Live Blog

October 31, 2014, 5:31pm
I count myself very lucky. I was a "yoot" in the second summer of love, that heady blip in the late eighties when we revelled in the utopian vision that 10,000 people and 10,000 watts of belly-rumbling bass could actually signify a change in the human state: love could indeed save the day. It was school blazer and house tie during the week, house music during the weekend.
The dominance of Thatcher's Britain at that time was arguably punctuated with a cultural movement well-documented to have rocked the core of the establishment - in fact, it inspired the Criminal Justice Bill passed in 1994, 20 years ago this November.
Rewind to ’94 and the UK witnessed the biggest demonstrations and marches since the Poll Tax and Miners' plight: 50,000 people descended on London in October of that year where running battles with the police were witnessed across the iconic capital spots of Park Lane, Hyde Park and Trafalgar Square. 
Arguably, this was in part a counter-intuitive law that ushered through clauses on the criminalisation of the gathering of people around repetitive beats. Old people's homes were raided while Dottie and friends banged out Nightingales Sang in Berkeley Square, and teenage birthday parties were closed down by the boys in blue; many aspects of the Bill were seen as a direct attack on legitimate lifestyle choices.
But beyond this I believe it kicked off a cultural shift so wide-reaching that we all experience it today: fear.
As Lars Svendsen wrote in his book, Philosophy of Fear: "The prospect of dire outcomes have been relentlessly inflated… the result is a widespread sense of fear that increasingly permeates contemporary life."
And so, the brand of fear we're served is perpetual, sneaky, often unfounded. Of course, there is threat in our world, but what we miss is a real understanding of what fear really is as one of the least understood of our emotions.
Fear almost precedes any rationality of thought, overshadowing context. The fear of terrorism, a brand called ISIS, Al Qaeda – the fear that permeates through our lives, aggressively flogged to us. Even closer to home is a fear based mantra – house prices, NHS, Trident, border control, EU.
It is against this heightened backdrop of fear that we can observe the countershift in brands. Many are in pursuit of love – "lovemarks" and brand love - wrapping customers up with optimistic promises. No longer the fear of germs, but the freedom for children to play, no longer fear of an STI but promoting the pleasure of sex, even high street banks are offering to be there for the journey. 
So while fear permeates the media, there appears to be a positive solace in brands – brands replacing the establishment as anchor-points for positivity, hope, love.
What we need right now is the power of love to rule over the often unfounded power of fear.
Madrid Airport
October 31, 2014, 5:12pm

The heavily-trailed flotation of the world's largest airport operator has been postponed until at least the early part of next year, a source close to the deal has confirmed.

Spanish government-owned Aena, which owns 46 airports including Luton, Madrid Cuartro-Vientos and Barcelona-El Prat, had been due to list 49 per cent of its shares on November 12, which had been expected to raise $10bn for the company. 

The decision is an embarrassing u-turn for the Spanish government, which had been using the listing as a bellwether for retail investors' confidence in the country's economic prospects, advertising the offer heavily on local TV and radio. 

Although it has been reported that the delay is due to a "technical flaw", meaning a tender was not organised to find an auditor to sign off the "comfort letter" needed for the prospectus, it is thought shaky figures coming out of European economies and weakening enthusiasm for new listings have also contributed.

There are also reports of in-fighting among government ministers, particularly minister of development Ana Pastor, who is in favour of the deal, and the ministers of finance and economic affairs, Luis de Guindos and Cristóbal Montoro

Last week, the listing was put back when the filing of its prospectus was delayed, although Aenas said it expected the government to give it the go-ahead at some point today.

Bank of England building
October 31, 2014, 5:10pm

The Bank of England has revealed proposals to increase the leverage ratio of UK banks to ensure banks have a larger safety net to fall back on in the event of another financial crisis.

The tough new measures will force banks to keep capital of up to 4.95 pence for every £1 they lend by 2019. It’s an increase on the three per cent already required from the UK's biggest banks and includes a minimum 4.05 per cent requirement and an additional buffer of between 0 and 0.9 per cent. 

Markets responded positively to the development as analysts expected the BoE to require a higher ratio of more than five per cent. Barclays shares leapt nearly ten per cent in afternoon trading while shares in RBS and Lloyds also went up.

Barclays, HSBC and other global banks will be subject to an earlier requirement however, of introducing a 0.875 per cent buffer on the current three per cent from 2016.

Smaller banks could also be subject to the big banks' current minimum three per cent requirement from 2018 pending a review in 2017.

The BoE's Financial Policy Committee made the recommendations to Chancellor George Osborne this afternoon after he asked the FPC to begin a review of banking leverage ratio in Novemeber last year.

Osborne said the Treasury backed the BoE proposals and would seek to get legislation through parliament which would grant the FPC powers to implement them.

Jayda Fransen
October 31, 2014, 4:54pm

Royal Mail is refusing to deliver a leaflet by the far-right group Britain First to voters in Rochester and Strood, saying it “does not comply with the law”. 

The by-election, due to take place on November 20, is the first time Britain First has run for a parliamentary seat, though it is also endorsing votes for Ukip. 
Although the Eurosceptic party is distancing itself from Britain First, its activists have been criticised for posing for pictures with the candidate Jayda Fransen. The Mirror argues the two parties have not-dissimilar policies. 
The party was formed in 2011 by former members of the BNP including Jim Dowson – who left this summer because of the group's "provocative and counterproductive" so-called "mosque invasions". 
Fransen, who is also the deputy leader,  has produced a leaflet focusing on proposals for a mosque and community centre in nearby Gillingham.
It starts:
My name is Jayda Fransen and unlike the rest, I am proud to be English.
I have campaigned hard against the huge new mega mosque that is going to be built on Rochester's doorstep and that is why I am standing in the Rochester and Strood by-election.
If this mega mosque is built, Medway will be flooded with more Muslim immigrants. I want Medway, especially Rochester, to remain English – unfortunately none of the other parties do... 


But the Royal Mail has refused to deliver this leaflet. 
A spokesman told Political Scrapbook: 
Royal Mail has a legal obligation under the Representation of the People Act 1983 to deliver parliamentary election mail. Royal Mail may refuse to carry election mail if we consider its contents to be illegal, for example if it is threatening, abusive or insulting, or is intended to cause distress or anxiety.
We have procedures in place to evaluate whether election mail complies with the law. In this instance, we consider that the election mail in question does not comply with the law and have therefore refused to carry it. 
However Britain First is not going to go quietly. 
Its website carries a statement from Royal Mail saying the postal company had received legal advice indicating “the election mail may be unlawful. We have refused to deliver the election mail on this basis”. 
But the use of the word “may” was “hardly a legal certainty”, the website argued. “Our solicitors have sent the Royal Mail several emails demanding that they provide legal clarification of their petulant refusal to approve our election literature,” it added. 
If you're interested in seeing Fransen in action, Political Scrapbook links to this video of her berating local Muslims for the plans
She tells somewhat startled worshippers: “We don't want your mega mosque in our English town,” and "The English people in this town are going to suffer because you guys need yet another mosque... I speak for the British people."
Michael Spencer
October 31, 2014, 4:30pm

Former Tory treasurer and Icap founder Michael Spencer has sold his online spread betting business to US rival Gain Capital for $118m (£74m), in a deal that will create a company with 235,000 customers in more than 180 countries, with annual trading volumes of more than $3tn.

Spencer sold the business, of which his private investment vehicle IPGL owns two-thirds, to Gain in a deal comprising of $20m in cash, $60m in convertible bonds and shares in City Index worth $5.3m. The business has $36m of cash on its books, and $65m of net operating losses, which can be carried forward.

Established in 1983, City Index was one of the UK's first spread betting providers, although it suffered during the recession, writing off £35m and forcing Spencer to inject £70m. However, last year the company reported adjusted earnings of $10.7m on revenues of $124.8m.

Today Spencer said he was "very pleased" with the transaction.

[Gain] will be able to move City Index to the next level, by leveraging its broad array of trading products and services onto a global platform. We believe this combination will enhance Gain's leadership position in the FX/CFD industry by putting together two highly complementary companies to create significant value for customers and stakeholders. This is the latest example of the way that IPGL is able to invest actively in businesses over the long term to support their growth and development

October 31, 2014, 4:28pm
There was plenty keeping us busy this week, and not all of it was Halloween related. What were the top 10 things we learned? 
1. An inadvertent comment by a Royal Bank of Canada employee cost the firm several million dollars. The bank had been working on the record-breaking Alibaba IPO but voluntarily withdrew from the deal. If ever there was a facepalm moment, that was it.
3. The UK is having to import sperm from Denmark to keep up with demand, leading to the possibility we could have a second wave of Viking babies (the first, of course, starting with the destruction of Lindisfarne back in 793. It took William the Conqueror to end the Viking era, but this time around it's hoped a new project to increase sperm donations will do the trick.
4. British banks survived the EU's stress test – but the Bank of England has warned them not to become too complacent about meeting what one analyst dismissed as “relatively lightweight” criteria. However the BoE's minimum leverage ratio requirement was raised to 4.05 per cent, lower than the five per cent analysts had been expecting. 
5. This autumn hasn't been as warm as we thought. Turns out temperatures this October have actually come in below average, looking back over the past 20 years. That hasn't stopped clothing companies including Next and SuperGroup from blaming poor sales on “unseasonably” warm weather though
6. The premium property market is hotting up, however. More million-pound properties were sold in London this year than ever before. Most of these were, naturally, in London, specifically Kensington and Chelsea, Westminster and Wandsworth
7. Ukip is targeting constituencies whose residents tend to be older, less wealthy and less qualified than the national average. Most of these seats are clustered in the south and around the coasts of England, with all but two being held by Tories. With the Rochester and Strood by-election swinging closer to a purple victory, the traditional parties will need to pull all the stops out.  
8. After nearly six years, the US brought its quantitative easing programme to an end, with markets dropping only slightly as a result.  The bigger surprise was the Bank of Japan's decision to vastly expand its own programme and the hint that the Eurozone could follow suit
9. The UK was ranked as the eighth best place in the world to do business. But it's easier to start a new one in Ireland. Taxes are also more business friendly on the Emerald Isle, and trading across borders is easier. 
10. Banks' forex costs are growing. This week it was revealed that Barclays has earmarked £500m and RBS has put £400m aside. That brings the total so far to a whopping £3.68bn – although that figure is likely to rise further.   
View from Verde building terrace
October 31, 2014, 4:18pm

It’s the perfect weather for it today, but anyone wanting to relax and enjoy the views from this stunning office roof garden will have to wait until spring 2016.

Lucky office workers will be able to see stunning views of Buckingham Palace, St James’ Park and across central London from six, yes six, roof gardens being built at the Verde SW1 development in Victoria.

The outdoor space will make up 20,000 of the 282,000 square foot of office space spread over 11 storeys, with terraces on each level from the sixth to the eleventh floor.

Could the development attract business HQs away from the City? With those views on offer, frankly, who wouldn’t be tempted?

Developers Tishman Speyer, which is calling it a park in the sky, says the building is designed to attract the “next big company HQ”.

Managing director Dan Nicholson says “With a statement new glass façade and six dramatic roof gardens, we are creating a 21st century workplace, designed with the wellbeing of workers and productive business in mind.”

City workers will have fingers crossed that their company is eyeing a change of location.

Here's what those six roof gardens will look like. Bring on summer 2016.

(Source: Tishman Speyer)

Mark Zuckerberg
October 31, 2014, 4:02pm
Do you Lean In or would you rather have a Four-Hour Work Week? Is your management style more Facebook founder Mark Zuckerberg or Burberry cool cat Christopher Bailey? Or would you rather just flash the cash like Bob Diamond?
With all those confusing leadership "gurus" touting management different styles, deciding what kind of role model you want to be can be a tricky business. But never fear! City A.M. has done the hard work so you don't have to - just take our handy quiz to find out who your leadership idol is. 
You may not have been made chief executive quite yet - but it always helps to plan ahead...

It’s 6.30am and your alarm just went off. What are you wearing today?

Your company’s making cutbacks and you have to make some redundancies. How do you feel?

Uh-oh: it’s results time and with the numbers as they are, shareholders are unlikely to be impressed. What’s your reaction?

3. What’s Ello?

The intern's going on a coffee run. What are you having?

What a day! Time to kick back. What are you up to tonight?

Construction site
October 31, 2014, 3:10pm

Balfour Beatty has completed the sale of its design arm Parsons Brinckerhoff to Canadian firm WSP Global for $1.24bn (£753m).

The deal, which derailed merger talks between the construction firm and Carillion, gained shareholder approval earlier this week.

Balfour Beatty expects to spend the proceeds on returning £200m to shareholders through a share buyback programme and £85m on reducing the group’s pension deficit. The remaining money will be added to the company’s books “to ensure a strong balance sheet and provide increased financial flexibility.”

Executive chairman Steve Marshall had this to say: "This sale represents a significant return on Balfour Beatty's investment and a compelling level of value creation for shareholders. Following the sale, Balfour Beatty will be a simplified and more focused group.  It has leading positions in the UK and US construction and infrastructure markets, all supported by a strong balance sheet.  Leo Quinn joins as group chief executive in the New Year to take the group forward and to drive shareholder value."

The firm said it would continue to have a turnover of £8bn after the sale of Parsons, which it picked up in 2009 for £382m.

Balfour Beatty's share price ticked up nearly half a per cent at pixel time in afternoon trading.

Currency exchange prices on a screen
October 31, 2014, 1:35pm

RBS is the latest bank to set aside a hefty pot of cash for the potential costs of settling with the City regulator after a major investigation into the manipulation of forex markets.

The bank revealed that figure stands at £400m in its third quarter results today. It’s a large sum, but by no means the largest amount from the six banks in talks with the Financial Conduct Authority.

Just yesterday, Barclays revealed its own figure of £500m, while Citigroup earlier earmarked £600m and JP Morgan just over that.

While UBS added an additional £1.18bn in the latest quarter to its war chest of potential legal costs, it did not specify what these costs were in relation to. The Swiss bank did reveal it was in talks with the US department of Justice to resolve forex litigation.

It’s total war chest for potential litigation costs stands at around £2.3bn, some of which is likely to be earmarked for a potential settlement with UK or US regulators, or both, by the end of the year analysts expect.

This brings the total amount earmarked so far to a potential £3.68bn. However, that figure is likely to rise.

HSBC, the sixth British bank with which the FCA has been talking, has yet to earmark potential costs, but is due to report its latest earnings on Monday.