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Alexon jobs saved as group sold

2011-10-23T21:08:00.000-07:00

30 September 2011 Last updated at 10:55 GMT Continue reading the main story Women's clothing retailer Alexon has been sold to a private equity firm in a deal expected to secure the jobs of its 2,700 staff.

The struggling retailer said it had failed to find necessary funding and had appointed KPMG as administrators.

KPMG then sold the business to Sun Capital in a process known as a pre-pack administration.

Alexon, which owns a number of brands including Ann Harvey and Eastex, issued a profits warning earlier this month.

It said trading conditions had deteriorated and forecast that its performance this year would be "well below" expectations.

The group's stock market listing and trading in its shares were suspended on Thursday morning.

'Exciting acquisition'

Alexon had been looking to raise the money it needed to continue trading by looking for buyers for all of the company or one of more of its brands.

Continue reading the main story Use the dropdown for easy-to-understand explanations of key financial terms:AAA-rating GO The best credit rating that can be given to a borrower's debts, indicating that the risk of borrowing defaulting is miniscule."Unfortunately these options have failed to reach a satisfactory conclusion in the time available," the company said in a statement.

"Following discussions with the group's lenders, it became clear that the group was unable to continue trading as a going concern."

Paul Daccus, of Sun European Partners, US-based Sun Capital's European arm, said it looked forward to helping Alexon "achieve sustainable growth".

"Alexon has strong brands which operate in a growing segment of the retail sector and this is an exciting acquisition," he added.

Alexon, which specialises in fashion for older women at mid-market prices, has 990 outlets across the UK and continental Europe.

Retail consultant Geoff Nicholson described it as "a challenging takeover".

"Alexon has not kept up with the changing requirements of its more mature customers and the brands have lost much of their value," he said.

"There is a market to be satisfied, but with '60 the new 40', many retailers compete for it. It will require heavy investment and considerable skill to get the Alexon brands back to being credible players."

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VIDEO: Protesters march on Wall Street

2011-10-23T17:01:00.000-07:00

6 October 2011 Last updated at 05:25 GMT Help

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World pays tribute to Steve Jobs

2011-10-23T12:11:00.000-07:00

6 October 2011 Last updated at 03:12 GMT Consumers paid tribute to ''a man of great perspective''

Apple's corporate statement announcing the death of 56-year old co-founder Steve Jobs was brief: "We are deeply saddened to announce that Steve Jobs passed away today.

"Steve's brilliance, passion and energy were the source of countless innovations that enrich and improve all of our lives. The world is immeasurably better because of Steve."

Many technology experts, industry peers and other admirers have been quick to add their own tributes.

"Steve was among the greatest of American innovators - brave enough to think differently, bold enough to believe he could change the world, and talented enough to do it.

"By building one of the planet's most successful companies from his garage, he exemplified the spirit of American ingenuity.

"By making computers personal and putting the internet in our pockets, he made the information revolution not only accessible, but intuitive and fun.

"The world has lost a visionary. And there may be no greater tribute to Steve's success than the fact that much of the world learned of his passing on a device he invented."

"Apple has lost a visionary and creative genius, and the world has lost an amazing human being.

"Those of us who have been fortunate enough to know and work with Steve have lost a dear friend and an inspiring mentor.

"Steve leaves behind a company that only he could have built, and his spirit will forever be the foundation of Apple."

"For those of us lucky enough to get to work with him, it's been an insanely great honour. I will miss Steve immensely.

"Steve and I first met nearly 30 years ago, and have been colleagues, competitors and friends over the course of more than half our lives."

"All of us would be touched every day by products that he was the creative genius behind, so this is very sad news and my condolences go to his family and friends."

"Tonight, America lost a genius who will be remembered with Edison and Einstein, and whose ideas will shape the world for generations to come.

"Again and again over the last four decades, Steve Jobs saw the future and brought it to life long before most people could even see the horizon.

"In New York City's government, everyone from street construction inspectors to NYPD detectives have harnessed Apple's products to do their jobs more efficiently and intuitively."

Steve Jobs is credited with revolutionising the way people listen to music

"Steve, thank you for being a mentor and a friend. Thanks for showing that what you build can change the world. I will miss you.

"His legacy will extend far beyond the products he created or the businesses he built. It will be the millions of people he inspired, the lives he changed, and the culture he defined.

"Steve was such an 'original,' with a thoroughly creative, imaginative mind that defined an era. Despite all he accomplished, it feels like he was just getting started."

"He always seemed to be able to say in very few words what you actually should have been thinking before you thought it."

"VISIONARIES are always called CRAZY in the beginning. A VISIONARY sees things that everybody else says is IMPOSSIBLE, sees a World that People can't invision (sic) - MAC, IPOD, IPAD, IPHONE, ITUNES and PIXAR. I have nothing but Love for Mr. Jobs and Apple, they have always given me and my films L-O-V-E."

"'Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose', as Steve Jobs said in 2005."

"Steve lived the California Dream every day of his life and he changed the world and inspired all of us."

"Thank you for revolutionising the way we listen to music. Your vision will not be forgotten."

Industry colleagues and rivals flocked to pay their compliments for and respect to Steve Jobs, including the founder of Twitter, Dick Costolo, AOL's founder, Steve Case, the chief executive of Time Warner, Jeff Bewkes, the chief executive of Dell, Michael Dell and the chairman of the New York Times, Arthur Sulzberger.

Other tributes (via Twitter) included praise for the way Steve Jobs changed the technological landscape:

"Thank you, Steve Jobs, for making technology a delight to use, instead of a necessary evil."

"The world pauses their iPods and rushes to their MacBooks and iPhones to confirm the news."

"3 Apples changed the World, 1st one seduced Eve, 2nd fell on Newton and the 3rd was offered to the World half bitten by Steve Jobs."

Apple fans were invited to share their thoughts, memories and condolences by sending messages to rememberingsteve@apple.com.

And social networking groups were calling for iPhone vigils in public parks across the United States.

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Guinea PM defends mining shake-up

2011-10-23T08:01:00.000-07:00

14 September 2011 Last updated at 13:01 GMT Guinea is the world's main exporter of bauxite Guinea's new mining code will curb corruption and make more money available for development, Prime Minister Mohamed Said Fofana has said.

The code gives the government a free 15% share in mining companies and demands greater financial transparency.

Several foreign firms have warned that the code, which came into law over the weekend, will deter investors.

Guinea, despite being the world's main exporter of the aluminium ore bauxite, is one of Africa's poorest countries.

A democratic government was elected in December, ending the authoritarian and military rule that had blighted the country since independence in 1958.

In an address on national TV, Mr Fofana said the government would hold investors accountable and ensure they paid taxes and royalties.

Foreign companies would have to invest a minimum of $1bn (￡633m), he said.

'God-given riches'

The BBC's Alhassan Sillah in the capital, Conakry, says this is intended to prevent companies bribing officials in exchange for cheap mining rights.

Continue reading the main story

"[The] mining code adopted in Guinea increases considerably tax pressure on mining companies, making it senseless to invest in development and new projects”

End Quote United Co Rusal Previous mining contracts would be reviewed to ensure there were no irregularities, our reporter says.

On Monday, Mines Minister Mohamed Lamine Fofana told Reuters news agency that the government had overturned an agreement by the ex-military junta to give secretive investment group China International Fund the rights to all of Guinea's unexploited resources.

The new code guarantees the government a minimum stake of 15% in companies and the option of buying a further 20%, Reuters says.

It also requires companies to carry out environmental and social impact studies before they are granted mining permits, the agency says.

The prime minister said this would prevent environmental degradation, making sure that communities living near mines did not suffer.

Our reporter says most Guineans have welcomed the mining code, hoping that they will finally benefit from the country's "god-given riches".

But it has been opposed by several big companies operating in Guinea, including Moscow-based aluminium company United Co Rusal, which said it would not make further investments in Guinea.

"[The] mining code adopted in Guinea increases considerably tax pressure on mining companies, making it senseless to invest in development and new projects," it said in a statement to Bloomberg news agency.

Another major investor in Guinea, Australia's Rio Tinto, also expressed concern about the code, saying it would cost the company an extra $10bn, the Christian Science Monitor news website reports.

Our correspondent says the government is unlikely to bow to business pressure because mining sector reforms was a key promise to voters in the build-up to December's elections.

The government took over from the military junta that had seized power in December 2008 on the death of the previous President, Lansana Conte, who had ruled for 24 years.

Guinea holds half of the world's bauxite reserves, as well as large deposits of gold and diamonds.

However, most of its citizens live on less than $1 a day.

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Will NFC make the mobile wallet work?

2011-10-23T03:05:00.000-07:00

6 October 2011 Last updated at 23:52 GMT By Fiona Graham Business reporter, BBC News Mobile money: Will paying for a taxi in New York with a swipe of your mobile phone become second nature - or will the dangers outweigh the benefits? As Tim Cook unveiled the new iPhone 4S, for many there was a sense of slight disappointment.

For some financial institutions and telecoms companies, the highly-anticipated launch had failed to bring the announcement they'd been hoping for - that the new phone would have NFC (near field communication) technology integrated into it.

NFC has many uses as a technology. But the one that has pushed it into the spotlight lately is as an enabler of the mobile wallet.

The developing world has been using mobile phones to pay for goods and services in shops, taxis, and just about anywhere else for a few years now. These are usually based on SMS technology.

In the developed world - although there are other options, such as the service PayPal offers - the announcement earlier this year of the launch of the Google Wallet in the US kick-started the hype around NFC.

In Japan, Sony's FeliCa contactless payment system - originally used on Hong Kong's mass transit system in the form of Octopus cards - has been a feature of NTT Docomo mobile phones since 2004. The rest of the world may be catching up.

Japan has been using contactless mobile payment in shops since 2004 Radio silence

It works like this. Two devices with NFC chips are brought into close proximity to each other, at least 4cm, and are then able to communicate with each other.

The NFC chip - which is a form of radio frequency identification (RFID) - is an enabler, letting the data - your payment - move between devices. There also has to be a secure element to deter hackers, and an application that provides a user interface on the phone.

Although some handsets are equipped with NFC chips, phones can be retro-fitted with sim cards, microSD cards, or cases that incorporate chips. So although the iPhone has no inherent NFC capability, thanks to devices like the one created by DeviceFidelity and used by Visa among others, it can still run a mobile wallet.

The wallet could be run by your bank or Mastercard or Visa, the likes of Google or Isis in the US, or one of the telecoms companies - Telefonica O2 and Orange are just two with offerings in Europe.

Business basics

What are the advantages for business?

Telecoms analyst David Snow of Juniper Research says it is an attractive proposition for retailers.

"I think for the retailer on the street particularly if it means he doesn't have to handle so much cash, if you're thinking of a convenience store you can process people faster, you can bust the queue."

This does mean at some point there has to be an investment in new NFC-capable point of sale devices.

Carl Tsukahara of mobile banking solutions supplier Clairmail says NFC's flexibility could motivate shoppers through the door.

Services like Visa's real time alerts could be used with NFC payments

"The value goes far beyond the payment. There has to be a motivation for the consumer to use this thing as well as the merchant to put in the equipment at the point of sale.

"And that value is driven by the value surrounding the payment. Electronic receipting to the consumer might be one example. The ability to get offers because you have location on a phone - imagine walking into a store, and immediately because of the device you get offers pushed to your phone you can redeem at the point of sale."

Michelle Janes of Visa agrees. The credit card giant has its own mobile wallet technology, which they have also licensed to Google and Isis. They already use a real-time offer service tied to their cards.

"We think the opportunity for mobile is much more beyond just making a payment at point of sale," she says.

"The benefits of a dynamic device like the mobile is the ability to add additional services.

"So Visa has realtime alert services, and offers capabilities and preference management that we really see complementing payment."

Jason Reese, director of mobile payments at Everything Everywhere, says they are starting to see more and more retailers embracing the technology.

Orange is rolling out a mobile wallet in several European markets

"For example McDonalds have rolled out across all of their 1200 [UK] outlets. We're starting to see more and more retailers on board.

"Once you've got the retailers interested, the consumers interested you create the environment for the market."

Security alert

Not everyone is quite so sanguine about the adoption of the mobile wallet.

Phil Lieberman, head of IT security specialists Lieberman Software, believes the technology poses a significant security risk to consumers.

"I think it's insane. How's that for vague?" he says.

"I really do like technology, for the most part I do trust it, and security is the business that my company is in.

"It is possible to create secure solutions - but there's an old saying, don't fix what isn't broken and technology should make life better and more secure, I'm not sure in my thinking how this actually creates a more secure environment."

Phil Lieberman believes NFC chips are at risk from hackers

Mr Lieberman believes that because the chips remain programmable, this leaves the way clear for hackers. He does stress that the technology needs to become more widely adopted before it becomes a worthwhile target.

"When credit cards are manufactured, they're made in a secure facility and when the card issuer is done setting up the card they burn a fuse in the card that makes it tamper proof, meaning that the card can't be updated any longer.

"In this technology they're talking about programming this over the air."

"I think the one thing that concerns me is that the programming path to the wallet is open."

Dr Siva Narendra is the president of Tyfone, a company that has created technology that lets this financial institutions programme NFC chips wirelessly. He disagrees completely.

"If that security is not sufficient there is no security today that is sufficient.

"There are two ways to manage security. You keep the algorithm of how you communicate a secret or you keep the algorithm open and keep the digital keys that unlock that secret.

"The entire planet's security to date relies on keeping the digital keys. That's how smart card chips work today. Those digital keys can continue to be a secret, and you can manage that lifecycle remotely."

Pin money

For Andy Kemshall, chief technology officer at SecurEnvoy, the concern is authentication.

For small payments with some contactless payment systems there is no requirement to enter a pin number.

"If someone steals your phone clearly they could start to use it for micropayments or connectivity. We need to maintain that second factor."

But unlike Mr Lieberman, he feels that the mobile wallet isn't such a bad idea.

"If however the system's set up for the micropayments where that second factor is still maintained, we're asking should the phone be the logical equivalent of a credit card.

"The answer is yes it should, it's an ideal device."

Loading money on to your phone no longer means finding some change

Visa Europe's head of innovation Sandra Alzetta says all of the security checks have been made.

"We've been through a huge amount of security and risk review, through all of the external labs, where basically people's job is to hack into this. All of the statistical security, all of the software security and so on.

"Is something ever 100% secure? I don't believe there's any such thing. Is it fit for purpose? Absolutely, and it has to be."

And as mobile money expert Monitise's Richard Johnson says - ultimately NFC is not the only option.

"Mobile wallets don't have to have NFC. You've got what Paypal are showcasing at the moment which is very pointedly not dependent on NFC. You've got the wallet that we're involved in in the UK, the Simply Tap network which is ready for NFC but in its initial phases isn't at all dependent on NFC.

"NFC is just a technology. It's about the ability of people to build compelling propositions around it. It's not a Vegas thing, build it and they will come, it's because it's more convenient.

And will the mobile wallet replace the humble credit card? Probably not entirely, says Juniper Research's David Snow.

"They're going to be complementary for a long time. For instance contactless cards are being distributed widely in the States but not many people use them, they still swipe them," he says.

"It will take time. I think up until this point the slowness of the NFC phone roll-out has been the bottle neck. But that appears now to be being unblocked. I think the bottle neck will move into other areas.

"I would be bullish about the market, it's such a winning technology."

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'More help' on childcare costs

2011-10-22T23:40:00.000-07:00

7 October 2011 Last updated at 00:13 GMT Parents eligible for tax credits can get help with up to 70% of their childcare costs Parents on low incomes who are working less than 16 hours a week will be eligible for childcare support from 2013, under new government plans.

Some ￡300m has been allocated for the move, worth up to ￡175 a week for one child and ￡300 for two or more.

Ministers say it will benefit 80,000 families receiving universal credit.

Charities had been calling on them to increase the amount they planned to spend on childcare support as part of sweeping welfare reforms.

Under the universal credit system, a single payment will replace child tax credit and working tax credit, as well as income-related jobseeker's allowance, housing benefit, income support and income-related employment support allowance.

The switchover will begin in 2013 and continue into the next parliament.

'First steps'

The universal credit budget had been set at ￡2bn, but ministers say an additional ￡300 million has been found to extend childcare tax credits.

At present, families can get credits to cover up to 70% of their weekly childcare costs, but only if they work more than 16 hours a week. The exact amount given depends on income level, but couples with an income up to ￡41,000 can qualify.

Work and Pensions Secretary Iain Duncan Smith said: "We are determined to help more parents take their first steps into work, but under the current minimum hours rule parents are trapped in state dependency without the childcare support they badly need - providing yet another barrier to work."

Deputy Prime Minister Nick Clegg said: "Childcare support is vitally important. It's a lifeline for families up and down the country, particularly for mums who want to get back into work, maybe for just a few hours a week after they've had children.

"This will help an extra 80,000 families who have previously had no help at all with childcare costs."

Childcare costs vary widely, but the government says the benefit would help low income families pay for an average of about 40 hours a week.

Labour said the government had already reduced support from 80% to 70% of weekly costs.

Liam Byrne, shadow work and pensions secretary, said: "Today's announcement is frankly smoke and mirrors. It won't mean a penny more help for parents already struggling on childcare tax credits.

"Universal credit is now set to lock in a 'parents' penalty' that cuts back childcare payments so hard that many parents will be forced to give up work.

"With parents struggling to make ends meet, it beggars belief that the Tories are stopping parents working the hours and shifts they need by taking away their childcare."

In a recent survey of 4,359 parents by the Daycare Trust and Save the Children, nearly a quarter said the cost of childcare had put them in debt.

A quarter of those on the lowest incomes said they had given up work and a third had turned down work because of childcare costs.

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Firms fear energy price hikes

2011-10-22T19:38:00.000-07:00

4 October 2011 Last updated at 04:09 GMT By Gerry Northam Reporter, File on 4 Energy-intensive industries have seen gas and electricity bills soar Despite government hopes that manufacturing will lead the UK recovery, there are fears some energy-intensive industries may be forced to leave the UK as prices rocket.

Davin Bates is standing at the cool end of a tunnel kiln watching racks of cups and sugar bowls trundle out ready for glazing.

As we peer fifty feet in to the bright orange centre, he tells me that the internal temperature is well over 1000 degrees centigrade.

Then he breaks the bad news about his gas bill.

Davin is a management accountant at one of Stoke-on-Trent's remaining successful potteries, Steelite. It is a sprawling village of redbrick buildings employing 650 people which produces half a million pieces of crockery a week.

There are seven kilns in all. Keeping them fired up was costly enough last year.

But this year Davin has faced a 55% rise in the cost of gas. The firm's electricity bill has also gone up by 17%.

Tough decisions

"We find it difficult to pass on these costs to our customers," says Davin.

He says profits are therefore getting squeezed and the company's future plans are in jeopardy: "Investment will have to be looked at, because this is coming off the bottom line," he adds.

Across the whole sector, energy bills are driving managers to make tough decisions.

At the British Ceramic Confederation, Dr Laura Cohen has watched factory after factory close - and she identifies high energy costs as a major problem.

She knows that other companies have moved production overseas.

"We heard only a few weeks ago that one firm has transferred all of their manufacturing to China," she says. "Energy costs are a significant part of that."

It is a trend which is not confined to the long-troubled Potteries. Other parts of the country are hit too.

The huge chemical industry, which contributes ￡30m a day to the British economy, is also suffering.

At the family firm of Thomas Swan in County Durham, enormous sealed vats of chemicals are heated and stirred to make specialist powders and liquids for niche hair dyes, printing and cleaning products.

Managing director Harry Swan, a great-grandson of the founder, has steered the company through the recession and now finds himself hit by electricity and gas bills of almost ￡1m.

His plant uses 28,000 megawatt hours of energy a year. Even before the latest round of price rises, his extra energy costs this year were equivalent to a month's profit. He is dreading the next bill.

For the Chemical Industries Association, chief executive Steve Elliott fears British job losses could be imminent: "There will come a moment when people say enough is enough," he says.

"There will only be one direction of travel - out of the UK."

There could be worse to come.

Industries have been totting up the cost of government and European initiatives to promote a low-carbon economy, the so-called "green taxes", and some say their additional bill will run into the millions.

'Tipping point'

Cemex UK runs the biggest cement plant in the country, based on the outskirts of Rugby. It is not averse to the idea of a green economy. In recent years it has moved away from dependence on coal alone.

It now also burns chippings from old tyres and a fuel made from minced-up household waste. But the company is worried about the impact of coming green taxes.

Director Andy Spencer estimates that they will increase his annual energy costs by ￡12m.

What most concerns Cemex is that other countries will not impose similar new taxes on their cement producers. His prices would then struggle to compete on world markets.

So Andy Spencer's thoughts are already turning to the possibility of switching production out of the UK to Cemex plants abroad, particularly in Egypt.

"I can foresee a time when economically it makes more sense to do that and I don't think that time is far away," he says.

"We are very committed to the UK, but there is a genuine concern that we could reach that tipping point where the economics don't stack up to produce domestically in the UK."

This seems at odds with the government's goal of rebalancing the economy in favour of manufacturing industries. The Chancellor George Osborne has called for "a march of the makers".

Andy Spencer sees that march hitting a roadblock. "We know we need to make the transition to a green economy," he says.

"But it must not come at the price of exporting our domestic energy intensive industries."

No blank cheques

The Energy Secretary Chris Huhne says there is little the government can do about some energy price rises.

"How much of this is due to the fact that these businesses are very reliant on world market factors? We've had a 27% increase in the gas price on world markets over the year to August," he says.

"Now with the best will in the world, I can't do anything about that."

But he argues the government's reform of the electricity market will reduce prices for business and domestic consumers alike.

He is working on plans to announce special help for high-energy industries later this year, and says that in 2020 the net effect of the government's energy and climate change policies will be to reduce bills across the board.

But he is sceptical of some complaints on green taxes.

"I don't accept that some of the stories we are hearing about green taxes are correct. There are some ludicrously inflated and exaggerated claims," he says.

"I do not want to see even the most energy-intensive industries leave the UK, that would be madness.

"But am I writing blank cheques to anybody who says they've got a problem? No."

File on 4 is on BBC Radio 4 on Tuesday 4 October at 20:00 BST and Sunday 9 October at 17:00 BST. Listen again via the Radio 4 website or download the podcast.

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Indian summer 'sparks cash spree'

2011-10-22T15:07:00.000-07:00

4 October 2011 Last updated at 10:00 GMT Record temperatures were recorded for October in England More money was withdrawn from UK cash machines last Friday than any other day so far this year, thanks to the hot weather.

Some ￡577m was taken out from the Link network of machines that day as daytrippers prepared for the warm weekend.

This was the highest amount withdrawn since Christmas Eve, Link said.

Temperatures in England reached record levels for October, with the mercury hitting 29.9C (85.8F).

Cash spending

There are 64,000 cash machines connected to the Link network in the UK - that is nearly all that exist across the country.

The ￡577m withdrawn on 30 September was 14% higher than the amount taken out of cash machines on the same day a year earlier.

The cash spree - and the hot weather - continued through the weekend. The ￡252m withdrawn on Sunday was 11% more than a year earlier.

"The good weather really seems to have encouraged people to withdraw cash in preparation for increased spending over an unusually sunny weekend - confirmation that the right combination of feel good factors can boost short term spending and that cash is a very popular way of paying for these kinds of goods and services," said John Howells, chief executive of Link.

Other factors may include consumers choosing cash over cards when buying things outdoors, and that more people were in the country enjoying the sunshine than would have been the case during the summer holiday season.

Friday lunchtimes are commonly the most popular time of the week for cash machine use, with consumers preparing for weekend spending.

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Mongolia and Rio reach stake deal

2011-10-22T10:54:00.000-07:00

7 October 2011 Last updated at 05:09 GMT Resource-rich Mongolia has attracted many foreign investors Mongolia and mining giant Rio Tinto and Ivanhoe have reached an agreement on stakeholding of the Oyu Tolgoi project in the resource-rich country.

The Mongolian government had sought to increase its stake in the mine to 50% from 34% as previously agreed.

The mining companies had said that the government should honour an original agreement signed in 2009.

When completed, the project is expected to be one of the biggest copper mines in the world.

According to the initial agreement, Mongolia government could renegotiate its stake after a period of 30 years.

However, the authorities had wanted to bring forward the negotiation period, a move that did not go down well with the miners as well as industry analysts.

In a joint statement released on Wednesday, they said "all parties have reaffirmed their continued support for the investment agreement and its implementation".

Shares of Ivanhoe rose as much as 18% on the Toronto Stock Exchange.

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Default retirement age abolished

2011-10-22T07:44:00.000-07:00

1 October 2011 Last updated at 07:05 GMT The default retirement age has been phased out The default retirement age in the UK has been fully abolished after being phased out from April this year.

New legislation stops employers from compulsorily retiring workers once they reach the age of 65.

However, research by law firm Norton Rose suggests one in 10 firms plans to offer financial incentives to encourage workers to move on at a certain age.

The charity Age UK welcomed the legislation but said age discrimination was still prevalent in the workplace.

'Devastated'

The legislation came too late for Andrew Webster, from Richmond in Surrey.

He was issued with a compulsory notice to retire from his job as an English teacher at a performing arts school.

''I was devastated. I had found a job I loved, I felt I was in my prime. I got on well with the students and they had good results," he said.

"I wanted to go on doing it for as long as possible and I needed the money as well so it was a terrible blow when it happened.''

Andrew Webster said he was pleased others would not be in his position

He has found work as a tutor but said he took home only a third of his previous earnings, even taking his pension into account.

''I know it is too late for me but I am pleased that other people will not also be forced to retire before they are ready," he said.

Rules

The Employment Equality (Repeal of Retirement Age Provisions) Regulations 2011 started phasing out the default retirement age from the start of April.

That was the point after which employers could no longer issue the minimum six-month notification for compulsory retirement, using the default retirement age procedure.

Continue reading the main story

Discrimination in the recruitment process is against the law, but it still happens in practice quite a lot”

End Quote Christopher Brooks Age UK If employers still want to enforce retirement, their decisions will have to be objectively justified, but workers can no longer be forced to retire on the grounds of age alone.

The Norton Rose research indicated that some firms were preparing to offer employees a "golden goodbye".

''Our survey suggests employers feel there will be limited ability to take on younger workers as a result of the default retirement age being removed and their perceived inability to ask more senior levels of staff to move on,'' said Paul Griffin, an employment lawyer at Norton Rose.

''If firms are approaching people to retire that could be seen as age discrimination in its own right.

"But our survey indicates that firms are willing to pay to encourage people to move on at a certain time in their career."

Ageism

Age UK said that instead of focusing on making space in firms for younger employees, businesses should instead look at the benefits that experienced older workers could bring.

Christopher Brooks, head of policy for work and learning at Age UK, said there was still a prevailing culture of ageism.

"Many employers simply see the stereotypes of an older worker, particularly in the recruitment phase and statistics show older workers find it harder to find another job than any other age group," he said.

''Discrimination in the recruitment process is against the law, but it still happens in practice quite a lot.

"It is however quite hard to prove but we do get lots of feedback from people who have been in interviews and been told they are over qualified or just too old to do the job, which quite often amounts to age discrimination."

Life experience

Chief executive Liz Fields from business consultancy the Financial Skills Partnership said keeping older workers had benefits.

"The skills and life experience that an older person can bring to a business actually helps that business become much more competitive," she said.

However, the Federation of Small Businesses said the move was "unncessary meddling".

"It will lead to a legal quagmire for a lot of small business owners. If you can't get rid of someone, you then have to go through the process of performance managing someone out of an organisation, which if you have a big HR department and you're experienced in these things is easy," said Andrew Cave from the federation.

"The average business in this country employs four people. The owner-manager doesn't necessarily have that expertise."

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US economic growth rate at 1.3%

2011-10-22T04:11:00.000-07:00

29 September 2011 Last updated at 13:09 GMT Continue reading the main story The US economy grew at an annualised rate of 1.3% between April and June, the Commerce Department has said in its third estimate for the quarter.

This is higher than the 1% growth it reported in its second estimate, but the same as its first calculation for the three month period.

Consumer spending and exports were both stronger than previously estimated.

Last week, the Federal Reserve unveiled a new plan to try to help the economy.

Under a scheme dubbed Operation Twist, the US central bank is selling about $400bn (￡260bn) worth of bonds maturing within three years and buying longer-term debt.

The sluggish growth in the US economy has not been sufficient to reduce high levels of unemployment, with the jobless rate in August at 9.1%.

For the first six months of 2011 the US economy expanded by 0.9%, the lowest rate of growth in more than two years.

Joe Manimbo, analyst at Travelex Global Payments in Washington, welcomed the latest economic growth figures.

"The final print of second-quarter GDP came out a little bit faster than expected and that suggests the US economy entered the third quarter on a slightly better footing," he said.

Most economists expect the economy to improve in the third quarter, with predictions that it will grow at an annualised pace of about 2%.

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Olympic corporate deals 'unsold'

2011-10-22T00:35:00.000-07:00

6 October 2011 Last updated at 08:37 GMT By Michael Hirst BBC 2012 Almost two thirds of corporate on-site packages for London 2012 have yet to be sold to companies

With 300 days to go before London 2012, just a third of on-site hospitality tickets for the Games have been sold.

But despite the financial downturn, the company with sole corporate hospitality rights inside Olympic venues remains bullish about sales.

Prestige Ticketing won a tender by Olympic organisers Locog for some 90,000 tickets - about one per cent of the total allocation.

The British public has bought most of the 6.6m tickets available by ballot.

In contrast, more than 60% of the company's deals are still on offer.

The company would not disclose how much it paid for the tickets, nor its expected profit, citing commercially sensitive information.

And, as London 2012 will be the first Olympics to have on-site corporate hospitality, it is not possible to compare figures with previous Games.

Sir Steve Redgrave said Olympics VIP hospitality had lagged behind other sporting events

But industry insiders have told the BBC they would expect a much higher proportion of packages to have been sold after nearly seven months of sales.

In the much-criticised public ballot for tickets earlier this year, top-tier tickets at the Olympic ceremonies cost ￡2,012, with the best seats at athletics events going for ￡750.

The cheapest of Prestige Ticketing's deals cost ￡495, while the most expensive ￡4,500 packages are being sold in batches of 10 and secure seats at the ceremonies or prized athletics and cycling finals.

Sell-out events

Corporate guests enjoying on-site hospitality can expect:

"Best seats in the house" for Olympic events Champagne and canapé receptionFour-course lunch with unlimited "best of British" food and wines Travelcards for London's transport network, although hundreds of parking spaces will also be available

At the Olympic Park, Prestige Ticketing is building a ￡7.5m three-storey pavilion catering for 3,000 guests at a time, just 70m (77 yards) from the main stadium.

Continue reading the main story 70m (77 yards) from the Olympic Stadium Cost ￡7.5m Three-storey pavilion with massive glass atrium Six restaurants catering for 3,000 dinersIn use for just 29 days before being demolishedHospitality venues will also be located at Greenwich Park, North Greenwich Arena, Horse Guards Parade, Eton Dorney and Wimbledon.

The economic downturn meant traditional customers in finance and advertising had been joined by companies in sectors like construction, energy and resources, said the company.

While corporate packages at the women's hockey final had been the first to sell out, there had also been strong demand for the tennis at Wimbledon, rowing at Eton Dorney and equestrian events in Greenwich, said the company.

Prestige Ticketing's Marketing Director Tony Barnard said he was confident other packages would be sold as companies settled their budgets for the next year.

"We're seeing a significant increase in sales activity," he told the BBC. "The ballots for tickets have ended so people know that if they want to go, there's only one way left to go."

Olympic opportunity

Prof Simon Chadwick, Director of the Centre for the International Business of Sport at Coventry University, said that while the financial crisis had hit the corporate hospitality industry in recent years, the exceptional nature of London 2012 would allow it to "transcend prevailing economic conditions".

In a study commissioned by Prestige Ticketing, Prof Chadwick predicted that companies buying hospitality packages - at an estimated cost of ￡1.45bn - would make a return of more than 12% on their investment.

But he cautioned this figure was based on intangible factors such as extra business being generated through goodwill and strengthened business relationships.

Five-time Olympic gold medal winner Sir Steve Redgrave said London 2012 had a unique opportunity to put Olympics hospitality on a par with that at other international events.

"I've been invited to go as a guest with other sponsors of [previous] Olympic Games after I retired, and you're looked after well, but not quite as well as at some of the other major sporting events," he said.

Prestige is one of three official providers for hospitality packages, but has exclusive rights to Olympics venue hospitality.

Thomas Cook reportedly paid Locog more than ￡20m for 200,000 tickets to sell as part of exclusive travel and accommodation packages, while Jet Set Sports are said to have bought 100,000 tickets that are being offered as part of five star deals for overseas customers.

Locog says proceeds from hospitality ticket sales will be used to give free tickets through the Tickets For Troops scheme and the Get Set initiative for school and college students.

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How to make sense of big data

2011-10-21T20:58:00.000-07:00

5 October 2011 Last updated at 23:08 GMT Each week we ask high-profile technology decision-makers three questions.

This week it is Keith Collins, chief technology officer (CTO) of SAS Institute.

The company describes itself as the world's leading business analytics software company. With about 12,000 staff and customers in 126 countries, the company has a turnover of $2.43bn (￡1.5bn). Founded in 1976 by Jim Goodnight, the firm prides itself for investing 24% of its revenue in research and development.

What's your biggest technology problem right now?

The biggest challenge is that the problems we are trying to solve have increased in complexity. Companies have more and more data, and more and more issues that they want to answer.

They have a flood of information from mobile devices, and all these data bring issues of large scale process optimisation and how to improve large scale forecasting.

Operational analytics allows people to fine tune their business. For example there is a big shift to trying to understand customers - in every industry. The products they buy, at which price. It's about customer satisfaction, whether it's for a mobile phone firm, an insurance company or ATM [cash] machines.

The analytics shows that consumers are more in charge than ever before.

We recently worked with a bank were customer satisfaction with ATMs was a huge issue, so we had to understand how to minimise the times when a machine runs out of cash, and project when the device fails.

Understanding the data made a huge impact on the customer satisfaction score and brought a $2m reduction in maintenance cost.

It's about bringing analytics to specific business problems. We had very good success with this in the retail space, and also help banks fighting credit card fraud.

Call centre optimisation is another example: How can you make sure you pay attention to your most important customers? When you are talking to a customer, do you know how they would prefer to get their information? And is there an opportunity to give them offers, to upsell?

There is an explosion in the understanding in the value of analytics. One problem is actually acquiring enough talent fast enough to deal with the demand.

So we are helping multiple colleges around the world to launch or improve and expand their analytics programmes.

What's the next big tech thing in your industry?

We are investing very heavily in top performance analytics and high performance computing.

Today there's just a small set of customers that demand that scale, but that's accelerating quickly. What we now call high performance computing, in three to five years it will be standard.

This will not always be a big company thing. There is a whole shift to being more consumer centric, and making customers mobile.

Almost any new company that is starting out today has a completely digital view of the market. New startups understand that they need analytics as part of their company's DNA.

And lots of small and medium-sized companies are looking for ready business analytics solutions that they can just plug in - whether it is in the cloud or a targeted application. We will see a shift where this software is directly plugged into a company's process and consumed through the cloud.

Even small companies can act big, because everything that works on Amazon's cloud service rivals anything that our largest customers have.

Adoption of these new models depends a bit on the age of a company's leadership. There is a new generation of entrepreneurs who gets it from the beginning. We also see mid-sized retailers changing their game.

Larger companies usually adapt when a new board comes in.

What's the biggest technology mistake you've ever made - either at work or in your own life?

I have a big problem here, picking the toughest one.

I once developed a whole set of brilliant technologies to near readiness, but had failed to tell the rest of the company about how it works.

So it's not just about having a vision, you need to plan the execution as well.

So I had this design technology for a data partition process to have the fastest data warehouse, but I didn't do a good job to educate our sales channel to take advantage of the opportunity.

Another one: I did not realise how fast the market for tablet computers would develop.

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Wolseley returns to annual profit

2011-10-21T16:30:00.000-07:00

4 October 2011 Last updated at 07:19 GMT Wolseley said weaker economic forecasts would have an impact on its markets Building and heating materials group Wolseley has returned to a full-year profit in 2010-11.

The group suffered when the housing market was hit during the recession, but said it had focused on improving its "customer, product and vendor mix".

Wolseley reported a pre-tax profit of ￡391m in the year to July, compared with a ￡328m loss a year earlier.

It said markets were broadly stable but there had been "no strong rebound in activity after the recession".

Revenues rose 3% to ￡13.6bn.

The group also took a ￡39m charge on its Bathstore and BCG brands in the UK, "reflecting a deterioration in the outlook for retail markets".

It added that in the current environment, it remained cautious about its cost base.

"Recent economic forecasts have weakened, and over time this is likely to have an impact on our markets," said chief executive Ian Meakins.

The company has been selling off units as part of a disposal strategy over the past 18 months.

In July, it sold its French distribution division Brossette and British Build Center business to France's Saint-Gobain for ￡310m.

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How the crisis is affecting you

2011-10-21T11:41:00.000-07:00

29 September 2011 Last updated at 23:00 GMT Debt in the eurozone, concerns over growth in Europe and the US, and turmoil on the financial markets have led to fears of a renewed financial crisis and recession.

The BBC has been asking how the crisis has been affecting you personally.

Here are some of your stories.

It sucks. I am 20 years old. I graduated from high school in 2009 and just wanted to start working.

Two years later I still don't have a job. I've mostly been looking for simple retail work. The number of jobs I've applied for must be in the hundreds, and I have had only one interview.

I haven't applied for any benefits because I've been told I'm not eligible as I haven't had a job before.

I live with my parents and my brother. I have taken a couple of college classes but I find it rather soul-crushing, and there doesn't seem to be any light, or indeed, an end, to the tunnel.

Philip Petersen, chief executive of AdInfa, says "The situation is tough but it presents opportunities"

I run a small software company. Our software helps people who run computer data centres save money by monitoring and managing their data usage.

I see the current economic situation as an opportunity. I believe the market demand for our kind of product is growing because organisations are much concerned about their operating costs, and energy is a growing item of expenditure.

The current economic situation, or that which has prevailed for the last couple of years, has definitely increased awareness of this issue.

However, one difficulty we are contending with is investment. Raising money for an early stage technology business, particularly if you are not in consumer, e-commerce, mobile or social networking, is plain hard and that is something we are contending with.

I run a home-made ice cream business on the seafront in Paros, but business has been horrible lately and I am closing my shop.

We rely on tourism - Greek tourists in particular - and there just aren't any.

I will close my books at the end of October. I've got about 90,000 euros' (￡78,000) worth of equipment but I probably won't be able to sell everything as everyone here is trying to sell.

When I told the local children that I was closing, they were so upset and burst into tears as they love the shop.

I am now going to do an online master's [degree]. I've made my budget for the next eight to 10 months, and will have to survive on 600-700 euros a month.

We are an Indian-based international distributor of books, DVDs, software and electronics.

Before the downturn, we were able to secure credit from our suppliers, but now we have to meet the condition of advance payment to fulfil our orders.

We are a registered company in India and the US. But Indian banks will not lend to us because of the uncertainty in US markets, and currently US banks are not lending at all.

To compound it all, even other lending companies and bill-discounting companies will not lend to us due to uncertainty in the mail order retail industry.

This has not only impacted on our performance - some of our orders are pending due to lack of funds and sometimes they are cancelled because of late delivery - but we have also had to put our expansion plans on hold.

I work as a hotel receptionist. I'm still being affected by the economy right now.

If you look at the cost of sugar now in Kenya and compare it with [what the] common mwananchi [man] earns, it is not fair at all.

Also house rents are very high, especially for people like me with no parents and no wife.

I lost my wife in July 2011. I have three children and I'm facing big problems. My wish is for the government to take action.

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FirstGroup sells German bus unit

2011-10-21T08:30:00.000-07:00

30 September 2011 Last updated at 06:47 GMT FirstGroup is focusing on its core markets in the UK and US Rail and bus firm FirstGroup has announced the sale of its German bus operations for 5.5m euros (￡4.8m).

The Aberdeen-based transport company said it had sold FirstGroup Deutschland to Marwyn European Transport.

FirstGroup chief executive Tim O'Toole said the disposal marked "a further step in our programme of small asset and business disposals".

This was part of the group's strategy to focus on its core operations in the UK and North America, he added.

FirstGroup Deutschland operates about 130 buses in the Rhineland Pfalz region in south-west Germany.

On Thursday, FirstGroup said it expected like-for-like passenger revenue at its UK rail division to rise by 9% in the six months to 30 September, and revenue at its UK bus division to increase by 1.2%.

FirstGroup also operates school buses and the coach business Greyhound in the US.

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Knowledge economy: Global best school buildings

2011-10-21T03:40:00.000-07:00

4 October 2011 Last updated at 23:30 GMT

Tributes to Apple founder Steve Jobs

Protesters march on New York's financial district

Readers' pictures on the theme of gardens.

Photojournalist dies at the age of 84

Photos from around the world on 5 October

Photos from around the world on 4 October

Court overturns convictions of Knox and Sollecito

Attack in the Somali capital, Mogadishu

Hundreds camp out in New York's financial district

Libyan transitional authority troops ceasefire

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Premier Foods in profit warning

2011-10-20T23:57:00.000-07:00

7 October 2011 Last updated at 08:20 GMT Mr Kipling is one of the eight "power brands" the group is investing in Premier Foods, the owner of brands such as Hovis, Bisto and Mr Kipling, has warned its full-year trading profit will fall below expectations.

The UK's biggest food manufacturer had been looking at a profit of between ￡214m and ￡232m.

But the company said current trading was "disappointing" and "significantly behind our expectations".

Sales in the third quarter fell 3.6% on a year ago, while the group's market share declined by 1.9%.

The group said it was in "constructive dialogue" with banks on refinancing.

Shares in Premier Foods fell 4 pence, or 40%, to 6p in morning trading.

New chief executive Michael Clarke has outlined five key priorities for the business in the short term.

These are agreeing a refinancing plan, improving sales and marketing, reducing the size of Premier's portfolio, reducing costs, and investing in eight "power brands" that they feel have the best growth prospects.

The eight brands are Ambrosia, Batchelor's, Bisto, Hovis, Lloyd Grossman, Mr Kipling, Oxo and Sharwood's.

Mr Clarke, who had previously been president of Kraft Foods Europe, took the helm at Premier Foods on 1 September.

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VIDEO: ECB holds interest rates

2011-10-20T20:33:00.000-07:00

6 October 2011 Last updated at 15:41 GMT Help

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Hong Kong maid wins landmark case

2011-10-20T16:28:00.000-07:00

30 September 2011 Last updated at 11:32 GMT By Katie Hunt Business reporter, BBC News Evangeline Banao Vallejos' lawyer, Mark Daly: "It's a good win for the rule of law"

Hong Kong's High Court has ruled that a domestic helper from the Philippines should be allowed to apply for permanent residency in the city.

The case was brought by Evangeline Banao Vallejos, who has lived in Hong Kong since 1986.

The ruling follows a landmark judicial review and could lead to more than 100,000 other foreign maids winning rights to residency.

The government has said that it will appeal against the ruling.

The case has sparked widespread debate on equal treatment for foreign maids.

Mark Daly, the lawyer acting on behalf of Ms Vallejos, said that she was very pleased by the ruling.

"When we told her she said 'thank God'," he said, adding that it was a normal working day for her.

"It's a good day for the rule of law," he added.

Hong Kong's Secretary for Security, Ambrose Lee, said that the government would not process or approve right-of-abode applications for domestic workers while it appealed against the ruling.

"The government respects but is disappointed with the ruling," he said.

Public resources

Some critics have said granting residency to domestic helpers would strain the provision of health care, education and public housing.

Continue reading the main story

We hope it will pave the way for Hong Kong to open its doors to equal treatment for migrant workers”

End Quote Norman Carnay Mission for Migrant Workers While other foreign nationals can obtain residency after working in Hong Kong for seven years, immigration rules exclude domestic helpers from seeking permanent residency.

Human rights lawyers and many domestic helpers argue that this is discriminatory.

Permanent residency means that a person can remain in Hong Kong indefinitely, vote and stand in elections.

But some politicians and commentators warned that allowing foreign domestic helpers to have permanent residency would allow them to bring their children and other relatives to the city, who would require education and housing.

Equal treatment

Norman Carnay, programme officer at the Mission for Migrant Workers said that he welcomed the decision.

The case has divided opinion in Hong Kong

"We hope it will pave the way for Hong Kong to open its doors to equal treatment for migrant workers," he said.

But he added that right of abode was not necessarily a priority for many domestic helpers.

"From surveys of our community, the more pressing concerns are wages and working conditions," he said.

There are around 300,000 foreign domestic helpers in Hong Kong, mainly from Indonesia and the Philippines. It is thought that around 120,000 have lived here for more than seven years.

They are required to live with their employers and cannot accept other jobs.

Without the right to permanent residency, if a maid is dismissed by her employer, she must find another job as a domestic helper or leave Hong Kong within two weeks.

Hong Kong's domestic workers have a guaranteed minimum wage of 3,740 Hong Kong dollars ($480; ￡308) a month and day off each week, meaning their working conditions are better than other countries in Asia with large numbers of domestic helpers, such as Singapore.

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Dexia shares slump on Greece woes

2011-10-20T13:17:00.000-07:00

3 October 2011 Last updated at 19:56 GMT Dexia received a 6bn-euro bailout at the height of the financial crisis Dexia has called an emergency board meeting amid fears over its exposure to Greek debt.

Meanwhile, shares in the Franco-Belgian bank fell 10% on Monday after rating agency Moody's said it was reviewing Dexia for a possible downgrade.

The finance ministers of Belgium and France are meeting eurozone colleagues in Luxembourg, and are expected to discuss ways to support the bank.

Financial markets fell on news Greece would miss deficit reduction targets.

Greece announced on Sunday that the 2011 deficit was projected to be 8.5% of gross domestic product, down from 10.5% in 2010, but short of the 7.6% target set by the EU and IMF.

Write-off

The news affected financial markets across Asia and Europe, with bank shares among the hardest hit.

Eurozone banks have been hit by cash outflows since the summer amid fears that Greece, and possibly other governments, may ultimately default on their debts, and even leave the eurozone, leaving their lenders sitting on big losses.

Dexia shares initially fell 14% on news of the possible rating downgrde, and despite a rally back in later trading, they were still the worst hit in the financial sector.

Moody's cited Dexia's potential losses on a Greek debt default, as well as the bank's recent difficulties in borrowing short-term cash from markets, as reasons for the rating review.

Continue reading the main story

It was only on July 15 that the European Banking Authority [stress tests]... portrayed Dexia as one of the strongest banks in Europe”

End Quote Robert Peston Business editor, BBC News Dexia's exposure to Greek government debt totals 3.4bn euros ($4.5bn; ￡2.9bn). Its total exposure to Greece - including to private-sector Greek borrowers - is 4.8bn euros.

It has already written off 21% of its Greek debts, but market prices now suggest the eventually loss to lenders could be in excess of 50% of the amount owed by Greece.

Paris-based business newspaper Les Echos reported on Friday that the French and Belgian governments would discuss measures to shore up Dexia's balance sheet.

The bank is already partly-owned by the two governments, after it received a 6bn euros joint bailout at the height of the financial crisis in 2008.

There were reports last week that the bank could be split up, and speculation of a possible nationalisation of the bank.

Another option under consideration is the sale of Credit Local, a unit of the bank responsible for lending to French local governments.

Belgian Finance Minister Didier Reynders told Belgian radio on Friday that Dexia's shareholders should be behind the bank and be ready intervene if there was a problem.

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Crisis at S Korean savings banks

2011-10-20T08:46:00.000-07:00

3 October 2011 Last updated at 16:02 GMT By Lucy Williamson BBC News, Seoul Who's to blame for bad financial shape of South Korea's savings banks? About lunchtime during the last bright days of the Korean summer, Jeong Gu-haeng, the president of one of South Korea's biggest savings banks, jumped from his sixth floor office window, killing himself.

As he jumped, prosecutors were inside the building, seizing documents from the bank's headquarters.

They were investigating whether his Jeil 2 Savings Bank had mishandled loans given out to creditors.

The death of the bank's president - splashed over the front pages of newspapers here - refocused attention on a widening crisis among the country's savings banks.

Jeil 2 was one of seven banks to be suspended last month after financial regulators found that they all had too little capital stored against risky loans.

They have been given 45 days to correct the situation or face being sold.

It was the second round of suspensions to hit Korea's savings banks.

Nine others were suspended earlier this year, and several others have narrowly avoided it.

The current investigation - into seven of the suspended banks - is looking at whether major stakeholders and chief executives misused the company's capital to finance personal projects or those of their close contacts.

But the question of why so many of Korea's savings banks were in such bad financial shape to begin with, goes much deeper.

Risky loans

A large part of the answer lies in the forest of concrete on the outskirts of Seoul's city centre.

Kilometre after kilometre of grey-beige tower blocks, rising high into the sky, have been built to house the capital's burgeoning workforce.

Continue reading the main story Jeil Savings BankJeil 2 Savings BankTomato Savings BankPrime Mutual Savings BankAce Mutual Savings BankDae Yeong Mutual Savings Bank Parangsae Mutual Savings Bank Until recently, real estate was a good investment here.

Prices were rising, people kept buying, and construction firms were keen to keep building.

But after the global financial crisis three years ago, demand began to fall - and with it, prices. And that left builders, and their backers, exposed.

Dr Jeong Dae hee, an associate fellow at the Korean Development Institute, says that savings banks were on the front line of the downturn in the construction industry, because they provide many of the bridging loans which get projects started, often before there are any real assets.

When builders start a construction project, he says: "They often don't have the money to do it, so they go to savings banks and ask for loans.

"But they actually don't have the land or even permission to build the apartments..

"So they make some plans, and the savings banks look at the plans, and if the plans aren't too weird, they give them the money."

As the loans became riskier, he says, the banks' interest rates got higher - meaning that when demand began to fall it was harder than ever for builders to honour their debts.

Blame game

Financial officials agree that the banks' credit practices have been too loose. And that discovery has led the finger of blame to swing in the direction of the country's financial regulators.

Dr Jeong believes that Korea's main financial enforcement agency, the Financial Supervisory Service, or FSS (which takes its cue from the Financial Services Commission, or FSC), was unable to act strictly enough in its regular audits because it was under political pressure not to scare the market.

Savings banks were on the front line of the downturn in the construction industry

And also, he says, because many of the banks' senior employees were former FSS officials.

Allegations that the relationship between financial regulators and the savings banks was too cosy are widely accepted - even by regulators themselves.

One financial official, speaking on condition of anonymity, says: "The FSS has been parachuting in their retirees as auditors of the savings banks, so their juniors [who were still working in the FSS] couldn't go through a very rigorous audit."

In Korea, the sense of professional hierarchy and respect for those in senior positions is acute.

Confronting your boss is almost unheard of.

To inspect a bank which now employs a former senior colleague as auditor would put many Koreans in a difficult position.

"To some extent, we accept it," the official says.

But he also believes that the banks' "lack of risk management skills and business scope" was more to blame.

Wider impact?

But if the proper regulation and good business practices were lacking in Korea's savings banks, what about the rest of its financial industry? And what about the impact of the suspensions on the wider economy?

Dr Jeong says commercial banks are unlikely to face the same problems, because they have different financing to savings banks, and have many more assets.

Savings banks act as a kind of safety net for commercial banks, he says.

They are the first stage in the financing process, and so weed out the worst performers.

Continue reading the main story

If the problem of the savings banks is just non-performing loans, then it's going to be much easier to fix this.”

End Quote Dr Jeong Dae hee Korean Development Institute And Choo Kyungho, the vice-chairman of Korea's policy regulator, the Financial Services Commission, says there's little to worry about financially.

"There are two sides to this," he says.

"From the political-social standpoint, it's a big issue with many concerns. From a purely financial point of view, this issue is very small.

"The total assets of savings banks are less than 3% of the total financial market, so there's no chance this can escalate."

Dr Jeong agrees there's little chance of the savings banks affecting the wider economy. And the risk is made even smaller by an insurance fund that he believes will more than cover any losses.

But politically it has been tricky, even so.

The public have been shocked to learn of the 16 suspensions.

And with national elections due here next year, politicians have been queuing up to demand reform.

Mr Choo says it's not expecting any more suspensions this year, and the FSC has already put forward its proposals to improve the system - though some accuse it, and its enforcer the FSS, of refusing reform themselves.

As Dr Jeong points out, the real problems in this case aren't bad loans at all - but the trickier issues of possible illegality and lack of regulation.

"If the problem of the savings banks is just non-performing loans," he says, "then it's going to be much easier to fix this."

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New £50 note set for 2 November

2011-10-20T05:15:00.000-07:00

30 September 2011 Last updated at 15:24 GMT Boulton (left) and Watt were two key figures in the Industrial Revolution The Bank of England has announced that the new-style ￡50 note will be introduced on 2 November.

The design of the new note was revealed in 2009 and features entrepreneur Matthew Boulton and engineer James Watt, who pioneered the use of steam engines in textile manufacturing.

The Bank says the note will have a range of enhanced security features.

It will be the first time that two portraits will appear together on the reverse of one its banknotes.

The Boulton and Watt note will initially be circulated in tandem with the current ￡50 note featuring Sir John Houblon, the first governor of the Bank of England.

The Houblon note will eventually be withdrawn. The Bank will announce a withdrawal date in due course.

The design has seldom changed since it was first introduced in 1725. A white ￡50 was in use for more than 200 years until 1943.

There are 210 million ￡50 notes in circulation, valued at ￡10.5bn. That is 84% higher than 7 years ago.

The ￡20 is the most common Bank of England note in circulation, with 1.55 billion notes in circulation worth ￡31bn.

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Japan retail sales drop in August

2011-10-20T00:26:00.000-07:00

29 September 2011 Last updated at 00:53 GMT Consumers are being hurt by global economic problems and a weaker labour market Retail sales in Japan registered a surprisingly sharp fall in August as a post-earthquake rebound petered out.

Sales fell 2.7% versus a year ago, a much sharper decline than the 0.6% rate expected by markets.

It ends two months of rising sales during which the Japanese economy appeared to be returning to normality after the natural disaster in March.

The disappointing result mirrors a similar downturn in consumer spending and sentiment in the US and Europe.

On a seasonally-adjusted basis, August sales fell 1.7% from July, which were themselves down a revised 0.3% from the month before.

Wholesalers meanwhile continued to do well, according to the data from the Ministry of Economy, Trade and Industry.

The volume of wholesale transactions accelerated to a year-on-year rate of 5.6% in the month.

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Japan tourism industry recovering

2011-10-19T21:25:00.000-07:00

6 October 2011 Last updated at 11:20 GMT Himeji Castle is one of 14 World Heritage sites in Japan Japan's tourism industry is showing signs of recovery following the devastating tsunami and earthquake last March, according to a report.

The World Travel & Tourism Council said that foreign visitor numbers in June and July were 36% lower than for the same period last year.

In comparison, visitor numbers fell 62% in April and 50% in May year-on-year.

"So, while a full recovery is still some way off, the situation has improved significantly," the WTTC said.

The council's president and chief executive David Scowsill said in the report: "As the world's third largest travel and tourism economy, the recovery of Japan is one of the most compelling issues facing the industry anywhere in the world."

Prior to the earthquake and tsunami on 11 March, Japan's travel and tourism industry was expected to provide nearly 1.5 million jobs in 2011 and to directly contribute 2.2% of total Japan's gross domestic product.

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