Barclays credit rating outlook cut by Moody's and S&P
Rating agencies Moody's and Standard and Poor's have lowered their outlook on Barclays from stable to negative amid the bank rate-rigging scandal.
Moody's said shareholder and political pressure was creating uncertainty about the bank's future.
S&P said the emergence of "weak business practices" had hit the company's prospects.
The move comes a day after ex-Barclays chief executive Bob Diamond told MPs the rate fixing was "reprehensible".
One MP, however, called some of Mr Diamond's evidence "implausible".
MPs will vote later on whether to have a judge-led inquiry over the scandal, favoured by the opposition, or a parliamentary one, favoured by ministers.
Moody's said pressure on the bank could force it to move away from investment banking.
"Although this could have potentially positive implications over the longer term, the uncertainty surrounding such a change in direction is credit negative in the short term," the agency said.
It added that Barclays may find it difficult to replace Mr Diamond, chief operating officer Jerry del Missier, and chairman Marcus Agius, all of whom resigned this week. Mr Agius is staying on at the bank to oversee finding a replacement for Mr Diamond, but will step down once someone has been found.
S&P said "weak compliance" and "current management flux" had knocked the company's outlook.
'Physically ill'
Mr Diamond underwent a three-hour grilling by MPs on Wednesday, some of whom expressed surprise at some of his evidence.
Andrew Tyrie, chairman of the Treasury Committee, said some of what the banker said seemed "implausible", while another committee member, David Ruffley, said he was not satisfied with Mr Diamond's explanation.
Mr Diamond said he had only learned the true extent of the scandal in the past month, and that he had felt "physically ill" when reading incriminating emails from traders that they had conspired to manipulate the Libor rate - the interest rate at which banks lend to one another and which is used to set lending rates across the economy.
Mr Diamond said he "loved" Barclays and had resigned on Tuesday to protect its reputation. "I'm sorry, disappointed and angry," he said.
But Mr Tyrie, who has been asked to lead a parliamentary inquiry into banking following the scandal, was sceptical about some of what he heard.
He told the BBC after the hearing: "We learnt that Bob Diamond says he didn't know anything about this until about a month ago, which I find rather surprising.
"I think, cumulatively, the whole package looks somewhat implausible. And if it is plausible, it's only because there is something wrong with the culture of Barclays and, of course, it's the culture that needs to be put right."
In a separate BBC interview, committee member David Ruffley said: "Either [Mr Diamond] was complicit or, frankly, incompetent."
Misunderstanding
Paul Tucker, the Bank of England's deputy governor, will give evidence to the committee next week.
Mr Diamond said that, during a telephone conversation in October 2008, Mr Tucker told him "senior figures within Whitehall" were concerned about why Barclays was setting its Libor rate higher than some other major banks.
Subsequently, the Libor borrowing rates submitted by Barclays fell, potentially understating the extent of the bank's borrowing costs.
Mr Diamond maintains that he did not view his conversation with Mr Tucker as an instruction to change the bank's rates submissions.
However, he said his chief operating officer Jerry del Missier, who also resigned on Tuesday, misunderstood the message from the Bank, and directed traders to take actions to lower Barclays' Libor rates.
The Financial Services Authority has investigated Mr del Missier's actions, and will take no further action.
Banks borrow from each other daily, and report at what rate they got the money. A high rate can indicate a bank is having trouble borrowing money because it is in financial trouble.
Bank of England pumps £50bn more into economy
The Bank of England has announced it will pump a further £50bn into the UK economy over the next four months through its quantitative easing (QE) programme to try and boost demand.
QE is the Bank's scheme which aims to boost the economy by buying bonds. The stimulus currently stands at £325bn.
The Bank also said it would leave UK interest rates unchanged at 0.5%.
The Bank's Monetary Policy Committee (MPC) has held rates at their current record low for more than three years.
The Bank said that the UK economy, which is back in recession, had "barely grown for a year and a half". It added that growth in export markets had also slowed.
The additional stimulus had been expected following last month's MPC meeting, when four of the nine members voted to increase QE.
Since then, the UK economy has shown no real signs of recovery.
Last month, the Bank announced two new stimulus measures. The first of these will provide banks with access to tens of billions of pounds of cheap credit on the basis that they lend this on to businesses.
The second provides banks with access to cash, should they encounter any short-term funding difficulties.
Volkswagen agrees to buy rest of Porsche for $5.6bn
Volkswagen says it has agreed a deal to buy the remaining 50.1% stake in Porsche it doesn't already own by the start of next month.
VW will pay 4.46bn euros ($5.6bn; £3.6bn) plus one VW common share to acquire the stake.
The two firms had agreed in 2009 to merge by the end of 2011, but have since faced legal obstacles.
The deal is likely to reduce costs and boost VW's earnings as it seeks to become the world's biggest carmaker.
"The accelerated integration will allow us to start implementing a joint strategy for Porsche's automotive business more quickly and to realize key joint projects more rapidly," said Hans Dieter Poetsch, chief financial officer of Volkswagen.
Both the firms had been seeking to accelerate the merger. However, one of the stumbling blocks for the deal was the likelihood of a big tax bill for both the firms.
Volkswagen had acquired a 49.9% stake in Porsche in 2009.
According to various reports, if it bought the remaining stake before 2014, the two companies may have had to pay more than 1bn euros in taxes, making the move less attractive.
Analysts said that by structuring the deal as one which involved the payment of one VW common share to Porsche, the firms may be able to avoid that bill.
They said that such a move means that the deal may see it being classified as a restructuring of the company rather than a takeover.
"It's a great deal for Volkswagen, both financially and in operative terms," said David Arnold, an analyst with Credit Suisse.
Meanwhile, Volkswagen said in a statement that "the accelerated integration model that has now been agreed can be implemented on economically feasible terms".
Role reversal?
Once completed, the deal will bring an end to one of the most dramatic takeovers in the car manufacturing industry.
Porsche had been trying to takeover Volkswagen for many years.
Its attempt failed in 2009 as it fell short of acquiring the required 75% stake.
The global financial crisis and the slump in the global automotive sector made it difficult for the carmaker to raise enough money to buy the required stake.
But none the less, Porsche accumulated large amounts of debt in the process and was sued by investors who accused it of misleading them.
In a turnaround of events, the firms agreed a deal in 2009 under which Volkswagen agreed to takeover Porsche.
GKN agrees to buy Volvo's aero engines division
Engineering group GKN has agreed to buy the aero engine business of Swedish truck-maker Volvo for £633m ($986m).
GKN's chief executive, Nigel Stein, said the deal was, "a highly attractive acquisition... creating a market leader in aero engine components".
The deal will give GKN more exposure to the civil aircraft sector, offsetting falling defence sales as governments cut back on defence spending.
Shares in GKN rose 12% on news of the deal.
The British engineering group said the payment broke down into £513m for the business, plus a pension settlement of £50m and refinancing of £70m.
GKN has plants in Bristol and Cowes, Isle of Wight.
GKN's aerospace business is the firm's second biggest division. It makes parts for civilian and combat aircraft as well as helicopters.
Last year it had sales of £1.5bn.
HTC defeats Apple in swipe-to-unlock patent dispute
HTC is claiming victory in a patent dispute with Apple after a ruling by the High Court in London.
The judge ruled that HTC had not infringed four technologies that Apple had claimed as its own.
He said Apple's slide-to-unlock feature was an "obvious" development in the light of a similar function on an earlier Swedish handset.
Apple has also cited the patent in disputes against firms using Google's Android system software.
Slide-to-unlock
HTC launched the London-based lawsuits a year ago as part of an effort to invalidate European patents Apple had referred to in a German court case. Apple subsequently countersued.
The four patents at stake were:
- Unlocking a device by performing a gesture on an image.
- The use of a multilingual keyboard offering different alphabets on portable devices, including mobile phones.
- A system to determine which elements of a screen were activated by single-finger touches; which were activated multi-finger touches and which ignored touches altogether.
- Letting a user drag an image beyond its limits and then showing it bounce back into place to illustrate that they had reached its furthest edge.
The judge ruled that the first three patents were invalid in this case, while the fourth did not apply to HTC's devices.
Lawyers fighting other lawsuits against Apple are likely to pay close attention to the decision regarding its slide-to-unlock patent.
The judge said that HTC's "arc unlock" feature - which also involves a predefined gesture along a path shown on-screen - would have infringed Apple's technology had it not been for a device released in 2004.
The Neonode N1 showed a padlock on its screen with the words "right sweep to unlock" when it was in its protected mode. A later version replaced the text with an arrow.
The judge said it would have been an "obvious" improvement for the developers to have offered users visual feedback in the form of a "slider" in the way that Apple later used.
He added that the concept of a "slider" was not new since it had already appeared in Microsoft's CE system.
As a result Apple's claim to the innovation was rejected.
'Limited impact'
A statement from the Taiwanese firm said: "HTC is pleased with the ruling, which provides further confirmation that Apple's claims against HTC are without merit. We remain disappointed that Apple continues to favour competition in the courtroom over competition in the marketplace."
Apple declined to comment on the specifics of the case.
Instead it re-issued an earlier statement, saying: "We think competition is healthy, but competitors should create their own original technology, not steal ours."
Apple has previously defended its slide-to-unlock patent in other disputes against Samsung, HTC and Google's Motorola unit with some success.
Most recently a US court ruled the patent was valid in a dispute that led to a sales ban being imposed on the Google-branded Nexus smartphone.
However, Andrew Alton, a lawyer at UK firm Urquhart-Dykes and Lord who used to do work for Apple, said the impact of the London ruling might be limited.
"National patent laws thematically are very similar, but can be applied very differently.
"Not only are the tests different but also the evidence that can be introduced in different courts varies. If the Neonode wasn't released in the US it might not be able to be cited there.
"So the fact that Apple has lost this particular patent battle in the UK shouldn't mean it should be seen to have lost the global war."
UN Monitor Chief Says Team Will Adapt Syria Mission
The head of the United Nations observer team in Syria says he will adjust the way the monitors work when their mission resumes, with a focus on staying in certain areas for longer periods of time.
Major General Robert Mood told reporters Thursday in Damascus that it is time to stop spreading the team out “too thin” and that the U.N. Security Council will decide on the future of the mission in the coming days and weeks.
“Whatever decision the Security Council makes, the international community's continued responsibility to the Syrian people is moral as well as political. We cannot and we will not turn our eyes and ears away from your plight, and we'll continue our work to find new paths to political dialogue and peaceful resolution to the crisis.”
Mood suspended operations on June 16 due to safety risks to the 300 observers in Syria. The United Nations said attackers targeted the observer team several times with gunfire and bombs.
The crisis in Syria is expected to be a major topic Thursday as foreign ministers from France and Turkey meet in Paris and their counterparts from Germany and Russia hold talks in Moscow.
The meetings come a day before France is set to host about 100 delegations for a “Friends of Syria” meeting – one which Russia and China say they will not attend. Neither country appeared at the group's previous meetings in April and February.
Chinese foreign ministry spokesman Liu Weimin said Thursday that while China will not participate in Friday's talks, the aim of bringing an end to the crisis is important.
“We believe that now is a crucial moment for finding a political resolution to the Syria issue. The international community should strive to implement the consensus reached at the Geneva talks. Meanwhile, resolving the Syria issue will require the joint effort and participation from all parties in Syria. Right now, China is not considering attending this meeting.”
Russia and China have disagreed with Western countries this week over the meaning of an accord reached last Saturday in Geneva calling for a transitional governing body in Syria. Several Western nations said the agreement would preclude Syrian President Bashar al-Assad from being a part of a transitional government, but Russia and China say there is no such stipulation.
The two sides have long been at odds over how to address the situation in Syria, where a revolt against Mr. Assad's nearly 12-year rule broke out in March of last year. Russia and China have used their veto power on the United Nations Security Council to block several rounds of proposed sanctions against Syria.
French Foreign Minister Laurent Fabius said Wednesday that his government wants to see signs of movement “as quickly as possible” or else it would return to the United Nations to seek tougher measures, ranging from sanctions to possible military intervention.
The Britain-based Syrian Observatory for Human Rights told VOA 21 people were killed Wednesday as clashes continued throughout Syria. Opposition activists say the carnage has spiked in recent days, with at least 109 people killed Sunday, 114 on Monday and 69 on Tuesday.
VOA
Fukushima Nuclear Disaster ‘Man-Made’
A Japanese parliamentary panel has concluded that last year's Fukushima nuclear disaster was “man-made,” even as authorities announced the controversial return of nuclear power for the first time following the crisis.
The report, based on a six-month investigation, faulted both the government and the plant operator, Tokyo Electric Power Company, for failing to foresee and prevent the worst nuclear accident since the 1986 Chernobyl disaster in Ukraine, eastern Europe.
The investigative panel found that officials “deliberately postponed decisions” that would have protected the Fukushima power plant from the massive earthquake and tsunami that struck in March last year.
In its most stern report yet, the panel said the accident “cannot be regarded as a natural disaster” and that its effects “could have been mitigated by a more effective human response.”
Meanwhile, a nuclear reactor in western Japan began generating badly needed electricity for the first time since a nation-wide nuclear shutdown was implemented in the wake of the disaster.
The number 3 reactor at the Ohi nuclear power plant went back on the grid Thursday, despite widespread public opposition to the resumption of atomic power.
Following the meltdown at Fukushima, all of Japan's nuclear reactors were eventually taken offline to conduct safety inspections and stress tests. The country had been without nuclear power for two months. The government has argued the restart is necessary to avoid blackouts during the upcoming summer months.
The parliamentary report released Thursday could have major implications for the future of nuclear power in Japan, which before the disaster relied on atomic energy for about 30 percent of its electricity.
The investigation was the result of over 900 hours of hearings and 1100 interviews with officials, including former Prime Minister Naoto Kan and TEPCO ex-President Masataka Shimizu.
The investigation committee chairman, Kiyoshi Kurokawa, said he was confident the commission has completed a thorough investigation.
“We have managed to compile this report within six months. Though this is a short period of time, we have conducted a thorough investigation and verification process during this time.”
While the commission's final report did not vary greatly from previous findings, the panel said it cannot rule out that the March 11 earthquake, and not just the ensuing tsunami, was the primary cause of the accident. Previous reports indicated that the plant's reactors survived the earthquake but were damaged in the tsunami.
Romanian Lawmakers Move to Impeach President
A coalition of Romanian lawmakers are moving to try to impeach President Traian Basescu, as part of a power struggle with the country's prime minister.
The coalition's action is the latest move in a month-long campaign of attacks by Prime Minister Victor Ponta against the President Basescu.
Lawmakers from the three-party Liberal Social Union , which include Prime Minister Ponta's Social Democrat Party, could vote on a motion to impeach the president as early as Friday, after debating the issue Thursday. Some analysts say the coalition's actions to remove President Basescu are illegal. His supporters have likened Mr. Ponta's attack on the president as an attack on democracy in Romania and they are calling for the prime minister's resignation because of a plagiarism scandal.
The president has been accused of overstepping his powers and violating the country's constitution. The pro-government coalition has also approved a measure barring the Constitutional Court from ruling on parliament matters, making it easier to impeach the president without a legal fight. Voters will have the final say on President Basescu's fate during a referendum vote. The USL suspended a President Basescu in 2007, but he was reinstated during a referendum vote.
Nato supply trucks cross Pakistan border after row
Trucks supplying Nato in Afghanistan crossed the border from Pakistan for the first time in seven months after Islamabad reopened transit routes.
Pakistani officials said at least two Nato containers passed through the Chaman border point on Thursday.
Many more lorries remain in the southern Pakistani port of Karachi awaiting clearance to proceed.
Pakistan reopened the routes after the US apologised for killing 24 of its soldiers on the border in November.
The decision will save the US hundreds of millions of dollars as it prepares to withdraw from Afghanistan.
Pakistan has said it hopes the move will improve relations with the US and other Nato countries.
"We received orders yesterday to allow Nato supply trucks through, but security officials hadn't received their instructions," Pakistani customs Imran Raza told Reuters news agency.
"They received their orders today, and now two trucks have crossed the border into Afghanistan."
The BBC's Aleem Maqbool in Karachi says it appears, however, that most Nato trucks in Pakistan remain stationary.
He says drivers in Karachi have yet to be given the all-clear and have told the BBC they do not know of any trucks that have left the city yet.
US aid
The seven month-long row over supply lines have been hugely damaging to relations between Pakistan and the US, with both sides unwilling to back down.
It began in November last year when two dozen Pakistani soldiers were killed as US air strikes hit two posts on the Afghan border.
At the time, Afghan officials said that Nato forces had been retaliating for gunfire from the Pakistani side of the volatile border, but Pakistan rejected that claim.
The supply route through Pakistan is crucial to the United States as it prepares to pull all combat troops out of Afghanistan by 2014.
Reports suggest the US may now release over $1bn in funding to Pakistan's military.
Islamabad confirmed it would not raise transit fees when the lines re-open.
US officials say the existing charge of $250 (£160) per truck will not change - Washington had baulked at a reported Pakistani demand for $5,000 per container to let supplies flow again.
The Taliban have threatened to resume attacks on the convoys.
--BBC
TURKS AND CAICOS PUBLISHES NEW DRAFT LAW TO GOVERN POLITICAL CAMPAIGNING
Consultation regarding proposed new rules and regulations for governing the conduct of politicians and their parties in the Turks and Caicos, particularly during election campaigns, begins today with the publication of the draft Political Activities Ordinance today, Tuesday, 3 July 2012.
Previously referred to as the Conducts Ordinance, the suggested legislation asks TCI civil society to consider how donor finance to political parties should work, what are the limits for campaign spending, what are parties’ accounting requirements, how might the filing of reports and penalties be better managed?
The specific legislation is specified explicitly in the New Ordinances Milestone and takes forward one of the recommendations of the 2009 Sir Robin Auld Commission of Inquiry. It also specifies the role of the Integrity Commission as the monitor of the conduct of parties for these measures, as well as describing the penalties for election finance offences.
An earlier draft of the legislation was given to the PDM, PNP, Advisory Council and Consultative Forum, Election Preparations Oversight Group in Spring 2012. Indeed, it was a point of specific discussion when the PDM and PNP met with UK Parliamentarians from the Westminster Foundation for Democracy in March. This session produced a wide range of modifications which have now been included in the new draft.
The draft ordinance would apply to both political parties as well as independent candidates, although the reporting requirements and obligations on independents are lesser due to their likely lack of party machinery to support their campaigning. Comments as to how this might be best achieved are specifically being sought during the public consultation.
Views are also being sought on:
- Should there be a maximum amount an individual donor (person or business) can give a Turks and Ciacos political party? The figure of $50,000 is suggested but is this too much or too little? Who should be allowed to fund TCI political parties and candidates?
- How much should a party be able to spend on campaigning? This is currently proposed as $50,000 for each constituency seat and $200,000 for each at large candidate. The draft legislation is seeking views on people’s views as to whether or not this is appropriate in a seat with less than 700 voters which would average $71 spent per head, for example. By way of comparison in the UK a constituency of 70,000 electors (a modest size by UK standards) the total spend according to the formula allowed by law is £12,000 (approx. $18,000), equivalent to £0.17 (approx $0.25) per voter. The proposed maximum spending in the TCI is, therefore, 284 times higher per capita than in the UK.
“The Westminster Foundation for Democracy plans to return to TCI in late July to begin their work the local political parties on accounting for campaign financing and political financing, advice on policy-based campaigning and bilateral consultations for prospective independent candidates,” said Philip Rushbrook, Director of Strategy in the Governor’s Office. “The draft Political Activities Ordinance will be used as the basis of their training activities.
“Further, it is proposed that the Integrity Commission would set up an ‘election monitoring unit’ to receive the accounting returns required from parties and candidates, as well as to investigate omissions and complaints. Together, this unit would work in conjunction with the Elections Office.”
This new draft is being considered by the Consultative Forum, with the review period ending on Friday, 13th July. Thereafter, a finalised text will address the responses received and subsequently be taken forward to complete its passage into law before the end of the month.