Senior bankers should face a criminal offence of 'reckless misconduct' under a toughened sanctions regime for failures at UK banks, according to the Parliamentary Commission on Banking Standards. The Commission's long-awaited 571-page report also criticises UK governments for "clearly not acceptable" interference in the running of part-nationalised lenders (Financial Times).
Full report HERE, summary HERE -- other key recommendations:
Study a split of RBS. "The Commission recommends that the Government immediately commit to undertaking such detailed analysis on splitting RBS and putting its bad assets in a separate legal entity"
Get rid of UK Financial Investments. "It may be possible to bolster UKFI's independence, but this would be extremely unlikely to end political interference in the State–owned banks"
Decade-long pay deferrals. "...much more remuneration to be deferred and, in many cases, for much longer periods of up to 10 years"
Commission quote: "One of the most dismal features of the banking industry to emerge from our evidence was the striking limitation on the sense of personal responsibility and accountability of the leaders within the industry for the widespread failings and abuses over which they presided..."
Andrew Tyrie MP: "This is not a bank bashing report" / George Osborne: "warm response" / Ed Balls: "radical blueprint" / CBI: 'said that prescriptive measures to defer bonuses would not be right' (Financial Times)
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In Asia, the Nikkei 225 increased up to 1.3 per cent on good data for Japanese exporters, although the Shanghai composite was in danger of closing at its lowest level since December following signs of interbank funding getting tighter (Bloomberg).
Dish abandoned its current pursuit of Sprint Nextel. Dish said before a Tuesday deadline for a final offer that it would instead focus on its offer for Clearwire, though it added that it "continues to see strategic value" in a merger. Sprint shareholders will vote on a $21.6bn offer from Softbank on June 25 (Reuters, Wall Street Journal).
Abenomics watch: The value of Japanese exports rose 10 per cent in May from a year earlier, their largest increase since 2010. Exports to China rose 8.3 per cent (Bloomberg).
Shinzo Abe claimed G8 backing for his stimulus policies. "This is a policy to achieve domestic objectives and this is not targeted at the foreign exchange rate of Japan," the Japanese prime minister said following the G8 summit at Lough Erne. Other leaders had a "clear understanding" of the need for stimulus, Abe added (Financial Times).
EADS's chief executive said "never say never" to another attempt at a BAE Systems tie-up. But Tom Enders played down the prospects of a rapid return to dealmaking after last year's planned deal between the two companies foundered on German government opposition (Financial Times).
How to game Platts oil benchmarks? "Offer to sell a small amount at a loss to drive down published oil prices, then snap up shiploads at the lower price... Several... traders interviewed by The Wall Street Journal said they have engaged in similar transactions... Platts says it isn't aware of any instances in which its indexes were gamed in such a way." (Wall Street Journal)
COMMENT AND CURIOS
- Making 'reckless misconduct' in banking a crime is the right move, says Philip Augar. (Financial Times)
- John Kay: don't blame the tax havens -- fix corporation tax in the G8 instead. (Financial Times)
- Martin Wolf's take on the IMF's Greek mea culpa. (Financial Times)
- Daniel Loeb, Abenomist. (Bloomberg)
OVERNIGHT MARKETS: UP
Asian markets
Nikkei 225 up +140.75 (+1.08%) at 13,148
Topix up +14.61 (+1.34%) at 1,101
Hang Seng down -264.54 (-1.25%) at 20,961
US markets
S&P 500 up +12.77 (+0.78%) at 1,651
DJIA up +138.38 (+0.91%) at 15,318
Nasdaq up +30.05 (+0.87%) at 3,482
European markets
Eurofirst 300 down -0.92 (-0.08%) at 1,184
FTSE100 up +43.72 (+0.69%) at 6,374
CAC 40 up -3.11 (-0.08%) at 3,860
Dax up +13.78 (+0.17%) at 8,229
Currencies
€/$ 1.339 (1.34)
$/¥ 95.21 (94.88)
£/$ 1.56 (1.57)
Commodities ($)
Brent Crude (ICE) down -0.03 at 105.99
Light Crude (Nymex) down -0.08 at 98.36
100 Oz Gold (Comex) down -2.00 at 1,364
Copper (Comex) up 0.01 at 3.16
10-year government bond yields (%)
US 2.19
UK 2.14
Germany 1.57
CDS (closing levels)
Markit iTraxx Europe +0.2bps at 108.1bp
Markit iTraxx Xover +1.2bps at 442.4bp
Markit CDX IG -0.1bps at 81.7bp
Sources: FT, Bloomberg, Markit
