Bank of England calls for audit of eurozone crisis risk
The Bank of England's new financial policy committee (FPC) has called for an audit of UK banks' exposure to the eurozone debt crisis.
The Bank's governor Sir Mervyn King said the debt problems of Greece and other countries posed "the most serious and immediate risk" to UK banks.
The FPC also called for banks to divert their profits towards building up their reserves against future losses.
Prime Minister David Cameron welcomed the committee's suggestions.
"Every bank needs to make absolutely clear what its exposure is," he said following a European Council summit in Brussels.
"We need to make sure all our banks are being strengthened in terms of their capital reserves and what they can withstand."
UK lenders need to build up their capital buffers as part of the Basel III international agreement, which was designed to ensure that all banks worldwide are better able to withstand another financial crisis.
Sir Mervyn said that by paying out less of their profits to shareholders and employees, the banks could rebuild their capital without having to cut back on lending.
In the conclusions of its first meeting, the committee asked the soon-to-be-replaced Financial Services Authority (FSA) to ensure that the banks it supervises comply with the recommendation.
Tangled web
Regarding the eurozone, the Bank governor said that while UK banks may not have lent very much directly to Greece and other troubled economies, they were still at risk of financial contagion.
"The direct exposures of UK banks to Greece are really remarkably small," he said in response to a question at the press conference.
But he said that British banks may be exposed to other lenders who may get into trouble if they were to suffer big losses on their loans to distressed eurozone countries.
The FPC said that all banks, big and small, should be permanently required to report more thoroughly their exposures to different countries.
"There is always uncertainty about the scale of exposures, which counter-parties out there are the ones which are heavily exposed," he explained.
He said this can lead to a crisis of confidence in the banks, because lenders cannot untangle the web of risk exposures involved.
'Gift'
Sir Mervyn also queried whether the emergency loans being arranged for Greece would do much to save it from default.
"Simply the belief that we just lend a bit more will never be [an] answer [to a question] which is essentially one of solvency," he said.
He said that a country such as Greece, that had more debts than it was able to repay, had two options.
"One is to receive gifts or transfers from other countries," he said - something that goes well beyond the loans being discussed with European counterparts.
The Bank governor did not specify whether a default by Greece on its debts might also constitute such a "gift", provided by Greece's existing lenders.
The second option was improving competitiveness to enables the "current account deficit to be turned into a surplus".
Many economists have said that the most obvious way for Greece to do this is by leaving the euro and allowing its currency to devalue.
Opaque
Among the committee's other recommendations was that the FSA carry out a more extensive review of whether the banks have set aside enough money to cover possible losses on their lending and how much debt relief they are granting customers.
The FPC also raised a warning flag over "exchange-traded funds" or ETFs.
Sir Mervyn said that many of these funds - which are traded on the stock exchange and offer investors the return on an index or portfolio of investments - were opaque.
Speaking at the same press conference, Hector Sants, who runs the FSA, questioned whether "synthetic ETFs" - which use financial derivatives to make their investments - were appropriate for ordinary individual investors.
Conrad Black ordered back to prison
A US judge has resentenced former media tycoon Conrad Black to 42 months in prison for fraud and obstruction. He is likely to serve just 13 months because of time already served.
The Canadian-born British peer was convicted in 2007 of defrauding shareholders in media holding company Hollinger of $6.1m (£3.8m).
He was freed in 2010 after the US Supreme Court court found an anti-corruption law unconstitutional.
The court let two other charges stand.
In Chicago on Friday, US District Court Judge Amy St Eve ruled that when Black was released in July, more than two years into a six-and-a-half year term, he had not yet served enough time in prison to remain at liberty.
'Greed and lies'
But she rejected prosecutors' request to sentence him to the same term once again. Imposing that sentence again would have left Black with about four-and-a-half more years to serve.
"He fails to acknowledge his central role in destroying Hollinger International through greed and lies, instead blaming the government and others for what he describes as an unjust persecution," prosecutors said recently.
Black, 66, once controlled a media empire that included the Daily Telegraph in the UK, the Chicago Sun-Times and other newspapers in the US and Canada.
But in 2007, he and three other Hollinger International executives were convicted of defrauding shareholders of $6.1m.
Prosecutors said Black defrauded investors by paying himself a tax-free bonus from the sale of newspaper assets without the approval of the company's board.
Black's convictions rested partly on the idea that he had deprived Hollinger of his honest services as a corporate officer.
In June 2010, the US Supreme Court found that "honest services" law unconstitutionally vague, ruling the law could apply only to cases where bribes and kickbacks had changed hands.
US economic growth is revised upwards
The US economy grew at an annualised rate of 1.9% in the first three months of the year, slightly faster than previously thought, official figures have shown.
This equates to a 0.5% quarterly rise. The last estimate by the Commerce Department showed growth of 1.8%.
This compares with an annualised rate of 3.1% in the final quarter of 2010.
High unemployment and a weak housing market are undermining the US economic recovery, analysts say.
Corporate profits, in particular, were blamed for the slowdown from the final quarter of last year.
US GDP is expressed as an annualised rate, which shows what the three months' economic activity would mean if it carried on for a year.
Separate figures from the Commerce Department showed that orders for heavy manufactured goods rose by 1.9% in May, compared with a fall of 2.7% the previous month.
The rise was greater than analysts had expected.
April's drop was due to supply issues following Japan's earthquake and resulting tsunami in March, analysts said.
Chinese Premier Wen Jiabao due in UK
Chinese Premier Wen Jiabao is due to arrive in the UK later for the UK-China Strategic Summit.
Mr Wen will visit the MG car plant at Longbridge, near Birmingham, on Sunday. The plant used to make MG Rover cars, but is now owned by China's Shanghai Automotive Industry Corporation.
The first new MG for 16 years rolled off the production line in Longbridge earlier this year.
On Sunday, Mr Wen will meet UK Prime Minister David Cameron.
The summit is an annual meeting between the two countries. The last one took place in Beijing in November last year.
The aim of the summit is to strengthen bilateral relations between the two countries.
With China having overtaken Japan as the world's second largest economy, many European companies are looking for investment, while Chinese acquisitions in Europe have also been increasing.
Earlier this month, Chinese PC maker Lenovo agreed to buy German electronics retailer Medion in a bid to boost its market share in Europe.
A lot of luxury goods companies have also been focusing their attention on China, as the country now has a large, growing middle class with money to spend.
Labour lost touch with public and members - Ed Miliband
Labour leader Ed Miliband is to admit his party's leadership lost touch both with its own members and the public.
In a speech in Wrexham to his national policy forum, he will propose reforms aimed at making the party less insular and its decision-making more open.
He will say the last Labour government did not listen to concerns over issues like immigration and housing benefits.
The Tories say Labour ignores the way its leader is elected. They criticise the trade unions' role in that process.
In his speech to party activists and trade unionists, Mr Miliband is expected to unveil a series of proposals.
Its annual conference will be opened up to campaign groups and charities - who will be allowed to speak from the floor in debates although they will not get to vote on policies.
Local Labour parties will be allowed to organise petitions on issues which they feel ought to be debated at national level, and if they can demonstrate enough support, those issues will be placed on the agenda at future meetings of the policy forum.
There will also be a new code of conduct for the party's candidates and politicians to ensure they meet voters regularly and are transparent about their expenses.
And following on from an idea trialled in Oxford and Birmingham, local parties across the UK will get extra resources if they sign up more supporters.
Looking outwards
Mr Miliband is also expected to cite the decision under Prime Minister Gordon Brown to abolish the 10p starting rate of income tax, which saw millions of low earners lose out.
In his speech Mr Miliband is expected to say: "'Old Labour forgot about the public. New Labour forgot about the party.
"And, by the time we left office, we had lost touch with both.'
Turning to the policies of the last Labour government, he will say: "We went from six people making decisions in a smoke-filled committee room to six people making the decisions from a sofa in Whitehall. Sometimes less than six.
"But the party was trying to tell us what the people wanted us to know. They were telling us about immigration, about housing benefits and about the 10p tax. We didn't listen."
He will go on to defend plans to scrap elections to the shadow cabinet. The move to take sole responsibility for frontbench appointments has been criticised by some backbench MPs who feel they will be distanced from the party's top team.
Mr Miliband will say shadow cabinet elections sees the party "look inwards not outwards".
"I want us to be an alternative government," he will say. "The only election members of the shadow cabinet should be worrying about is the general election."
BBC political correspondent Iain Watson said it is understood that Mr Miliband does not intend to address the party's leadership rules highlighted by the Conservatives, which allowed him to be elected with the help of union votes, despite more party members favouring his brother, David.
He has already said these will be revised as part of a series of changes which will go to the party's autumn conference, under the banner Refounding Labour.
Protesters, Security Forces Face Off in Syria; 12 Dead
At least 12 people were killed Friday when Syrian security forces fired on crowds as tens of thousands of protesters took to the streets nationwide in another round of demonstrations aimed at overthrowing President Bashar Assad.
The demonstrators gathered throughout the north and around the capital, Damascus, despite a heavy military presence and the fear of the continuing military crackdown. Protesters have been under assault by pro-government forces for more than 100 days.
Rami Abdel Rahman, an activist with the London-based Syrian Observatory for Human Rights, told the French news agency by telephone from the town of Kiswah that security forces opened fire on demonstrators there and wounded an unknown number of people.
Deaths were reported near Damascus and elsewhere. Syrian state-run television blamed "armed gangs" for shooting at security forces in a Damascus suburb, killing three people.
Details of Friday's violence have not been independently confirmed, largely because Syria does not permit outside media to cover protests. Activists say Syria's crackdown has killed at least 1,400 people in the last three months.
Turkish officials said Friday that more than 1,500 Syrian refugees crossed the border into Turkey after Syrian troops stormed the town of Khirbet al-Jouz.
According to Turkish government estimates, nearly 12,000 Syrians are now housed in massive tent encampments in Turkey.
Syrian troops are said to be within 500 meters of the border.
Syria's deployment is the closest its troops have come to Turkish territory since military operations in the area began two weeks ago. Turkish troops moved their border positions several hundred meters back, apparently to avoid potential confrontations with Syrian units.
U.S. Secretary of State Hillary Clinton says the border scene is "very worrisome," and has warned Syria to pull back its troops. She says their presence is worsening an already bad situation for refugees and risks sparking border clashes with the Turks.
Suspected al Qaeda militants escape from Yemeni jail
Dozens of suspected al Qaeda militants escaped Wednesday from a jail in the Yemeni city of Mukalla, a senior security official said.
An Interior Ministry official said 63 members of al Qaeda had managed to break out of Almakla prison, according to the state-run SABA news agency. He said three were killed and another two arrested and that a prison guard was killed. He asked to remain anonymous because he is not authorized to speak to the media.
Some of the escapees had already been convicted; others were awaiting trial, the official told SABA. They escaped by digging a 35-meter (115-foot) tunnel, he said.
Witnesses said armed militants began attacking the prison at about 8 a.m. and fired heavy artillery before the escape.
The prison break comes two days before Yemeni President Ali Abdullah Saleh, who is being treated in Saudi Arabia after an attack on his compound, is to return to Yemen, his party said Tuesday. Opposition leaders called the news of Saleh's planned return a false rumor.
Saleh and other senior officials were wounded June 3 in an attack on the mosque at the presidential palace and taken to Saudi Arabia for treatment.
Yemen has been consumed by unrest for months as protesters have demanded an end to Saleh's rule. In recent weeks, government troops have battled both anti-government tribal forces and Islamic militants, including al Qaeda in the Arabian Peninsula.
But in recent days, the Yemeni government's control has been receding, said Christopher Boucek, an associate in the Middle East program at the Carnegie Endowmen for International Peace. "There are instances where you can say that the Yemeni government is instigating some of this chaos -- with the goal to demonstrate to the United States, Saudi Arabia and others that this regime -- the government of President Saleh -- is the best to fight al Qaeda."
Boucek said the Yemeni government is more concerned with protecting itself from the popular revolt than with going after al Qaeda. As a result, he said, the government has repositioned its counter-terrorism forces, retreating from areas such as Abyan province where it had lost ground and circling the wagons.
However, a Yemeni official briefed on security operations rejected Boucek's conclusion. "What about the blood of 66 soldiers?" he said, citing the number of soldiers who he said have died in Abyan province alone in recent weeks. Another 291 soldiers have been wounded in operations there that killed six of the most wanted al Qaeda operatives and 40 other militants, he said.
The official said it was not clear how Wednesday's prison break occurred. But, he said, the area was "shut down," military and police forces were on high alert, and forces were looking for the escapees.
Recent clashes in the southern province of Abyan killed seven Yemeni soldiers and 17 militants. The fighting was mainly concentrated in the cities of Zinjibar and Jaar.
Government troops have been battling both anti-government tribal forces and Islamic militants, including al Qaeda in the Arabian Peninsula.
The United States has been aiding Yemen's military in its fight against Islamic militants amid fears that al Qaeda is exploiting the political chaos and leadership vacuum engulfing the unstable and impoverished Arabian Peninsula country.
Jeffrey Feltman, U.S. assistant secretary for Near Eastern Affairs, was scheduled to meet Wednesday with senior Yemeni officials during a visit to Yemen.
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New York Senate Approves Same-Sex Marriage in Major Gay Rights Victory
Lawmakers in the U.S. state of New York have voted to approve same-sex marriage, handing American gay rights advocates a major victory in their quest for equality.
After extensive debate, the New York State Senate approved the legislation Friday night by a vote of 33 to 29, as two previously undecided Republican lawmakers cast the deciding votes in favor of the law. The Democrat-controlled state Assembly, which approved a different version of the law last week, is now expected to approve the new version and Governor Andrew Cuomo is expected to sign the legislation into law.
When the final approval is given, New York would become the sixth U.S. state where gay couples can wed, and by far the largest. Gay couples would be able to begin marrying in the state within 30 days.
New York could become a magnet for such marriages because the state has no residency requirement for obtaining a marriage license.
Activists consider New York's approval particularly significant since it is the third largest U.S. state and because of New York City's international stature. The city also is considered to be the birthplace of the gay rights movement, with the Stonewall riots in the city's Greenwich Village community in 1969.
The state Senate debate over the last several days centered on providing legal protections for religious groups opposed to same-sex marriages that feared they would be sued for discrimination if they refused to allow their facilities to be used for gay weddings. The lawmakers agreed on language allowing religious organizations to refuse to perform such marriages or provide space for them.
One of the pivotal Republicans, State Senator Stephen Saland, had voted against a similar bill two years ago, but on Friday pledged the deciding vote in favor the law. He called his change of heart “a vote of conscience” and said he was “doing the right thing.”
Gay couples in the legislative gallery wept as they listened to his speech.
When the New York law is enacted, the state will join Vermont, New Hampshire, Connecticut, Massachusetts, Iowa and Washington, D.C. in allowing gay couples to marry.
The legislative debate coincided with President Barack Obama's speech Thursday before a group of gay rights supporters at a campaign fundraising event in New York City.
Mr. Obama told the crowd that gay couples deserve the same legal rights as any other couple in this country, but he did not fully endorse same-sex marriage. The president has upset gay rights activists for his support of civil unions over marriage, but recently said his views on the matter are “evolving.”
Mr. Obama defended his administration's record on gay rights, including repealing the ban on homosexuals serving in the military, and ordering the Justice Department to stop defending a law that narrowly defines marriage as that between a man and a woman.
Nevis goes to the polls July 11
Premier and leader of the Nevis Reformation Party (NRP), Joseph Parry, announced on Wednesday night that the people of Nevis will go to the polls on July 11, 2011.
Nomination Day is Monday, July 4, 2011.
"It is against this backdrop that today I consulted with His Excellency, the Governor General. It is with the confidence of knowing that we have done our best, under the circumstances, that I advised on the dissolution of the Parliament here in Nevis," commented the premier.
He urged every citizen to demonstrate peace and respect for each other during the election campaign.
“We pray that the elections would be peaceful and harmonious,” said Parry, who is seeking a second term as premier of Nevis. The NRP took over the reins of government on Nevis on July 10, 2006.
He told the nation in his address, which was broadcast live on several radio stations and streamed live on the internet, that the vision of the NRP is a vision of progress, development and a positive emphasis on education.
During an interview on Thursday morning, Parry said his party has ensured the realization of a vision for the young people to take their rightful place among the youthful population of the world.
“The government has delivered in education,” said the premier, as he noted 170 university scholarships given, homework assistance programs, the one-on-one laptop programs, school meal programs and additional buildings to a number of schools on the island.
In housing, the government has successfully built 308 affordable homes in Nevis in five years.
He added that the NRP will continue to change the economic and social landscape of Nevis, with focused growth in the small business, agriculture, land ownership and infrastructural sectors.
Andy Murray beats Ivan Ljubicic
British number one Andy Murray secured his place in the second week of Wimbledon with a tense four-set win over Croatia's Ivan Ljubicic.
Rain meant Murray had to wait until 1853 BST for his third-round match to start under the Centre Court roof, but he prevailed 6-4 4-6 6-1 7-6 (7-4).
Ljubicic threatened with his huge serve but Murray found a burst of form in the third set and edged a nervous fourth.
The Scot goes on to face Richard Gasquet in the last 16 on Monday.
That will be a repeat of their five-set epic at the same stage three years ago, and Murray can expect another testing encounter after being pushed hard by Ljubicic.
The Croatian is the world number 33, and at 32 years old remains a player capable of threatening the very best, in large part because of his world-class serve.
That proved to be the key shot in the early stages, faltering under sustained pressure from the Murray return in game six but getting him out of trouble from 0-40 and seeing off four break points.
A rasping Ljubicic forehand winner then earned a break point in the following game and Murray dumped a mid-court forehand into the net to fall 4-3 behind.
This was not what the Centre Court crowd had expected to see, and the sense of shock appeared to transfer to Ljubicic as he barely had time to enjoy his advantage before a double-fault handed the break straight back in game eight.
Ljubicic could not afford to give the world number four any gifts but at 5-4 down he misjudged a Murray defensive lob that landed inside the baseline, allowing the Scot to take the point and moments later convert his second set point with a brilliant forehand pulled down the line.
But the lapses in concentration that still blight Murray's game were to reappear early in the second set, successive double-faults rounding off a dreadful service game and handing Ljubicic a lead he would not relinquish as he served out to level at one set all.
Another set, another Murray, and the Briton was switched on from the start of the third, a drop shot and a sweet backhand winner carrying him to a break at the start, and a tracer-like backhand down the line helping move 4-0 clear in no time.
Murray served out the set and looked in a similar mood to the latter stages of his first-round win over Daniel Gimeno-Traver, when he reeled off the last 15 games, but he needed a backhand of pinpoint accuracy to save a break point at 1-0 down in the fourth.
It was the world number four who was in the ascendancy though, and passes off the backhand and forehand sides gave him the break at 3-2 before, with confidence flowing in game seven, he repeated the between-the-legs shot he had used at Queen's Club.
That confidence was nowhere to be seen when Murray tried to serve out the match, however, and he found the net on break point to give Ljubicic a lifeline, only for the Croatian to crack first in the tie-break that followed.
Two errors allowed Murray to move 6-3 clear and the Briton thumped away a forehand on his second match point to seal victory after two hours and 56 minutes.
"It was a tough one," said Murray. "Both of us were struggling a bit behind our second serves. When I served for the match he swung and made it. You'll have tough sets and you have to come through tough matches in Grand Slams.
"It's very intense here - I just need to serve better, but I returned well and I'm ready. I thought tonight's match was a very, very high standard."