Dividend stocks – dubbed “the new fixed income” as investors search for yield amid historically low interest rates – could be among the investments most sensitive to US Federal Reserve chairman Ben Bernanke’s impending pronouncements on monetary easing, reports the Financial Times.
US utilities stocks are down 8.7 per cent and telecommunications equities 3.9 per cent lower since the end of April when talk began that the Fed may taper its quantitative easing programme, making them the two worst sectors in the US equity market.
Banking Commission: Bankers should face threat of jail and loss of bonuses
Senior bankers should face jail and the loss of millions of pounds in bonuses if they are involved in a future banking collapse, according to a report by a cross-party group of MPs and peers, reports the Daily Telegraph.
The government has been urged to introduce a new criminal offence for “senior persons” who run banks in a “reckless manner”, as well as much more stringent clawback rules that could see managers being stripped of several years’ worth of pay.
Huge Treasury black hole opens as pension costs soar
George Osborne faces a £3bn hole in the public finances after failing to curb the public sector pension bill, reports The Times.
Days before the chancellor finalises his spending round for 2015-16, it has emerged that the move to force 6m public sector workers to pay more into their pensions has failed to make savings.
Co-op restructuring sparks bond confusion
The debt restructuring of Britain’s Co-operative Bank has sparked confusion among bondholders over the risks to investors for when European banks “bail in” their lenders, reports the Financial Times.
The decision to impose possible losses on subordinated debt holders and convert their bonds to shares makes the mutually owned bank the latest of several European financial institutions to upset bondholders, albeit in different circumstances. Analysts warned banks’ funding costs could rise.
Rupert Murdoch splits empire but keeps faith in tomorrow’s newspapers
Rupert Murdoch’s News Corporation will be split in half on Wednesday as the mogul hopes to build two new empires out of his vast portfolio of assets. It is likely to prove the octogenarian’s final major corporate move, and once again he is betting he has seen an opportunity others have missed, reports the Guardian.
The profitable entertainment assets – including the 20th Century Fox movie studio and the Fox broadcast network in the US – will form 21st Century Fox.
Chief defends Lloyds over PPI but admits complaint failings
Lloyds Banking Group has done “absolutely the right thing” to ensure that its customers get compensation for mis-sold payment protection insurance, its chief executive told MPs yesterday, reports The Times.
António Horta-Osório said that PPI mis-selling was “totally unacceptable” but admitted that when it came to dealing with complaints, it “doesn’t mean, like in real life, that you get 10 out of 10 right”. He was responding to a question from the Treasury Select Committee member John Mann, who said that Lloyds appeared to have been “trying to avoid paying full and proper compensation” to some of its customers.
