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| LONDON (SHARECAST) - Lloyds, Royal Bank of Scotland and Northern Rock will be broken up and parts of their businesses sold off to create three new banks, it emerged last night. Government sources said ministers were "determined" to see more competition in the market, following the £1.2 trillion bailout of the sector which resulted in the loss of three independent banks and several building societies, says the Independent. The Telegraph adds that the European Commission will today clear the way for the sale of Northern Rock by approving the nationalised lender’s plans to split into a “good bank” and a “bad bank”. Analysts reckon the government could fetch as much as £1.5bn. Alistair Darling, the chancellor, will decide on Wednesday whether to sign off on the choice of senior UBS banker Robin Budenberg as the next chief executive of UK Financial Investments, the body that runs the government’s bank shareholdings, writes the FT. The City watchdog has launched a review of the entire £35bn structed products market after uncovering failings that have cost retail savers tens of millions of pounds as a result of Lehman Brothers' collapse, reports the Telegraph. The Independent adds that thousands of savers who lost more than £100m in investment plans backed by the failed banking giant Lehman Brothers may be in line for compensation after the City watchdog ordered financial advisers to look at their cases. The Federal Reserve could order a financial institution to sell a risky division or stop dangerous trading activity if the central bank determined there was a threat to the US financial system, under a draft law released on Tuesday, according to the FT. National Australia Bank on Wednesday reported a large decline in full-year profits to A$2.59bn ($2.4bn) after a surge in bad and doubtful debt charges, writes the FT. Lord Mandelson will say today that he intends to press ahead with controversial measures to cut off the internet connections of people caught downloading pirated music, films or television programmes, reports the Times. The spat between Sports Direct and Newcastle United owner Mike Ashley and Kaupthing Singer and Friedlander's administrators reached a new level yesterday as the two parties traded yet another round of claims over disputed shares. The row has been rumbling since KSF – the UK arm of failed Icelandic bank Kaupthing – collapsed last October, taking Sports Direct's holdings of 28.5 per cent of the voting rights in Blacks and 11.9 per cent of JD Sports with it, according to the Independent. Goldman Sachs has defended the use of controversial techniques including 'dark pools,' short-selling and flash trading, in a firm rebuttal of recent negative Congressional and media comments about some of the trading practices it uses, says the Telegraph. The Financial Services Authority (FSA) will come under attack from MPs today for failing to carry out an inquiry after the collapse of Icelandic banks. The Communities and Local Government Select Committee is furious that the FSA has chosen not to meet its demand for an investigation into losses suffered by local authorities with the banks, reports the Times. First Quench, the troubled owner of the Threshers off-licence chain, is at risk of entering into administration. First Quench, which also owns the Wine Rack brand, was on Tuesday night scrambling to stave off this prospect, which would put thousands of jobs at risk, although people familiar with the situation said it could not be ruled out, writes the FT. Britain has slipped again in the international league table for gender equality. The authors of an acutely embarrassing report from a leading think-tank have described the position of professional women in the UK as "stagnant", showing little or no progress for the best part of a decade, and with significant setbacks in some areas, according to the Independent. British Airways cabin crew could see their pay docked by up to £5,000 each as part of proposals put forward by the airline to cut costs. BA wants to cap the amount its 14,000 crew members can claim in allowances for working long-haul flights, says the Times. Terminate the Rate, the campaign launched by mobile phone group 3 UK and telecoms giant BT, will today hand the communications watchdog a 114,000-strong petition calling for a cut to the cost of calling mobiles, reports the Independent.
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