Mervyn King blew into the open the lack of trust and rancour between the bank of England and the Treasury on Wednesday as he complained he had not been adequately consulted on Alistair Darling’s plans for reform of banking regulations.

The Bank governor also heightened tensions over fiscal policy by insisting that the government’s “extraordinary” and “enormous” levels of borrowing had to be reduced faster than the Treasury planned, even if the economic recovery was only as strong as Mr. Darling pencilled in at the Budget.

The Organisation for Economic Cooperation and Development says the world economy is near the bottom of the worst recession in post-war history. The body that represents the 30 most industrialised nations said that those economies would shrink 4.1% this year. But it adds that recovery is likely to be “weak and fragile” for some time.

The UK is in “a sharp recession”, it says, with output set to decline by 4.3% in 2009. worse than its previous forecast of a 3.7% fall.
The OECD predicts zero growth in the UK economy in 2010, and says the UK budget deficit will reach 14% next year – both worse than UK government estimates.

Reality television mogul Simon Cowell and retail billionaire Sir Philip Green are finalising details of a new company they plan to run together.
Mr. Cowell has a production company called Syco, which makes shows such as Britain’s Got Talent and X Factor. Sir Philip would add his business acumen as the owner of BHS and Topshop.

On the FTSE, Stagecoach, the operator of the U.K.’s largest rail franchise surged 8.5 percent to 127.75 pence, the biggest jump since April 1.
British Land Co., the U.K.’s second-largest biggest real estate investment trust, increased 1.3 percent to 385.25 pence after Credit Suisse Group AG recommended buying commercial property shares.

McBride Plc, Europe’s largest supplier of store-brand household goods to supermarkets, soared 11 percent to 136 pence after saying revenue in its fourth quarter was “stronger.”

The benchmark FTSE 100 added 49.96, to reach 4,279.98, rising for the first time in three days. The FTSE 250 climbed by 127.89 points to 7,320.85

Sterling rose slightly against dollar as well as the Swiss Franc whilst retreating against the other two major currencies on a mixed day for trading.
Pound/US dollar 1.6451
Pound/Euro 1.1778
Pound/Japanese Yen 157.1041
Pound/Swiss Franc 1.8054

The recession in the US is “slowing” according to a spokesman from the Federal Reserve whilst cautioning that the economy is likely to remain weak.
Interest rates are to remain unchanged at their current low range of between zero and 0.25% where they will remain for an “extended period”.
In addition. the” Fed ” announced that they will continue their present level of purchasing long-term government debt to expand money supply.

On Wall Street, share values made a minor recovery with the Dow Jones up 61.44 points to 8384.35, while the NASDAQ jumped 35.65 points to close on 1800.57

As the day for his sentencing approaches for US financier Bernard Madoff, his lawyer has announced that Madoff should be handed down a sentence of no more than 12 years in prison for his crimes. Madoff pleaded guilty to 11 charges of investment fraud amounting to £35 billion. Madoff, now 71, is liable to be sentenced for to 150 years in jail (or life)

In their first-ever offer of unlimited one-year funds, the European Central Bank has pumped a record €442.2 billion into the eurozone banking system in their continuing struggle to combat Europe’s severe recession. The next largest amount injected in a single ECB operation was the €348.6 billion injected into the European Community in December 2007.

The Swiss franc fell sharply on Wednesday after the country’s central bank intervened in the foreign exchange market to halt the currency’s rise.
Traders said the Bank for International Settlements was active in the market on behalf of the Swiss National Bank, first buying Euros against the Swiss franc and later buying dollars against the Swiss currency.

Oil prices continued to edge lower falling below the $70 mark to $ 68.48.

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Tags: Bank, Banking, Bernard Madoff, European Central Bank, Financial News, Recession, Swiss National Bank, UK Banks

Not even the most fertile of imaginations could sit down and concoct a theory that the current global quagmire that the World finds itself in is part of a predetermined and conceived conspiracy conjured up by some fiendish and faceless financial guru who is now sitting in some hidden underground hiding place is counting his trillions. After all, even Bernard Madoff got caught in the end, and he only stole around $50 billion dollars.

Yet there are guilty parties in this mess and they are the leaders of the governments of the free World who ware only too aware that the world debt situation was veering rapidly out of control, yet sat back and did very little about it. And when you think about it, why should they. At the same time as the World’s assets were appreciating in value every year by around five percent, and banks and businesses were making vast profits on which they were paying company taxes and the white and blue collar workers had never had it so good, both spending money that they never really had as well as paying income tax on their earnings and value added tax on everything they bought, the situation as far as tax revenues for these governments was as high and as comfortable as it could possibly be.

And there les the crunch for even the most unsophisticated of economists will tell you that such a unnaturally long running seam of global prosperity is unnatural and could not have been maintained for as long as it had done by natural means, and had to end in tears. Which it certainly did. Governments throughout the Western World have had no option whatsoever but to press gang taxpayer’s money to prevent the US and UK banking system from totally collapsing, taking with them the hard earning savings of a relatively broad cross section of the population who are totally innocent of any wrong doing. Now the UK government, as evidenced in the last budget, have imposed on their citizens a period of austerity that is estimated to last for up to ten years.

So who can be called to task for this catastrophe? Some say they banks. However they are only doing what comes to them naturally. That is to soak up as much profit as they can and usually from the man in the street. This is the typical consumer who had neither the means nor more importantly the personal discipline to avoid the temptations of “buy today and pay tomorrow even if you don’t have it” mentality. These unfortunates generated trillions of dollars in paper profit for the banking system, which were worth considerably less than the paper they were printed on. But who knew, and even worse, who cared enough to put a stop to it before the damage to the very framework of our financial systems slewed totally out of control.

The banks certainly didn’t want to put a stop to the madness, as they were earning tremendous profits, on which they paid out generous dividends to their shareholders, who in turn authorized disproportionately high performance bonuses to bank officials. All of it in cash.

So where are these profits and bonuses now? Certainly not being returned to the now seriously ailing banks in an uncharacteristic fit of compassion and embarrassment. Instead probably stuck away in a bank account in another country, and probably one famous for its chocolate.

So who is to blame? If you haven’t guessed already, the answer is the Governments of the World. They are guilty by default for sitting back and letting it happen. They should have intervened in 2004 and 2005 when it was becoming obvious to all and sundry that this financial wheel of fortune was already being artificially driven. And what price should these people have to pay? There place in history should be forever tarnished for the role they played in this debacle. And don’t let anyone ever tell you that they were taken by surprise.

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Tags: Bank, Banking, Bernard Madoff, British Economy, conspiracy theory, Financial News, UK Banks