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Begbies Traynor, the insolvency and recovery specialist, will launch its Red Flag Alert system as a commercial tool to allow companies to measure the financial health of their customers and competitors. Until now, Red Flag Alert has been used internally by Begbies and for media houses to assess the corporate landscape in the UK. It runs on a database of more than 6m firms. Executive chairman Ric Traynor said: “As trading must go on, early detection of businesses that are on the brink of failure is crucial to minimising the risk of financial losses.”

Citigroup and the US government disagree over how much the bank should raise to repay taxpayers and talks may not finish for weeks or even months, people briefed on the matter said yesterday.

The bank and the United States have to resolve questions including how the government would shed its roughly 7.7bn shares in the bank – worth $31bn (£18.8bn) at current prices – and how the government would stop insuring a pool of troubled assets against loss, the sources said.

After Bank of America sold $19.3bn of shares last week and announced a plan to repay government money borrowed through the Troubled Asset Relief Programme, investors are paying close attention to other banks that may soon leave the programme.

Citigroup has much to gain from exiting Tarp. The US government has a good deal of say over how it pays its top executives, for example, which could hinder the bank’s efforts to retain its best employees.

But Citigroup may have more trouble paying back bailout funds than Bank of America did, because it has received more government support. The United States owns about a third of the bank’s shares, after Citigroup gave a big chunk of common stock to investors in exchange for preferred shares.

The government also guarantees a portfolio of Citigroup assets against excessive losses. That portfolio stood at around $182bn at the end of the third quarter.

The government did not own Bank of America common shares and never closed on a deal to guarantee a portfolio of the bank’s assets against high losses. That portfolio stood at around $182bn at the end of the third quarter.

Irish airline Aer Lingus said yesterday that the number of passengers travelling with it for long-haul flights last month was 25 per cent lower than in the same month last year. But overall passenger numbers were up by nearly 5 per cent.

The airline also said its November traffic decreased 6.4 per cent to 1.08bn revenue passenger kilometres or RPKs, from 1.15bn RPKs in the same period last year. The airline's capacity for the month was 1.51bn available seat kilometres or ASKs, down 4.7 per cent from 1.59bn ASKs in the prior year period.

Britain’s top shares ended 0.2 per cent lower yesterday, with banks weak on concerns over a possible windfall tax, offsetting modest gains in miners and energy stocks which rebounded from earlier losses.

The FTSE 100 closed 11.70 points lower at 5,310.66 points, paring some losses from earlier in the session when the index dropped to a day-low of 5,250.98 points.

Banks were the biggest fallers, pressured by reports of a potential windfall tax on bankers’ bonuses.

Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland and Standard Chartered (fell 1.4 to 4.7 per cent.

A government source said that a tax on banks was one revenue-raising option being considered by finance minister Alistair Darling for his pre-budget report on Wednesday, and newspapers were heavy with speculation on what form this could take.

In further woes for the sector, analysts at Evolution Securities said in a note that capital will remain tight for European banks in the next two years as regulatory changes bite, which will effectively “scuttle” many banks’ ability to lend.

Defensive pharmaceutical and telecoms stocks fell back after posting gains on Friday, with AstraZeneca and GlaxoSmithKline off 0.7 and 0.6 per cent respectively, while shed 1 per cent.

London Stock Exchange fell 1.7 per cent. The exchange said trades in November were 21 per cent lower than in the same period a year ago.
Scottish & Southern Energy shed 0.9 per cent after UK energy regulator Ofgem set new price controls.

Britain’s six big energy suppliers must cut their power and gas prices early next year and should not use their need to invest as an excuse to overcharge customers, energy regulator Ofgem said.

The FTSE has so far rebounded 54 per cent since hitting a low in March. A combination of brightening economic data and upbeat corporate earnings since the lows have put the index on track to post its best yearly gains since 1997.

Analysts say equities could trend upwards before the end of the year.

“In the short-term we could see a bit more strength (on the FTSE) going into Christmas,” said David Jones, chief market strategist at IG Index.

“People still have a fairly bullish bias towards stock markets and it wouldn’t be surprising to see it run back up to the highs of the year at around 5,400,” he said.

Miners were mostly higher, as metals prices regained some lost ground after the US dollar eased off a five-month high against a basket of currencies. Antofagasta, BHP Billiton, Kazakhmys, Lonmin and Rio Tinto rose 0.5 to 2.2 per cent.

BHP Billiton and Rio Tinto signed a $116bn iron ore joint venture agreement on Saturday to combine their Western Australian iron ore operations.

Energy stocks reversed earlier losses as crude prices edged up slightly but remained below $75 a barrel. BG Group, BP, Cairn Energy and Royal Dutch Shell were up 0.3 to 0.7 per cent.

Among the gainers TUI Travel added 1.5 per cent after Panmure Gordon repeated its “buy” rating following results last week from Europe’s biggest tour operator. Within the sector, Thomas Cook, which was also rated as a “buy” by Panmure, rose 1.9 per cent.

Accountancy software company Sage gained 0.8 per cent after BofA Merril Lynch raised its target price following the company’s results.

BANK of America’s integration with fellow banking scion Merrill Lynch might have been fraught with difficulty over the course of the past year, but it seems the powers that be are finally learning the art of tactful compromise.

After Merrill’s beloved bovine logo appeared to have been dropped by BoA in favour of a new, sleeker merged insignia earlier in the year, bankers at the group are now rejoicing at the official return of the bull to their business cards.

“We’re all desperately happy to see it survive,” croons one delighted banker. “It’s an iconic symbol that represents a very positive tradition…”

What they are all keen to know, however, is whether the reappearance of the bull on the company’s business cards will indicate its return in the form of other Merrill memorabilia as well. Apparently, pencils, notepads and coveted mini “stress bulls” – rubbery miniatures of the animal – were eagerly squirrelled away before the axe fell at the bank by employees keen to make a quick buck on eBay in the future.

But it looks like that effort will be in vain, as an amused spokeswoman confirms there’s a strong chance that more of the various bric-a-brac will be coming off the production line in the future. Phew.

TOO BIG TO FAIL
Feast your eyes, if you will, on the bravery represented by the picture below – which, although you may believe is a joke, is actually a numberplate cruising the streets of NYC as we speak.

According to Andrew Ross Sorkin, the author of the latest hot book on the financial crisis, Too Big To Fail, the plate is attached to a gas-guzzling Porsche Cayenne Turbo and belongs to one vice-chairman at Morgan Stanley, Rob Kindler.

The champagne-spraying banking days of old may not quite have made their comeback yet, but on this evidence, it doesn’t look like they’re far away.

GLORIOUS FOOD
Staff at Linklaters are more used to dealing with troubling litigation on behalf of their clients than lobbying for better facilities at their swanky HQ, but it appears their new Silks canteen is having less than the desired effect on morale.

Law blog RollOnFriday has published a long email from members of staff to their head of catering, complaining about the refurbishment of the cafeteria.

Pages and pages of documentation follow (well, we all know lawyers like to be thorough, don’t we?), containing grumbles about everything from the fact made-to-order sarnies are no longer available, to the extortionate mark-up on a large bowl of soup (up 62 per cent to a horrifying £1.10, apparently), the unnecessary numbers of black-shirted staffers standing around like lemons, and the inconvenient positioning of side-dishes of broccoli and other greens.
All, of course, rendered in perfectly argued solicitors’ English.

Positively a work of art...

BAGGAGE HANDLERS
To a rather heated debate on Friday evening, courtesy of a packed train bound for Luton airport. My spies tell me that despite the crush of passengers crammed into the aisles and spaces between the carriages, four nonchalant flight attendants in full orange easyJet regalia were happy to take up two seats apiece, reserving one for their large items of baggage.

Needless to say, despite the airline’s no-frills policy, the etiquette oversight didn’t go down too well with fellow travellers, who didn’t shy away from threatening them with full-blown fisticuffs if they didn’t show some manners. Tut, tut.

FISHY BUSINESS
Those who thought tensions were running high between private equity mogul Jon Moulton and his former colleagues at Alchemy, which he sensationally quit earlier this year and called for investors to wind it up, may have to think again.

I hear former Alchemy finance director John Bostock has landed a new job at a private company in which Moulton is the main shareholder – The Cool Blue Box Company, which provides environmentally-friendly boxes for transporting fresh fish. Not quite so glamorous as the high-powered world of finance, perhaps, but at least they can reminisce about the good old days over a guilt-free gourmet fish supper.

BELLES OF THE BALL
Finally, a mention for the Sparks Charity Ball, taking place this Thursday in aid of the children’s medical research charity and sponsored by big-hearted Frank Timis, the executive chairman of miner African Minerals. Satirist and impressionist Rory Bremner has been lined up already as the night’s entertainment, so visit the charity’s website for more details…

The S&P 500 and Nasdaq ended slightly lower yesterday and the Dow was flat, reversing earlier gains, after comments by Federal Reserve Chairman Ben Bernanke sparked jitters about the economic recovery.

Financial and technology shares were among the biggest drags on the market. The S&P lost 1.6 per cent while the KBW Bank Index shed 2.1 per cent.
Speaking at the Economic Club of Washington, Bernanke said inflation could remain subdued, but the US unemployment rate could remain elevated for some time.

Initially the Fed chief’s remarks lifted stocks and sent the dollar lower, but later some investors pared positions. Bernanke said the US economy faces “formidable headwinds,” including a weak labour market and tight credit conditions that have persisted despite the Fed’s efforts to support the economy.

“Obviously there was an initial boost, but as people looked more into it, they realized ... we do face ‘formidable headwinds,’” said Tim Speiss, partner at Eisner LLC.

The Dow Jones industrial average ended up 1.21 points, or 0.01 per cent, at 10,390.11. The Standard & Poor’s 500 Index lost 2.73 points, or 0.25 per cent, at 1,103.25. The Nasdaq Composite Index fell 4.74 points, or 0.22 per cent, at 2,189.61.

Investors had been looking for a clue as to how the Fed might unwind its economic stimulus efforts after a report on Friday showed employers cut far fewer jobs than expected in November were reassured.

Bank of America closed down 2.4 per cent at $15.89 and JPMorgan Chase fell 1.2 per cent to $41.25.

Citigroup shares ended down 2.2 per cent to $4.03 on news that it is in a disagreement with the US government over how much money the bank should raise to exit the Troubled Asset Relief Program. Negotiations between the bank and the government may not be finished for weeks or months, according to people briefed on the matter.

“(In financials) there are still a lot of questions as to how TARP recipient banks are going to pay back, the issue with compensation, lots of things to point to,” said Angel Mata, managing director of listed equity trading at Stifel Nicolaus Capital Markets.

Volume was light on the New York Stock Exchange, with 1.06bn shares changing hands, below last year’s estimated daily average of 1.49bn, while on the Nasdaq, about 1.89bn shares traded, also below last year’s daily average of 2.28bn. Advancing stocks outnumbered declining ones on the NYSE by a ratio of 16 to 13.

Europe needs a new growth model and tighter regulation to prevent another meltdown, said incoming EU internal market commissioner Michel Barnier yesterday.

The former French agriculture minister said the financial crisis meant “more governance and regulation where needed,” adding, “obviously times are different now.”

“Faced with the exit from the crisis that we’re trying to shape, faced with a new sustainable, green growth model, Europe has a role to play,” he said. Barnier’s comments come in the wake of French President Nicolas Sarkozy’s boasting that his appointment was a victory for Paris and a loss for the financial free-wheeling Anglo-Saxon model in London.

However, Barnier attempted to dispel British anxiety in a French TV interview claiming that he “won’t take orders from Paris any more than from London or Berlin”.

That Barnier has confirmed his independence from European capitals is encouraging, said a British Bankers’ Association spokesman.

“We have accepted the need for these tighter rules and are working with the European institutions to create an improved framework,” he said.

THELABOUR government is facing an increasingly furious City backlash over plans to slap a punishing windfall tax on bank bonuses, with senior figures warning that the policy could prove the last straw for the UK’s ability to retain senior banking talent.

Chancellor Alistair Darling is expected to unveil the tax bombshell at tomorrow’s Pre-Budget Report (PBR), as part of a raft of measures designed to pander to populist anger towards the banks.The measures, which would only raise a few hundred million pounds, would have almost no effect on the budget deficit, which is set to hit £180bn this year.

City A.M. understands the most likely scenario will be a temporary year-long levy on larger banks’ bonus pools, rather than a charge on individual payouts over a certain limit, which some yesterday said would be “discriminatory” and subject to challenge under human rights law.

But the City’s primary concern yesterday was the effect any windfall tax on bonuses would have on its global competitiveness, which has already taken a hit from the crackdown on non-doms, a new 50p top rate of income tax and a cut in pension tax relief for high earners.

Higher national insurance contributions, new rules on bonuses, a planned European attack on hedge funds and private equity houses, tighter rules on skilled migrants and new rules governing compensation have also caused alarm in the Square Mile.

Speaking at the Wall Street Journal Future of Finance Initiative yesterday, Darling defended plans to clamp down on bonuses.

He said: “I can understand why some people say this is all political, but people need to really understand that there would not be a bank standing today if the taxpayer had not had to reach into their pockets.

“What we have been seeing is people getting bonuses of the sort of magnitude I couldn’t dream of. The industry as a whole does need to show a degree of restraint.

And he went on to address public anger over bonuses, telling bankers “if you can’t look a neighbour in the eye and justify what you’re doing, there’s a problem.”

But Stuart Fraser, the City of London corporation’s policy chairman, said: “If you’re a premier league investment banker looking around the world, you now have some serious questions over the UK. The message we’re sending abroad is that the UK doesn’t like high earners.”

Boris Johnson’s spokesman said the Mayor believes bankers have a duty to show social responsibility and self-restraint, but that he “is opposed in principle to one-off politically vindictive, short term measures.”

And Jon Terry, head of reward at PricewaterhouseCoopers, warned a windfall tax could prove to be “the straw that breaks the camel’s back” in terms of the City’s competitiveness.

Meanwhile Gordon Brown yesterday outlined £12bn of public sector efficiency savings over four years and plans to “name and shame” highly-paid public sector fat cats. The cuts – £3bn more than planned in the Budget – will come partly from streamlining central government, axeing the costly NHS IT upgrade programme and relocating departments out of London.

The Prime Minister said new public sector salaries above £150,000 would have to be approved by the Treasury, while the roster of civil servants currently earning that amount would be made publicly available.

The Tories responded by announcing plans for a Public Services Productivity Advisory Board to increase accountability in the public sector.

ELLIOTT PERRY RK HARRISON
“London is still at the top of the game as a financial centre. Technology is developing all the time, which drives people to come and work here. As long as the downturn doesn't hit development in that area, London will remain competitive.”

SAM WARD MARSH
“There is real expertise in London – it’s still the centre of the financial world. The reputation of the banking industry is in tatters, and remuneration may reflect that, but there are other reasons for people to stay in the capital.”

IAN YUILL INVESTIT
“A heavier tax, as Darling seems to be preparing to suggest in the pre-budget report tomorrow, won’t lead to a mass exodus from the City immediately, but if the government continues to punish City workers, talent will drift away.”

MARTIN BOLTON MARKETFORM
“It is unlikely that people will leave the City for the sake of competitiveness. To flee to another country is a big upheaval, for what is likely to be a small boost in pay. Boris Johnson will be in there fighting for the City’s reputation.”