Morning papers: Cyprus unveils fresh rescue plan

Cyprus announced plans yesterday to overhaul its banking industry and force losses on big depositors as the European Central Bank (ECB) threatened to withdraw crucial funding if the island’s government failed to agree on a bailout, reports The Financial Times.

Panicos Demetriades, Central Bank of Cyprus governor, said parliament would be asked to wind up Laiki, the island’s second lender, and split it into a “good” and “bad” bank, with larger deposits folded into the latter.

Financial Conduct Authority chief says increasing fines will not change culture

Increasing the level of fines on highly profitable financial institutions will not alter their behaviour, the head of the Financial Conduct Authority (FCA) said on Thursday as he set out his vision for the new regulator, reports The Guardian.

Martin Wheatley, chief executive of the FCA, also admitted that there was a concern that the situation in Cyprus, where banks have been closed since Friday while the country hammers out details of a €17bn (£14.4bn) bailout, could cause problems elsewhere.

FCA promises a lighter regulatory touch

The leaders of new Financial Conduct Authority, which takes over investor protection and policing markets next month, called on Thursday for a more co-operative approach to regulation in which prevention of harm rather than enforcement would be the primary goal, reports The Financial Times.

US Congress averts government shutdown

The US Congress approved legislation to extend funding for the government until the end of September, averting a shutdown and blunting the impact of $85bn (£56bn) in budget cuts for a handful of federal agencies, reports The Financial Times.

The votes in the House of Representatives on Thursday morning and the Senate on Wednesday night were both overwhelmingly bipartisan, a sign of the uncomfortable truce that has set in on Capitol Hill over fiscal policy – at least on the simplest matter of keeping the government operating.

Bank of Japan vows ‘all means available’ to smash deflation

The Bank of Japan’s new governor Haruhiko Kuroda vowed to deploy “all means available” to end two decades of stagnation and kick-start economic revival, but insisted that there would be no attempt to steal a march on trade competitors by driving down the yen, reports The Telegraph.

“I will make an all-out effort to pull Japan’s economy out of deflation,” he said on his first day in office, promising to push through the revolutionary agenda of premier Shinzo Abe, which has that have set off a blistering 40 per cent rally on the Tokyo bourse since November.

Hedge fund managers hail revival at last

Leading hedge fund managers are reaping some of their biggest profits in years with many now hopeful that 2013 will prove to be a turnround year for the troubled industry, reports The Financial Times.

The first quarter is likely to be one of the strongest ever for some hedge funds, in spite of a host of macroeconomic concerns worrying many mainstream investors.