Morning papers: RBS traders boasted of Libor ‘cartel’
This morning’s headlines brought to you by Investment Adviser: Thursday September 27 2012
Senior traders at Royal Bank of Scotland (RBS) boasted about operating a “cartel” that made “amazing” amounts of money by rigging interest rates, it has been disclosed, reports the Daily Telegraph.
Internal messages revealed in court documents apparently show how traders claimed they could manipulate Libor, which is used to set borrowing costs for millions of businesses, consumers and investors.
The messages, some sent just months before the taxpayer was forced to bail out RBS at a cost of more than £40bn, have now dragged the taxpayer-backed lender to the heart of the Libor scandal.
Banks bamboozle politicians, BoE official says
A senior Bank of England official last night accused bankers of “propagating myths” and “exploiting fear” to hold back much-needed reform and protect their bonuses, reports the Daily Mail.
Robert Jenkins said “formidable” bank lobby groups are still managing to “bewitch” and “bamboozle” politicians five years on from the financial crisis.
Rajoy fights growing Spanish turmoil
Mariano Rajoy will today attempt to stave off a backlash from financial markets by announcing budget plans for next year, as the Spanish prime minister faces the most testing 48 hours of his nine-month-old tenure, reports the Financial Times.
As protesters descended on Spain’s parliament for a second night, Mr Rajoy called on Spaniards to ignore “short-term interests”. His government is also preparing to unveil a new reform programme and the results of a banking stress test.
EU urges action to fix debt woes
The European Commission yesterday distanced itself from a German, Finnish and Dutch statement that appeared to dash hopes that the eurozone’s bailout fund could soon be used to directly recapitalise banks in countries like Spain, which stands on the brink of bankruptcy because of a severe banking crisis, reports the Wall Street Journal.
Olivier Bailly, a commission spokesman, said eurozone governments should move “quickly” to break the link between bank troubles and sovereign debt and that an agreement reached in June by eurozone governments was “extremely clear” in expressing a determination to sever that tie.
EU group votes to curb high-frequency trades
Curbs on firms that trade shares faster than the blink of an eye moved a step nearer in the EU on Wednesday when a committee of the European parliament voted unanimously to introduce sweeping reforms of securities markets, reports the Guardian.
High-frequency trading has been singled out by regulators and policymakers on both sides of the Atlantic for favouring speculators and adding to share price volatility.
Debt-hit eurozone faces a ‘lost decade’ of economic pain and surging unemployment
The eurozone faces a “lost decade” of economic woe and sky-high unemployment as it struggles to recover from the sovereign debt crisis, according to a hard-hitting report published today, reports the Daily Mail.