Shadow banks reap Fed rate reward
Loosely regulated non-bank lenders have emerged as among the biggest beneficiaries of the Federal Reserve’s ultra-low interest rates with three specialist categories increasing their assets by almost 60 per cent since the height of the financial crisis. Such lenders, widely considered part of the “shadow banking” system, have expanded rapidly on the back of investors who are clamouring for the higher returns on offer from financing riskier types of lending.
Transocean reaches deal with Icahn
Transocean, one of the world’s largest offshore drilling contractors, will raise its dividend, step up its cost cuts and spin off some of its assets in a new partnership under a plan agreed with Carl Icahn, the activist investor who controls 6 per cent of the company’s shares. It has also agreed to add a second employee of Icahn’s to the board, and cut its number of directors from 14 to 11.
Volcker rule prospect worries banks
US officials are optimistic that the Volcker rule, stopping banks trading for their own account, will be delivered by the end of the year. For more than three years regulators have been arguing over where to draw the line between prohibited prop trading on the one hand and permitted market making for clients and hedging on the other.
Rating firms accused of recklessness
The three big credit ratings agencies routinely gave ultra-safe triple-A scores to risky property backed securities knowing one day the “house of cards” would collapse, according US court filings yesterday. Standard and Poor’s and Fitch said the allegations were without merit. Moody’s had no immediate comment.
Fear over pressure to jail bankers
Rudolph Giuliani, who served as Manhattan’s top prosecutor through the 1980s, said “young, impressionable” prosecutors chasing “celebrity status” risk succumbing to public pressure to jail supposed instigators of the financial crisis.
The Daily Telegraph
E.ON eyes 6.6 per cent price hike
More than 4m more households face spiralling energy bills this winter as E.ON prepares to push up charges by more than double the rate of inflation. The German-owned energy supplier is planning to unveil a rise of 6.6 per cent in gas and electricity rates later this month – with the increase set to take effect in early January.
Record high stock market confidence
Investors’ confidence in the stock market is at a nine-year high, a survey suggests. Around eight in 10 savers expect to profit from the UK stock market in the next 12 months, according to a survey from Hargreaves Lansdown.
THE WALL STREET JOURNAL
Sotheby’s loss narrows
Sotheby’s said its third-quarter loss narrowed as the auction house logged an increase in private sale commissions and auction commission revenue. The company’s shares rose in after-hours trading, as results for the quarter exceeded Wall Street’s expectations.
HealthCare.gov enrolment falls short
Initial reports suggest that fewer than 50,000 people successfully navigated the troubled federal health-care website to enrol in private health insurance plans as of last week, two people familiar with the matter said yesterday.