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Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to 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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Swiss bank UBS returns to profit

Category : Business

Swiss bank UBS returned to profit in the first three months of the year, after racking up big losses related to the Libor scandal at the end of 2012.

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SEC OKs Nasdaq’s $62 million Facebook payout

Category : Business

Knight Capital, Citadel, Citigroup and UBS lost a combined $500 million due to technical glitches at the Nasdaq during Facebook’s IPO.

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UBS banker gets $26m ‘golden hello’

Category : Business

The new head of UBS’s investment bank, Andrea Orcel, receives a $26m “golden hello” in 2012, the bank’s annual report reveals.

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UBS fined for mis-selling AIG fund

Category : World News

Swiss bank UBS is fined £9.45m by the Financial Services Authority for mis-selling an investment fund from insurer AIG.

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VIDEO: Davos: UBS chairman on bank’s future

Category : Business, World News

The chairman of UBS has spoken about his vision for the future of the bank at the World Economic Forum in Davos.

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After a humiliating year, bank bonuses are sure to be negligible. Aren’t they?

Category : Business

The appearance before MPs of one genuinely humbled banker – UBS’s Marcel Rohner – is, sadly, not a sign that the industry as a whole has learned moderation

A truly humbled former bank boss appeared before MPs and peers last week. Marcel Rohner may not be a household name in the UK but in Switzerland – where he ran UBS during the height of the banking crisis – he is high-profile, albeit publicity-shy.

The letter Rohner wrote to the committee before his appearance – published only on Friday – made it clear that as a Swiss citizen and resident he was appearing voluntarily before Britain’s parliamentary banking standards commission. Admitting that he could “expose myself to the possible risk of reputational harm” by his appearance before the commission, chaired by MP Andrew Tyrie, Rohner also made it clear that he “almost certainly” will never hold an executive position in a financial institution again.

During his appearance – and that of three other former top UBS bankers – he provided a reminder of the precarious state that the industry had been in, as he recalled how he had presided over eight profits warnings and three fundraisings during his tenure between 2007 and 2009.

This was the humbled face of banking that is not often witnessed. Indeed, sitting alongside Rohner was former colleague Huw Jenkins, now a top adviser at the bank BTG Pactual, who was forced to admit he was handed £10m a year by the bank – a rare insight into the kind of pay dished out in the runup to the crisis.

For a while after the 2008 bailouts, high pay was put on hold, but it was not long before the acronym “BAB” – bonuses are back – was bouncing around the City again. And this year is likely to see the trend continuing: in the coming days, big-name players – and payers – such as Goldman Sachs, Morgan Stanley and JP Morgan will be informing staff of the size of their bonus cheques for 2012.

It is an annual jamboree that will be followed up at European banks in the coming weeks when the likes of UBS, Barclays and even bailed-out Royal Bank of Scotland all “compensate” their employees for turning up to work.

To anyone outside the financial arena – and even some of those within it– the sums of money being handed out are unimaginable. Tyrie’s commission again provided a reminder of this: it also took evidence from Andrea Orcel, the man hired by UBS to sort out its investment bank, who in 2007 is said to have received a £7.5m fee from his then employer, Merrill Lynch, for advising on what proved to be one of the most disastrous deals of recent times – Royal Bank of Scotland’s acquisition of Dutch bank ABN Amro. That fee was reported to be only part of his “compensation” for a year in which the bottom fell out of the banking industry, taxpayers were left dangling on the hook and havoc was wreaked across world economies.

The pain is still being felt. Evidence is emerging that the UK is hurtling towards a triple-dip recession – fourth-quarter GDP data on 25 January will be the first official pointer – and big-name UK employers such as Honda are cutting back their workforces.

In the coming weeks, be ready for the City to claim that it is taking its share of the pain. “Comp” – as City types refer to their remuneration – is forecast to slide for 2012, even though profits in many areas are up. Shareholders and regulators are making it clear that the scandals of 2012 – the Libor-rigging that has shamed UBS being just one – should be reflected in pay.

But take it all with large dose of salt. The banks might think their bonuses are moderate, but in the real world they’ll look anything but.

RPI, RPIX, CPIH: whatever official index you use, it all spells inflation

Statisticians may boggle our brains with their fiendish equations, but we should at least be able to expect them to be paragons of clear thinking. Yet the Office for National Statistics’ decision last week to reject radical changes to the methodology for calculating the retail prices index, while conceding that it systematically overestimates inflation, was hardly a display of hard-nosed mathematical purity.

Instead, Jil Matheson, who glories in the title of “national statistician”, opted for a careful political fudge in which she announced that the RPI was a poor representation of prices and no longer meets international standards – but caved in to lobbyists’ demands to keep publishing it anyway. However, from March the ONS will publish a new index, the RPIJ, using a different way of averaging prices, which it claims is a better representation of the true rate of inflation in the economy.

RPIJ will join an alphabetti spaghetti of existing inflation measures, including CPI (targeted by the Bank of England); a new CPIH, which will include housing costs, also to be published in March; and the long-established RPIX, which excludes mortgage interest repayments. Matheson hopes that by offering such a choice, she can leave the government, wage bargainers and other “users” of statistics to make their own choice of which measure they prefer.

Over time, the ONS clearly hopes the RPI will wither away, but without the row that would have ensued if it had taken a bolder approach and simply changed how the index is calculated.

However, the thicket of inflation measures, which are to be updated on Tuesday, all tell the same dismal story. After sliding since mid-2011, inflation is on the rise, helped by sharp increases in domestic energy prices.

With little sign of a recovery in workers’ bargaining power, wages are unlikely to follow suit. So the squeeze on living standards that has been exerting pressure since the crisis took hold will continue, meaning less money for consumers to spend and weaker

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Should Ackman short JC Penney instead?

Category : Business

It’s been a tough week for Bill Ackman. Herbalife is up. And struggling retailer JC Penney, which is a big Ackman long position, plunged after UBS downgraded it to a ‘sell.’

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UBS working to ‘recover honour’

Category : Business

Swiss bank UBS is focused on recovering its past honour after being fined $1.5bn (£940m) for attempting to rig the Libor rate, an executive says.

Continued here: UBS working to ‘recover honour’

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2012: A big hand for everyone who gave business a bad name

Category : Business

Computer meltdowns, government cock-ups, inflated floats, on-off mergers, tax avoidance, Libor-rigging … when the financial news wasn’t farcical, it was often plain criminal

This has been a vintage year – maybe not for business but for commercial farce and scandals. So the Observer‘s business awards committee was deluged with entries as it met to dole out this year’s gongs. After deliberating, cogitating and digesting all the worthy efforts, the following (far from exhaustive) list emerged.

The Noel Edmonds mock crystal sherry decanter for deals (or no deals)

In a year when corporate financiers were shy of even publicly suggesting deals – never mind attempting to complete them – this was hardly a hotly contested field. However, the judges were impressed with the standard of farcical entries the City managed to conjure up, including defence group BAE Systems‘ failed attempts to merge with European counterpart EADS, plus the equally comical (but ultimately successful) efforts to combine commodity trading firm Glencore and miner Xstrata.

In the end, despite the roll-call of highly paid advisers – the outcomes were actually decided by the interventions of two heavyweight politicians. The creation of a European defence giant was scuppered after Germany’s chancellor, Angela Merkel, registered her disapproval.

In the UK, however, we possess a former top-ranking politician who takes a slightly different view to lubricating the wheels of commerce, and so the late intervention by Tony Blair, peace envoy extraordinaire, saving the formation of Glenstrata was the judges’ unanimous choice in this category. When Glencore announced in February that it was making a tilt for Xstrata, the mining firm in which it already held a 34% stake, it seemed little could go wrong. That seems fantastically complacent now.

First, Xstrata shareholders didn’t like the price or the amounts they were expected to pay the miner’s management just to persuade them to stay. As they whinged, Qatar’s sovereign wealth fund started buying up Xstrata shares, eventually soaking up a 12% stake that everyone assumed would be voted in favour of the deal. D’oh!

The Qataris then surprised almost everybody by demanding a better price,

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Bank rate-fixing scandals reveal the rotten heart of capitalism | Will Hutton

Category : Business

The magnitude of the banking scam must be realised and tough action taken

This is the year the consensus changed. Around the world, policy-makers, regulators and bankers recognised that the legacy of the 20-year credit boom up to 2008 is more corrosive than all but a few realised at the time. The bankers – and the theorists who justified their actions – made a millennial mistake. Navigating a way out of the mess was never likely to be easy, but it is made harder still by not recognising the magnitude of the disaster and the necessary radicalism involved if things are to be put right.

If there were any last doubts they were dispelled by the record $1.5bn fine paid by the Swiss bank UBS for “pervasive” and “epic” efforts to manipulate the benchmark rate of interest – Libor – at which the world’s great banks lend to each other. The manipulation was at the behest of the traders who buy and sell “interest rate derivatives”, whose price varies with Libor, so that cumulatively billions of pounds of profits could be made. Nor was UBS alone. What is now evident is that all the banks that made the daily market in global interest rates in 10 major currencies were doing the same to varying degrees.

There was a complete disdain for the banks’ customers, for the notion of custodianship of other people’s money, that was industry wide. It is hard to believe this culture has evaporated with the imposition of a fine. No banker falsifying the actual interest rates at which he or she was borrowing or lending, or trader who requested that they did so, had any sense that there is something sacred about banking – that the many billions flowing through their hands are not their own. It was just anonymous Monopoly money that gave them the opportunity to become very rich. The UBS emails, which will be used to support criminal charges, could hardly be more revealing. This was about making money from money for vast personal gain.

Interest rate derivatives are presented as highly useful if complex financial instruments – essentially bets on future interest rate movements – that allow the banks’ customers better to manage the risks of unexpected movements in interest rates. Whether a multinational or a large pension fund, you can buy or sell a derivative so you will not be embarrassed if suddenly interest rates jump or fall. Bookmakers lay off bets. Interest rate derivatives allow buyers to lay off the risk that their expectations of interest rate movements might be wrong.

What makes your head reel is the size of this global market. World GDP is around $70tn. The market in interest rate derivatives is worth $310tn. The idea that this has grown to such a scale because of the demands of the real economy better to manage risk is absurd. And on top it has a curious feature. None of the banks that constitute the market ever loses money. All their divisions that trade interest rate derivatives on their own account report huge profits running into billions. Where does that profit come from?

The answer is it comes largely from you and me. Global banking, intertwined with the global financial services and asset-management industry, has emerged as a tax on the world economy, generating much activity and lending that has not been needed, but whose purpose is to make those who work in it very rich. The centre-left thinktank IPPR reports that people with identical skills earn on average 20% more in financial services than in other industries, with the premium rising the higher the seniority. That wage premium does not come from virtuous hard work or enterprise. It comes from how finance is structured to deliver excessive profit.

The Libor scam is an object lesson in how finance taxes the rest of the economy. Plainly, the final buyers of the mispriced interest rate derivatives could not have been other banks, otherwise they would have lost money and we know that they all made profits. In any case, they were part of the scam. The final buyers of the mispriced derivatives were their customers. Some must have been large companies, but many were those – ranging from insurance companies and pension funds to hedge funds – who manage our savings on our behalf.

Here a second scam kicks in. One of the puzzles of modern finance is why the returns to those who buy shares in public stock markets are so much lower than the profits made by the companies themselves. One of the answers is that there are so many brokers, asset managers and intermediaries along the way all taking a cut. Sometimes it is through excessive management fees, but another way is not doing honest to God investing – choosing a good company to invest in and sticking with it – but through churning people’s portfolios or unnecessarily buying interest rate derivatives to protect against interest rate risk, while charging a fee for the “service”. Many of those mispriced interest rate derivatives will have ended up in the investment portfolios of large insurance companies and pension funds or, more sinisterly, in the portfolios of the banks’ clients.

Bank managements are presented as ignorant dolts, fooled by rogue traders. They were no such thing. The interest rate derivative market is many times the scale than is warranted by genuine demand precisely because it represented such an effective way of looting the rest of us. The business model of modern finance – banks trading on their own account in rigged derivative markets, skimming investment funds and manipulating interbank lending, all to underlend to innovative enterprise while overlending on a stunning scale to private equity and property – is not the result of a mistake. It represents a series of choices made over 30 years in which finance has progressively resisted any sense it has a duty of custodianship to its clients or wider responsibilities to the economy. It was capitalism allegedly at its purest. We now understand it was capitalism at its most rotten. It needs wholesale reform.

The government’s proposals to ringfence investment banking from the rest of a bank’s activities, following the proposals from Sir John Vickers, is a start. But it is only that. Last week, Conservative MP Andrew Tyrie’s cross-party parliamentary commission proposed ” electrifying” the ringfence with the threat of full separation if malpractice continues. It also considered banning banks from trading in derivatives on their own account. But while tough, the commission should extend its brief. The issue is to create a financial system in its entirety that serves individuals and business alike, makes normal profits and, above all, embeds its public duty of custodianship in the bedrock of what it does. The government fears that more upheaval will unsettle banking and business confidence. It could not be more wrong. Reform is the platform on which a genuine economic recovery will be built.