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January 31, 2012

Elizabeth II annuls Fred Goodwin knighthood

Elizabeth II annuls Fred Goodwin knighthood

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Tuesday, January 31, 2012

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Queen Elizabeth II, the British monarch, has today withdrawn and annulled a knighthood given to Fred Goodwin in 2004, heeding the advice given to her by a forfeiture committee. Goodwin is the former chief executive at the Royal Bank of Scotland Group (RBS) and was awarded his knighthood by the British government of the time for services to banking. The committee concluded “that widespread concerns about Fred Goodwin’s decision meant that the retention of a knighthood for services to banking could not be sustained.”

Goodwin was chief executive of RBS when they purchased ABN AMRO, a Netherlands bank, in 2007. The British government subsequently bailed out RBS for £45 billion, amidst the late-2000s financial crisis.

British prime minister David Cameron stated about the annulment: “The proper process has been followed and I think we’ve ended up with the right decision.” Cameron and Ed Miliband, UK Leader of the Opposition, both believed Goodwin’s knighthood should be removed. Miliband called it “the start of the change we need in our boardrooms.”

Liberal Democrat leader and Deputy PM Nick Clegg considered it to be the “right decision”. “[A]ppropriate” was the word George Osborne, Chancellor of the Exchequer used to describe it. “RBS came to symbolise everything that went wrong in the British economy in the last decade,” Osborne stated. Alex Salmond, First Minister of Scotland stated the title was given “for services to banking which could not therefore be sustained”, calling the decision “correct”.

Goodwin does not have the right to appeal against the decision, nor had the right to provide the forfeiture committee with any representations. The monarch holds sole responsibility for withdrawing all knighthoods; on this occasion Elizabeth II followed the advice of the committee, who decided to recommend the withdrawal to her. The Cabinet Office announced the advice had been given to the queen on the understanding that “Goodwin had brought the honours system in to disrepute”.

Speaking of the “exceptional case”, the committee explained: “In 2008, the government had to provide £20 billion of new equity to recapitalise RBS and ensure its survival and prevent the collapse of confidence in the British banking system. Subsequent increases in government capital have brought the total necessary injection of taxpayers’ money in RBS to £45.5 billion.” The committee understood that “Fred Goodwin was the dominant decision maker at RBS at the time.”

Until this announcement, criminal conviction and professional expulsion were the only causes for which individuals had their knighthoods revoked.



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April 11, 2011

Iceland voters reject deal to repay billions to UK, Dutch

Iceland voters reject deal to repay billions to UK, Dutch

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Monday, April 11, 2011

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Results from Iceland’s referendum on Saturday show that Icelanders overwhelmingly voted “no” on a government-approved plan to repay Britain and the Netherlands billions of euros lost in Iceland’s 2008 bank crash.

In Sunday’s final results almost 60 percent rejected the deal, with the voting turnout high, the government reported. This is the second repayment plan rejected by the voters; the first one was rejected by 93 percent last year.

British and Dutch investors lost 3.9 billion euros ($5.6 billion) in Icesave, an Icelandic internet bank that failed in Iceland’s economic collapse of 2008. The two governments reimbursed their citizens and are now seeking repayment from Iceland. Iceland compensated its own citizens for losses but not overseas depositors.

The latest repayment plan took two years to work out between Britain, the Netherlands and Iceland and was passed by a 70 percent majority of the Icelandic parliament. It provided for a lower interest rate and a longer repayment period, conditions much more beneficial to Iceland than the previous plan. The cost would average about 12,000 euros before interest per Icelander. Those against the referendum felt that amount was a heavy burden on Iceland and the taxpayer was not legally responsible for a private bank’s losses.

In a press conference, Iceland’s Finance Minister Steingrimur Sigfusson said, “I think it’s very hard to interpret this in any other way than the fact that the Icelandic people are not prepared to accept payments or shoulder the burden unless there is a clear legal obligation to do so.” He said that Iceland can pay its debts and the country has the reserves to cover future payments.

But Iceland’s Prime Minister Jóhanna Sigurðardóttir said the referendum results were disappointing and have divided the country. She considers acceptance of the payment plan essential to Iceland’s attempts to join the European Union (EU). Under an EU directive, Britain and the Netherlands are owed compensation by Iceland. The International Monetary Fund’s 2009 loan to Iceland of $2.1 billion contained the provision that Iceland repay the British and Dutch governments. Britain and the Netherlands are in a position to block Iceland’s application for European Union membership.

The Netherlands and Britain said the opportunity to negotiate has passed and the dispute will end up before the European Free Trade Association, the court for the European Economic Area.

British Chief Secretary to the Treasury Danny Alexander said that the British government had fulfilled its obligation to its citizens to compensate them for their losses. “We have an obligation now to get that money back, and we will continue to pursue that until we do. … We have a difficult financial position as a country and this money would help.”

Dutch Finance Minister Jan Kees de Jager said, “Iceland remains obliged to repay. The issue is now for the courts to decide.”

The increasingly bitter dispute must be resolved for Iceland to have access to financial markets essential to fund its recovery, experts say, and resolution is essential for Iceland’s attempts to become an EU member.



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April 17, 2010

US bank Goldman Sachs accused of fraud

US bank Goldman Sachs accused of fraud – Wikinews, the free news source

US bank Goldman Sachs accused of fraud

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Saturday, April 17, 2010

US bank Goldman Sachs has been accused of fraud by the American regulator Securities and Exchange Commission (SEC).

Cquote1.svg Goldman Sachs arranged a transaction at Paulson’s request in which Paulson heavily influenced the selection of the portfolio to suit its economic interests Cquote2.svg

—A statement from the SEC, accusing Goldman Sachs of fraud

According to the SEC, Goldman Sachs failed to inform investors of a conflict of interest in the banks’ marketing of sub-prime mortgage investments, which were being sold at a time of uncertainty in the US housing market. The SEC says that a Goldman subsidiary, Paulson & Co, had been involved in the selection of securities included in the mortgage investments. It had not been disclosed to investors that Paulson had bet that the value of the investments would fall, benefiting Paulson but not those who bought the investments.

The securities, which were combined into a package called Abacus that was sold to investors, lost over $1 billion during the collapse of the US housing industry. According to the SEC, Goldman, Paulson, and the creator of Abacus, a vice-president of Goldman Sachs named Fabrice Tourre, all knew that the housing market was going to collapse, but continued to sell Abacus despite the risks.

Tourre had been in command of selecting the investments within Abacus, and then was the person responsible for selling it to investors. He had told those who invested in Abacus that its components had been selected by an independent party, ACA Management.

In all, 99% of the investments within Abacus were downgraded, and investors lost upwards of a billion US dollars.

The SEC alleged that “Goldman Sachs arranged a transaction at Paulson’s request in which Paulson heavily influenced the selection of the portfolio to suit its economic interests.” In a short response from Goldman, the bank said that “The SEC’s charges are completely unfounded in law and fact and we will vigorously contest them and defend the firm and its reputation.”



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April 3, 2009

G20 Summit plans to inject US$5tn into economy before 2011

G20 Summit plans to inject US$5tn into economy before 2011

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Friday, April 3, 2009

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The G20 Summit held in London, England concluded Thursday with an injection into the economy of US$5 trillion by the end of 2010.

Global trade would be supported by $250 billion (169.5 billion pounds). “We are going to act decisively to kickstart international trade. We will ensure availability of at least $250 billion over the next two years,” said Gordon Brown Prime Minister of the United Kingdom.

The International Monetary Fund IMF will have access to $750bn in resources of which $250bn will support special drawing rights.

Developing countries received $100bn which will be dispensed via Multilateral development banks. Towards this end, the IMF will sell off gold reserves.

China will support the IMF fund by $40bn, the European Union by $100bn, and Japan by $100bn.

There will be increased regulation on banking and credit ratings agencies. There was a commitment to clamp down on hedge funds, tax havens and toxic assets. To restore consumer confidence in the financial sector, a new Financial Stability Board will be initiated internationally. There would be new policies implemented to control pay and bonuses paid to the heads of banks and corporations.

The G20 leaders were adverse to protectionism and rallied to support international trade and investment.

The Leaders’ statement said, “We reaffirm the commitment made in Washington: to refrain from raising new barriers to investment or to trade in goods and services, imposing new export restrictions, or implementing World Trade Organization (WTO) inconsistent measures to stimulate exports.”

Eoin O’Malley, senior adviser on international trade at BusinessEurope, said “The measure also needs to be part of wider package to avoid protectionism and conclude the Doha round which will stimulate trade growth. The key point now is to move forward with Doha. The key now is implementation. G20 governments must act quickly to provide this finance to companies that need it urgently.”



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February 5, 2009

Wikinews Shorts: February 5, 2009

Wikinews Shorts: February 5, 2009 – Wikinews, the free news source

Wikinews Shorts: February 5, 2009

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A compilation of brief news reports for Thursday, February 5, 2009.

Help Wikinews! Contribute to Wikinews by expanding these briefs or add a new one.

Flight 1549 transcript released

The United States Federal Aviation Administration has released a transcript of the conversations that went on between Flight 1549 and the control tower at La Guardia before the airplane crash landed in the Hudson river. All 155 passengers and crew survived and were rescued by a flotilla of boats.

The transcripts reveal that the pilot, Chesley Sullenberger, realised that both engines had been disabled by bird strike and that the airplane was about to crash. Controllers attempted to clear runways at nearby airports but Sullenberger had to put down immediately, telling them “we’re going to be in the Hudson”.

The transcript, in PDF format, can be read here.

Sources


UK house prices rise despite recession

The average price of a house in the United Kingdom rose by 1.9% in January, according to a survey by the mortgage lender Halifax. This takes the average price to £163,966 – a rise, according to The Daily Mail, of £100 a day, although their headline and story do not agree on the figure.

Year-on-year figures show that prices fell 17.2% since January 2007, and 5.1% over the last three months. A similar survey by the Nationwide Building Society said that prices fell 1.3% in January. The Daily Mail says 1.2 million households now have “negative equity”, where the mortgage on their property is more than the property is actually worth.

Sources


Bank of England cuts interest rate; European Central Bank waits

The Bank of England, the UK’s central bank, has cut interest rates to their lowest level since the bank was created in 1694. The new base rate is to be 1%, down half a percentage point.

Meanwhile, the European Central Bank, which governs rates in the Eurozone, has left its rates unchanged at 2%, but has hinted that a half point cut is possible in the next review in a month’s time.

Sources


U.S. new unemployment at 26-year high

The U.S. Department of Labor says that initial jobless claims in the country have gone up 35,000 to a seasonally adjusted 626,000. The figures for the last week of January are the highest since 1982. The four-week average, which removes anomolies like strikes and holidays, were up 39,000 to 582,250. America now has 4.788 million people unemployed and claiming welfare. Bloomberg believes that 7.5% of the working population will be unemployed in figures to be released tomorrow.

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February 2, 2009

Barclays Bank credit rating cut by Moody\’s

Barclays Bank credit rating cut by Moody’s

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Monday, February 2, 2009

Barclays Bank branch in Westminster, London
Image: David Edgar.

An international credit ratings agency has downgraded the creditworthiness of British bank Barclays LSE: BARC

The bank’s shares fell on the news that Moody’s had cut long-term debt ratings from “Aa1” to “Aa3” on the back of fears of nationalization, significant losses and write downs of more bad loans as the recession bites. The bank’s financial strength was also downgraded from “C” to “B”. Last week, another agency, Fitch, downgraded the bank one step to “AA-minus”.

Barclays is one of the few major “High Street” banks in the UK not to have taken any government capital support. The support is given in return for shares, giving the government significant – sometimes even controlling – stakes in other banks, such as Lloyds Banking Group and the Royal Bank of Scotland Group.

Moody’s said that the downgrades “reflect [our] expectation of potentially significant further losses at Barclays as a result of write-downs on credit market exposures as well as an increase in impairments in the UK, which could weaken profitability and capital ratios… [we consider] the systemic importance of the bank and the likelihood of receiving government support in case of need to be high.”

The bank has forecast a pre-tax profit of £5.3 billion for 2008. It has £36 billion in committed capital equity and expects gross write downs of £8 billion. The bank has recently been referred to the UK’s Serious Fraud Office over allegations of breaching South Africa’s foreign exchange controls, something the bank denies.



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This text comes from Wikinews. Permission is granted to copy, distribute and/or modify this document under the terms of the Creative Commons Attribution 2.5 licence. For a complete list of contributors for this article, visit the corresponding history entry on Wikinews.

Barclays Bank credit rating downgraded

Monday, February 2, 2009

Barclays Bank branch in Westminster, London
Image: David Edgar.

An international credit ratings agency has downgraded the creditworthiness of British bank Barclays LSE: BARC

The bank’s shares fell on the news that Moody’s had cut long-term debt ratings from “Aa1” to “Aa3” on the back of fears of nationalization, significant losses and write downs of more bad loans as the recession bites. The bank’s financial strength was also downgraded from “C” to “B”. Last week, another agency, Fitch, downgraded the bank one step to “AA-minus”.

Barclays is one of the few major “High Street” banks in the UK not to have taken any government capital support. The support is given in return for shares, giving the government significant – sometimes even controlling – stakes in other banks, such as Lloyds Banking Group and the Royal Bank of Scotland Group.

Moody’s said that the downgrades “reflect [our] expectation of potentially significant further losses at Barclays as a result of write-downs on credit market exposures as well as an increase in impairments in the UK, which could weaken profitability and capital ratios… [we consider] the systemic importance of the bank and the likelihood of receiving government support in case of need to be high.”

The bank has forecast a pre-tax profit of £5.3 billion for 2008. It has £36 billion in committed capital equity and expects gross write downs of £8 billion. The bank has recently been referred to the UK’s Serious Fraud Office over allegations of breaching South Africa’s foreign exchange controls, something the bank denies.


Sources

  • Bill Condie (Evening Standard) “Moody’s cuts Barclays’ credit rating”. thisismoney.co.uk, February 2, 2009
  • Graham Ruddick “Barclays has credit rating downgraded”. The Daily Telegraph, February 2, 2009
  • Natalie Holt “Concern over “significant losses” at Barclays”. Mortgage Strategy, February 2, 2009
This text comes from Wikinews. Permission is granted to copy, distribute and/or modify this document under the terms of the GNU Free Documentation License, Version 1.2 or any later version published by the Free Software Foundation; with no Invariant Sections, no Front-Cover Texts, and no Back-Cover Texts. For a complete list of contributors for this article, visit the corresponding history entry on Wikinews.

Barclays Bank credit rating cut by Moody’s

Monday, February 2, 2009

Barclays Bank branch in Westminster, London
Image: David Edgar.

An international credit ratings agency has downgraded the creditworthiness of British bank Barclays LSE: BARC

The bank’s shares fell on the news that Moody’s had cut long-term debt ratings from “Aa1” to “Aa3” on the back of fears of nationalization, significant losses and write downs of more bad loans as the recession bites. The bank’s financial strength was also downgraded from “C” to “B”. Last week, another agency, Fitch, downgraded the bank one step to “AA-minus”.

Barclays is one of the few major “High Street” banks in the UK not to have taken any government capital support. The support is given in return for shares, giving the government significant – sometimes even controlling – stakes in other banks, such as Lloyds Banking Group and the Royal Bank of Scotland Group.

Moody’s said that the downgrades “reflect [our] expectation of potentially significant further losses at Barclays as a result of write-downs on credit market exposures as well as an increase in impairments in the UK, which could weaken profitability and capital ratios… [we consider] the systemic importance of the bank and the likelihood of receiving government support in case of need to be high.”

The bank has forecast a pre-tax profit of £5.3 billion for 2008. It has £36 billion in committed capital equity and expects gross write downs of £8 billion. The bank has recently been referred to the UK’s Serious Fraud Office over allegations of breaching South Africa’s foreign exchange controls, something the bank denies.


Sources

  • Bill Condie (Evening Standard) “Moody’s cuts Barclays’ credit rating”. thisismoney.co.uk, February 2, 2009
  • Graham Ruddick “Barclays has credit rating downgraded”. The Daily Telegraph, February 2, 2009
  • Natalie Holt “Concern over “significant losses” at Barclays”. Mortgage Strategy, February 2, 2009
This text comes from Wikinews. Permission is granted to copy, distribute and/or modify this document under the terms of the GNU Free Documentation License, Version 1.2 or any later version published by the Free Software Foundation; with no Invariant Sections, no Front-Cover Texts, and no Back-Cover Texts. For a complete list of contributors for this article, visit the corresponding history entry on Wikinews.

Barclays Bank credit rating cut by Moody’s

Monday, February 2, 2009

Barclays Bank branch in Westminster, London
Image: David Edgar.

An international credit ratings agency has downgraded the creditworthiness of British bank Barclays LSE: BARC

The bank’s shares fell on the news that Moody’s had cut long-term debt ratings from “Aa1” to “Aa3” on the back of fears of nationalization, significant losses and write downs of more bad loans as the recession bites. The bank’s financial strength was also downgraded from “C” to “B”. Last week, another agency, Fitch, downgraded the bank one step to “AA-minus”.

Barclays is one of the few major “High Street” banks in the UK not to have taken any government capital support. The support is given in return for shares, giving the government significant – sometimes even controlling – stakes in other banks, such as Lloyds Banking Group and the Royal Bank of Scotland Group.

Moody’s said that the downgrades “reflect [our] expectation of potentially significant further losses at Barclays as a result of write-downs on credit market exposures as well as an increase in impairments in the UK, which could weaken profitability and capital ratios… [we consider] the systemic importance of the bank and the likelihood of receiving government support in case of need to be high.”

The bank has forecast a pre-tax profit of £5.3 billion for 2008. It has £36 billion in committed capital equity and expects gross write downs of £8 billion. The bank has recently been referred to the UK’s Serious Fraud Office over allegations of breaching South Africa’s foreign exchange controls, something the bank denies.


Sources

  • Bill Condie (Evening Standard) “Moody’s cuts Barclays’ credit rating”. thisismoney.co.uk, February 2, 2009
  • Graham Ruddick “Barclays has credit rating downgraded”. The Daily Telegraph, February 2, 2009
  • Natalie Holt “Concern over “significant losses” at Barclays”. Mortgage Strategy, February 2, 2009
This text comes from Wikinews. Permission is granted to copy, distribute and/or modify this document under the terms of the GNU Free Documentation License, Version 1.2 or any later version published by the Free Software Foundation; with no Invariant Sections, no Front-Cover Texts, and no Back-Cover Texts. For a complete list of contributors for this article, visit the corresponding history entry on Wikinews.

Barclays Bank credit rating cut by Moody’s

Monday, February 2, 2009

Barclays Bank branch in Westminster, London
Image: David Edgar.

An international credit ratings agency has downgraded the creditworthiness of British bank Barclays LSEBARC

The bank’s shares fell on the news that Moody’s had cut long-term debt ratings from “Aa1” to “Aa3” on the back of fears of nationalization, significant losses and write downs of more bad loans as the recession bites. The bank’s financial strength was also downgraded from “C” to “B”. Last week, another agency, Fitch, downgraded the bank one step to “AA-minus”.

Barclays is one of the few major “High Street” banks in the UK not to have taken any government capital support. The support is given in return for shares, giving the government significant – sometimes even controlling – stakes in other banks, such as Lloyds Banking Group and the Royal Bank of Scotland Group.

Moody’s said that the downgrades “reflect [our] expectation of potentially significant further losses at Barclays as a result of write-downs on credit market exposures as well as an increase in impairments in the UK, which could weaken profitability and capital ratios… [we consider] the systemic importance of the bank and the likelihood of receiving government support in case of need to be high.”

The bank has forecast a pre-tax profit of £5.3 billion for 2008. It has £36 billion in committed capital equity and expects gross write downs of £8 billion. The bank has recently been referred to the UK’s Serious Fraud Office over allegations of breaching South Africa’s foreign exchange controls, something the bank denies.


Sources

  • Bill Condie (Evening Standard) “Moody’s cuts Barclays’ credit rating”. thisismoney.co.uk, February 2, 2009
  • Graham Ruddick “Barclays has credit rating downgraded”. The Daily Telegraph, February 2, 2009
  • Natalie Holt “Concern over “significant losses” at Barclays”. Mortgage Strategy, February 2, 2009


This text comes from Wikinews. Permission is granted to copy, distribute and/or modify this document under the terms of the GNU Free Documentation License, Version 1.2 or any later version published by the Free Software Foundation; with no Invariant Sections, no Front-Cover Texts, and no Back-Cover Texts. For a complete list of contributors for this article, visit the corresponding history entry on Wikinews.
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