Wednesday, August 24, 2011

LONDON Wednesday newspaper round-up: Greek bailout, BofA, Pension funds...


Date: Wednesday 24 Aug 2011
Jyrki Katainen, the Finnish prime minister, has threatened to withdraw support for theGreek bailout in a move that could crush the fragile signs of recovery on global markets. Mr Katainen said that if Finland's bilateral agreement with Greece over collateral payments was overruled, the Nordic country could back out of the rescue programme, writes the Telegraph.

Bank of America was last night fighting rumours that it may have to raise about $50 billion in new capital to bolster its finances amid growing concerns about global financial liquidity.

On another volatile day for banks around the world, the spotlight fell on America’s biggest lender after several analysts said that it may have to pay out billions of dollars more in compensation for alleged fraud over sales of mortgage investments and raised concerns about its relatively low capital ratio compared with its peers, the Times reports.

Britain's banks are using toxic assets left over from the financial crisis to plug huge holes in their pension funds. HSBC and Lloyds have both injected assets they have found difficult to sell into their pension schemes, with the effect of reducing their pension deficits, while shifting problem assets off their balance sheets. Banks also gain from capital and tax relief on the transfers, according to the Daily Mail.

Short sellers and securities lenders have remained calm in spite of controversial short selling bans for bank stocks introduced in Europe this month. Securities lending data show that the amount of stock on loan – used as a proxy for tracking the scale of short positions – has dropped just 0.1 per cent on average since immediately before the 15-day prohibitions on shorting bank stocks were announced by France, Spain, Italy and Belgium, according to the Financial Times.

A collapse in German investor sentiment and weakening demand for new homes in the US sent out fresh warnings about the general health of the global economy. The Markit monthly snapshot of economic confidence in Europe's biggest economy found that optimism was at its lowest ebb since December 2008 – the depths of the recession that followed the collapse of Lehman Brothers, writes the Guardian.

Leading companies are failing to tackle gender diversity at board level, experts warn. That's despite a government deadline demanding they publish proposals to boost the number of female board members. In February Lord Davies called on FTSE 350 companies to achieve "urgent change" and announce aspirational goals within the next six months. The deadline falls tomorrow, but while figures from FTSE 100 firms point to positive action, outside the main blue chip index the response appears less favourable, according to the Independent.

Australian brewer Foster’s plans to return at least $500million (£318million) to investors over the next year as it resists a hostile £6billion takeover bid from Peroni and Grolsch group SABMiller. Foster’s chief executive John Pollaers said UK-listed SAB’s offer “significantly undervalues” the business as he talked up its growth prospects and £35million annual cost savings before the end of 2013, the Daily Express says. 

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