By Howard Mustoe 28 April 2017
Sir John Vickers, who was asked to construct a safety plan for Britain’s banks in the wake of the financial crisis, has warned regulators over hasty bank asset sales.
Parliament is investigating whether UK banks have the capital means to keep going during a shock and Sir John and the Bank of England gave evidence.
The Bank said some lenders could help themselves by selling off assets.
Sir John has warned that this could lead to a “fire sale”.
By Howard Mustoe 2 March 2017
The Financial Reporting Council (FRC), which regulates how firms govern themselves, is too “timid” and needs more powers, says former City minister Lord Myners.
It should “stand up to government and say we need legal change… to strengthen governance,” he said.
He added that shareholders also had to take responsibility and act if a company’s standards were failing.
The FRC said it had requested more powers to tackle bad behaviour.
By Howard Mustoe 20 February 2017
Kraft Heinz has abandoned its offer to buy Unilever, its Anglo-Dutch rival.
The Marmite maker rejected the US food giant’s bid on Friday, saying it saw “no merit, either financial or strategic” in Kraft’s offer, worth about $143bn (£115bn).
“Unilever and Kraft Heinz hold each other in high regard,” the companies said in a joint statement.
Shares in Unilever, which closed 13% higher on Friday, fell 7.3% in lunchtime trading in London to £35.18.
By Howard Mustoe 17 February 2017
If the UK produced more of its own food, it could protect consumers and producers from sharp rises and declines in global food prices, a report says.
Only 52% of food eaten in the UK comes from British farmers, according to a report published by Morrisons.
Making the UK self-sufficient in food is probably impossible, it says.
But making it less reliant on global food markets is possible, and may help protect consumers from international price rises, it adds.
By Howard Mustoe 1 September 2016
UK companies should adopt a Swedish-style shareholder committee in an effort to curb excessive pay for bosses, an MP has said.
The five biggest shareholders in large publicly-traded companies would sit on the committee, said Chris Philp, MP for Croydon South.
It would make decisions on pay and hiring directors.
His plan follows a call from Prime Minister Theresa May for tighter controls on corporate excess.
“I’m concerned that large shareholders in big public companies are simply not sufficiently engaged in taking responsibility for their investments in the companies they are invested in,” he told Radio 4’s Today programme.
By Howard Mustoe 27 May 2016
HM Revenue & Customs has lost its bid to recover up to £50m in stamp duty from the sale of the Chelsea Barracks in 2007.
Three Court of Appeal judges decided that the tax office had pursued the wrong party for the tax.
The purchaser, a firm owned by the Qatar Investment Authority, had used a type of Islamic finance that meant a bank actually owned the property.
HMRC said it was “disappointed” by the ruling.
By Howard Mustoe 24 March 2016
Companies should stop buying up their own shares unless they can show why it is a good idea, a leading advisory firm has told the BBC.
Companies should explain why they are buying and cancelling their own shares and not paying more dividend or using cash to expand their businesses, Pirc told the BBC’s Today programme.
Buying up shares can make a company’s performance seem better, often leading to bigger bonuses for bosses.
It used to be illegal in the UK.
“It’s the ultimate of what is described as financial engineering where the company is seen as a financial instrument rather than a thing which shareholders own and should be creating value from what it’s doing,” said Tim Bush, head of governance and financial analysis at investors’ advisory consultancy Pirc.
By Howard Mustoe 18 March 2016
The “unknown” of leaving the EU could help stimulate Britain, according to Hargreaves Lansdown co-founder Peter Hargreaves, who backs the UK’s withdrawal from the union.
He told the Today programme a fresh start could help Britain innovate.
Demand for UK fashion and cars, as well as the attractiveness of the UK as a market for the EU, would ensure good trade deals, he said.
The Stronger In campaign said the EU supported jobs, growth and low prices.
By Howard Mustoe 16 March 2016
Slower economic growth has meant Chancellor George Osborne has rethought how he will meet his target to spend less money than he brings in by 2020.
The Office for Budget Responsibility now sees 2016 growth of 2%, down from the 2.4% expected in November.
That is the effect of what he describes as a “dangerous cocktail” of global economic risks and slower economic growth than was predicted.
It means a cut of nearly £30bn to close the gap in the last year of the decade.
By Howard Mustoe 2 March 2016
Oil giant Shell is being sued in London for the second time in five years over spills in the Niger Delta.
Two communities are claiming compensation and want Shell to clean up their land.
Shell said it is at an “early stage” in reviewing the claims and that the case should be heard in Nigeria.
By Howard Mustoe 15 February 2016
The man who led an inquiry into the future safety of Britain’s banks has said Bank of England plans are not strong enough.
Sir John Vickers, who headed up the Independent Commission on Banking (ICB), said: “The Bank of England proposal is less strong than what the ICB recommended.”
In a BBC interview, he added: “I don’t think the ICB overdid it.”
By Howard Mustoe 1 December 2015
Royal Bank of Scotland and Standard Chartered were the weakest of Britain’s seven largest lenders in a Bank of England stress test.
For the second year, the central bank has subjected the UK’s biggest lenders to tests to measure whether they would survive a financial shock.
This time, it was assumed that oil had fallen to $38 a barrel and that the global economy had slumped.
No bank was ordered to come up with a new capital plan.
By Howard Mustoe 24 November 2015
The property market, like that of gold and oil, is a rather murky world.
The prices you’ll see on most websites are asking prices. The value of a done deal – the real price – can take land registries weeks to process, by which time a fast-paced market will have moved on.
So those on the inside doing the deals, such as estate agents and developers, have a distinct advantage.
Could technology help blast open this closed market?
By Howard Mustoe 24 November 2015
The past few months have seen a number of market watchers express concern about the corporate bond market.
This is a $10tn market in which companies sell debt to investors for set terms averaging about eight years.
The market has doubled in size in the past decade, swelled by cheap money after years of low interest rates.
At the same time, banks – the market-makers for these assets, or traditional shop front – have cut their holdings.
By Howard Mustoe 26 October 2015
After Libor, payment protection insurance, phone hacking and every other scandal, nothing appears to have been learned to stem the tide of bad behaviour from the world’s largest companies.
And now VW has been caught cheating on emissions tests.
Not only is this a close repetition of other corporate attempts to dodge regulation, it’s actually so uninventive that VW was caught and fined in 1973 for dodging similar tests. It paid $120,000 (the equivalent of about £400,000 today) and admitted no wrongdoing.
So, why does no-one appear to learn anything?
By Howard Mustoe 21 October 2015
David Cameron and President Xi Jingping have signed a deal agreeing to Chinese investment in a new nuclear power station in Somerset.
It will be largest inward investment ever in the UK. France’s EDF and CGN, a Chinese nuclear consortium, will build the plant, and possibly two more.
By Howard Mustoe 13 October 2015
Barclays is close to appointing former JP Morgan banker James “Jes” Staley as its new chief executive.
Hiring an investment banker is being seen by some analysts as a prelude to making a push back into that industry, one which the last holder of the top job, Antony Jenkins, was backing away from.
But will an expansion into a sector dominated by a few American names be successful? After all, this won’t be Barclays first drive into investment banking.
By Howard Mustoe 12 October 2015
MPs got their chance to grill UK representatives for Volkswagen and Transport Secretary Patrick McLoughlin earlier.
Details are still emerging about what the company does and does not know about what went wrong and how it plans to fix the situation.
By Howard Mustoe 5 August 2015
When he spoke in Parliament in 2011, former Barclays boss Bob Diamond claimed the time for apologising and remorse from lenders was over. He may have thought he had misjudged the mood when he was forced out of his bank a year later, under pressure from regulators.
But as Chancellor George Osborne presses for change at the City’s watchdog after sacking its chief, Martin Wheatley, cuts back a key tax on banks, and starts selling the government’s stake in Royal Bank of Scotland, are things now finally looking up for our financial institutions?
In spite of recent misdemeanours – not least this week’s conviction of the trader Tom Hayes for rigging Libor rates – are we ready to forgive them?
By Howard Mustoe 4 August 2015
The question on everyone’s lips is whether the taxpayer will get value for money from its investment in Royal Bank of Scotland as the government sells it back to private investors.
But the complexity of the investment, and the chaotic time during which the UK bailed out the bank, mean you can choose any answer you wish.
Overnight, the government has sold 5.4% of the bank for £2.1bn, booking a loss of about £1bn in selling the shares at 330p apiece.
Analysis: Howard Mustoe, business reporter
By Howard Mustoe, New York 15 June 2015
On Monday, laws which offer some of New York City’s renters protection from large hikes are due to expire.
Many people associate the rent rules with the TV shows Friends and Sex and the City, which allowed the protagonists to live in Manhattan with relatively modest-paying jobs.
Tenants are campaigning for stronger rules that will keep homes protected by law, while landlords worry about squeezed incomes and legislation they argue favours high-earners rather than the less well-off.
By Howard Mustoe, New York 21 May 2015
On Wednesday, four of the world’s largest banks – JP Morgan, Barclays, Citigroup and Royal Bank of Scotland – pleaded guilty to criminal charges in the US relating to the rigging of currency markets…
It is rare for a company to be found guilty of criminal behaviour. For some bank watchers this move represents a problem for regulators: aside from more fines, little else has changed, and they may have just played their best card.
Two years ago, the then US Attorney General Eric Holder opined that criminal charges against large banks could threaten the global economy. But now?
“Now it’s a non-event. We have trivialised the criminal penalties, so I don’t know what’s left,” says Cornelius Hurley, director of the Boston University Centre for Finance, Law & Policy.
By Howard Mustoe, New York 13 May 2015
AOL, the firm which told you “you’ve got mail” and delivered more CDs to your door than Amazon, is being bought by Verizon.
The deal values AOL at $4.4bn (£2.8bn), a long way from the mammoth $222bn price tag the company attracted 16 years ago during a boom in the share prices of technology firms.
AOL started life as Quantum Computer Services, which first provided an online service for the Commodore 64 computer system in 1985.
By Howard Mustoe 5 May 2015
HSBC, Europe’s largest bank, may be on the lookout for a new home.
When it announced its plan to review where to have its headquarters, it made passing references to “regulatory and structural reforms” and the UK’s plans to “ring fence” retail banks.
Some shareholders think a higher dividend would be available if the bank moved from London to a city with lower taxes and looser capital controls, according to people close to the lender.
It pays the most out of the UK’s lenders on the banking levy, handing over $1.1bn (£716m) to Britain’s Treasury last year.
But if it does decide to move, where could it go?
By Howard Mustoe 13 April 2015
Billionaire Mike Ashley’s Sports Direct International has been challenged in Parliament about how the firm is run.
Mr Ashley has been criticised before for the grip he has as a majority shareholder, on the firm – famous for selling top trainers on the cheap and indestructible oversized mugs.
The Institute of Directors says it has warned already that Mr Ashley holds too much sway and the IoD’s senior advisor on corporate governance, Oliver Parry says that there is no “effective check on [Mr Ashley’s] power”.
Now his firm’s handling of the collapse of one of its businesses, fashion chain USC, is also under scrutiny, being described at the Scottish Affairs Committee as “well dodgy”.
By Howard Mustoe 31 March 2015
The average chief executive trousered £4.5m in 2013 – more than 160 times the pay of the average Briton, and up 5% from 2012.
This research from the High Pay Centre is likely to put executive pay high up on the agenda during April’s annual general meeting (AGM) season.
While exorbitant levels of pay at the top may stick in the craw of hard-pressed workers trying to cope with falling wages and job insecurity, it seems that even business leaders themselves are growing concerned.
A recent poll of Institute of Directors members found that more than half thought excessive pay packets were eroding people’s trust in big companies.
So how can we curb boardroom wage inflation?
By Howard Mustoe 10 February 2015
For HSBC, revelations that it helped wealthy clients in Switzerland evade tax is part of a litany of scandals for it and other banks. Documents seen by Panorama show bankers helped clients evade tax and offered deals to help tax dodgers stay ahead of the law. But for some watching the lender and its peers, it is a case study of a much wider problem of governments not cracking down with enough urgency on dodged tax, and a useful lesson on the short arm of international law.
By Howard Mustoe 9 January 2015
The Money Shop, a payday lender owned by US firm Dollar Financial, is in the midst of a consultation process to close as many as 200 of its 500 stores… As many as 350 staff could be made redundant out of a total of about 3,000 employed by Money Shop, the company has confirmed… The company hopes to keep compulsory redundancies down by finding new roles for staff, sources told the BBC earlier.
By Howard Mustoe 13 November 2014
Oil firm Royal Dutch Shell was told a pipeline had reached the end of its life years before it spilled up to 500,000 barrels of oil, according to court documents seen by the BBC.
By Howard Mustoe 17 September 2014
As Scotland decides whether to become an independent nation, some financiers are asking themselves what this could mean for two of the oldest money centres in the world: London and Edinburgh.
Analysis: Howard Mustoe, business reporter
Part of Emilio Botin’s success was spotting the opportunities for Spain as it joined the European Community in 1986. This was a mere 11 years after the death of dictator Francisco Franco and the year Mr Botin took over the bank from his father.
He grew the bank through aggressive purchase of competitors, but also through banking services novel in Spain at the time, turning it into the largest bank by value in the eurozone today.
By Howard Mustoe 29 August 2014
Death, jingoism and stalemate are the themes for classroom lessons on World War One. But away from the mud of the trenches, advances in science and manufacturing helped to decide the outcome of the war. Some businesses prospered, while others saw a need to revamp themselves. And amid the flurry of invention and reinvention, some people were suspicious of the money being made while the bodies piled up.
By Howard Mustoe 17 June 2014
Not many people investing money in a pension or crowdfunding a project would consider they are participating in something as sinister-sounding as shadow banking.
However, as banks cut lending and businesses look for other ways to find the money they need, this area of finance is growing and attracting the attention of the government.
But what exactly is shadow banking?
By Howard Mustoe 5 June 2014
“Putting together the pipelines,” was how Pfizer chief executive Ian Read explained his proposed takeover of British drugmaking rival AstraZeneca.
“Let’s make sure we get good capital allocation… build a culture of ownership… flexible use of financial assets… productive science… opportunity to domicile… putting together the headcount,” were among his phrases as he faced MPs last month, much to the frustration of committee members.
By Howard Mustoe 20 March 2014
A change in pension rules heralded in the chancellor’s Budget speech means a retiree can now draw their entire pension in one go, if they wish. For some, the freedom will mean retirement planning that can better suit their needs. But what does it mean for the centuries-old annuity, and the security of an income for life which it provides?
Jan 31, 2014
HSBC Holdings Plc (HSBA), Europe’s largest bank, is planning to sell parts of its Swiss private bank as some foreign lenders retreat amid a crackdown on bank secrecy and rising regulatory scrutiny, four people with knowledge of the situation said.
Dec 9, 2013
HSBC Holdings Plc (HSBA), Europe’s largest bank, has no plans to sell a stake in its U.K. consumer unit, one of the most profitable in the country, said a person with direct knowledge of the matter.
May 23, 2013
Three U.K. business lobby groups told the European Union its proposed financial transaction tax will harm economic recovery and damage the trading bloc’s competitiveness.
The tax will be paid for by consumers, rather than the financial companies it targets, in the form of price increases, the Confederation of British Industry, the British Bankers’ Association and EEF, the U.K. manufacturers’ organization, said in a joint letter today, seen by Bloomberg News.
Apr 3, 2013
U.K. lenders are preparing to lobby the European Union’s chief banking regulator to reduce the number of employees hit by rules capping bonuses, two people familiar with the talks said.
Feb 27, 2013
Governments should let failing banks collapse rather than risk taxpayers’ money, according to Anthony Browne, chief executive officer of the British Bankers’ Association.
Jul 16, 2012
The U.K.’s Financial Services Authority refused to release questions it asked former Royal Bank of Scotland Group Plc Chief Executive Officer Fred Goodwin, regarding the bank’s near collapse, saying it’s his own personal information and may deter others from cooperating.
Jul 9, 2012
Barclays Plc (BARC) needs to find a successor for Robert Diamond who is the opposite of the American investment banker as a first step to restoring political trust.
Diamond, 60, quit last week after the London-based bank was fined a record 290 million pounds ($449 million) for trying to rig the London interbank offered rate, the benchmark interest rate for more than $360 trillion of securities.
Jul 4, 2012
When Robert Diamond took over Barclays Plc (BARC)’s shrinking securities unit in 1997 he vowed to turn the business into a leading global firm.
Fifteen years later, his success in creating a top investment bank, whose profit reached $4.7 billion in 2011, may hasten its split from the lender after the London-based bank admitted to trying to rig global interest rates. Diamond quit as Barclays’s chief executive officer yesterday and hours later Chief Operating Officer Jerry del Missier followed.
Dec 15, 2011
Barclays Plc (BARC)’s management is “99 percent to blame” for poor relationships with British politicians and regulators, said Bruce Packard, an analyst at Seymour Pierce Ltd. in London. Barclays Chief Executive Officer Robert Diamond and Anthony Jenkins, head of the bank’s consumer unit, faced questioning yesterday on banker pay and regulatory change by the House of Commons Treasury Committee in London.
Nov 7, 2011
Three-quarters of London financial professionals said the gap between rich and poor is too big, according to a report by the St. Paul’s Institute, a church group that seeks to engage banks with moral questions.
May 24, 2011
Hawker Beechcraft Corp., the private- aircraft manufacturer owned by Goldman Sachs Group Inc. (GS) and Onex Corp. (OCX), said it’s in negotiations about a joint venture that could lead to the production of planes in China.
Aug 24, 2010
Rolls-Royce Group Plc has yet to reopen a site used to trial jet engines for Boeing Co.’s 787 Dreamliner model and the rival Airbus SAS A350 after a $17 million turbine blew up on the test bed three weeks ago.
Jan 14, 2009
Small-cap technology companies from Silicon Valley to Israel, struggling to raise enough money to survive amid the credit crisis, are selling prized patents to stay in business.
By Jonathan Browning and Howard Mustoe Dec 24, 2009
National Express Group Plc offered to pay the U.K. government 100 million pounds ($160 million) in return for a staged withdrawal from the unprofitable East Coast railroad franchise, according to official documents obtained by Bloomberg News. The plan was rejected and the line nationalized.
By Howard Mustoe and Jonathan Browning Nov 18, 2009
Accountants, management consultants and custom tailors are donating increasing time and expertise to Britain’s Conservative opposition, anticipating the party will beat Prime Minister Gordon Brown in next year’s election.
Jul 3, 2009
British units of companies including Grupo Ferrovial SA (FER), Westfield Group (WDC) and Deutsche Bahn AG are shifting cash to the Conservative opposition from the Labour Party as Prime Minister Gordon Brown’s popularity ebbs.
By Howard Mustoe and Jonathan Browning April 17, 2009
U.K. Financial Investments Ltd., which oversees the government’s shareholdings in banks, is allowed to lend out the stock to short-sellers, who were only months ago attacked by politicians for destabilizing the banks.
By Caroline Alexander and Howard Mustoe Oct 9, 2008
Hidden in foliage next to a path in the southeast England seaside town of Hastings are digital cameras. Their target: litterbugs and dog walkers. The electronic eyes feed images to a monitoring unit, where they’re scanned and stored as evidence to prosecute people who discard garbage or fail to clean up after pets, a spokeswoman for the town council said.