wo40

Reebok pays $25m over toning shoe

2011-10-31T18:12:00.000-07:00

AppId is over the quota
AppId is over the quota
28 September 2011 Last updated at 18:41 GMT Reebok got into trouble in the US about alleged health benefits of using its toning shoes Sports goods maker Reebok International is to pay $25m (￡16m) to settle charges that it made unsupported claims about its Easy Tone and Run Tone shoes.

Reebok, a unit of Adidas, said these toning shoes would "strengthen and tone key leg and buttock (gluteus maximus) muscles more than regular shoes".

The US Federal Trade Commission ruled these advertising claims were false.

Adidas said Reebok had settled with the commission "to avoid a protracted legal battle".

"Settling does not mean we agreed with the FTC's allegations; we do not," Adidas added.

The FTC said Reebok began making the claims in early 2009 and provided statistics about the alleged benefits.

The $25m penalty will go towards consumer refunds.

"The FTC wants national advertisers to understand that they must exercise some responsibility and ensure that their claims for fitness gear are supported by sound science," said David Vladeck, director of the FTC's bureau of consumer protection.

The commission said in one advert Reebok claimed that by walking in its Easy Tone shoes users were able to strengthen hamstrings and calves by up to 11%, and tone the buttocks up to 28% more than normal trainers.

UK advert

It comes three months after a Reebok advert in the UK, which featured Formula One driver Lewis Hamilton, was banned.

The Advertising Standards Authority (ASA) banned the leaflet which said Reebok's ZigTech Apparel helped blood vessels to relax, boosting oxygen levels by up to 7%.

The ASA said the claims could not be proved and also criticised the advert for implying the trainers Hamilton wore in it featured the new technology.

Reebok said it disagreed with the ASA ruling but accepted it.

View the original article here

Full Tilt Poker licence revoked

2011-10-31T13:19:00.000-07:00

AppId is over the quota
AppId is over the quota
29 September 2011 Last updated at 15:38 GMT Online poker is a multi-billion-dollar industry despite being banned in the US Besieged online gambling site Full Tilt Poker has had its licence revoked.

The move comes after the Alderney Gambling Control Commission (AGCC) held a hearing about the US-run site, which is registered on the Channel Island of Alderney.

The AGCC said that the owners of Full Tilt Poker had misled authorities over the amount of cash to hand.

This month, the US accused the firm of being a "global Ponzi scheme" that defrauded players out of $440m (￡289m).

Full Tilt Poker's licence was suspended by the AGCC in June.

Full Tilt Poker "had fundamentally misled AGCC about their operational integrity by continuously reporting as liquid funds balances that had been covertly seized or restrained by US authorities, or that were otherwise not actually available to the operator," the regulator said.

The AGCC said the revoking of the licence did not prevent new owners from rescuing the business.

Although online gambling is illegal in the US, internet poker remains a multi-billion dollar industry because companies use a variety of ways to flout the law, including locating operations offshore.

The US Justice Department said earlier this month that Full Tilt had "defrauded players by misrepresenting that their funds on deposit in online gambling accounts were safe, secure and available for withdrawal at any time".

"In reality, Full Tilt Poker did not maintain funds sufficient to repay all players, and in addition, the company used player funds to pay board members and other owners more than $440m since April 2007," it said.

The US also charged two other online poker companies, PokerStars and Absolute Poker, with money laundering and illegal gambling in April.

View the original article here

'Bad bank' plan for Dexia assets

2011-10-31T09:10:00.000-07:00

AppId is over the quota
AppId is over the quota
4 October 2011 Last updated at 22:46 GMT Dexia shares have fallen sharply in the past two days The Belgian government has approved the creation of a "bad bank" for risky assets held by the troubled Franco-Belgian bank Dexia.

Shares have fallen sharply in the past two days amid fears about its large exposure to Greek government debt.

Belgian Prime Minister Yves Leterme said his cabinet had agreed to isolate at-risk assets and to guarantee debts.

There are fears that Greece may end up defaulting on more than 50% of its debt, mostly held by European banks.

Shares fell by as much as 37% at the start of European trading on Tuesday - adding to a 10% Monday drop prompted by an alert by ratings agency Moody's - but rallied back to a mere 22% down at the end of the day.

Reorganisation

The commitment to guarantee debts raised questions over the heavily indebted Belgian government's own solvency.

Belgium's 10-year cost of borrowing jumped from 3.7% to 3.8% in bond markets on Tuesday.

Separately, the French and Belgian central banks also stated that they "fully support" Dexia, indicating that they will provide whatever borrowing is needed by the bank to ensure it does not run out of cash.

Continue reading the main story

The European Banking Authority... portrayed Dexia as one of the strongest banks in Europe”

End Quote Robert Peston Business editor, BBC News The bank is to be restructured. As well as the creation of a "bad bank" supervised by the French and Belgian governments, a unit of the bank responsible for lending to French local authorities, Credit Local, will be sold off.

A joint statement from the countries' finance ministers said: "In the framework of Dexia's restructuring, the governments of France and Belgium, in co-ordination with our central banks, will take all necessary steps to ensure the protection of depositors and creditors."

The two ministers, who were meeting at a wider EU finance ministers' meeting in Luxembourg, have been discussing ways to support the bank.

Many investors anticipate that the bank will ultimately have to be recapitalised by the two governments - in other words, nationalised.

The crisis at Dexia comes just weeks after the bank passed stress tests by regulators of all the major European banks, further undermining the credibility of the entire exercise.

Exposure

Market concerns over Greece's ability to repay its debts were further heightened on Monday, as eurozone finance ministers again delayed a decision on giving Greece its next instalment of bailout cash.

It came after Greece said it would not meet this year's deficit cutting target.

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 exit the eurozone, leaving their lenders sitting on big losses.

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 eventual loss to lenders could be in excess of 50% of the amount owed by Greece.

The bank is partly-owned by the French and Belgian governments, after it received a 6bn-euro joint bailout at the height of the financial crisis in 2008.

View the original article here

Heathrow triples anti-snow teams

2011-10-31T04:13:00.000-07:00

AppId is over the quota
AppId is over the quota
29 September 2011 Last updated at 11:38 GMT ￡11m has been invested in equipment to avoid chaos.

Heathrow airport has tripled the number of snow clearance vehicles to tackle severe winter weather.

Operator BAA also has three times as many staff ready to clear snow compared with last year.

Thousands of passengers were left stranded at the airport as 4,000 flights were cancelled over five days for heavy snow before Christmas.

But BAA said it now has 185 snow clearance vehicles and has 468 staff per shift, compared to 117 last year.

The operator said it has invested ￡32.4m so far to tackle severe weather.

BAA had been criticised following last year's disruptions and a report accused the operator of a breakdown in communication and lack of "preparedness" for the bad weather.

After the publication of the Winter Resilience Enquiry Report, BAA promised to invest ￡50m to avoid facing disruptions on a similar scale.

Announcing its "winter resilience programme", the airports operator said it has introduced a new "reservist" role whereby up to 950 staff will be deployed to the terminals to help passengers during disruption.

'More to do'

BAA also has plans for a new airport control centre and improvements to passenger information.

But Normand Boivin, chief operating officer of Heathrow, said: "There is more still to do.

"There will be lots of attention on Heathrow the next time it snows heavily.

"We won't be perfect but we will be better and we will improve each time we practise our new response plans.

"There will still be times when, for safety reasons, airports have to close during severe weather, but the work detailed in today's report means this should happen less often at Heathrow and the airport responds better when it does."

View the original article here

AUDIO: Greek government 'must stop fooling around'

2011-10-30T23:31:00.000-07:00

AppId is over the quota
AppId is over the quota

A senior German politician in Angela Merkel's coalition has said that Greece should leave the euro.

Former Greek finance minister, Stefanos Manos tells us why the Greek government should get tougher ahead of today's meeting of Europe's finance ministers.

Get in touch with Today via email , Twitter or Facebook or text us on 84844.

View the original article here

Survey finds 28p beer price gap

2011-10-30T20:04:00.000-07:00

AppId is over the quota
AppId is over the quota
5 October 2011 Last updated at 23:08 GMT Even the cheapest pint of bitter in London costs more than ￡3, the survey says The cheapest pint of beer is 28p cheaper in pubs in the north of England compared with south-eastern hostelries, a survey suggests.

Some 650 pubs were asked for the cost of their cheapest pint of bitter by researchers for the Good Pub Guide.

They found that this pint cost ￡3.15 on average in the south-east of England and London, but ￡2.87 in Yorkshire and the North.

Campaigners say that overheads faced by pubs could explain the difference.

Rates and rents were often higher for London publicans and that could be reflected in the cost of a drink, said Tony Jerome, spokesman for the Campaign for Real Ale (Camra).

Brewers

The 30th edition of the Good Pub Guide, published on Thursday, found that prices had risen by 7% over the last year - and that the north-south price divide had been in evidence for some time.

However, it suggested that pubs brewing their own ale were often charging less than ￡2.50 a pint, with scarcely any increase over the last year. A recent Camra survey claimed West Yorkshire had more breweries producing more types of beer than any other county in the UK.

Figures from the British Beer and Pub Association's Statistical Handbook claimed that the price differential for a pint in London and in the North East in 2010 was even greater - at 84p.

One brewer warned that the price of a pint could continue to rise

Paul Maloney, national officer of the GMB union, said: "Since the Good Pub Guide was first published, the Beer Orders were introduced in 1989. The aim was to foster competition to increase consumer choice and bring down prices.

"The opposite of this aim has been achieved. The average price for a pint of lager in Britain has risen by 80p higher than justified by inflation and changes in taxes in pubs, as property companies replaced brewers as owners."

Rising costs

Brewer Shepherd Neame said on Wednesday that beer prices would continue to rise in the coming months.

The brewer, which produces real ales such as Spitfire and Bishops Finger, said cereals such as barley were up to 30% more expensive than a year ago, while the price of glass has also increased, pushing up the cost of beer bottles and pint jars.

However, changes to the tax system have made some drinks cheaper.

Since 1 October, all beers with an alcohol content of 2.8% abv and below are being taxed less, to the equivalent of around 35p on every pint when compared with a typical 4.2% cent beer.

The Good Pub Guide also suggested that steak-in-ale pie was the most popular pub food.

Editor Fiona Stapley said that many pubs were diversifying, such as offering breakfasts and coffee mornings, to get through tough economic conditions.

View the original article here

Ask the experts: Eurozone crisis

2011-10-30T15:05:00.000-07:00

AppId is over the quota
AppId is over the quota
27 September 2011 Last updated at 22:54 GMT By Laurence Knight & Ian Pollock Business reporters, BBC News Our experts answer your eurozone crisis questions Last month, the BBC asked viewers what questions they had about their finances, particularly given fears about a renewed financial crisis and recession.

Here, BBC journalists Laurence Knight and Ian Pollock answer your questions about how the eurozone debt crisis might affect you.

Why, with the eurozone in crisis, is the pound still so weak against the euro? - Roy Waite, Carentoir, France

Put simply, the UK is in no better shape than the eurozone.

Both currency blocs (and the US for that matter) face the same economic malaise. Debts are too high, particularly household debts, so nobody wants to spend - not consumers, not businesses, not even governments.

That means interest rates in the UK and the eurozone are likely to remain very low for many years, making both currencies an unattractive place for investors to park their cash.

But thanks to the hawkish European Central Bank, eurozone interest rates have actually been somewhat higher than in the UK - and were even rising until recently - helping to push the euro's value up.

High interest rates and a strong euro have of course made things even harder for Greece and other heavily-indebted governments, and markets view their debts as very risky.

But the euro is also home to German government debt - considered an ultra-safe investment by markets.

Even if the more distressed eurozone governments defaulted on their debts, the consequences would be felt well beyond the eurozone's borders, much as the collapse of Lehman Brothers in 2008 was felt outside the US.

And if these countries left the euro, the value of the remaining, more German-dominated euro might actually go up.

How prepared are we, the Bank of England, etc, for a Greek default? - Robert W Warne, Cardiff

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.

Bank of England governor Mervyn King revealed in response to MPs' questions in June that the Bank was working with the Treasury to draw up contingency plans for a Greek default.

He did not give any details of what those plans are, nor have any emerged since.

The direct exposure of UK banks to Greece is fairly limited, but - as with the bankruptcy of Lehman Brothers - a Greek default could have a number of knock-on effects that affect the UK far more severely.

For example, it could lead to the failure of one or more European banks because of their exposure to Greece, or to a general loss of confidence in global banks, in the euro or in the debts of other over-stretched eurozone governments.

The plan may consider actions such as:

emergency cash loans from the Bank of England to the UK banks, if there is a collapse of market confidence in theminterventions to support other short-term cash markets, such as commercial paper markets, which are used by companies to fund themselvesthe government injecting new loss-absorbing capital into the banks, if they suffer heavy losses because of the failure of a European bank or losses on other eurozone government debtsthe Bank publishing details of an audit currently under way of the UK banks' exposures to the eurozone, in order to reduce uncertainty and restore confidencemonetary stimulus - such as cutting rates to zero and buying up more UK government debt - in order to head off a broader economic downturnemergency tax cuts and/or spending increases by the government for the same purpose, with some of the resulting borrowing to be funded by the Bank of England's debt purchasescurrency interventions if the euro were to drop significantly against the pound.What would happen to euros in bank accounts in non-eurozone countries when/if the eurozone breaks up and turns into two or more different currencies? - Robert, Bath

You should check the terms of your bank account.

So long as the euro continues to exist - minus some members - your account should be unaffected.

If, for example, Greece left the euro, its government would probably pass a law overriding its existing euro contracts, as well as those of Greek banks, companies and individuals, redenominating them all into new drachmas.

Some legal experts have warned of a huge mess in these circumstances, with litigation brought by anyone who lost out on the conversion.

However, most financial contracts specify the law of a particular country as its "governing law". For a bank account in Athens or a Greek government bond, the governing law is Greece. So it would be hard for anyone to argue in court that these contracts should not be redenominated, if the Greek parliament says so.

But an account held in a non-eurozone country is likely to apply the law in that country, or the law of a popular jurisdiction such as England, New York or Germany. So it should be unaffected by a Greek redenomination law, unless your account is with a Greek bank.

If the euro ceased to exist altogether - with even Germany exiting - then what happens depends primarily on your account terms, assuming that they are not governed by the laws of one of the eurozone countries.

Your bank probably would have reserved the right to choose which national currency to use as a successor to the euro. Its choice would then be a commercial decision, based on how much it values its reputation and client relations over its own short-term financial gain.

Where does the European Central Bank get the money from to buy Spanish and Italian bonds? How much do they have available and what will they do if they use it all? - Peter Gray, Hitchin, Herts

Essentially the ECB, together with the "eurosystem" of 17 national central banks, can itself create the money that it uses to buy government debts.

There is therefore no theoretical limit to how much it can buy up.

When the ECB buys an Italian bond, it can pay for it by providing to the bond seller with a newly-created euro deposit at the seller's national central bank.

The seller can then use this deposit as "money" to buy other financial instruments, or it can redeem the deposit for newly-printed euro cash.

Practically, however, there are three limits on how much the ECB can do this.

The central bank's first priority is price stability. Creating new money is typically viewed as inflationary.

The ECB may try to reduce the impact of this money creation by borrowing the newly-created money back from the market, or by selling other assets it owns - German government bonds perhaps.

However, in the current heavily-depressed economy, many economists argue that money creation is not inflationary at all, at least in the medium-term, as banks are simply hoarding the money.

Secondly, the ECB may make losses on the bonds if Italy defaulted on its debts, or if it sold them back to the market at a lower price than it bought them.

The eurosystem has "capital" - money given to it by the eurozone governments when it was set up, plus profits it has made on its operations - of about 80bn euros that can absorb these losses.

But if the losses are too big, the ECB would need to be given new capital by the eurozone governments - something they are not legally obliged to do.

So the ECB may be concerned that any such bail-out could damage its cherished political independence.

Thirdly, the ECB is concerned not to distort markets too much, and in particular, not to discourage fiscal discipline by the Italian or Spanish governments by making it too easy for them to borrow.

I have three Spanish buy-to-let mortgages. I am saving sterling in the hope that the euro will collapse in value, to help pay off one of the mortgages. If a euro member leaves, is this likely to happen? If I default on the other two mortgages, can the bank take the one that I have just paid off? - Michael Sands, Northern Ireland

There are too many missing pieces of information to give you a sensible answer. Are the three properties in Spain or the UK? Is your lender in the UK or Spain? Were the loans in pounds or euros?

Whatever the facts, you appear to be in a hole, and as the former Labour Chancellor Denis Healey once said, in that situation, you should stop digging.

Let's assume the properties are in Spain and you borrowed euros from a UK lender to buy them.

Your suggested strategy is complex and hinges on several different things going your way, which they may not.

Firstly, devaluation of the euro. That might happen if one or more countries left the euro, but equally the euro might in fact strengthen if just the weakest countries such as Greece and the Irish Republic leave.

If Spain left the euro and, presumably, readopted the peseta as the national currency, you might think you would benefit from a probable devaluation of the newly adopted peseta.

But you might still be legally obliged to repay your debts in euros, regardless of the new local currency in Spain. And again, the euro might not devalue but appreciate if Spain left.

So, your guess that economic upheaval will inevitably reduce the value of your euro-denominated debts may not be accurate.

Your ambition to default on two mortgages after paying off just the third is also off beam.

Firstly, it is arguably dishonest.

Secondly, if you borrowed from a UK lender, then unless they were asleep when they lent you the money, they will have a charge over all three properties.

They will be able to chase you for any outstanding debts, once they have seized the two defaulted properties and sold them.

The same applies if you borrowed from a lender in Spain. If you still owe them money after they have seized your two mortgaged homes and sold them, they can still pursue you for the debt, there and here.

If your finances are too distressed, default may be inevitable. But it will not be an easy escape route from the debts you took on.

View the original article here

US Senate postpones currency vote

2011-10-30T10:57:00.000-07:00

AppId is over the quota
AppId is over the quota
7 October 2011 Last updated at 04:02 GMT President Obama has said that any action by the US has to be consistent with international treaties The US senate has postponed its vote on the much-debated currency bill until next week amid differences between the Republicans and Democrats.

The bill would make it easier to impose penalties on goods from countries seen as keeping their currencies artificially low.

Politicians and some business groups have accused China of using its policy of limiting the yuan's value to boost exports.

Leaders differed on certain amendments.

"I think China needs to carefully think about and process the substance of what people are saying here on the floor of the United States Senate." said John Kerry, chairman of the Democratic Senate Foreign Relations Committee.

'Very aggressive'

The debate on China's currency policy has become the centre of attention amid a slowdown in the US economy.

Continue reading the main story

Whatever tools we put in place, let's make sure that these are tools that can actually work, that they're consistent with our international treaties and obligations”

End Quote Barack Obama US President President Barack Obama said "China has been very aggressive in gaming the trading system to its advantage and to the disadvantage of other countries, particularly the United States."

"It is indisputable that they [China] intervene heavily in the currency markets and that the RMB [yuan], their currency, is lower than it probably would be if they weren't making all those purchases in the currency markets."

Politicians and policy makers have said that undervalued yuan has not only given an unfair advantage to Chinese exporters, it has also contributed to the unemployment situation in the US.

"We cannot continue to let China flaunt the rules," said Democratic Senator Chuck Schumer.

Mr Schumer added that if no action was taken against China's policies the US "may never recover as a country. This is serious stuff".

Cautious approach

However, President Obama warned that the US needed to take a cautious approach while handling the matter.

"My main concern and I've expressed this to Senator Schumer, is whatever tools we put in place, let's make sure that these are tools that can actually work, that they're consistent with our international treaties and obligations." he said.

President Obama's comments come as China has accused the US of using the currency dispute to take protectionist measures.

At the same time, some politicians and trade groups have said that such a bill may do more harm than good to the US economy.

They have warned that any such action by the US may start a trade war with China.

"Unilateral action by the United States will only serve to increase trade tensions and negatively impact the US economic recovery during this fragile period in the global economy," Bruce Josten of the US Chamber of Commerce wrote to the Senators earlier this week.

View the original article here

Shares up on eurozone bank plan

2011-10-30T06:42:00.000-07:00

AppId is over the quota
AppId is over the quota
5 October 2011 Last updated at 21:02 GMT German support is considered crucial for any European bank rescue proposal European stock markets ignored fresh warnings about Italy's ability to repay its debts by staging a strong rally.

Reports that European leaders are considering co-ordinated action to bolster banks sent European markets up 3%-5%, while Wall Street also rallied.

On Tuesday, Moody's cut Italy's credit rating by three notches and warned about the country's growth rate.

But investors focused on signs that the debt-laden banking system may soon be recapitalised by European authorities.

German support

In an interview in the Financial Times, Olli Rehn, European commissioner for economic affairs, said: "There is an increasingly shared view that we need a concerted, co-ordinated approach.

"There is a sense of urgency among ministers and we need to move on," he said.

German Chancellor Angela Merkel also said she favoured a pan-European recapitalisation programme if it proves necessary, and that she stood ready to help German banks absorb losses from a possible write-off of Greece's debts.

Continue reading the main story

There are some European regulators and politicians who regard the downgrade of Italy and the woes of the Franco-Belgian bank Dexia as positive events (oh yes)”

End Quote Robert Peston Business editor, BBC News German support is seen as crucial for any such proposal to succeed.

Meanwhile, the International Monetary Fund (IMF) - which has also been calling for eurozone governments to bolster their banks - put the likely cost of such a programme at 200bn euros ($267bn; ￡173bn).

That would put it within the means of the eurozone's bailout fund - the European Financial Stability Facility (EFSF) - which is currently being augmented.

In an embarrassing gaffe, the IMF's Europe director, Antonio Borges, suggested in a press conference that the IMF itself may add its own money to the EFSF's.

But he later rushed out a statement retracting his comments, noting that the IMF lacked the legal authority for such a move, nor did the idea have the backing of the IMF's shareholders, which include the US government.

Banks rise

Signs that Europe's leaders were ready to act came on Tuesday when plans were announced to split struggling Franco-Belgian financial group Dexia into its "good" and "bad" banks.

This plan to ring-fence Dexia's toxic debts led to an initial 10% jump in the firm's share prices in early trading, but it ended the day only 1.4% higher.

Continue reading the main story The problems at Dexia have further undermined the credibility of stress tests carried out earlier this year by European regulators to determine the resilience of the EU's banks - tests that Dexia comfortably passed.

Any recapitalisation programme may need to be preceded by a new round of stress tests, according to the BBC's business editor, Robert Peston, and would presumably consider the possibility of a significant write-off of Greek - and possibly other government - debts.

France's three big banks, which are also heavily exposed to Greece, rose sharply on stock markets, with Credit Agricole 9.9% higher at the close of trading.

Italy's biggest banks were up 5%-7%, while in London Barclays rose 7.7% and RBS was 5% higher.

The rally, which began as a late surge on Wall Street on Tuesday night, continued into US trading hours on Wednesday.

By the close of trading in New York, the Dow Jones was up a further 1.2%, with tech and media stocks taking the lead, while the Nasdaq rose 2.3%.

View the original article here

House prices 'lacking direction'

2011-10-30T03:10:00.000-07:00

AppId is over the quota
AppId is over the quota
6 October 2011 Last updated at 07:24 GMT The market has been relatively difficult for first-time buyers House prices are "lacking genuine direction", according to the Halifax, as it reported a 0.5% fall in values in September compared with August.

Prices were down 2.3% from a year ago, leaving the average home in the UK worth ￡161,132, the lender said.

It said there had been a mixed pattern of monthly changes in prices, but broad stability overall.

And the lender said it expected little change in prices and activity during the rest of the year.

"Greater uncertainty about economic and personal financial circumstances, together with pressure on householders' finances from weak earnings growth, higher inflation and increases in taxes, are likely to be constraining housing demand," said Halifax housing economist Martin Ellis.

"Despite these pressures, low interest rates and a rise in employment over the past year, have been supporting the market."

Lending

Prices in the three months to September were 0.1% higher than the previous three months.

The report of static house prices from the Halifax's lending data chimes with the latest figures from the Nationwide. The building society said last week that prices were "treading water".

However, the latest statistics on mortgage approvals from the Bank of England may suggest that sales funded by mortgage borrowing could pick up this autumn.

It said the number of new mortgages approved, but not yet lent, for home buyers rose to 52,410 in August - its highest monthly level since December 2009.

View the original article here

VIDEO: IMF: 'Europe risks recession in 2012'

2011-10-29T23:00:00.000-07:00

AppId is over the quota
AppId is over the quota

View the original article here

Australia's trade surplus widens

2011-10-29T18:23:00.000-07:00

AppId is over the quota
AppId is over the quota
4 October 2011 Last updated at 04:59 GMT Australia's coal exports have been picking up after being hurt by floods earlier this year Australia's trade surplus surged in August as exports of coal and other minerals increased despite concerns of a global slowdown.

Shipments from Australia grew 8% from the previous month, while imports rose 3%, the statistical bureau said.

That resulted in a trade surplus of 3.1bn Australian dollars ($2.9bn; ￡1.9bn), the second-largest on record.

Meanwhile, the Reserve Bank of Australia (RBA) left the interest rate unchanged at 4.75%

The data comes amid concerns that fears of a slowdown may hurt demand for Australia's mineral exports.

"Export volumes are really kicking along and that will be a big fillip for the economy in the quarter," said Brian Redican of Macquarie.

Asia factor Continue reading the main story

The indications are that the pace of near-term growth is unlikely to be as strong as earlier expected”

End Quote Glenn Stevens Reserve Bank of Australia Analysts said the fact that a huge amount of Australia's mineral shipments head to Asian economies has been a big factor in ensuring that its export sector sustains its momentum, despite global slowdown concerns.

They said that as economies like India and China see more people move from rural to urban centres, the demand for minerals will continue to rise.

"Both these countries have more than 1 billion people, and that is a big factor," David Lennox of Fat Prophets told the BBC.

As these countries undergo rapid urbanisation, they will also need to boost their power generation capacity in order to meet the increased demand for electricity.

"That process is not dependent on what happens in the US or European economies," Mr Lennox said.

He added that given these factors, exports of Australian minerals to the region will continue to grow.

Monetary easing?

However, despite the encouraging export numbers, the RBA indicated that it may ease its monetary policy going forward.

Glenn Stevens, the governor of the central bank, said the slowdown in the US and the ongoing debt crisis in Europe are likely to hurt global growth and also have an impact on Australia's economy.

"The indications are that the pace of near-term growth is unlikely to be as strong as earlier expected," he said in a statement.

There have been concerns that while its mining sector is booming, other parts of its economy are facing a tough time due to falling consumer demand.

However, the central bank inisisted it was ready to act in a bid to boost demand.

"An improved inflation outlook would increase the scope for monetary policy to provide some support to demand, should that prove necessary." the bank said.

View the original article here

Crisis at S Korean savings banks

2011-10-29T14:20:00.000-07:00

AppId is over the quota
AppId is over the quota
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."

View the original article here

Video: protesters March on Wall Street

2011-10-29T10:32:00.000-07:00

Help 6 October 2011, last updated on: 10: 05 GMT

View the original article here

High Street bookshops in decline

2011-10-29T05:56:00.000-07:00

AppId is over the quota
AppId is over the quota
4 October 2011 Last updated at 01:42 GMT The Book Warehouse saved Notting Hill's Travel Bookshop earlier this month The number of bookshops on UK High Streets is in steady decline, according to The Booksellers Association.

Membership of the body, which represents 95% of booksellers in the UK and Ireland, has continued to fall over the last six years.

Since 2006, the total number of members, not including supermarket outlets, has fallen by 20%.

Independent bookshop membership has fallen by over a quarter during the same period.

Chief executive officer Tim Godfray has called for the government and publishers to step in to stop the decline.

"At a time when literacy is an issue and libraries are under threat from government cuts, we need to build a coalition of publishers, government and consumers to provide opportunities for the passionate and creative entrepreneurs who run bookshops on our High Streets to thrive," he said.

In 2006, there were 4495 outlets who held memberships with the Booksellers Association, including 1483 independents.

By June this year, the total number had fallen to 3683, while independents dropped to 1099.

Last year, 50 new independent bookshops opened across the UK but 72 closed, confirming an overall decline for the third year running.

One of the most high profile shops to close this year was The Harbour Bookshop in Dartmouth, founded by the son of Winnie the Pooh author AA Milne in 1951.

In a recent Booksellers Association survey, the top three issues concerning shop owners that the government could address were the cost of rates, parking and planning.

"This is not just an issue for our members; it's also about preserving the retail diversity of our town centres," said Mr Godfray.

The rise of the e-book has also been blamed, an issue which the government can do little about.

Sales of e-books increased by 318% in 2010 and many predict that at least 50% of all books sold within 10 years will be digital downloads.

Book retailers have also faced increasing competition from online retailers.

Spending on printed books fell by 4% in August this year, with sales dropping to a seven-year low for the month, according to sales analysts Neilsen BookScan.

Yet physical non-fiction book sales were up 3% on this time last year, with significant gains for some genres such as cookery and fitness.

View the original article here

VIDEO: Youth unemployment rise in Eurozone

2011-10-29T01:33:00.000-07:00

AppId is over the quota
AppId is over the quota
4 October 2011 Last updated at 21:07 GMT Help

View the original article here

Pub wins over TV football ruling

2011-10-28T20:39:00.000-07:00

AppId is over the quota
AppId is over the quota
4 October 2011 Last updated at 09:25 GMT Karen Murphy on why she took her fight to Europe, speaking to 5 live in October 2010

A pub landlady has won the latest stage of her fight to air Premier League games using a foreign TV decoder.

Karen Murphy had to pay nearly ￡8,000 in fines and costs for using a cheaper Greek decoder in her Portsmouth pub to bypass controls over match screening.

But she took her case to the European Court of Justice.

The ECJ now says national laws which prohibit the import, sale or use of foreign decoder cards are contrary to the freedom to provide services.

'Relief'

It said national legislation, which banned the use of overseas decoders, could not "be justified either in light of the objective of protecting intellectual property rights or by the objective of encouraging the public to attend football stadiums".

"She's overwhelmed with relief at the moment," Mrs Murphy's lawyer, Paul Dixon, told BBC Radio Solent.

"It's been a long road for her but she's delighted to be getting the case back to the High Court now in London where it will be finalised, before very long we hope.

"It will mean increased competition in the broadcast market that's for sure."

The ECJ findings will now go to the High Court in London, which had sent the matter to the ECJ for guidance, for a final ruling.

However, it is unusual for a member state High Court to pass a different judgment to one provided by the ECJ.

'Contingency plans'

The decision could trigger a major shake-up for the Premier League and its current exclusive agreements with Sky Sports and ESPN, and pave the way to cheaper viewing for fans of top-flight English games.

"In practical terms, the Premier League will now have to decide how it wishes to re-tender its rights," said sports media lawyer Daniel Geey of Field Fisher Waterhouse solicitors.

Continue reading the main story

On the face of it, it looks like a blow for the Premier League and... broadcasters Sky and ESPN”

End Quote David Bond BBC sport editor "There can be little doubt it will have contingency plans ready to go and has various options available.

"Be it a pan-EU tender, selling in only certain EU member states or devising a plan to start its own channel, they will be deciding how best to maximise the value of their product to ensure any revenue shortfall is minimised."

The judges said the Premier League could not claim copyright over Premier League matches as they could not considered to be an author's own "intellectual creation" and, therefore, to be "works" for the purposes of EU copyright law.

However, the ECJ did add that while live matches were not protected by copyright, any surrounding media, such as any opening video sequence, the Premier League anthem, pre-recorded films showing highlights of recent Premier League matches and various graphics, were "works" protected by copyright.

To use any of these parts of a broadcast, a pub would need the permission of the Premier League.

'Major blow'

"On the face of it, it looks like a blow for the Premier League and... broadcasters Sky and ESPN," said BBC sport editor David Bond.

He said the Premier League had faced many regulatory challenges in the past and would find ways to get round the new situation.

Karen Murphy used the Greek firm Nova to show Premier League games

Sky has pumped billions into top flight English football since the league was founded in 1992, with the money given to clubs allowing them to buy some of the top names in the world.

Our correspondent said that would not necessarily change, given the huge value of other deals.

The Premier League's television income from mainland Europe is about ￡130m, less than 10% of their total ￡1.4bn overseas rights deal.

But he warned that it could have significant repercussions for other rights holders outside of sport, with life potentially getting more difficult for the film industry, which also sells its product on an country-by-country basis.

Satellite signals

The legal battle kicked off six years ago, when Ms Murphy was taken to court for using the Nova firm to show matches at the Red, White and Blue pub.

Using the Greek service, she had paid ￡118 a month, rather than ￡480 a month with the official broadcaster.

Licensed broadcasters encrypt satellite signals, with subscribers needing a decoder card to access them.

Ms Murphy took advantage of an offer to UK pubs to use imported cards.

In February, an ECJ advocate general said this was in line with the aims of the EU single market - a border-free zone for goods and services.

The Premier League has already taken action against two suppliers of foreign satellite equipment and a group of pub landlords who used imported decoding equipment to show English Premier League games and avoided the commercial premises subscription fees for Sky.

View the original article here

UK 'will resist' EU financial tax

2011-10-28T17:21:00.000-07:00

AppId is over the quota
AppId is over the quota
28 September 2011 Last updated at 22:30 GMT Jose Manuel Barroso: "We have to understand we are in a situation where we have to do things together"

Bank shares have fallen in London after the UK said it would "resist" a financial transaction tax on EU members proposed by the European Commission.

The tax would raise about 57bn euros ($78bn; ￡50bn) a year and would come into effect at the start of 2014.

At close, Royal Bank of Scotland was behind by 3.64%, Lloyds Banking Group by 2.4%, and Barclays by 1.22%.

London would be hardest hit by the tax as the majority of banking transactions in Europe come through the city.

'Tax on London?'

City of London officials have said that about 80% of the revenues of any Europe-wide financial tax would come from London.

Stuart Fraser of the City of London said the question that had to be asked was whether the proposal was "a tax on London".

The banking sector played a role in causing the economic crisis, the commission said

Mr Fraser also warned that such a tax could mean a lot of banking transaction being lost to outside of the EU, and that the cost of setting up the scheme could outstrip whatever monies it raised.

Under the proposals, the financial tax would be levied at a rate of 0.1% on all transactions between institutions when at least one party is based in the EU. Derivative contracts would be taxed at a rate of 0.01%.

The BBC's business editor Robert Peston said that while dealers and investors in financial products such as derivatives and bonds were not happy about the proposal, share dealers were more relaxed as the tax would cost less than the existing stamp duty, which the tax would replace.

Meanwhile, in Germany and France bank shares also fell at close, and the European Banking Federation called the tax a "nonsense".

Among the market losers were Deutsche Bank and Commerzbank in Germany, and Societe Generale and BNP Paribas in France.

'Contribution' Chancellor Merkel faces a crunch vote on the eurozone bailout fund

Despite the opposition Algirdas Semeta, EC commissioner for taxation, customs, anti-fraud and audit, said: "Our project is sound and workable. I have no doubt this tax can deliver what EU citizens expect - a fair contribution from the financial sector."

The EU executive also points out that financial services are "in the majority of cases exempt from paying VAT (due to difficulties in measuring the taxable base)".

Germany and France have been among countries pressing the European Commission to propose the tax on all financial investment systems, as they seek to show their citizens they are serious about recouping some of the costs of the banking crisis.

Austria, Belgium, Norway and Spain also support such a tax.

Earlier, Commission president Jose Manuel Barroso had said banks must "make a contribution" as Europe faced its "greatest challenge".

A transaction tax would need the approval of the UK in order to be implemented across the EU.

The commission said that if the UK vetoed the tax, it would look to implement it in the eurozone.

Referring to "the constraints of unanimity", Mr Barroso said "further changes to the Treaty of Lisbon" may be required in order to push through measures to stabilise Europe's economy.

'Additional revenue'

The commission said the tax was "to ensure that the financial sector makes a fair contribution at a time of fiscal consolidation in the member states".

It said financial firms had played a role in the current "economic crisis" and was "under-taxed" compared with other sectors.

The "significant additional revenue" raised would contribute to public finances, it added.

A spokesperson for the UK Treasury said it would "absolutely resist" any tax that was not introduced globally.

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."We would not do anything that is not in the UK's interests," he told the BBC.

The Treasury has said there are also a number of practical issues that need to be worked through.

And the financial secretary to the Treasury, Mark Hoban, said the transaction tax would be ineffectual unless it was a global agreement.

"If it's not done at a global level, it's not done as part of a comprehensive package, then people will find ways around it," he said.

"They'll move business out of Europe, somewhere else, they'll find different products that are outside the scope of this transaction tax, so I think there's a lot of detail to be looked at to get this right."

Earlier, in his annual State of the Union address in Strasbourg, Mr Barroso had called not only for the transaction tax but for eurozone members to issue debt collectively, through so-called eurobonds.

"Once the euro area is fully equipped with the instruments necessary to ensure both integration and discipline, the issuance of joint debt will be seen as a natural and advantageous step for all," he said.

Further austerity

Officials from the commission, along with those from the European Central Bank and International Monetary Fund, are due to begin reviewing Greece's attempts to reduce its debt levels on Thursday.

Greece's new property tax has proved particularly unpopular

They will then decide whether to release about 8bn euros from a 110bn bailout package agreed last summer, money the Greek government badly needs in order to pay its bills.

A key obstacle to the payment was removed on Tuesday when the Greek parliament passed a controversial new property tax bill that aims to boost revenues.

Eurozone members are in the process of ratifying proposals put forward in July, one of which would see private lenders writing off about 20% of their loans to Greece.

The proposals also included expanding the powers of the eurozone bailout fund. Finland approved the plan on Wednesday, while Germany will vote on it on Thursday.

With 330 seats in the 620-seat Bundestag, Chancellor Angela Merkel can afford no more than 19 rebels if she is to deliver the 311 seats required for a majority.

Greek write-off

There has been renewed optimism this week that eurozone leaders may finally be ready to take decisive action to tackle the debt crisis.

G20 leaders met over the weekend to discuss the best way forward, but EU officials stressed that no grand plan of action had been agreed.

A number of ideas were reportedly discussed, including a 50% write-down of Greece's government debts.

Other proposals included strengthening big European banks that could be hit by any defaults by highly indebted governments, and boosting the size of the eurozone bailout fund.

These helped to boost investor sentiment with stock markets rising sharply on Tuesday, although Asian and European markets were largely flat on Wednesday.

View the original article here

VIDEO: Can the eurozone maintain the euro?

2011-10-28T12:33:00.000-07:00

AppId is over the quota
AppId is over the quota
29 September 2011 Last updated at 21:40 GMT Help

View the original article here

VIDEO: The future for in-flight movies

2011-10-28T09:22:00.000-07:00

AppId is over the quota
AppId is over the quota

Keith Wallace reports on how technology could bring about major changes to in-flight entertainment in the skies.

Airlines are looking at options to link your phone or laptop to the aircraft's entertainment system or the internet and touch-screen ordering for your drinks and snacks on board.

Get in touch with Fast Track via e-mail or Facebook.

Watch Fast Track on the BBC World News channel on Saturdays at 0430, 1230 and 1930 GMT or Sundays at 1930 GMT.

View the original article here

VIDEO: Steve Jobs: Apple's driving force

2011-10-28T04:50:00.000-07:00

AppId is over the quota
AppId is over the quota
6 October 2011 Last updated at 03:56 GMT Help

View the original article here

Drug bust at Boeing defence plant

2011-10-28T00:18:00.000-07:00

AppId is over the quota
AppId is over the quota
30 September 2011 Last updated at 03:25 GMT Chinook helicopters are key cogs in US and international armed forces US federal agents have arrested 37 people in a drugs raid on a plant run by the aircraft manufacturer Boeing.

All but one of those detained are current and former employees at the facility near Philadelphia, which produces aircraft for the US military.

It is alleged they were dealing and buying prescription drugs. Boeing was alerted to the alleged drugs ring by members of staff.

Managers then called in the FBI, whose agents worked undercover at the plant.

The Boeing plant makes Chinook helicopters and Osprey planes used in Afghanistan.

'Critical role'

In all, 37 people were arrested for distributing and/or trying to buy prescription medication - mostly painkillers and anti-anxiety drugs.

US Attorney Zane David Memeger said 23 people were charged with selling the prescription painkiller Oxycontin among other drugs, while 14 people were charged with attempted possession of various drugs.

The suspects are men and women, most of them aged in their 40s and 50s.

"This investigation and prosecution focused not only on the sellers, but also on the users because of the critical role that these employees play in manufacturing military aircraft," Mr Memeger said.

The alleged dealing took place at the plant, although Boeing insists the quality of its production line was never compromised.

In a statement, the firm praised the authorities for a "rigorous and thorough investigation".

The plant, at Ridley Park, Pennsylvania, employs some 5,500 people, reports say.

View the original article here

London 2012 athletics track ready

2011-10-27T20:39:00.000-07:00

AppId is over the quota
AppId is over the quota
World Championship 1,500m silver medallist Hannah England tries out the new track at the Olympic Stadium

The athletics track at the London 2012 Olympic stadium has been completed.

The track is made of synthetic rubber and has been designed to help athletes run fast times. Five world records were set on a similar surface in Beijing.

London 2012 chairman Lord Coe said: "Today marks a huge milestone for the project as the stadium comes to life."

Long jumper Chris Tomlinson, 1,500m runner Hannah England and Paralympic discus thrower Dan Greaves were the first athletes to test out the track.

They were joined on the new surface by local schoolchildren, who will benefit from the Stadium's legacy plan to be a venue for sport, athletics, community and cultural events.

The 80,000-capacity stadium is nearing completion with the latest anticipated final cost of the work being ￡486m.

Lord Coe and Hannah England take a run on the new track

The stadium will host the opening and closing ceremonies of both the Olympic and Paralympic Games, as well as all the track and field events.

An 80m sprint straight made of the same material as the main track has been laid under one of the main stands and a 400m training track will be laid shortly.

The track will be covered to protect it from the elements while other work continues at the Stadium.

"People can get a glimpse of how it will look in less than 10 months' time when we welcome the world's athletes to London," Coe added.

"There is still a lot of work to do on the stadium but seeing some of our top British athletes on the track with local schoolchildren really underlines the stadium's potential for 2012 and beyond."

Hugh Robertson, Minister for Sport and the Olympics, said: "This is another piece in the jigsaw for our Olympic Stadium."

Olympic Delivery Authority chairman John Armitt added: "Watching athletes and children run around the Olympic Stadium's track 10 months before the London 2012 Games highlights just how much has been achieved over the last four years."

View the original article here

Fraudsters turn to card snatching

2011-10-27T17:36:00.000-07:00

AppId is over the quota
AppId is over the quota
4 October 2011 Last updated at 23:18 GMT Card snatching when customers have been distracted in shops has been used by fraudsters Con-artists are resorting to basic card snatching, police say, as the payments industry continues to cut losses from more hi-tech crimes.

Fraud losses on UK credit and debit cards in the first half of the year fell by 9% compared with the same period of 2011.

The UK Cards Association said this was the third consecutive half-year fall and that ￡169.8m was lost.

Fraudsters were often relying on distracting shoppers to steal cards.

Police dealing with cases say con-artists have been grabbing cards in shops or at cash machines without the owners noticing, or tricking them into revealing their Pin code.

Online banking

Total losses hit a peak at ￡610m in 2008, but have mainly been falling since.

Online banking dropped by 32% from the first half of 2010 to the first six months of this year to ￡16.9m.

This was the result of computer users being more wise to security and banks' use of fraud detection software, the association said.

Continue reading the main story Shield entry of a Pin number at a cash machine with a free handRegularly update a computer's anti-virus softwareBe wary of unsolicited e-mails and telephone callsThe amount lost through telephone banking rose by 48% over the same period to ￡8.6m.

Often, this involved a caller pretending to be from the police or a bank and telling their victim that card has been subject to a fraudulent transaction.

They then asked the victim to key some details into the handset. They guessed the numbers from the audio tones on the keypad and used those details to access their bank account and withdraw money.

Detective Chief Inspector Paul Barnard is head of the Dedicated Cheque and Plastic Crime Unit, which is a specialist police unit sponsored by the industry.

"There has been an increase in old fashioned scams - criminals using distraction techniques and social engineering methods to get hold of people's cards or phone banking details," he said.

"We are urging everyone to be on their guard. Your bank or the police will never cold call you or email you and ask you for your login details, cards or Pins. If anyone does, they are probably a criminal, so hang up the phone or delete the email."

Innocent victims of fraud on their debit or credit cards are protected under rules in the UK banking system, so they should always be refunded any financial losses.

View the original article here

King fears crisis is 'worst ever'

2011-10-27T13:45:00.000-07:00

AppId is over the quota
AppId is over the quota
7 October 2011 Last updated at 04:13 GMT Mervyn King: 'Quantitative easing will work'

Bank of England governor Mervyn King has said this financial crisis could be the worst the UK has ever seen.

His comments came after the Bank authorised the injection of a further ￡75bn into the economy through quantitative easing (QE).

Explaining the move Sir Mervyn told Sky News: "This is the most serious financial crisis we've seen at least since the 1930s, if not ever."

The Bank has already pumped ￡200bn into the economy.

It has done this by buying assets such as government bonds, in an attempt to boost lending by commercial banks.

Sir Mervyn said: "We're having to deal with very unusual circumstances and to act calmly and do the right thing. The right thing at present is to create some more money to inject into the economy."

The Bank's Monetary Policy Committee has been split for months over whether the UK needs a boost to the economy through QE, an increase in interest rates to stave off inflation - which at 4.5% is well over double its target - or to leave things as they are.

Only one member, Adam Posen, has consistently pushed for more QE.

Slow money

Sir Mervyn said the economic landscape was unfamiliar and the world had changed in the past three months and so had the policy response necessary.

He said the amount of money in the economy was not growing quickly enough.

Sir Mervyn also said he could not rule out a further bout of QE.

On Wednesday, data showed the UK economy grew by 0.1% between April and June, which was less than previously thought.

"The deterioration in the outlook has made it more likely that inflation will undershoot the 2% target in the medium term.

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.The CBI and the British Chambers of Commerce (BCC) business groups welcomed the Bank's move to expand the QE programme to ￡275bn, but said that on its own, its impact would be limited.

"This measure will help support confidence, but we need to recognise that its impact on near term growth prospects is likely to be relatively modest," said Ian McCafferty, the CBI's chief economic adviser.

"Only once the turmoil in the eurozone is resolved will confidence be fully restored."

'Radical'

David Kern, chief economist at the BCC, said: "Higher QE on its own is not enough and we urge the MPC [Monetary Policy Committee] to look at other radical methods.

"There is a strong case for the MPC to help boost bank lending to businesses by immediately raising its purchases of private sector assets."

However, the National Association of Pension Funds (NAPF) is calling for an urgent meeting with the pensions regulator to discuss ways of protecting UK pension funds from the negative effects of QE.

QE tends to push down long-term bond yields, therefore reducing the return on the investments made by pension schemes.

"Quantitative easing makes it more expensive for employers to provide pensions and will weaken the funding of schemes as their deficits increase," said Joanne Segars, chief executive of the NAPF.

Complementary actions Continue reading the main story

If you're not sure of the quality of your ammunition, it's best to fire first. Some will see that as the explanation for the slightly early launch of QE2 from the Bank of England”

End Quote Stephanie Flanders Economics editor, BBC News Mervyn King wrote to the chancellor earlier on Thursday, setting out the MPC's case for expanding the asset purchasing programme.

In his letter of response, in which he authorised the move, Chancellor George Osborne said: "I agree that an increase in the ceiling would provide the MPC with scope to vary the stance of monetary policy to meet the inflation target."

In his speech to the Conservative Party conference earlier in the week, Mr Osborne said that the Treasury would look into "credit easing" - a way to underwrite loans to small businesses who are struggling to get credit now.

He confirmed this in his letter to Mr King: "Given evidence of continued impairment in the flow of credit to some parts of the real economy, notably small and medium-sized businesses, the Treasury is exploring further policy actions. Such interventions should complement the MPC's asset purchases."

View the original article here