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Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to http://pennystockpaycheck.com for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...

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Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...

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Cambodia: aftermath of fatal shoe factory collapse... Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday

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Spate of recent shock departures by 50-something CEOs While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted upOn approaching his 60th birthday...

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UK Uncut loses legal challenge over Goldman Sachs tax... While judge agreed the deal was 'not a glorious episode in the history of the Revenue', he ruled it was not unlawfulCampaign group UK Uncut Legal Action has lost its high court challenge over the legality...

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Are the UK growth pessimists right?

Category : Business

Past five years appear to be a dress rehearsal for future: smaller economy, falling living standards, austerity and fed up voters

Since the start of the crisis five years ago, mainstream economics has been waiting for life to return to normal. Whatever ideological differences they might have, Keynesians and monetarists share a faith that all it takes is time and the right policies to bring back the good times. What unites them is the belief that the tough time the world has been going through since the summer of 2007 is an aberration.

But what if it isn’t? What if – in the memorable phrase of Tony Crosland when the wheels came off the economy in the mid-1970s – the party’s over? What if the 25% share of the vote taken by Ukip at last week’s local elections is not just a here today, gone tomorrow protest, but a sign of the political disaffection to come?

Should that prove to be the case, it will necessitate a complete re-think of political economy, since the model of the past 70 years has relied on decent levels of growth providing the resources not just to raise personal consumption levels but also to allow the expansion of welfare provision.

There are three reasons why this might be an over-gloomy assessment. The first is that growth does at last seem to be picking up, even if slowly and unevenly. In the US, the housing market is on the mend and the financial system has been largely patched up. In Britain, demand for mortgages is rising, new car sales are robust and the forward-looking business surveys are looking stronger. Consumers seem to be fed up with being miserable and have started to spend a bit more.

The second reason why the dark clouds may eventually be banished is that this is not the first time people have predicted the end of growth and been proved wrong. You don’t need to go all the way back to Malthus for an example: in the 1970s, there were plenty of doomsters who said the limits to growth had been reached.

The final reason, linked to the second, is that every now and then a burst of technological innovation has come along to revitalise the western industrial model. It happened at the end of the 19th century with a wave of innovations that included the automobile, the aeroplane and the cinema, and there are those who think what’s happening in digital, biotechnology, robotics and energy will perform the same function over the next 10-15 years.

Let’s take these points in turn. It is certainly true that western economies – the eurozone apart – are enjoying some growth. It is also true that the emergency policy actions of late 2008 and early 2009 prevented a severe recession from turning into a rerun of the 1930s. But five years on these emergency measures are still in place. Not just that, they have been augmented over time and are now permanent features of macro-economic policy. We have become hooked on stimulus and this is not a healthy sign.

An alternative history of the past 40 years goes as follows. The growth pessimists were broadly right, but what they did not anticipate is that the west would find new, ingenious and often dangerous ways of keeping the show on the road: financial de-regulation, personal debt, globalisation, exploiting the environment. There are still a few tricks policymakers can turn, such as shale gas and quantitative easing, but essentially these are just new versions of the old tricks. The game is up.

Nor, if the American economist Robert Gordon is right, can we rely on the cavalry to arrive in the form of technological change. Gordon argues that the current wave of innovations will prove less growth rich than those of a century ago.

Stephen King, the chief economist at HSBC, says in his new book, When the Money Runs Out, that we should not take progress for granted and should instead be bracing ourselves for the end of western affluence. He says the stagnation is far from temporary and will reach crisis proportions before too long.

King paints a dystopian vision of the future in which nations recoil from globalisation and become more willing to fight over resources. Populations lose their faith in governments and in money that has been debased by attempts to revive growth.

You don’t need fully to buy into this argument to see that King might be on to something. In Britain, we have a set of economic assumptions: that the economy will expand by 2% or so a year; that rising house prices will provide owner-occupiers with a nest egg; that the nation is wealthy enough to spend more on the steadily increasing cost of health, education, pensions and care for its elderly citizens.

There would need to be a radical scaling back of expectations in the event that the trend rate of growth is no longer 2 to 2.5% a year but 1%. Some of the promises we have made ourselves about the future would look extravagant, even reckless. There would be hard choices to be made between higher taxes and pared-back provision of public services. There would be a struggle to secure the fruits of what little growth there was, which those with the sharpest elbows would win. Many people would be in the position of seeing their living standards drop year after year, and would be mightily unhappy as a result.

In reality, a dress rehearsal for this sort of world has been going on for the past five years. The economy is smaller now than it was in 2008; living standards have fallen sharply; austerity has been imposed and – as the support for Ukip shows – there is a great deal of disgruntlement about.

Received political wisdom is that David Cameron and the Conservatives have the most to lose from the rise of Ukip. That’s true if Nigel Farage is merely surfing a wave of Euroscepticism, but if he’s tapping into a deeper well of disquiet the political leader with the real headache is Ed Miliband.

Why? Because social democratic parties thrive in times of abundance and wither in times of dearth. A growing economy allows parties of the left to increase investment in public spending and to redistribute resources from rich to poor. When they preside over falling living standards and cuts in social provision, they get kicked out.

Many natural Labour supporters voted for Ukip last Thursday, even though the past three years under the coalition should have made the official opposition the receptacle for protest. Labour should have done much, much better. That it didn’t boils down to two things. The opposition is still blamed for the state of the economy when the crisis broke. More significantly, perhaps, Labour needs to show that the growth pessimists are wrong and that it has a plan for remedying the UK’s deep structural problems after the next election. As yet, it has not remotely done so.

• Stephen King: When the Money Runs Out; Yale University Press

Regulator surprised no bank bosses face charges over financial crisis

Category : Business

Andrew Bailey, head of Prudential Regulation Authority, says it’s odd action taken only against people lower down in failed banks

Britain’s most senior banking regulator has questioned why none of the bosses of the country’s failed banks have been formally charged over their roles in the financial crisis. Andrew Bailey, head of the new banking regulator, the Prudential Regulation Authority, said: “It is more than odd that action has been taken against people lower down in institutions, but no action has been taken at the top.”

At a conference debating how to rebuild trust in Britain’s scandal-hit banks, Bailey said it was a “source of surprise” that no senior bank directors have been disqualified. He pointed out that the secretary of state sought the disqualification of Barings Bank for their roles in failing to adequately supervise Nick Leeson.

Chuka Umunna, the shadow business secretary, said bankers caught trying to play the system in order to line their own pockets should be “thrown into jail”.

He said it “cannot be right” that benefit cheats who fiddle the system for a couple of hundred pounds are thrown into jail while “those who seek to rig the financial system and receive hundreds of thousands of pounds as a result never seem to suffer the same fate”.

In an impassioned speech at the Future of Financial Services summit in Canary Wharf on Monday, Umunna said the City would not be able to rebuild trust with society “until custodial sentences are imposed on those guilty of criminal wrongdoing in your sector”.

He said the “prospect of jail for gross wrongdoing” was one of the best ways to affect cultural change in Britain’s scandal-hit banks.

No bankers have been jailed in connection with the Libor rate-fixing scandal, but the Serious Fraud Office (SFO) has launched a criminal investigation and arrested three men. In the US, two former UBS employees have been charged.

Umunna acknowledged that politicians were hardly in the best position to lecture others on trust and morals. “We are less popular than you and we learned the hard way after the expenses scandal, when we had to get our house in order,” he said. “But at least the people saw politicians brought to book – with some of our number serving jail time for their wrongdoing.”

He also attacked Barclays for trying to sneak out news that it paid its bosses bonuses of £39.5m on budget day. Umunna said it “sent all the wrong messages”.

Ashok Vaswani, boss of retail and business banking at Barclays, who was also at the debate, admitted that the timing of the release was “a mistake”.

Labour will on Tuesday resume its push for changes to banking reforms going through parliament, calling for stronger immunities for whistleblowers.

In Tuesday’s parliamentary debate, Labour will table amendments to the bill to protect whistlebowers as well bolster protection for customers of savings schemes such as Farepak, which collapsed in 2006.

Labour will also produced figures showing that the government’s levy on balance sheets has brought in £2bn of revenue less than originally forecast.

Chris Leslie, a shadow Treasury minister, also intends to call for a full licensing review of bankers. “If a GP or a barrister was involved in serious misconduct, they would have to answer to the BMA or Bar Council ethical practice committees and could lose their licence – and so we also need similar processes for those who break financial regulations too,” Leslie said.

Financial workers sail through ‘fit and proper’ tests

Category : Business

Financial regulator turned down an average of one appointment for every 7,566 proposed in past six years, figures show

Britain’s financial regulator has blocked just 30 of a possible 227,000 applications to the sector’s most risk-sensitive jobs in the six years since the banking crisis erupted.

The renamed Financial Conduct Authority (FCA) rejected an average of one appointment for every 7,566 proposed by banking, insurance and other finance firms under the terms of its “approved persons” regime between April 2007 and the end of 2012, according to figures seen by Reuters.

Regulators overseeing London’s financial industry have been at the forefront of a Europe-wide drive to increase professional standards by scrutinising candidates slated for key roles, to try to ensure they have the requisite skills to do their jobs.

Members of the financial community said the rules, tightened in late 2008, would impede company hiring plans, and 1,850 of the 40,997 candidates put forward in the year to April 2009 voluntarily withdrew applications for approved status.

But the latest figures show the number of people withdrawing from assessment has fallen sharply, while rejections from the FCA have remained negligible.

Will Pomroy, corporate governance policy adviser at the National Association of Pension Funds, said he hoped the small number of failed applications reflected more robust assessments of staff competence, capability, honesty and integrity at company level.

“Investors expect the board to take responsibility – and be accountable – for setting the culture from the top and ensuring it filters down throughout the workforce,” Pomroy said. “They would not want to be relying solely on the assessments of the regulator for each individual employed in a controlled function – of which there are a large number.”

But others said they drew less comfort from the figures, suggesting that rejections might have fallen because staff were being coached to pass the tests or giving up promotion prospects because they did not want to risk humiliation, or other consequences, if they failed.

“Think of it in terms of Heisenberg’s uncertainty principle or the observer effect: directors are like subatomic particles, they behave differently under observation,” one industry sceptic said, on condition of anonymity.

The FCA does not break down rejections by year, but annual figures show the number of applications and withdrawals. The latest full-year figures show withdrawals came in at just 597 in the year to April 2012, against a peak of 1,850 in the year to April 2009.

“In addition to 30 applications for approval being formally refused since 2007, during the same period, over 7,000 applications were withdrawn after submission – many of which were after close scrutiny by the FSA,” a spokeswoman for the regulator said.

The UK’s “fitness and probity” process is one of the broadest in Europe, encompassing senior management and directors, and staff working in compliance, risk and internal audit across all firms authorised by the regulator.

Most assessments are done in writing but the regulator routinely interviews candidates for the most senior roles in “high-impact firms”, and carries out other interviews on a “risk-based approach if there are concerns about a candidate or firm”, the spokeswoman added.

Slovenia’s prime minister tries to quell eurozone bailout rumours

Category : Business

Bratusek insists government committed to fixing country’s banks, struggling with bad debts as double-dip recession continues

Slovenia’s prime minister has attempted to quash speculation that she will become the next eurozone leader to seek a bailout, after an influential report warned that the country faces the threat of a “severe banking crisis”.

On an official trip to Brussels on Tuesday, Alenka Bratusek insisted that her government was committed to fixing Slovenia’s banks, which are struggling with bad debts as a double-dip recession continues.

Bratusek admitted that Slovenia did not face an easy task, but denied that it would be forced to seek international help.

“The new government is determined to do everything in its power to solve its problems by itself,” she told a press conference, after holding talks with European Commission president José Manuel Barroso. “We are aware that the banking sector is the number one problem in

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