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WHAT THE OTHER PAPERS SAY THIS MORNING

FINANCIAL TIMES
MUTUALS CLOSE TO CAPITAL DEAL
Building societies are close to finalising details of a new investment instrument that would allow them to comply with tough new capital requirements without compromising their mutual status. According to senior figures in the industry, talks are close to conclusion on the creation of of “mutual ordinary deferred shares”, or Mods. These would behave like bonds, with a capped coupon, but be loss-bearing for regulatory purposes.

INVESTORS RUSH FROM JUNK BONDS
Investors are selling out of junk bonds at the fastest rate since September 2005 in the latest indication that concerns over sovereign debt are spreading to other credit markets. In the week that ended on Wednesday, almost $1bn (£640m) was withdrawn from US funds that hold high-yield corporate (junk) bonds.

DELOITTE CHIEF REIGNITES DEBATE ON ACCOUNTING FOR BANKS’ LOSSES
Two of the world’s biggest acounting firms are reigniting the dispute over the way that banks account for losses -- raising doubts over the long-awaited convergence of global reporting standards. Jim Quigley, global head of “Big Four” accounting form Deloitte Touche Tohmatsu, has proposed that banks account for losses in two radically different ways, to meet the opposing demands of politicians and accountants.

RBS IN LINE FOR LOSS ON GERMAN PORTFOLIO
Royal Bank of Scotland is sitting on a loss of several hundred million pounds after being forced to take back the keys on €2.1bn (£1.8bn) in German properties bought at the peak of the market by a fund run by Morgan Stanley. RBS has taken control of a portfolio of 28 properties, mostly located in the Rhine-Main and Berlin areas.

THE TIMES
EBOOKS: PUBLISHERS POISED FOR VICTORY IN LATEST BATTLE
Publishers look set to win the latest round in the battle for supremacy on electronic books, with Google ready to offer major concessions as it prepares to enter the increasingly competitive e-book market. Following the unveiling of Apple’s iPad, which will feature an electronic bookstore when it launches next month, Google is thought to have given in to the book industry by offering it a higher share of the sale of e-books.

BLACKS SELLS OFF MAMBO
Blacks Leisure, the struggling outdoor clothing retailer, has sold its Mambo surf brand to one of the men behind Lush Cosmetics for £800,000. Andrew Gerrie, the New Zealand-born chief executive of Lush, has bought Mambo through his Hong Kong investment vehicle.

THE GUARDIAN
PUBLIC SECTOR RECESSION ‘HAS ALREADY STARTED’
Almost a third of public sector employers are planning to cut jobs during the first quarter of this year, amid warnings that the “starting gun for a public sector recession has been fired”. In a survey of 700 employers, the Chartered Institute of Personnel and Development said today that redundancies in both the public and private sectors are set to accelerate during the first three months of 2010.

CANADA COURTS CHINA TO JOIN CONTROVERSIAL PROJECTS
Canada, faced with growing political pressure over the extraction of oil from its highly polluting tar sands, has begun courting China and other Asian countries to exploit the resource. The move comes as US firms are turning away from tar sands due to its heavy carbon footprint.

WALL STREET JOURNAL
MICROSOFT TARGETS PHONES
Microsoft plans to introduce long-awaited new software for powering cellphones today, as the company seeks to regain a technology edge in the market against rivals like Apple and Google. At a wireless industry conference in Barcelona, the company plans to publicly show a new version of its cellphone operating system, Windows Mobile 7, for the first time.

CHENEY ATTACKS OBAMA
Former vice president Dick Cheney renewed his attack on the Obama administration’s national security policy yesterday, suggesting it was failing to prepare against another major terrorist assault. Vice president Joe Biden countered that Cheney was “misinformed or he is misinforming”. On Sunday news shows, the two men sparred on homeland matters.