayer-funded Advantage West Midlands (AWM), a Regional Development Agency, was invoiced for the money by St Modwen Properties, the listed company, when it bought the site for redevelopment from a third company, the Telegraph reports.RSA, the general insurance group, is looking at large acquisitions - potentially worth about £600m ($994m) - that might need to be supported with a rights issue, it has told investors and analysts. The company, which has a strong capital cushion and a stated strategy of pursuing smaller, bolt-on deals, said there were "recently emerged opportunities that could be larger than 'bolt-on' acquisitions", according to analysts at Keefe, Bruyette & Woods, the FT reports.Aviva, the UK's largest insurer, faced a fresh challenge to its plans to make £500 million in cash windfall payments to its with-profits policyholders after Which?, the consumer group, said the settlement was "derisory" and called on a high court judge to ring-fence further funds, the Times reports.Shell, Chevron and Exxon are to spend A$43bn (£22bn) building the world's second-largest oil and gas installation off western Australia. The Gorgon gas project will tap reserves estimated at 6.7 billion barrels of oil equivalent. It includes platforms installed in water 1,300 metres deep, two subsea pipelines with a combined length of 240 kilometres, and a liquefied natural gas (LNG) facility on Barrow Island capable of producing 15 million tonnes per year, the Independent reports.