Date: Tuesday 19 Nov 2013
LONDON (ShareCast) - A crash in house prices is one of the fastest-growing risks for Britain’s lenders, according to a survey by the Bank of England. Banks, hedge funds and insurers told the central bank that the housing market was becoming a “bubble” that posed dangerous threats to financial stability. They also warned, in the Bank’s half-yearly Systemic Risk Survey of finance professionals, that a “snapback” in interest rates from the historic low of 0.5% to more normal levels would hit borrowers and send shares, property and debt markets reeling, The Times reports.
Liv Garfield, responsible for the £2.5bn rollout of super-fast fibre broadband as BT's boss of Openreach, is leaving to become chief executive of FTSE 100 water company Severn Trent. Garfield, 38, will take up the role in spring 2014 following the retirement of Tony Wray. Her annual salary will be £650,000, with a 25% pension contribution taking the package up to £812,500, and will also be eligible for an annual bonus of up to 120% of her £650,000 salary.The surprise move will be considered a blow for BT, according to The Guardian.
A US Senate hearing on the “risks, threats and promises” of virtual currencies sparked a new leg up in the price of Bitcoin, the experimental currency which has risen by more than 5,000% in value this year. An intervention by Ben Bernanke, chairman of the Federal Reserve, enabled Bitcoin’s enthusiasts to put the spotlight where they believe its potential value lies, namely as a cheaper alternative to the current system for transferring money around the world, the Financial Times says.
The company behind iconic British treats such as Jammie Dodgers and Wagon Wheels has been snapped up by a Canadian pension fund in a deal thought to be worth almost £350m. Burton’s Biscuits, which employs some 800 workers at its Sighthill plant in Edinburgh, has been sold to Ontario Teachers’ Pension Plan (OTPP). Jo Taylor, head of the pension fund’s London office, said the plan was to support growth plans at the business, with the possibility of using OTPP’s formidable firepower to make strategic acquisitions, The Scotsman says.
JPMorgan Chase is expected to pay around $4bn as part of a compensation agreement that could hit $13bn as talks to finalise the deal took place last night between the United States Government and the investment bank. The final settlement with the US Justice Department, which could be announced today, will include the previously reported $4bn that was agreed between JPMorgan and the Federal Housing Finance Agency, writes The Times.
British companies trying to plug the black holes in their final salary pension schemes have spent £182bn since the beginning of quantitative easing in 2009. The introduction of the Bank of England's 'money printing' economic stimulus measure has taken a substantial toll on firms running lucrative defined benefits pension schemes. They pumped £29bn into reducing their deficits in 2012/13. This is actually a fall on the £36bn paid in 2011/12, but employers have made an additional £18bn in 'special' payments to ensure their shortfalls don't widen even further, according to The Daily Mail.
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