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King angry about being kept in the dark on banking regulations reform

June 25th, 2009 by admin | 0 Comments | Filed in Central banks, Daily News, UK Bank Accounts, UK Banks, World Banks

banking 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.