Banks settle on mortgages February 9, 2012 FIVE US banks accused of abusive mortgage practices have agreed to a $25bn government settlement that may help one million borrowers. The record state-federal settlement will spread relief in the form of mortgage relief and $2,000 payments to borrowers who lost their homes to foreclosure. It will also release the banks – Bank of America, [...]
QE not the answer to UK’s problems February 9, 2012 IF the Bank of England is to be believed, more quantitative easing is necessary to make sure inflation doesn’t fall below its target. Yet the Bank’s record is not good enough to allow us to take it on trust. Simon Ward of Henderson calculates that the Bank’s forecasts for inflation in one year’s time have [...]
EU agrees derivatives deal February 9, 2012 THE TREASURY last night welcomed an EU agreement on regulating derivatives markets that ended almost two years of debate on how to control one of the most opaque areas of finance. Under the deal, over-the-counter trades will be forced through clearing houses – a process that incurs a charge and is designed to discourage the more [...]
WHAT THE OTHER PAPERS SAY THIS MORNING February 9, 2012 FINANCIAL TIMES OSBORNE DROPS TARGETS FOR CREDIT EASING DEAL George Osborne has decided not to repeat the fixed lending targets agreed with five banks a year ago under the Project Merlin deal. Treasury officials are seeking to offer government guarantees on up to £20bn of bank funding, as long as the cost savings are passed [...]
Oil trader Hall’s fund makes a loss February 9, 2012 Andrew Hall, the legendary trader who rode oil’s rise and fall to a super-charged profit record for more than a decade, is human after all. Roiled like so many of his rivals by last year’s unprecedented market volatility and distortions, Hall, 61, suffered a 3.8 per cent loss at his $5bn Astenbeck hedge fund in [...]
Lehman sues Citi for $2.5bn February 9, 2012 Lehman Brothers Holdings has sued Citigroup to recover $2.5bn transferred in the months leading up to Lehman’s historic collapse, saying Citigroup is wrongfully keeping the money at the expense of other creditors. In a complaint filed in the US courts, Lehman said Citi demanded the money as economic conditions worsened in 2008, to protect itself [...]
ECB is divided on taking low quality assets February 9, 2012 NOT ALL European Central Bank (ECB) governing council members agreed to fund banks in exchange for lower quality collateral, Bank boss Mario Draghi revealed yesterday. Europe’s banks flocked to take liquidity from the ECB in December, taking three-year loans after offering assets as security. At its next long-term refinancing operation (LTRO) at the end of [...]
WHAT IS THE ECB DOING? February 9, 2012 Q.What is the LTRO? A.The ECB is offering long-term cash to Eurozone banks, letting them borrow money at one per cent for three years – a long-term refinancing operation, or LTRO. The idea is to flood banks with cash so that they do not have to restrict lending because of liquidity worries. Q.What will that [...]
Banks to rejig risk calculations to raise capital February 9, 2012 EUROPEAN banks are relying on rejigging the way they calculate the riskiness of their balance sheets to “raise” nearly a quarter of the capital demanded of them by the European Banking Authority (EBA), the regulator revealed yesterday. In its preliminary assessment of lenders’ capital-raising plans, which they must execute by June, the EBA has revealed [...]
KKR dividend hits high but earnings drop February 9, 2012 US private equity giant KKR posted a slump in a key profitability measure last night but told investors it would pay a record cash dividend. Fourth quarter economic net income dropped 60 per cent year-on-year to $285.5m, underlining the challenges facing buyout groups when they go public. Scott Nuttall, head of KKR’s global capital and [...]
