June 28, 2017

Bank of England Holds Rate at Already Low Level

LONDON — The Bank of England made good on its pledge to keep interest rates low on Thursday, amid signs that Britain’s economic recovery was picking up steam.

The British central bank kept its benchmark interest rate unchanged at a record low of 0.5 percent. It also said it would hold its program of economic stimulus at £375 billion, or $580 billion.

After avoiding a triple-dip recession at the beginning of the year, the British economy started to recover. Relatively low borrowing costs, a buoyant housing market and an improvement of the economic situation in the euro zone, Britain’s largest export market, pushed growth to 0.7 percent in the three months that ended June 30.

But the Bank of England governor, Mark J. Carney, and some economists have warned that the current speed of the recovery, though encouraging, is unlikely to be sustainable.

“In the near term, we will get pretty strong growth,” said Jens Larsen, an economist at RBC Capital Markets. “Looking ahead, I don’t think we’ll have that very fast cyclical recovery that this would suggest. Wages, income in general and the level of indebtedness are still headwinds.”

The bank said Thursday it would reinvest proceeds from £1.9 billion worth of maturing British government bond purchased under its asset-buying program in keeping the overall size of the economic stimulus at £375 billion.

Mr. Carney, the former Canadian central bank governor who moved to the Bank of England in July, said in a speech last month that the outlook for British growth had “improved considerably in recent months” but that the prospects over the next three years were “solid, not stellar.” The pace of recovery is widely expected to slow at the beginning of next year.

In July, Mr. Carney pledged to keep interest rates at a record low of 0.5 percent until unemployment fell to 7 percent; it currently is at 7.8 percent. The pledge, called forward guidance, is supposed to help fuel the economic recovery by creating certainty among borrowers about the affordability of debt in the near term.

But Rob Wood, chief economist for Britain at Berenberg Bank in London, said in a note that he expected unemployment to reach 7 percent in the third quarter of 2015.

This is a faster decline than the BoE expects, so the first rate rise is probably coming sooner than Mark Carney has argued,” Mr. Wood wrote. “Output is still 3 percent lower than it was in 2007, and there are 732,000 more part-time workers who want but cannot get a full-time job. So recovering demand growth will result in a jobs-lite recovery rather than rapidly falling unemployment.”

Nick Beecroft, chairman and senior market analyst at Saxo Capital Market, noted that the bank’s statement on Thursday madeno attempt to fight the market’s judgment that rates will be on the increase long before the bank’s doomed forward guidance would have us believe.” He predicted that “rates will be on the rise in late 2014.”

The Organization for Economic Cooperation and Development said Tuesday that the economic outlook in countries like Britain, the United States and Japan had improved and that a “moderate recovery” was under way. Growth in Britain was “picking up more vigorously than expected,” and the euro area as a whole was no longer in recession, the O.E.C.D. said.

According to one survey, the British manufacturing sector grew to the highest level in more than two years in August. Yet some economists worried that growth was bolstered only by stoking the British property market.

Britain’s construction industry grew last month at the fastest pace in six years and faster than some economists had expected, according to Markit Economics and the Chartered Institute of Purchasing and Supply. Construction of residential homes was the best-performing section of the industry. In a separate survey, Markit said the British manufacturing sector grew to the highest level in more than two years in August.

The value of homes has been rising, helped by low interest rates and a government program to help first-time buyers. House prices increased at the fastest pace since 2010 in July, according to Hometrack, a property research concern. Home builders, including Persimmon and Barratt Homes, have reported higher sales over the last three months and stepped-up the construction of new homes.

Article source: http://www.nytimes.com/2013/09/06/business/global/bank-of-england-holds-rate-at-already-low-level.html?partner=rss&emc=rss

Carney Says Rates Pressure Might Trigger More Stimulus

In his first policy speech since taking over the bank, Mark Carney also announced a relaxation of rules for banks which could boost lending and help Britain’s “solid but not stellar” emergence from its deep recession.

Financial markets have challenged the BoE’s new plan to keep interest rates on hold for possibly three more years and Carney said the bank could provide more stimulus if premature rate hike expectations added to risks facing the recovery.

“The upward move in market expectations of where Bank Rate will head in future could, at the margin, feed into the effective financial conditions facing the real economy,” Carney said, adding policymakers would watch those conditions closely.

“If they tighten, and the recovery seems to be falling short of the strong growth we need, we will consider carefully whether, and how best, to stimulate the recovery further.”

Sterling initially weakened but recovered its losses against the dollar and expectations that the BoE might have to raise interest rates in 2015, a year earlier than its plan implies, were little changed. British government bond prices fell, pushing up yields further, as investors worried that the new bank rules could lead to sales of gilts.

Carney sought to underscore his message that the BoE’s new forward guidance plan – something he deployed while running the Bank of Canada and helped land him the job in London – was not reliant on how financial markets responded.

“Hanging this on markets is to miss the point,” he told reporters after making his speech to business representatives in the city of Nottingham, far from London’s financial hub.

“What my colleagues and what I am hearing across the country is that there is appreciation for that greater degree of certainty that is being provided by the bank,” he said.

The BoE’s interest rates, not market rates, were most important to most households and businesses, Carney said.

Philip Rush, an economist with Nomura, said the comments on more stimulus did not appear to signal any imminent new move.

“Easing is not ruled out if higher rates start to impair recovery but that point does not seem upon us,” Rush said. “While higher rates reflect stronger growth, easing would constitute a negative confidence shock – i.e. the opposite of what the BoE is trying to achieve.”

The Bank of England spent 375 billion pounds ($580 billion) on government bonds between 2009 and last year to try to prop up Britain’s economy after the financial crisis.

Carney said the option of further stimulus was part of the forward guidance plan announced by the BoE this month. That plan mentioned the possibility of further asset purchases. Carney declined to go into detail on stimulus options on Wednesday.

Most of the bank’s nine top policymakers are opposed to a revival of the bond-buying program although it was supported by Carney’s predecessor Mervyn King.

And if it did want to do more to help growth, the bank would need to show it can keep its foot on the stimulus pedal without pushing up already above-target inflation.

That challenge was made greater after one of the BoE’s policymakers voted against the forward guidance earlier this month, voicing concerns about inflation.

UNEMPLOYMENT

Carney dedicated much of his speech to explaining why the central bank believed unemployment would fall only slowly, pointing to expected further job losses for public workers and large numbers of part-time workers who want to work full-time.

Markets appear to expect unemployment to fall to 7 percent by mid 2015 but Carney said the bank saw only a one in three chance of this happening.

He said the BoE remained committed to fighting inflation but it was right for it to allow it to come back down to its 2 percent target only slowly, given the weak state of the economy and temporary factors pushing up price growth.

Carney announced a widening of a planned relaxation of rules on banks and building societies, on condition they meet new requirements on capital buffers.

Under the change, eight major lenders in Britain would be allowed to reduce their required liquid asset holdings – cash and safe but low-yielding investments – by 90 billion pounds if they meet the minimum 7 percent capital requirement, freeing up more money for lending and in turn spurring growth.

That kind of increase in the potential supply of credit had the potential to provide “a significant jolt” towards getting lending back to normal although it remained to be seen if companies were confident enough to borrow more, said Simon Hayes, an economist with Barclays.

In a nod to concerns about the property market heating up again, Carney said the BoE was “acutely aware” of the risk of unsustainable credit and house price growth but said gauges of the housing market and household borrowing costs were not at historically high levels. ($1 = 0.6435 British pounds)

(Additional reporting by London markets and economics teams; Writing by William Schomberg; Editing by Jeremy Gaunt and Toby Chopra)

Article source: http://www.nytimes.com/reuters/2013/08/28/business/28reuters-britain-economy-carney.html?partner=rss&emc=rss

DealBook: R.B.S. Faces Doubts About Its Direction

Stephen Hester, chief of the Royal Bank of Scotland.Oli Scarff/Getty ImagesStephen Hester, the departing chief of Royal Bank of Scotland.
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LONDON – After years of restructuring and job cuts, Royal Bank of Scotland again finds itself confronted with an uncertain future.

A day after Stephen Hester, the chief executive, announced he was leaving the bank, investors expressed their displeasure over the surprise move, sending R.B.S. shares down more than 6 percent in trading in London on Thursday.

For many, the departure of Mr. Hester, a former Credit Suisse banker, raised concerns about how R.B.S. would navigate the British government’s planned share sale, which could begin as soon as the second half of next year.

After leading a mistimed acquisition of the Dutch financial giant ABN Amro in 2007, R.B.S. received a multibillion-dollar bailout during the financial crisis, leaving the British government with an 81 percent holding.

The stake, which is managed by the government-owned UK Financial Investments, could take the rest of the decade to offload, and analysts warned that changing R.B.S.’s chief executive could add extra instability to the process.

“This resignation adds to the existing political and regulatory uncertainty surrounding R.B.S.,” Citigroup analysts said in a research note to investors on Thursday. “One should not underestimate the time it will take for the UK Financial Investments to exit from the 81 percent stake.”

Since the financial crisis began, R.B.S. has jettisoned around 900 billion ($1.4 trillion) worth of assets from its balance sheet, and eliminated about 40,000 jobs in a bid to bolster profitability.

The bank says it will now stop selling a number of complicated financial products, including equity derivatives, through its investment banking unit, which has been pared back significantly to reduce exposure to risky trading activity.

The latest restructuring will lead to around 2,000 job cuts, or roughly 17 percent of the unit’s staff, mostly in Asia, according to a person with direct knowledge of the matter, who spoke on the condition of anonymity because he was not authorized to speak publicly.

In a memo to employees, Mr. Hester wrote that when he joined the bank, “we were a company close to the point of collapse with no clear path back to recovery.”

“All the odds and much of the opinion was against us,” he wrote, “but your efforts and strengths proved to be the biggest asset in ensuring we could recover the business for everyone who relied on us.”

The departure of Mr. Hester, 52, by the end of the year will leave the bank without many of its current senior executives ahead of its pending privatization. The bank’s chief financial officer, Bruce Van Saun, an American, will also leave his role at R.B.S. in September to lead the firm’s United States unit, the Citizens Financial Group, ahead of its planned initial public offering in 2015.

Analysts said a number of internal candidates, including the bank’s chief risk officer, Nathan Bostock, and the head of its noncore division, Rory Cullinan, could now be tapped for the top job at R.B.S.

A spokesman for R.B.S. declined to comment, adding that the search for a new chief executive had just begun and would potentially include both internal and external candidates.

R.B.S.’s chairman, Philip Hampton, said Mr. Hester’s departure had been aimed at appointing a new leader who could oversee the privatization process from start to finish.

Whoever takes over, the person must deal with attempts by its largest shareholder, the British government, to jump-start domestic growth by calling on local financial institutions to increase their lending to consumers and companies.

While the taxpayers’ holding is controlled by a separate entity owned by the British government, questions remain about whether R.B.S. can succeed in its restructuring when faced with political pressure over how the bank is run. The bank’s share price is currently around 40 percent below the so-called break-even point where taxpayers would not lose money on the R.B.S. bailout.

“We continue to argue that the political wrangling has significantly impacted the franchise, especially in R.B.S.’s markets business,” Espirito Santo analysts said in a research note on Thursday. “Given the political interference not many will relish the opportunity to run R.B.S.”

Below is a copy of Mr. Hester’s memo to employees:

Dear colleague,

The Board is announcing today that it is starting the search for a new Group Chief Executive of RBS to lead the company through privatisation and beyond. I plan to step down by the end of this year, or earlier if a successor is in place, and to help the company as much as I can in the meantime.

Nothing about this decision was easy, but I can see that as we head towards a potential privatisation, now provides a window for the company to put in place a Chief Executive that can give fresh energy to the challenge of leading RBS through the next phase.

I joined RBS at its lowest point. We were a company close to the point of collapse with no clear path back to recovery. All the odds and much of the opinion was against us, but your efforts and strengths proved to be the biggest asset in ensuring we could recover the business for everyone who relied on us.

Five years is a long time for anyone to serve as Chief Executive. The endless scrutiny we all face carries a cost, but it has always been offset for me by the warmth and support of colleagues from across the business to carry on.

This strength of teamwork is no more evident than in the leadership team that exists in RBS today. It is the strongest such team we could wish for and is well placed to steer the business through the next phase of our journey to become a really good bank.

I’ve been conscious since first taking up this role that the success of RBS should never again be cast in the image of one person. Companies rarely succeed or fail on the actions of individuals, but on the skills and strength of character present in all those who work within them.

I have believed for some time now that the recovery process revealed strength of character in RBS that lay dormant.

In the face of significant challenge, we have proven ourselves as determined and capable people, quietly rebuilding a company that the nation depends on. But more than this, it is now clear to me that RBS is a company of decent, hardworking people who care a lot about doing the right thing for customers.

In the time I have spent with so many of you, I am always heartened when I see the depth of belief you have in doing the best for our customers. It may surprise our critics, but this is often matched by goodwill on the part of the many customers I meet in all parts of our business who truly want us to succeed.

Our future success starts and finishes with this focus on customers. We’ve made it our purpose to serve them well, and if we truly obsess about meeting their needs over our own, then RBS will become a really good bank. We know this to be right, not because we think it is, but because our customers tell us this is what they want.

RBS lost sight of why it was founded, and it nearly died as a result. We’ve got back to a place where we can once again focus on the customer above all else. If there is one positive legacy to take from our past mistakes it must be that we never, ever forget why we are here.

Leading RBS is an exceptional task, only made possible by the fact that I work with exceptional people. Thank you for all your commitment, support and teamwork.

Be sure to continue to serve customers well.

Yours sincerely,

Stephen

Article source: http://dealbook.nytimes.com/2013/06/13/royal-bank-of-scotland-faces-questions-about-direction/?partner=rss&emc=rss

European Parliament Moves to Limit Scope of Eventual U.S. Trade Deal

BRUSSELS — The European Parliament passed a resolution on Thursday demanding that the free-trade pact now under discussion with the United States exempt “audiovisual” industries so that countries like France could shelter their movie businesses from foreign competition.

The resolution, which also called for similar protections to be granted for online media, underlined the sensitivity in parts of Europe to the encroachment of American culture. It also represented a reality check for trade talks that in their early stages had generated enormous optimism but could still bog down in trans-Atlantic acrimony.

“This vote shows the honeymoon phase is over,” said Marietje Schaake, a Dutch member of the European Parliament for the free-market D66 party. She was referring to the excitement that many trade advocates had felt since February, when President Barack Obama endorsed U.S. efforts to reach a trade deal with the European Union that would create a partnership between the biggest markets in the world.

While the resolution is not binding on the Union’s governments, which still must agree on a mandate for the European Commission to begin negotiating with Washington, the vote was a signal that the Parliament was prepared to use newly acquired powers to block any eventual agreement with the United States that it disliked. And ultimately, the Parliament’s consent would be necessary as part of any final passage.

Trade officials from various E.U. member states planned to meet in Brussels on Friday to discuss the mandate, which members of Parliament said Thursday that they expected to be approved by mid-June. A similar process is under way in the United States, where Congress is in a 90-day consulting period with the Obama administration.

The British government immediately signaled frustration with the European Parliament for demanding so-called carve-outs, which could make bargaining more difficult for concessions in areas that the Americans consider sensitive.

“We want to realize all the potential benefits of this deal for businesses and consumers,” a British government spokesman said, on condition that he not be named, as is customary. “That’s why we believe that we should put all sectors on the table at the start of negotiations,” the spokesman said.

The resolution that passed Thursday did broadly welcome the prospect of trade talks with the United States.

But the inclusion of the paragraph about cultural industries that passed Thursday “summarizes how challenging it will be to reconcile the goal of raising growth by breaking down barriers with the tensions and political demands that crop up at the more local level,” said Ms. Schaake, who advocates a far-reaching deal between Europe and the United States.

The resolution comes as European filmmakers and governments in countries like France seek the right to preserve state subsidies for filmmakers and maintain requirements that television and radio stations broadcast at least a minimum number of European programs.

Karel De Gucht, the Union’s trade commissioner, has pledged in the trade talks to preserve the principle of cultural diversity, including allowing member states to set quotas for European movies and other cultural goods, and to subsidize European productions.

But he has also repeatedly warned that full-scale exclusion of media, including digital media, from the talks could significantly narrow the scope of any eventual deal.

“We are already streaming content without borders” and “we should also have the possibility to discuss about the audiovisual sector,” Mr. De Gucht said at a business conference in Brussels last week. “We should not carve out the audiovisual sector; it will be a mistake, and it’s also not good to start negotiations on the basis of carve-outs.”

The vote, held at the European Parliament in Strasbourg, passed by a wide margin, with 460 votes in favor, 105 against and 28 abstentions.

The resolution called for a comprehensive trade agreement and noted the many jobs that it could create, in principle at least. The lawmakers underlined some of their other priorities, including being kept “immediately and fully informed” at all stages of the talks.

“Parliament has teeth and can bite,” said Vital Moreira, a Socialist member of the European Parliament from Portugal who prepared the resolution and steered it through the chamber.

Article source: http://www.nytimes.com/2013/05/24/business/global/european-parliament-moves-to-limit-scope-of-eventual-us-trade-deal.html?partner=rss&emc=rss

Luxembourg Backs Challenge to Financial Transaction Tax

As Europe’s largest financial centre, London has the most to lose if finance firms move their trading operations to parts of the world free from such taxes.

“We are very sympathetic to the stance of the UK … We will certainly bring our support to the case that has been started in the European Court of Justice,” Frieden said during a question and answer session at the City Week banking conference.

The British government last week filed a deadline day challenge to the tax at the European Court of Justice.

A successful legal case against the tax would hinder its application outside those countries that sign up to it and could significantly cut the amount of revenue it brings in.

As the biggest trading centre in the EU, Britain would probably end up collecting much of the tax even though it won’t be applying it.

Germany has argued that banks, hedge funds and high-frequency traders should pay for a financial crisis that began in mid-2007 and exposed sovereign debt problems that forced euro zone countries to bail out peers such as Portugal and Greece.

Frieden told Reuters shortly after he made the comments that Luxembourg was now looking at whether to formally add its signature to the UK’s challenge, rather than just voice support.

“This is something that I have to examine. We are now in a political process and then I have to look into the details,” he said.

Speaking at the same conference, Thomas Donohue, head of the U.S. Chamber of Commerce, also stressed his country’s objections to the plans.

“European leaders are moving forward with proposals that are non-starters for the United States, for example the financial transaction tax and cap on bonuses for U.S. employees.”

“We will not allow the FTT to happen and we are going to be very careful how compensation is capped, regulated and dealt with like price control,” he said.

(Reporting by Marc Jones; Editing by Toby Chopra/Ruth Pitchford)

Article source: http://www.nytimes.com/reuters/2013/04/22/business/22reuters-banking-tax-luxembourg-fin-min.html?partner=rss&emc=rss

DealBook: Lloyds Banking Reports a $2.2 Billion Annual Loss

António Horta-Osório, chief of Lloyds Banking Group.Carl Court/Agence France-Presse — Getty ImagesAntónio Horta-Osório, chief of the Lloyds Banking Group.

LONDON — The Lloyds Banking Group reported a net loss on Friday of £1.4 billion, or $2.2 billion, partly because it was forced to set aside billions of dollars to compensate customers that were inappropriately sold financial products.

Lloyds, which is 39 percent owned by the British government after receiving a bailout during the financial crisis, said it had made a further £1.9 billion of extra provisions during the fourth quarter related to a number of wrongdoings.

Amid reports that the British government may soon starting selling parts of its stake in the British bank, Lloyds said it was continuing to dispose of noncore assets, as well as refocusing on the bank’s main retail division.

‘‘My main objective is to get taxpayers’ money back,’’ Lloyds’ chief executive, António Horta-Osório, told reporters during a conference call early on Friday.

Mr. Horta-Osório is in line for a £1.5 million bonus for 2012 that will be paid in deferred shares that he will not be able to access until 2018. To receive the bonus, the British government also must have sold at least one-third of its holding in the bank above 61 pence a share, which is what local taxpayers paid to bail out the bank in 2008.

Lloyds shares are trading around 54 pence, and have risen 56 percent over the 12 twelve months.

The bank’s net loss narrowed last year to £1.4 billion, compared with £2.8 billion in 2011.

Earnings were weighed down by a series of extra charges, including an additional £1.5 billion, or $2.3 billion, charge in the three months through Dec. 31 for inappropriately selling insurance to customers. The extra provision takes the total amount that Lloyds has set aside to compensate consumers to £6.8 billion.

Lloyds also more than tripled the amount during the fourth quarter of the year that it will use to compensate small businesses that were inappropriately sold interest-rate hedging products. The figure now stands at £400 million, up from £90 million.

The British bank also said that it continued to cooperate with local and international regulators over the investigation into the manipulation of global benchmark interest rates. Other British banks, including Barclays and the Royal Bank of Scotland, have been fined millions of dollars in connection to the rate-rigging scandal.

‘‘It is currently not possible to predict the scope and ultimate outcome of the various regulatory investigations,’’ Lloyds said in a statement.

Article source: http://dealbook.nytimes.com/2013/03/01/lloyds-banking-books-a-2-2-billion-annual-loss/?partner=rss&emc=rss

European Union Agrees on Plan to Cap Banker Bonuses

BRUSSELS — Bankers in Europe face a cap on bonuses as early as next year, after an agreement on Thursday to introduce what would be the world’s strictest pay curbs in a move politicians hope will address public anger at financial-sector greed.

The provisional agreement, announced by diplomats and officials after late-night talks between E.U. member representatives and the bloc’s parliament, means bankers face an automatic cap that sets bonuses at the level of their salaries.

If a majority of a bank’s shareholders vote in favor, that ceiling can be raised to two times a banker’s pay.

“For the first time in the history of E.U. financial market regulation, we will cap bankers’ bonuses,” said Othmar Karas, the Austrian lawmaker who helped negotiate the deal.

The backing of a majority of E.U. states is needed for the deal to be finalized.

Such limits, which are set to enter E.U. law as part of a wider overhaul of capital rules to make banks safer, will be popular on a continent struggling to emerge from the ruins of a 2008 financial crisis.

But it represents a setback for the British government, which had long argued against such absolute limits. The City of London, the region’s financial capital, with 144,000 banking staff and many more in related jobs, will be hit hardest.

As it stands in draft legislation, the cap would also apply to bankers employed by an E.U. institution but based elsewhere globally, for instance in New York, according to one official, who was not authorized to speak to the media.

There are also provisions for adjusting the value of long-term non-cash payments, so more bonuses could be paid that way without breaking through the new ceiling.

Ireland, which holds the rotating E.U. presidency and negotiated what it called a “breakthrough,” will now present the agreement to E.U. countries.

Irish Finance Minister Michael Noonan said he would ask his peers to back it at an EU ministers’ meeting on March 5 in Brussels.

The change in the law is set to be introduced as part of a wider body of legislation demanding banks set aside roughly three times more capital and build up cash buffers to cover the risk of unpaid loans, for example.

Some experts have criticized the E.U., however, for failing to keep to all of the so-called Basel III code of capital standards drawn up by international regulators to reform banking after the financial crash.

The agreement on Thursday will also require banks to outline profits and other details of operations on a country-by-country basis.

A ceiling on bonuses, the only one of its kind globally, is perhaps the most radical aspect of the new rules.

Many in banking argue, however, that such reform will do little to lower pay in finance, where head-hunters say some annual packages in London approach £5 million, or about $7.6 million.

“If the cap is implemented, it could result in significantly more complex pay structures within banks as they try to fall outside the restrictions to remain competitive globally,” said Alex Beidas, a pay specialist with the law firm Linklaters.

An earlier attempt to limit bankers’ pay with an E.U. law forcing financiers to defer bonus payments for up to five years merely prompted lenders to increase base salaries. But it would be harder for banks to raise base pay this time around.

Hedge funds and private equity firms will be excluded from such curbs, although they face restrictions on pay later this year under another E.U. law.

Article source: http://www.nytimes.com/2013/03/01/business/global/european-union-agrees-on-plan-to-cap-banker-bonuses.html?partner=rss&emc=rss

British Government Seeks to Limit Disclosure in Litvinenko Case

“Due to the complexity of the investigation which necessarily precedes the hearings,” the coroner, Sir Robert Owen, said, “it may not be possible to adhere” to the planned May 1 start date for the hearings.

The inquest would be the first — and probably the only — public forum where witnesses would testify under oath about the killing, which strained Britain’s relationship with the Kremlin and kindled memories of the cold war.

The prospect of a postponement brought accusations from Ben Emmerson, a lawyer representing Mr. Litvinenko’s widow, Marina Litvinenko, that the British government was trying to gag the inquiry to protect lucrative trade deals with Russia.

Referring to Prime Minister David Cameron, Mr. Emmerson said on Tuesday that “the British government, like the Russian government, is conspiring to get this inquest closed down in exchange for substantial trade interests, which we know Mr. Cameron is pursuing.”

The British government, he said, had “no right to say to an independent judiciary, ‘you may not investigate these issues’ — that happens in Russia, for sure.” He added: “This has all the hallmarks of a situation which is shaping up to be a stain on British justice.”

Sir Robert, the coroner, said he would rule on Wednesday on the government’s application for what is known as a Public Interest Immunity Certificate, which would block the inquest from hearing information on certain topics, usually on national security grounds. Sir Robert did not reveal the particulars of the government’s request.

British analysts say they believe the government wants to avoid disclosing any information that might link Mr. Litvinenko to the British security services.

In a preparatory hearing in December, Mr. Emmerson, the lawyer, asserted that Mr. Litvinenko had been a “registered and paid agent and employee of MI6,” as the British Secret Intelligence Service is known. Mr. Litvinenko also worked for the Spanish intelligence service, Mr. Emmerson said, and both agencies made payments into a joint account with his wife. The lawyer said that the coroner’s inquest should consider whether MI6 failed in its duty to protect Mr. Litvinenko, who fled Russia in 2000 and styled himself a whistle-blower and foe of the Kremlin.

Mr. Litvinenko died in November 2006 at the age of 43, a few weeks after he secured British citizenship. He had unknowingly ingested polonium 210 — a rare radioactive isotope — at the Pine Bar of the Millennium Hotel in Grosvenor Square in London.

British prosecutors are seeking the extradition from Russia of Andrei K. Lugovoi, another former K.G.B. officer, to face trial on murder charges in the case. Mr. Lugovoi denies the accusation. Russia says its Constitution forbids sending its citizens to other countries to face trial.

The coroner has said in previous hearings that he would examine what was known about threats to Mr. Litvinenko and try to determine whether the Russian state bore responsibility. In a deathbed statement, Mr. Litvinenko directly blamed President Vladimir V. Putin, who dismissed the accusation.

Mr. Emmerson, the lawyer, complained on Tuesday that the preparations for the inquest were being bogged down by “the government’s attempt to keep a lid on the truth.”

British media outlets, including the BBC and The Guardian newspaper, are opposing the government’s effort to restrict the evidence. The Guardian said that “the public and media are faced with a situation where a public inquest into a death may have large amounts of highly relevant evidence excluded from consideration by the inquest. Such a prospect is deeply troubling.”

But the Foreign Office said the authorities acted in line with their duty to protect national security, and that the coroner would rule according to “the overall public interest.”

Article source: http://www.nytimes.com/2013/02/27/world/europe/british-media-to-challenge-secrecy-bid-in-litvinenko-case.html?partner=rss&emc=rss

British Panel Opposes Quotas to Place Women on Boards

LONDON — As the debate in Europe widens over the merits of female quotas on company boards, a parliamentary committee in Britain plans to stake out its position: not so fast.

A report to be released Friday by a House of Lords committee concludes that such quotas would “generate negative perceptions amongst women and business leaders” while failing to address the “root causes” of inequality. Quotas, and penalties to enforce them, should be considered only as a last resort, the report says.

The findings come as little surprise. The British government has led opposition to a push by the European Commission to legislate on the issue.

The study comes ahead of discussions scheduled for next week in Brussels on whether the European Commission, the executive arm of the European Union, should propose a binding, Union-wide gender quota on supervisory boards — enforceable by sanctions.

Women make up only 13.7 percent of the seats on boards of publicly listed companies in the 27-nation European Union, according to the commission.

The effort to increase female representation in boardrooms has proved hugely divisive. The architect of the plan, Viviane Reding, a vice president of the European Commission, is under acute pressure to water down her original idea: a 40 percent quota with mandatory penalties for companies that fall short of the target.

Last month the commission postponed a decision over concerns about its legality and opposition from nine nations, led by Britain, which signed a letter criticizing the plans.

The commission plans to complete its re-worked proposal next week.

The report due Friday from the House of Lord’s Sub-Committee on the Internal Market, Infrastructure and Employment, endorses the objective of increasing female representation on company boards. A “more balanced board,” it says, “will be able to tap into the wealth of available talent in the labor market, provide a broader spectrum of ideas, better reflect a company’s customer base and improve corporate governance.”

But it argues that the case for quotas enforced by binding sanctions is not convincing, and that such an idea should adopted only if nothing else works.

“We consider that quotas should not be resorted to until all other options have been exhausted,” the report says. “They generate negative perceptions amongst women and business leaders and do not address the root causes of inequality.”

The study also rejects an argument made by Ms. Reding that better female representation on boards would automatically strengthen the financial performances of companies.

The report cites evidence from a professor — Susan Vinnicombe, Director of the International Center for Women Leaders at the Cranfield University School of Management — saying: “We agree with Professor Susan Vinnicombe: ‘you cannot correlate two or three women on a massive corporate board with a return on investment, return on equity, turnover or profits.”’

Ms. Reding said last month that she wanted to legislate on the issue because she had already tried persuading companies without effect. “Voluntary measures have not achieved any progress,” she said, “and if we continue at that pace we will need 40 or 50 years.”

Mina Andreeva, spokeswoman for Ms. Reding, said Thursday that the commissioner was discussing a revised proposal with her colleagues.

Constanze Krehl, spokeswoman on women’s issues for Germany’s center-left Social Democratic Party in the European Parliament, appealed on Thursday to the other members of the European Commission to support Ms. Reding.

“The European Commission has for years buried its head in the sand on this,” Ms. Krehl said. “Now, Ms. Reding dares finally to move forward. We appeal to the other 26 commissioners, her colleagues, not to hang her out to dry.”

Article source: http://www.nytimes.com/2012/11/09/business/global/british-panel-opposes-quotas-to-place-women-on-boards.html?partner=rss&emc=rss

DealBook: Royal Bank of Scotland Records $3 Billion Loss in First Half

The Royal Bank of Scotland offices in London.Simon Dawson/Bloomberg NewsThe Royal Bank of Scotland offices in London.

LONDON — Royal Bank of Scotland on Friday reported a net loss of £1.99 billion, or $3.09 billion, in the first half of the year after it took an accounting charge on its debt and other one-off charges.

The bank, which is based in Edinburgh and 82 percent owned by the British government after receiving a bailout, set aside £125 million to compensate customers for a recent technology problem and a further £135 million for the inappropriate selling of insurance to clients.

Royal Bank of Scotland said regulators continued to investigate its role in the manipulation of the London interbank offered rate, or Libor.

The firm has dismissed a number of individuals in relation to the inquiries, while several of its employees have been named as defendants in lawsuits connected to the rate-rigging scandal, according to a company statement.

The bank, which did not name the individuals implicated in the lawsuits, said it could not estimate the amount of future potential fines or when any announcement connected to the Libor investigations would be made.

“We are in a chastening period for the banking industry,” Royal Bank of Scotland’s chief executive, Stephen Hester, said in a statement. “The Libor situation is on our agenda and is a stark reminder of the damage that individual wrongdoing and inadequate systems and controls can have in terms of financial and reputational impact.”

Royal Bank of Scotland’s £1.99 billion net loss in the six months through June 30 came after it recorded a £2.97 billion accounting charge on its own debt. The first-half figures compared with a £1.42 billion loss over the same period last year. Revenue fell 8 percent, to £13.29 billion.

During the three months through June 30, the British bank’s net losses narrowed to £466 million, compared with £897 million in the second quarter of last year.

The firm’s operations continue to suffer from weak consumer spending as the fallout from the European debt crisis affected the retail and corporate banking units.

Royal Bank of Scotland also has been paring back its investment banking division in response to the current economic climate. That unit reported a 29.6 percent drop its operating profit, to £264 million, in the first six months of the year.

The British bank said it had cut its work force by 5,700 over the period, primarily from its markets and international banking division. Earlier this year, the firm said it would eliminate 3,500 jobs in its investment banking unit over the next three years in response to volatility in global financial markets.

Royal Bank of Scotland has been slashing its assets to improve profitability, and it said it had cut its noncore assets by £22 billion, to £72 billion, during the first half of the year. That figure stood at £258 billion in 2008.

The firm’s core Tier 1 ratio, a measure of a bank’s ability to weather financial shocks, rose slightly to 11.1 percent.

Shares in the bank rose 4.3 percent in morning trading in London.

Article source: http://dealbook.nytimes.com/2012/08/03/royal-bank-of-scotland-records-3-billion-loss-in-first-half/?partner=rss&emc=rss