Royal Mail In Stand-Off Over MPs' Inquiry

By Mark Kleinman, City Editor

Royal Mail has been secretly resisting pressure from MPs for it to appear alongside rival postal operators as part of a new probe into competition in the industry.

Sky News has learnt that Royal Mail made representations to the Business, Innovation and Skills (BIS) Select Committee requesting that it should not be forced to give evidence during the sale session as Whistl and UK Mail.

Sources said that Moya Greene, Royal Mail's chief executive, would appear before the Committee on 26 November, adding that the MPs had refused to bow to the company's desire for it to appear separately.

Royal Mail boss Moya Greene is due to appear before the BIS committee

The row is the latest development in Royal Mail's efforts to persuade politicians and regulators to commit to reforms that it says are necessary to protect the Universal Service Obligation (USO), which obliges it to deliver to every UK address for a fixed price.

"This decision might make good theatre but it won't make for good analysis of the issues," a source said on Friday.

The BIS Committee announced the launch of its inquiry in September following complaints from the privatised Royal Mail that its ability to meet its USO obligations is being undermined by the expansion plans of Whistl, the rebranded TNT Post.

Sky News also understands that Dave Ward, a senior official at the CWU union, has also been asked to appear before MPs this month, while Ed Richards, Ofcom chief executive, will give evidence in early December.

The hearings will mark the latest phase of an intensive period of lobbying by Ms Greene, who has been vocal in her criticism of the industry's regulatory regime.

Last month, she and her chairman, Donald Brydon, attended an Ofcom board meeting to warn that a review of postal markets planned for the end of next year must be accelerated to safeguard the USO.

Since listing on the stock market as part of its contentious £3.3bn privatisation last year, Ms Greene has complained that Whistl's expansion plans could cost Royal Mail £200m in lost revenue by 2017.

Ofcom is expected to decide whether to bring forward its assessment shortly.

Reiterating previous statements on the issue, a spokesman for the regulator said: "Protecting the universal service is at the heart of Ofcom's work, and our own evidence clearly shows that the service is not currently under threat.

"We are listening to the views of Royal Mail and other parties regarding competition in the market. We would assess any emerging threat to the service quickly, in the interests of postal users."

Royal Mail's shares have had a bumpy ride since last autumn's sale by the Government.

They initially surged, leading to accusations that Vince Cable, the Business Secretary, had cost the taxpayer £1bn by underpricing them.

However, the UK regulatory framework, an impending financial settlement with French competition authorities and the growing impact of greater competition - exemplified by Amazon UK's recent launch of a same-day delivery service - have weighed on Royal Mail shares in recent months.

On Friday, they were trading at just over 462p, down 20% during the last 12 months but exactly 40% higher than the price at which they floated last year.

Taxpayers continue to own 30% of Royal Mail, although there is little prospect of a sale of the remaining shares ahead of next year's General Election.

12.06 | 0 komentar | Read More

PM Trying To 'Fool' Public Over EU Surcharge

The Prime Minister has been accused of "trying to take the British people for fools" for claiming the UK has managed to wrangle a 50% reduction on the £1.7bn EU surcharge.

Chancellor George Osborne said Britain would now pay the European Union just £850m of the original demand.

Mr Cameron described it as a victory for Britain and praised the Chancellor for securing the deal.

But Shadow Chancellor Ed Balls claimed the deal had not saved the UK "a single penny" and accused the pair of "trying to take the British people for fools".

Mr Balls said: "By counting the rebate Britain was due anyway, they are desperately trying to claim that the backdated bill for £1.7bn has somehow been halved.

Video: Has Surcharge Really Been Halved?

"But nobody will fall for this smoke and mirrors."

The demand was made by Brussels after a recalculation of Britain's gross national income in relation to other EU states.

George Osborne said the deal, struck after meeting finance ministers in Brussels, was "far beyond what anyone expected us to achieve".

He said it meant the bill would be paid in two interest-free instalments after next year's election.

"Instead of footing the bill we have halved the bill, we have delayed the bill, we will pay no interest on the bill and if there are any mistakes in the bill we will get our money back," he said.

Video: Cameron: 'Good News' On EU Bill

But political opponents, including UKIP, claimed the reduction had been achieved only by bringing forward a rebate to which the UK would have been entitled anyway.

UKIP leader Nigel Farage wrote on Twitter: "Osborne trying to spin his way out of disaster. UK still paying full £1.7 billion, his credibility is about to nose dive."

Sky's Europe Correspondent Robert Nisbet said it appeared the EU would still get the full £1.7bn as a result of what he said some would call "clever accounting".

"Next year there will be two instalments that will equal £850m that will be paid to Brussels by the UK and it will get its rebate in full. So far, so good," explained Nisbet.

"But what will happen in 2016 is that an extra rebate based on increased VAT receipts will be used to settle the rest of the bill.

Video: Migrant Movements 'Not Unqualified'

"That allows the EU to claim it's getting its money, the UK to claim it's negotiated a great deal for Britain and for opposition parties to cry foul."

A Number 10 source insisted there was "no guarantee the rebate would have applied to this" before the deal was struck, and added: "Our view is that this is a very good deal."

However, Conservative MEP Daniel Hannan suggested the devil was in the detail, saying: "The EU sticks us with a bill. Ministers double it, apply the rebate, return to the original figure and claim victory. We're meant to cheer?

"Britain is worse off in absolute terms, but a straw man has been knocked down. A prelude to how the pro-EU side will fight the referendum."

Mr Osborne said EU rules would now be changed forever "so this never happens again", claiming he had got his counterparts to agree to change the system for calculating adjustments to member states' contributions.

Video: How Is The UK Seen In Europe?

The PM had earlier warned there would be a "major problem" if Brussels insisted on Britain paying the bill in full.

Mr Cameron went on the offensive after a meeting with other European leaders in Finland, saying Britain would not pay "anything like" the full amount ahead of a looming 1 December deadline.

12.06 | 0 komentar | Read More

Petrol Price Cuts Demanded By Treasury

A failure by petrol firms and supermarkets to pass on the full benefit of falling oil prices to customers filling up at the pumps would be an "outrage", a Cabinet Minister has warned.

Treasury Chief Secretary Danny Alexander has demanded guarantees from fuel companies and distributors that they were doing all they could to pass on the price cuts to hard-pressed motorists.

Danny Alexander is seeking assurances on petrol prices

His comments came as Asda announced it would be cutting the price of petrol and diesel by 1p to 119.7pm and 123.7p a litre.

Asda said it was the first time its petrol had gone under 120p a litre in four years.

Video: Chancellor On Petrol Prices

It triggered a supermarket price war and Sainsbury's and Tescos quickly followed suit with 1p cuts of their own.

At a speech in Aberdeen, Mr Alexander said consumers felt petrol prices rise "like a rocket" when oil costs went up, but fall "like a feather" when they came down.

And he said people would "rightly be angry" if they felt prices were not coming down as much as they should.

Brent crude slumped as low as $82 (£51) a barrel earlier this week, its lowest level in just over four years due to concerns about over-supply.

The Liberal Democrat frontbencher will say: "Especially in the current economic circumstances people would rightly be angry if they feel that pump prices don't fall as much as they should on the back of falling oil prices."

However, investigations into the failure to pass on the fall in the price of oil has been inconclusive.

Video: 'We Still Pay Too Much For Fuel'

Mr Alexander has written to the industry's major players "seeking their assurance that they are doing all they can to pass on the benefit of falling oil prices as quickly as possible".

He said: "When the price of oil falls, the public have a right to expect pump prices to fall like a stone, not a feather."

Motoring organisations were quick to say there was more then Government could do that just put pressure on oil firms.

RAC Foundation director Professor Stephen Glaister said: "It is encouraging that Mr Alexander shares the concerns of the nation's drivers but in a way he is passing the buck.

"The biggest driver of pump prices remains the Government. Well over 60% of the price is tax."

AA president Edmund King said: "They themselves could do more.

Video: Cuts: A Loss Leader Or Real Deal?

"First, policies to help strengthen the pound by just 10 cents against the dollar would double the potential for a 2p-a-litre fall in the price of petrol to 4p.

"Secondly, the Government's failure to introduce fuel price transparency, showing the relationship between oil, wholesale and pump prices, has helped no one."

Shadow chief secretary to the Treasury Chris Leslie said: "Of course it's right that drivers should benefit from falling oil prices with lower prices at the pumps.

"But since 2011 people have paid 3p more on every litre of petrol because the Lib Dems broke their promise and backed the Tories in raising VAT."

12.07 | 0 komentar | Read More

Banks' Fury Over FCA Foreign Exchange Fines

By Mark Kleinman, City Editor

Some of the world's biggest banks are resisting details of plans being drawn up by the City regulator to fine them for failings in their foreign currency operations.

Sky News has learned that a number of the six banks in talks with the Financial Conduct Authority (FCA) about a settlement are angry that the spread between the biggest and smallest penalties is in the low tens of millions of pounds.

They are understood to have expressed concern that there will be little distinction between the six in terms of reputational damage despite the fact that the scale of misconduct is understood to have varied markedly between them.

Sources indicated on Thursday that the FCA fines, which could be announced as soon as this month, are likely to range from approximately £225m at the lower end to approximately £250m at the other extreme.

During talks with the six banks, Martin Wheatley, the FCA chief executive, is understood to have informed them that a large proportion of the fines is the result of misconduct by foreign currency traders having taken place after the Libor rate-rigging scandal was exposed in the summer of 2012.

"The FCA is arguing that all of the banks should have heeded the warning after Libor emerged as an issue, whether they were punished for manipulating [Libor] or not," said one source.

It was unclear how the six banks - Barclays, Citi, HSBC, JP Morgan, Royal Bank of Scotland and UBS - would be ranked by size of fines.

The final penalties have yet to be formally agreed and the numbers are still moving around, according to sources close to the discussions.

However, the aggregate FCA fine is now thought to be likely to be in the region of £1.4bn.

During the last 10 days, Barclays, HSBC and RBS have made provisions in their accounts worth just over £1.1bn as they brace for the regulatory settlements.

The provisions followed similar moves from Citigroup, UBS and JP Morgan, which came in the wake of talks held between the banks and the FCA in September.

The so-called omnibus settlement will be the largest collective penalty ever imposed by the City watchdog.

The FCA will find the banks guilty of a string of systems and control failures in their foreign exchange businesses, although the timetable for the settlement, which is partly dependent upon whether the banks settle simultaneously with US regulators, could yet slip.

The FCA and the banks declined to comment.

12.07 | 0 komentar | Read More

Cable Concerns Over Tesco 'Supplier Squeeze'

By Mark Kleinman, City Editor

Vince Cable has raised concerns about Tesco's treatment of its supplier base, intensifying the pressure on Britain's biggest retailer as it battles to contain the fallout from its £263m accounting scandal.

Sky News has learnt that the Business Secretary wrote to the supermarket industry ombudsman in recent weeks to express support for a comprehensive review of the way Tesco deals with suppliers and whether its approach may have contributed to the shock profit overstatement.

In a letter to the Groceries Code Adjudicator (GCA), Christine Tacon, Mr Cable is understood to have said that while it was important not to prejudge her review of the matter, it would be an important exercise and closely watched by both suppliers and consumers.

Mr Cable's intervention underlines the interest in Westminster in the crisis at Tesco, which deepened last week when the Serious Fraud Office (SFO) confirmed Sky News' report that it was launching a criminal investigation into the issue.

The GCA was set up by Mr Cable two years ago amid growing anxiety about the treatment of suppliers by the major UK grocers.

Video: Tesco Faces Criminal Investigation

The Business Secretary is understood to have expressed concerns about Tesco's reputation for behaving robustly towards the companies which supply it, many of which are small or medium-sized businesses reliant on their contracts with the retailer.

He is also said by allies to be keen to examine whether aggressive accounting practices are connected to the way in which Tesco's supply chain is perceived to be squeezed by it.

Ms Tacon said in September that she would monitor the situation.

"I have requested that compliance with the Groceries Supply Code of Practice is included in the scope of the internal investigation and I have asked to be notified if Tesco starts to find practices which might breach the Code," she said.

"The GCA will take a decision on next steps based on the evidence."

Dave Lewis, Tesco's new boss, said last month that the £263m profits overstatement related to the premature recognition of revenues from suppliers, which make payments to retailers based on the sale of their products and the scale of promotional activity supporting them.

Video: Tesco's Woes In Detail

Eight executives, including the UK managing director Chris Bush, have been asked to stand aside pending the outcome of the investigations into the accounting mis-statement.

Deloitte, the accountancy firm, and Freshfields, Tesco's legal adviser, undertook a preliminary investigation, which was passed to the Financial Conduct Authority (FCA). The City watchdog dropped its own inquiry when the SFO confirmed that its probe was underway.

Mr Lewis, who replaced the ousted Philip Clarke, unveiled a fall in half-year profits of more than 90% last month, underlining the scale of the task ahead as the company battles to recapture market share lost to discounters such as Aldi and Lidl.

Tesco has also been deserted by some of its leading shareholders, including the US-based Harris Associates and Warren Buffett's Berkshire Hathaway, amid concern over its strategy and the state of its balance sheet.

The turmoil has forced Tesco to shore up its financial position by turning to five banks to lend the company £1bn each, with the sale of some of its assets likely in the coming months.

12.07 | 0 komentar | Read More

Petrol Price Guarantees Demanded By Treasury

A failure by petrol firms and supermarkets to pass on the full benefit of falling oil prices to customers filling up at the pumps would be an "outrage", a Cabinet Minister will warn.

Treasury Chief Secretary Danny Alexander is to demand guarantees from fuel companies and distributors that they are doing all they can to pass on the price cuts to hard-pressed motorists.

Danny Alexander is seeking assurances on petrol prices

Mr Alexander will use a speech in Aberdeen to say consumers feel petrol prices rise "like a rocket" when oil costs go up, but fall "like a feather" when they come down.

And people would "rightly be angry" if they felt prices were not coming down as much as they should.

Video: Cuts: A Loss Leader Or Real Deal?

Brent crude slumped as low as $82 (£51) a barrel earlier this week, its lowest level in just over four years due to concerns about over-supply.

The Liberal Democrat frontbencher will say: "Especially in the current economic circumstances people would rightly be angry if they feel that pump prices don't fall as much as they should on the back of falling oil prices.

"I believe it's called the rocket and feather effect.

"The public have a suspicion that when the price of oil rises, pump prices go up like a rocket.

"But when the price of oil falls, pump prices drift down like a feather.

"This has been investigated before and no conclusive evidence was found.

"But even if there were a suspicion it could be true this time it would be an outrage."

Mr Alexander promises to write to the industry's major players "seeking their assurance that they are doing all they can to pass on the benefit of falling oil prices as quickly as possible".

He will say: "When the price of oil falls, the public have a right to expect pump prices to fall like a stone, not a feather."

Pointing to the Treasury's fuel duty freeze, Mr Alexander will say: "I have made sure over the last four years that Government has helped with the cost of fuel.

"And when the oil price falls, industry must do all it can to help too."

12.07 | 0 komentar | Read More

Holiday Pay Should Include Overtime

Overtime should be taken into account when holiday pay is calculated, the Employment Appeal Tribunal has ruled.

The tribunal ruled on two cases against Hertel UK and BEAR Scotland, which related to the UK's interpretation of the Working Time Directive.

Workers for these companies claimed their holiday pay was less than it should have been because their employers did not factor in voluntary overtime completed in the period prior to time off.

Brian Gordon, managing director BEAR Scotland, said they were "disappointed" by the decision.

"We believe that this interpretation of the Working Time Directive is significant for all UK employers, public and private, and we will reflect on our position before considering how to respond," he said

Video: Is Ruling Good For Britain?

But unions welcomed the ruling, with Unite executive director Howard Beckett saying: "Up until now some workers who are required to do overtime have been penalised for taking the time off they are entitled to.

"This ruling not only secures justice for our members who were short changed, but means employers have got to get their house in order."

Business groups have described the ruling as a "blow" to business, with Confederation of British Industry director-general John Cridland warning of "punitive costs potentially running into billions of pounds".

"Not all will survive - which could mean significant job losses," he said.

"These cases are creating major uncertainty for businesses and impacting on investment and resourcing decisions.

"We need the UK Government to step up its defence of the current UK law, and use its powers to limit any retrospective liability that firms may face."

Tim Thomas, head of employment policy for manufacturers' organisation EEF, said firms will have little option but to factor the additional costs in to future pay negotiations and to reduce overtime, while one in four could cut jobs.

Some businesses had already prepared for the worst, with John Lewis setting aside £40 million to reimburse workers. 

Business Secretary Vince Cable told Sky News: "Our preliminary assessment is that the impact is likely to be modest."

When asked by Business Presenter Ian King whether the ruling could lead to job losses, he said: "If there is a very substantial cost to business, then that may well be the result, and we would very much regret that."

The Lib Dem confirmed a taskforce has been set up to discuss how to limit the impact of the decision for businesses, adding: "Employers and workers can also contact the Acas helpline for free and confidential advice."

12.06 | 0 komentar | Read More

Banks Call Off Effort To Stall Industry Probe

By Mark Kleinman, City Editor

Britain's biggest banks have abandoned efforts to head off a full-blown competition inquiry following a lukewarm response from regulators.

Sky News understands that the Competition and Markets Authority (CMA) will announce on Thursday that it is proceeding with a formal probe into the supply of banking services to small and medium-sized companies (SMEs) and personal current accounts.

The decision is understood to have been approved by the CMA board last month.

An inquiry, which could last for up to two years, will kick the politically sensitive issue of banking competition into the post-general election long grass.

The four largest banks collectively supply more than three-quarters of personal current accounts and an even higher proportion of banking services to SMEs.

Insiders said anything other than a decision to launch a full probe would have been unexpected given the small number of occasions on which the competition watchdog had reversed provisional findings.

It will, however, also prolong uncertainty for investors in big UK banks more than three years after the Independent Commission on Banking unveiled reform proposals intended to stimulate competition in the industry.

Announcing its provisional decision to make a market investigation reference in July, the CMA said it had been presented with a package of remedies to improve SME competition by the four lenders which collectively dominate the industry.

"The CMA is...particularly interested in hearing views on the 'in principle' proposals to remedy suspected problems in the SME banking sector that have been put forward by Barclays, HSBC, Lloyds Banking Group and the Royal Bank of Scotland Group, which they consider should be implemented instead of a market investigation reference being made.

"These proposals would involve those banks giving the CMA undertakings to set up a comparison website to improve transparency; to establish new account opening standards to make it easier for SMEs switching banks to open accounts; and to take certain promotional measures to facilitate comparability and switching."

The regulator said at the time that it believed that a full investigation would be "more appropriate" than accepting the banks' proposals but said it remained "open to views".

Insiders said, however, that there had been no further substantive discussions about the remedies and that the quartet of banks had effectively "downed tools" on work about how they would be implemented.

No meaningful responses suggesting that the CMA should accept the remedies had been received by the authority, they added.

Ed Miliband, the Labour leader, has pledged to break up the biggest banks by forcing them to sell significant numbers of branches if he becomes Prime Minister.

A person close to the CMA played down the prospect of a full break-up of the banks as a way of boosting competition, however.

The CMA declined to comment ahead of Thursday's announcement.

12.06 | 0 komentar | Read More

Virgin Money Revives IPO After Carney Boost

By Mark Kleinman, City Editor

Sir Richard Branson's banking arm is to revive plans to list on the stock market just days after receiving a boost from new Bank of England rules dictating the amount of capital that lenders must hold to protect them against losses.

Sky News can exclusively reveal that Virgin Money is poised to set out later this week a refreshed timetable for its flotation, which banking sources say is expected to value it at roughly £1.5bn, and result in its shares trading publicly before Christmas.

An announcement from the company, the main sponsor of the London Marathon, could be made as early as Tuesday.

The decision to resuscitate the initial public offering (IPO) comes days after Sir Richard's ambition of launching the world's first passenger space travel operation suffered a major setback following a fatal crash involving his prototype Virgin Galactic spacecraft.

Insiders said that while a final decision had not yet been made, the recovery in bank share prices since last Friday's leverage ratio announcement by the Prudential Regulation Authority (PRA) meant that Virgin Money was likely to revive its IPO much sooner than expected.

Video: Branson On 'Irresponsible Innuendo'

Virgin Money announced its intention to float on 2 October, targeting £150m from the sale of new shares in the company.

On 17 October, with stock markets hit by volatility caused by concerns about the Ebola virus, the threat of deflation and broader concerns about global economic growth, the company issued a further statement saying:

"Virgin Money continues to progress its plan for an initial public offering, mindful of market conditions. It now expects admission to occur later than October 2014 and as soon as constructive market conditions allow."

That market volatility prompted a number of other companies, including Aldermore, another fast-growing UK bank, to shelve its flotation indefinitely.

However, the stabilisation of equity markets since then, and last week's PRA announcement that the leverage ratio would be set lower than investors had expected, has encouraged Virgin Money to mount another attempt at listing.

Mark Carney, the Governor of the Bank of England, was praised by bank investors for adopting a pragmatic approach to the new rules, which will come into effect during the next few years.

In a statement responding to the PRA announcement, Jayne-Anne Gadhia, Virgin Money's chief executive, said: "One of Virgin Money's core strengths is our robust capital position and high-asset quality.

"As such we welcome the new leverage ratio framework announced today by the Financial Policy Committee, and are pleased to note that we operate in excess of the recommended requirements."

Video: NTSB News Conference

Ms Gadhia said Virgin Money had performed strongly during the third quarter, winning a 4.5% share of new mortgage applications.

"Looking to the future, we have a powerful brand, a strong balance sheet, a strong core business franchise and considerable opportunities to continue to extend our product range," she said.

Virgin Group and WL Ross, a US-based investment vehicle, collectively own just over 90% of Virgin Money.

The UK bank listing is not the only Virgin-backed company progressing its plans to go public this week despite the Galactic crash in the Mojave desert, which early reports have attributed to pilot error.

Virgin America, the US domestic airline partly owned by the British billionaire, published a listing prospectus on Monday which cited "adverse publicity in relation to the Virgin brand name" among its risk factors.

Bank of America Merrill Lynch, Barclays, Citi, Goldman Sachs and Keeffe Bruyette & Woods are working on the Virgin Money flotation.

A Virgin Money spokesman declined to comment.

12.06 | 0 komentar | Read More

HSBC Prepares For UK Forex Fines Of £236m

Banking giant HSBC has set aside almost £250m as it prepares itself to be hit with fines over alleged foreign exchange manipulation.

It said it has made a $378m (£236m) provision for potential penalties following an investigation by Britain's Financial Conduct Authority (FCA).

"Discussions are ongoing with the FCA regarding a proposed resolution of their foreign exchange investigation with respect to HSBC Bank plc's systems and controls relating to one part of its spot FX trading business in London," it confirmed.

"Although there can be no certainty that a resolution will be agreed, if one is reached, the resolution is likely to involve the payment of a significant financial penalty.

"We continue to cooperate fully with regulatory and law enforcement authorities in the UK and other jurisdictions."

Video: 1964: Banking For the Ladies

HSBC, Royal Bank of Scotland and Barclays have now set aside a combined figure of more than £1.1bn for potential FCA fines over currency-rigging claims.

US investigators are also likely to hit HSBC, Europe's biggest banking group, with settlement charges, but it has not chosen to quantify those possible penalties.

In addition to the currency trading woes, HSBC also said it was setting aside around £370m for potential additional payment protection insurance (PPI) mis-selling in the UK.

Video: MP Talks About Forex Probe

It has also agreed a $550m (£340m) settlement with the US Federal House Finance Agency.

The bank also confirmed it had been summoned to appear before French magistrates over whether its Swiss private bank had helped French citizens to evade tax.

Early last month, Sky News city editor Mark Kleinman revealed two key directors were quitting over tough new regulations that could see directors jailed over failed banks.

Video: The Cost Of Banking To The Banks

The news about the potential penalties comes as the bank released its results for the three months to the end of September.

Although total revenues were flat at $15.57bn (£9.7bn), adjusted pre-tax profit fell 12% to $4.4bn (£2.75bn) on the back of impairment charges that reached almost $1.7bn (£1bn).

Statutory pre-tax profit rose by just 2% on the 2013 figure, far below analysts' expectation of around 16%.

Video: Oddie Confronts HSBC Over Loggers

Shares were down in early trading before recovering.

Net profit for the period rose 7% to $3.43bn (£2.1bn), compared to the same period last year.

12.06 | 0 komentar | Read More

BBA: New Oversight Will Hurt Smaller Banks

By Mark Kleinman, City Editor

Smaller lenders would be hit by new rules heralding the world's toughest oversight regime for senior bankers, according to the industry's main City-based lobbying groups.

The warning is contained in a confidential paper submitted on Friday to UK watchdogs ahead of sweeping reforms that will include the threat of seven-year prison terms for directors of failed banks.

In a joint response to the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA), the British Bankers' Association (BBA) and Association for Financial Markets in Europe (AFME) said that smaller banks would suffer disproportionately high costs in order to comply with the new supervisory framework.

"Coupled with the existing funding, capital and payment access disadvantages already suffered, these new overheads will act as a further barrier to small banks which have fewer senior executives amongst whom responsibilities can be shared, reducing their ability to provide challenge and competitive alternatives in the UK retail and small business market," the lobby groups said.

Their submission, a copy of which has been obtained by Sky News, contains several other objections to the FCA and PRA proposals, including:

:: A suggestion that non-executive directors of banks would lose their independence and begin "man-marking" their full-time colleagues if they are covered by the same rules.

The response said: "The proposed regime could potentially alter the current nature of NED and executive director relationships, and impact the current collaborative and challenge-based board decision-making processes as individual NEDs seek to protect against their individual personal liability."

That warning comes weeks after Sky News revealed that two directors of HSBC's UK subsidiary were quitting in protest at the new rules, which will come into effect next year.

:: A concern that the FCA would have jurisdiction over the overseas employees of UK-based banks even when individuals have no direct connection with UK clients or a realistic possibility of causing harm to a UK-regulated firm.

:: A plan to discontinue the current FCA register of banking industry employees should be dropped because it "will have a negative effect on standards across the industry, in part because of a reduction in transparent (for the industry, consumers and regulators) of many individuals' conduct history".

:: Rejecting the idea that chairmen of banks should not be solely responsible for ensuring that whistleblowers are protected from detrimental treatment.

Regulators are likely to be particularly sensitive to the complaint about higher costs being imposed on smaller lenders following efforts led by George Osborne, the Chancellor, and Vince Cable, the Business Secretary, to pave the way for a new group of "challenger banks".

The new framework has emerged in the wake of pressure on regulators to toughen penalties in the wake of the financial crisis and subsequent trading scandals, including Libor and foreign exchange benchmarks.

Six banks are expected to pay well over £1bn to UK regulators alone to settle the forex issues, with an announcement expected next month.

12.06 | 0 komentar | Read More

New Law Plan To Tackle Mobile Phone Blackspots

Mobile telephone users could soon be able to talk to their friends even when they enter a signal blackspot, if proposed new legislation goes ahead.

Culture Secretary Sajid Javid wants to change the law to force networks to allow customers to switch providers when their phones cannot find a signal.

It has been estimated that a fifth of Britain suffers from an unreliable mobile phone signal.

The Government is expected to start a consultation process on the reforms this week.

It follows the failure of the 'big four' phone operators - Vodafone, O2, EE and Three - to reach an agreement on improving reception in areas where it is poor.

In most of the areas, at least one or two of the networks have sufficient coverage for people to receive a signal.

Mr Javid is understood to believe that the companies should be forced to allow 'roaming' between networks to ensure that everyone can receive a signal regardless of which operator they are with.

Currently, customers who have contracts with one network cannot make calls, send text messages or transfer data using another network.

Yet, whenever a customer travels abroad, they are able to use any network their operator has an agreement with.

A Whitehall source told The Daily Telegraph: "We want to eradicate this situation of partial not-spots.

"There is expected to be a consultation in the coming days and this could include a legislative option. If these companies do not change, we might force them to change."

12.06 | 0 komentar | Read More

Energy Bills: UK Gas Prices Hit Record Low

UK wholesale gas prices have hit a record low, piling more pressure on energy firms to explain why household bills have not been slashed.

The latest fall in raw costs - for November and December delivery - has resulted in a 23% fall over the year so far though bills have remained largely static.

The latest drop was a response to Ukraine and Russia signing a deal to end the threat of supplies being choked off.

The deal will see Moscow resume gas flows over the winter despite their continuing sovereignty row.

The agreement also guarantees delivery to the EU. Russian gas makes up approximately 15% of UK supply.

Raw energy costs, including oil too, have been tumbling in recent months - with Brent Crude losing 25% of its value since June on the back of weaker demand as the world's economic recovery shows signs of easing.

The energy regulator Ofgem told Sky News this week it was seeking an explanation from household suppliers on why they had not passed on to customers the significant falls in wholesale costs.

So-called 'Big Six' firms responded to today's development by insisting that bills reflected long term gas costs not short term pricing.

Companies have recently been tinkering with their offerings, taking their lowest annual tariffs below an average £1,000, but are yet to signal any major cuts to bills despite their wholesale costs diving by almost a quarter during 2014.

Industry body Energy UK said: "There are good deals on the market for customers shopping around and looking to fix their payments.

"Wholesale prices are just part of the bill and, although reduced pressure on the wholesale gas market is good news in the long term, companies buy energy days, weeks, months - even years - in advance to protect customers from sudden changes in costs, and will have bought gas when prices were higher."

Energy firms must use either the wholesale market or a contract with an electricity generator to purchase their energy, which is then delivered to households.

But some suppliers are also part of companies that generate their own energy, so they effectively sell energy to themselves - a situation that has led to calls for greater transparency on profits by splitting generation and supply businesses.

Reported profit levels have recently fallen back to levels not seen since 2009 and companies have consistently argued that their profits are fair and bills reflect not only the timing of their raw gas purchases and hedging strategies but also and high investment costs.

National Grid's latest Winter Outlook report warned that spare capacity was at its weakest level for seven years - a result of several factors including the failure to keep pace with power station closures and unscheduled plant outages.

12.06 | 0 komentar | Read More

BBA: New Oversight Will Hurt Smaller Banks

By Mark Kleinman, City Editor

Smaller lenders would be hit by new rules heralding the world's toughest oversight regime for senior bankers, according to the industry's main City-based lobbying groups.

The warning is contained in a confidential paper submitted on Friday to UK watchdogs ahead of sweeping reforms that will include the threat of seven-year prison terms for directors of failed banks.

In a joint response to the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA), the British Bankers' Association (BBA) and Association for Financial Markets in Europe (AFME) said that smaller banks would suffer disproportionately high costs in order to comply with the new supervisory framework.

"Coupled with the existing funding, capital and payment access disadvantages already suffered, these new overheads will act as a further barrier to small banks which have fewer senior executives amongst whom responsibilities can be shared, reducing their ability to provide challenge and competitive alternatives in the UK retail and small business market," the lobby groups said.

Their submission, a copy of which has been obtained by Sky News, contains several other objections to the FCA and PRA proposals, including:

:: A suggestion that non-executive directors of banks would lose their independence and begin "man-marking" their full-time colleagues if they are covered by the same rules.

The response said: "The proposed regime could potentially alter the current nature of NED and executive director relationships, and impact the current collaborative and challenge-based board decision-making processes as individual NEDs seek to protect against their individual personal liability."

That warning comes weeks after Sky News revealed that two directors of HSBC's UK subsidiary were quitting in protest at the new rules, which will come into effect next year.

:: A concern that the FCA would have jurisdiction over the overseas employees of UK-based banks even when individuals have no direct connection with UK clients or a realistic possibility of causing harm to a UK-regulated firm.

:: A plan to discontinue the current FCA register of banking industry employees should be dropped because it "will have a negative effect on standards across the industry, in part because of a reduction in transparent (for the industry, consumers and regulators) of many individuals' conduct history".

:: Rejecting the idea that chairmen of banks should not be solely responsible for ensuring that whistleblowers are protected from detrimental treatment.

Regulators are likely to be particularly sensitive to the complaint about higher costs being imposed on smaller lenders following efforts led by George Osborne, the Chancellor, and Vince Cable, the Business Secretary, to pave the way for a new group of "challenger banks".

The new framework has emerged in the wake of pressure on regulators to toughen penalties in the wake of the financial crisis and subsequent trading scandals, including Libor and foreign exchange benchmarks.

Six banks are expected to pay well over £1bn to UK regulators alone to settle the forex issues, with an announcement expected next month.

12.06 | 0 komentar | Read More