Wednesday newspaper round-up: Bank of England, GlaxoSmithKline, Banks

28th May 2014 07:23

Bank of England Governor Mark Carney said Tuesday the misdeeds of the financial sector risk undermining public support for free markets and called on bankers to radically improve their behaviour, a sign of simmering frustration in policy circles over a string of misdemeanours. In a forthright speech, Mr. Carney said recent scandals in currency and commodity markets highlight "a malaise in corners of finance that must be remedied," saying such "corruption" has hurt trust in modern capitalism. - The Wall Street Journal EuropeThe Serious Fraud Office has opened a criminal investigation into GlaxoSmithKline's commercial activities in a sharp escalation of an ethical scandal that began with allegations of bribes paid to doctors in China. Britain's largest pharmaceuticals company disclosed the inquiry last night. The group said: "GSK is committed to operating its business to the highest ethical standards and will continue to co-operate fully with the SFO." - The TimesThe big accountancy firms have been criticised once again for lacking rigour in checking the books of banks and building societies. In a report published today, the Financial Reporting Council (FRC) makes it clear that its repeated warnings about substandard audits have continued to fall on deaf ears. The audit regulator's annual review of quality found that not one of the ten audits of banks and building societies it checked in 2013-14 could be classed as "good", the highest of its four grades. - The Times Capitalism is at risk of destroying itself unless bankers realise they have an obligation to create a fairer society, the Bank of England Governor has warned. Mark Carney said bankers had operated a "heads-I-win-tails-you-lose" system. He questioned whether traders met ethical standards and said that those who failed to meet high professional standards should face ostracism. Speaking at a City conference, the Bank's Governor warned that there was a growing sense that the basic social contract at the heart of capitalism was breaking down amid rising inequality. - The GuardianSouth Africa is sliding towards a slow economic crisis as the global commodity boom fades and striking workers dig in their heels, becoming the third of the Brics quintet after Russia and Brazil at risk of full-blown recession this year. Output contracted by 0.6% in the first quarter, the worst since the Lehman crisis. "The GDP figures reveal a sad state of affairs and highlight the grave need for South Africa to get its industrial house in order," said Jeffrey Schultz, from BNP Paribas. - The Daily TelegraphHargreaves Lansdown investors are to be given discounted access to Mr Woodford's new equity income fund after it shot straight into the investing platform's famed Wealth 150+ despite having no assets or historic performance. Inclusion in the list means investors will be able to pay an annual management charge on the former Invesco Perpetual manager's new venture at 0.65% instead of the standard 0.75% when it launches on June 2nd. Investors will also receive an annual loyalty bonus of 0.05%. - The Daily MailAB