It now seems likely that the Financial Services Authority, the Government appointed body appointed to control the UK banking system seem to have become a little weak at the knees, with the announcement that their remuneration code, due to be released today, does not fully focus on requiring bank boards and management to link remuneration and especially bonuses more closely to risk

Their reaction appears to come after the CEO of the largely state owned RBOS Stephen Hester announced that if leading bank executives are not offered bonuses and salaries in keeping with their market value, they will leave the industry.

According to FSA chief executive Hector Sants, the FSA’s new guidelines are designed to ensure that boards prevent management from introducing compensation policies that, in effect, subordinate the interests of capital providers to those of employees.

But the final version will step back from the March draft’s specific recommendations that two-thirds of each bonus should be deferred and that individual rewards take into account the overall performance of a firm rather than just that of the individual or division, people familiar with the code say.

No more free holidays to Lichtenstein and a visit to the safety deposit box seem likely to happen for UK tax dodgers as the HM Revenue & Customs agree a deal geared to recover lost tax income. Up to £3 billion of taxable income is believed to have been secreted away by more than 5,000 British investors to be held in the vaults in this tiny land –locked European principality. With the exchange of information now guaranteed, these naughty investors will be offered the chance to volunteer details of their deposits in return for penalties, which will arrive at no more than the 10% of tax evaded on the money deposited over the past 10 years. As part of the reciprocal agreement the three Lichtenstein investors holding money in UK bank accounts will be presented with a free "kiss me quickly" hat by Chancellor Alistair Darling.

Europe’s largest defence contractor BAE Systems announced that they have been awarded five-year contract from the US army that will be worth around £1.32 billion. The contract is to supply sensors designed to allow all weather and night sight operation. All in all, yesterday was a big day for BAE Systems, with the announcement that their portable laser target locator had also been selected by the US Army for a separate five-year rolling contract that will be worth up to £250 million, while in the UK BAE Systems secured a 10-year partnership deal worth £369.5 million to support navy and air force torpedoes.

Despite the global tightening of defence budgets, BAE has continued to take a growing share of the market, with sales increasing by 28 per cent to £9.9 billion for the year.

An overwhelming increasing demand to generate energy from waste has encouraged the New Earth Group Company to float a rights issue intended to raise £15 million to fund expansion.

The New Earth Group plans to use the funds to develop new power plants to recover energy from waste that will operate alongside its existing waste treatment and composting business.

The company management’s conviction that there will be a demand for energy generation from waste comes as government regulations force businesses to find alternatives to landfill, and as the quest to cut greenhouse gas emissions intensifies.

The first stage looks likely to be a large new waste treatment facility based in Avonmouth, scheduled to begin operation pen in 2011.

Hanson, the heavy building materials company have announced that they will be putting their building products companies up for sale as the malaise haunting the UK construction industry continues. Hanson have been the dominant operators in the UK’s brick and cinderblock market for many years and consequently have been hard hit by the downturn in building starts.

A spokesman for Hanson UK announced that the company hoped to complete most of the sell-offs by the end of 2009.

The FTSE 100 continues to decrease in value, yesterday down 50.86 points to close on 4,671.34.

Meanwhile the FTSE 250 was losing ground after a run of gains. On Tuesday it dropped like a stone, down 118.35 on 8,302.66 at the end of the day.

Sterling fell for a fourth-consecutive session as data continued to point to inflationary trends.

• Pound/US dollar 1.6506
• Pound/Euro 1.1652
• Pound/Japanese Yen 158.0089
• Pound/Swiss Franc 1.7834

In the US, reports from Department of Labour show that in the second quarter of 2009 productivity rose at its fastest annual pace six 2003. The figures show that the average workers’ hourly output rose at an annual rate of 6.4% in the period from April to June. However, the figure for the first quarter of 2009 was revised downwards, to an increase of 0.3% from an initial estimate of 1.6% growth, while labour costs fell 5.8% on an annual basis during the same period.

Financial stocks led the way for the worst day in Wall Street since early July, amid some signs that the financial crisis is still around. Suffering particularly were the US Banks d after the Congressional Oversight Panel hinted that the US Treasury had not done enough to relieve them of toxic assets.

On Tuesday’s trading, the Dow Jones index continued to lose some of its value down a considerable 96.5 points, to 9241.45. The NASDAQ also continued to drop well below the 2,000 mark, down 22.51 points to close on 1969.73.

Crude oil prices have fallen again, on OPEC’s announcement that they anticipate demand to decline further than predicted next year, with renewed forecasts of 27.97 million barrels per day for 2010.

On the news, US light crude dropped $1.15 a barrel to $69.45, while London Brent finished $1.04 lower at $72.46.

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Tags: Alastair Darling, Alistair Darling, BAE Systems, Banking, British Economy, Credit Crunch, Currency, Dow Jones, Economy, Employment, Financial News, Financial Services Authority, FSA, FTSE, Hanson UK, HM Revenue & Customs, Money Markets, New Earth Group, RBOS, Stephen Hester, UK Bank Accounts, UK Banks, UK government, US Banks, US Treasury, Wall Street

Alliance & Leicester have re-launched their £100 cashback incentive for customers who switch their current account to an Alliance and Leicester Premier Current Account or Premier 50 Current Account. I have detailed further information on this below, so please could you update any content on site for the Premier Current Account and Premier 50 as soon as you can (please note that this offer is not available on the Premier Direct or Premier 21 Current Account products). The offer is available for one month only (30th April – 28th May) and we want to ensure that you get as many sales as possible from this offer!

Premier Current Account:

* £100 cashback when you apply online and move your banking to Alliance & Leicester using their free Premier Switching Service.
* Free annual multi-trip European travel insurance worth up to £60 (upper age limit of 65 applies).
* 0% EAR typical overdraft. No usage fees on arranged overdrafts for 12 months from when you open the account (new customers only). A usage fee of 50p a day (up to £5 a month) applies after that. Maximum overdraft limit is £2,000.
* Earn 0.50% AER (variable) on balances up to £2,500 and 0.10% AER (variable) on balances over that amount.
* You must be over 21. You’ll need to pay at least £500 every month into your bank account.
* You can have access to your account 24 hours a day using the internet, phone and mobile banking as well as access to any Alliance & Leicester branch and over 12,000 post offices™ across the UK.
* Switching is easy when you use the Alliance & Leicester Premier Switching Service. Their dedicated team will move your existing direct debits, standing orders and salary to your new account and look to match your overdraft limit (depending on your circumstances).
* Exclusive access to Premier Rewards with any Premier current account that includes a linked PlusSaver account, MoneyBack Rewards Credit Card (depending on your circumstances) and much more.

Premier 50 Current Account:

* £100 cashback when you apply online and move your banking to Alliance & Leicester using their free Premier Switching Service.
* Earn 5.00% AER (variable) on balances up to £2,500. After one year, 1.00% AER (variable) applies. Balances over £2,500 earn 0.10% AER (variable).
* Benefits include annual worldwide travel insurance up to age 79, exclusive health benefits, identity protection and help with lost cards – all for just £10 a month.
* 0% EAR typical overdraft. No usage fees on arranged overdrafts for 12 months from when you open the account (new customers only). A usage fee of 50p a day (up to £5 a month) applies after that. Maximum overdraft limit is £2,000.
Switching is easy when you use the Alliance & Leicester Premier Switching Service. Their dedicated team will move your existing direct debits, standing orders and salary to your new account and look to match your overdraft limit (depending on your circumstances).

For more information click here

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Tags: Alliance & Leicester, Bank, Financial News, UK Bank Accounts, UK Banks

Keyed on by much awaited drops in fuel cost as well as reduced housing costs brought about a fall in the UK inflation rate in January for the first time in almost nine months. A drop in inflation was reported as fuel costs, property rentals, food all fell. Mervyn King Bank of England Governor, instead of being optimistic again voiced his fears that continued drops in inflation could lead to deflation and the need to further ease consumer credit restrictions to stoke up the economy.

The principal contributors to the fall were fuel prices that fell by over fifteen percent, the largest monthly percentage fall since 1997. Crude oil traded below $37 a barrel in New York further increasing the speculation that the World’s largest economies and principal fuel burners demand for fuel continues to push prices down.

The UK car manufacturing sent another message that all was not well with the news that BMW is to cut 850 jobs at their Oxford factory where their Mini car is churned out. Decrease in demand means that BMW will be cutting the weekend shift, to curb production against falling demand for the Great British Mini, which has been in production in some form or other since the nineteen sixties.

On the energy front, the giant BG Group, in the face of strong competition, has upped their bid by 25% to acquire e Energy Resources, the Australian gas company. This bid provides ample evidence of the company’s determination to increase its market share in Australia’s emergent coal bed methane industry. BG’s new bid trumps the latest offer from Australia’s Arrow Energy, which last week raised its offer to A$890m. The new bid values Pure at £453million (A$995milion). On the announcement of the increased offer, BG’s shares fell 0.6 percent (6 pence to 1062 pence.)

Also on the FTSE, the U.K. manufacturer of natural-based chemicals, Croda International suppliers to such major clients as Procter & Gamble Co. are expected to publish their 2008 earnings. On a slightly unoptimistic note, their stock fell a token 0.6 percent (3 pence to 524 pence.)

Due to publish their figures for 2008 are Deveron Plc, makers of collagen sausage casings in the UK. The stock market seemed to have lost their appetite with shares falling 5.5 percent (6.2 pence, to 84 pence.)

Pizza seemed to be doing better, with Domino’s Pizza UK and Ireland Plc rising if only by 0.4 percent (I penny to 226 pence)

The world’s biggest hotel company Intercontinental Hotels Group Plc are also booked in to announce their 2008 earnings. Signs of nervousness abound as their stock fell 2.3 percent (11.25 pence to 475 pence.)

On the stock market, the FTSE 250 index fell by 1.81% or 116.84 points to 6345.23 while the FTSE 100 finished the session down by 1.48 per cent, or 61.16 points, at 4,073.59

Sterling remained stable against the major currencies.

Pound/US dollar 1.4253

Pound/Euro 1. 1282

Pound/Japanese Yen 130.8

Pound/Swiss Franc 1.66765

Wall Street shares had a fair day on trading with the Dow Jones Average remained stable to close at 7850.41. Nasdaq fell 7.35 points to 1534.36

Recent reports showed Japan’s economy contracted once again during the fourth quarter the highest fall since 1974 at an annual rate of 12.7 percent the fall comes after a 13.9 percent drop in exports from the third quarter.

Understandably enough, Shoichi Nakagawa the Japanese finance minister announced his resignation after these disappointing statistics were released. Nakagawa publicly apologised after the opposition party claimed he appeared drunk at the G7 press conference in Rome. The finance minister was quick to apologise for his behaviour and explained that after undergoing a medical examination, he had been diagnosed with a combination of exhaustion, back pain as well as a cold.

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Tags: Bank of England, Economy, Financial News, Interest Rates, Recession, Savings, UK Bank Accounts

The hard-hit banking sector surged in London on Wednesday, with some traders returning to lenders on the belief the U.K. government won’t fully nationalize them.

Lloyds also was helped by a Citigroup upgrade to buy from hold, as the U.K. lender’s net asset value per share would be 122 pence even if the British government were to provide all of the additional capital that it needs, the broker argued.

The feelings were that the bank’s recovery was largely due to the anticipated announcement from the US of the government’s program to remove bad debts from company balance sheets. Another confidence raising factor was the belief the government will make every effort to avoid total nationalisation of the U.K. banks.

The feeling that a form of stabilization may be kicking off in British currency as the pound rose to its highest level against the dollar for more than a week and the FTSE 350 Banks index showed an overall rise of 13 per cent., as Billionaire currency investor George Soros announced that he had stopped speculating that the pound’s decline would continue.

Also on the upturn was British Land, rising a healthy 8.8% percent on reports that together with their sister company Land Securities, plan to sell off £750 million of assets to help cushion some financing issues.

The FTSE 250 index stayed constant at 6,423.76 points The FTSE 100 finished the session at 4,295.20.

The pound rose for a third day against the dollar as welling as climbing against the euro.

Pound/US dollar 1.4118
Pound/Euro 1.0803
Pound/Japanese Yen 127.38
The US House of Representatives has passed President Barack Obama’s $825bn (£576bn) economic stimulus package.

Passed by 244 votes to 188, no Republicans backed the plan, saying it was too expensive and would not work.

The Senate debates the plan next week, and it could face stiff opposition as the Democrats have a slimmer majority.

After the vote, Obama urged members of Congress not to “drag our feet or allow the same partisan differences to get in our way”. He added that his package “would help create a favourable climate for American business to thrive”.

The bill is designed to cut taxes both for the public as well as for businesses by $275bn. In addition investing than $540bn into a range of public sector initiatives such as infrastructure, increased unemployment benefits, investment in new technology and renovations to ten thousand schools across the United States

It was too early to notice any effect that President Obama’s bill had on the Dow Jones Industrial Average which closed on Tuesday up 150 points at 8,243

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Tags: Bank, Banking, Credit Crunch, Currency, Interest Rates, Money Markets, Recession, Savings, UK Bank Accounts, UK Banks, UK Recession

If you can compare the current global financial crisis to a giant tidal wave carrying all before it, then it might be encouraging to take note that in the tail drift, tiny glimmers of hope are beginning to rise above the surface of the calmer waters while no one was looking. Financial experts ( what would we do without them) are blithely predicting that the World’s leading financial institutions are yet to lose the other half of their asset value, and until they do, the real financial recovery cannot begin to take place.

However there the first signs of a minor recovery in consumer spending among those who have realized that we are in the beginning of the biggest buyers market of all time, and there are bargains to be had, especially in the property market.

Figures issued yesterday showed that mortgage approvals in December 2008 jumped by 27 per cent from the previous month (22,051 from 17,339). This upturn in the property sales, mostly in the second hand sector, is being regarded as a cautious step in the right direction, although November 2008 approvals were among the lowest in recent history. In the “boom years” of the property market, e banks were handing out 80,000 mortgages in an average month, with almost a 100% approval rate. In other words, you turned up at your bank, you asked for a mortgage and you got it. In today’s uncertain climate, the approval rates are much lower, although the banks seem reluctant to release specific figures.

Figures released yesterday also showed that re-mortgage approvals were on the up by just a few hundred in December, along with increased activity in the buy-to-let and equity release mortgages sector of the property market.

These figures show a level of cautious optimism against the backdrop of what was a horrendous year for the UK mortgage industry. Total lending for 2008 came to £170 billion, down almost 25 per cent from the previous year, with the number of loans approved for house purchase down by more than fifty per cent.

In the US, slightly against expectations, house sales were also on the rise in December, a sure sign that buyers were taking advantage of the serious reduction in the prices of property caused by the credit crunch.

Sales of second hand properties rose by 6.5% in the month. Bearing in mind that December is usually one of the weakest months of the year for property transactions, this upturn shows that a gradual recovery may be beginning to get under way in the United States.

Second hand property prices fell by 15.3% in December from the previous years. One disturbing note to this optimism is that almost half of transactions that took place in December fell into the category of “distress sales”, where the seller needed to dispose of their property under pressure and was forced to reduce the price considerably.

Experts are now waiting till spring to see if this trend will continue, especially in the second hand market.

Other signs that the UK consumer is increasingly taking their share of responsibility in getting the country out of its largely self imposed mess are that the collective balance due on credit card debt in December 2008 fell by £218 million while outstanding balances on overdrafts and bank loans fell by £135 million in the same month.

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Tags: Credit, Mortgages, UK Bank Accounts, UK Banks, UK Credit Cards

The fight between financial watchdog The Office of Fair Trading and banks over billions of pounds creamed off customer accounts as unfair bank charges is rumbling on.

The OFT won their case but is waiting for a High Court decision following an appeal by the British Bankers Association, representing the High Street banks.

What is the row about?

Banks and building societies imposed unauthorised overdraft charges on customers and charged interest on the overdrawn amount plus the charges.

These charges include:

• Unpaid item fees – charged when a bill payment is refused because of a lack of funds in the account
• Guaranteed paid item fees – charged when a payment is made but creates an unauthorised overdraft, like paying a cheque backed by a guarantee card
• Paid item fees – charged when a payment is made and creates an unauthorised overdraft
• Overdraft excess charges -fees charged for going in to the red at the bank without permission

Banks levied these charges totaling up to £3.5 billion a year on 1 in 20 customers. If you are one of these customers and incurred charges like this from July 27, 2001 onwards, you can reclaim the money.

How to claim

Claiming your money back is not difficult, providing you follow these steps in the right order:

• The Unfair Terms In Consumer Contracts Regulations 1999 say penalty charges must reflect administration costs.

In plain language, this means banks must not profit from making you overdrawn and if they do, you can claim they are acting outside the law.

• Write to your bank and ask for your account records. You are entitled to this information under the Data Protection Act
• Tot up any fees the bank charged relating to your overdraft penalties.
• Write and ask for a refund. Quote the legislation mentioned in step 1 above.
• If the bank offers you some money but not the whole claim, refuse.
• If your bank refuses a refund, write them a ‘seven day letter’, which is a warning that if they don’t pay, you will take the matter to court. They won’t, so after the seven days has passed, fill in a claim at www.moneyclaim.gov.uk.
• The court will serve a notice on the bank giving them 14 days to respond.
• If the bank responds, there is a further 14 days for them to prepare a court case.
• If the bank doesn’t pay, ask the court for a warrant of execution by filling in form N323 on the Money Claim website.
• Once this is granted, bailiffs can take items to the value of your claim from the branch.

Your bank may threaten to close your account. Before you write to them to make a claim, set up a new account at another bank.

For More information on specific Banks use these links

• Alliance & Leicester
• Barclays
• Capital One
• Child Trust Fund
• First Direct
• HSBC
• Post Office
• Tesco Savings

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Tags: Bank, Bank Charges, Credit, UK Bank Accounts

Where’s the best place to keep your money as the credit crunch threatens to sink more banks?

The answer is no one really knows but a logical investor would look at the reasons that are causing banks to fail and invest in the one that comes out the best.

The first step is looking at why banks are failing.

Short selling bank shares

Stock Market speculators short selling were high on the list until the US and UK governments banned the strategy.

Short selling involved taking shares on loan for a specified period and paying their market value on the final day of the loan.

In practice, speculators would borrow bank shares, say, worth £10 each and sell them.

Next, somehow rumours about the bank’s ability to trade would start circulating. The rumours pushed the share price down and when the time came round for the speculator to buy the share, the price would have dropped to £3 each.

Gambling on the share price falling in the time the share was held earned the speculator £7 per share.

Subprime lending

Banks don’t lend their own money – they borrow from other banks to lend. Then someone had the idea of using mortgage portfolios as an asset to borrow more money against.

The idea was the more a bank could borrow at a low rate and lend at a high rate, the more profit The trouble came when lending restrictions were relaxed and a lot of the borrowers were not good credit risks.

Banks didn’t know which other banks were exposed to possible losses from subprime lending – that’s lending to people with poor credit ratings – so they just stopped lending to each other altogether.

That’s what caused Northern Rock to fall. Northern Rock was fine when the banking market rolled over their loans every three months, but when they couldn’t renew their borrowing; the bank had insufficient funds to cover their debt.

Safe as houses

Now short selling is out of the picture, a good indicator of which banks and building societies are safe and those that are not is how much they lend per £1 of investment savers have on deposit and who borrows that money.

The highest risks are borrowing by people with poor credit histories, followed by lenders with a high exposure to buy-to-let. The assumption here is these are the banks that will feel the hurt most as poor credit risks and landlords who don’t live in the property they own are more likely to fall in to arrears.

The problem the banks have is that the value of the property their loans are secured against is falling, pushing them towards negative equity.

Saving and lending balances for major banks and building societies

This league table is compiled from the latest company reports, balance sheets and accounts and shows:

• How much is loaned out
• How much savings are on deposit
• How much money is in the bank to cover lending

The more money loaned out exceeds savings deposit, the more at risk the bank faces from the credit crunch:

Since this table was compiled in July, other banks have swallowed five in the list up – the only survivor is Standard Life Bank.

The lender with the least exposure is HSBC bank, with enough funds on deposit to cover lending.

A betting man would maybe consider Standard Life is sitting out on a limb at lending £2.40 for every £1 on deposit.

Remember – this is not an exhaustive list of banks and the trading figures are historical and subject to change as new financial accounts are released.

For More information on specific Banks use these links

• Alliance & Leicester
• Barclays
• Capital One
• Child Trust Fund
• First Direct
• HSBC
• Post Office
• Tesco Savings

For all the best deals on Current bank account, Business bank accounts, Savings and Mortgage deals visit the number one Independent Bank Compassion site Bank—Accounts

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Tags: Credit Crunch, Savings, UK Bank Accounts, UK Banks

If you have money to spare out of your wages after paying your bills, consider saving some as a cushion for unexpected bills, like repairs to your house or car.

Savings accounts come in lots of packages. The main ones are:

· Bank and building society accounts
· National Savings and Investments
· Credit union accounts
· Individual Savings Accounts (ISAs)
· Christmas club and hamper accounts

Money in a savings account generally earns a higher rate of interest than excess cash in a current account.
Points to watch

Savings accounts are a good way of earning interest on any small cash surplus in the short term – say up to five years.

Also consider inflation may eat in to the buying power of your savings.

If you want longer-term savings, then look at alternative investments like a pension or unit trust. The best way to do this is to talk to an independent financial advisor.
Also beware of some potential pitfalls to savings accounts:

Regulation and compensation
The Financial Services Authority (FSA) regulates banks, building societies and credit unions. This means your money is safer if the account provider collapses because the FSA operates a compensation scheme for savers with less than £35,000 on deposit with any single lender.

Risks
Christmas clubs set up by companies or individuals do not pay interest on your savings and are not protected with a compensation scheme if they fail. Savers in these schemes are often limited to spending their money with the shop or hamper running the savings account.

Tax
Income tax is deducted at source on savings at 20% – but some accounts, like ISAs and National Savings are tax-free. If you pay tax at a higher rate (40%) you may have to complete a tax return and pay additional income tax.

Penalties
Some savings accounts may offer a higher rate of interest than others, but to get this rate you may have to tie up a minimum amount of cash in your investment or pay a fee if you take your money out.
Despite these points, savings accounts are low risk investments, provided you steer away from unregulated providers who can go bust and leave you with no way to claim any money back.

Opening an account
Don’t forget many savings accounts offer better rates if you deposit money by post or over the internet.
Many money comparison web sites show the current best deals to make shopping around easier.

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Tags: Bank, Building Society, FSA, Penalties, savings accounts, Tax, UK Bank Accounts

If you are in business, you must have business bank accounts to manage money coming in from customers and money paid out to staff and suppliers.

Many businesses also have a deposit account to earn interest on money set aside for VAT or tax.
For small businesses, like sole traders or partnerships, business bank accounts are vital to separate business cash from your personal money.

This is especially important if the taxman investigates your business finances, otherwise he can ask questions about money you might have received personally, like birthday or Christmas gifts, if he thinks they are really business income.

Business accounts are much like personal current and savings accounts. The main difference is many personal accounts are free, but businesses pay charges on transactions, like writing a cheque.
High street banks are the traditional first port of call for a business account as most building societies only deal with personal customers, but some are now opening their doors to business people.

Business current accounts
Besides the normal services expected with any current account, like cheques books, cash cards and overdrafts.

Business accounts also have some added extras like:

· A night safe for depositing business takings when the bank is shut
· Extra debit cards for employees to help track spending on petrol and consumables
· Short-term borrowing to aid cash flow, like invoice factoring
· Commercial loans and asset finance for investing in business property or machinery and vehicles

Deposit accounts
Deposit accounts are the business version of savings accounts. Many businesses keep a reserve for paying VAT and tax bills earning interest in a deposit account.
Interest is paid gross on business deposit accounts – that’s without tax deducted – so make sure this is dealt with correctly in business accounts, as tax must be paid on any interest received.

Foreign currency accounts
Business bank accounts are available in different currencies, like Euros and US dollars, to help businesses that trade overseas with currency fluctuations.
Again these accounts are current or deposit accounts.

The trick is to keep the funds in a foreign currency account until the exchange rate favours UK Sterling and then transfer the money to your main business current or deposit account.

PayPal
PayPal is worth considering running alongside a business bank account for many small traders operating on the internet.

For instance, eBay traders or freelances can receive payments in any currency for modest fees via PayPal and then transfer the money in UK Sterling to a personal or business account.
Larger businesses will find PayPal too restrictive for their needs.

Online banking
Most banks provide extensive online services for businesses to send and receive money over the internet, download statements and for tracking income and expenditure without having to wait for paper statements.
This data is available for download to import directly in to accounting software like Sage and QuickBooks

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Tags: Banking, Business, Business Bank Accounts, Deposit accounts, Foreign currency accounts, Online banking, Paypal, UK Bank Accounts