Exclusive: Bankers Court PCC Chairman

By Mark Kleinman, City Editor

The chairman of the Press Complaints Commission (PCC) is being lined up to orchestrate the creation of a new banking standards body that would have the power to ban individuals found guilty of malpractice.

I have learned Lord Hunt of Wirral has been approached by the British Bankers' Association (BBA) to help draw up a framework for the independent body. He is also being sounded out about becoming its inaugural chairman.

The approach to Lord Hunt was made by Anthony Browne, the new BBA chief executive, several weeks ago.

The Conservative peer would be a logical choice for the role. A former senior partner of Beachcroft, the law firm, he specialised in the insurance and financial services sectors throughout a career dating back to the 1960s.

Now chairman of the Lending Standards Board, another banking sector body, Lord Hunt also has vast experience of developing professional bodies across a wide range of industries, including the legal profession.

He served in the cabinets of both Margaret Thatcher and John Major, and was the architect of a report on the future of the Financial Ombudsman Service.

I understand Lord Hunt is interested in taking on the banking standards body role, although he has not yet formally agreed to do so.

The new organisation has become a key priority of Mr Browne, who only took over at the BBA a few weeks ago.

He believes the toll taken on the reputation of the banking sector by Libor and insurance mis-selling scandals, as well as the continuing controversy over bankers' pay, can only be repaired by prolonged evidence of high ethical standards.

Among the powers of the new body would be the ability to strike off rogue bankers, exceeding the current capabilities of the Financial Services Authority.

Speaking at the BBA's annual conference earlier this week, Mr Browne insisted the creation of a new body was at the feasibility study stage, with a taskforce comprised of bank representatives beginning work on it.

"It has got to be credible. There is no point doing this if it seems like a whitewash," he said.

As I revealed last month, the suggestion for a new banking standards body and a register from which industry employees could be struck off was made by Barclays in its submission to the Parliamentary Commission on Banking Standards.

Sir David Walker, who takes over as Barclays' chairman in about 10 days' time, backed the principle of a new body. Also speaking at the BBA summit, he said a more formal code of conduct had worked well in the accounting, legal and medical professions and was required to restore trust in banking.

"The tricky part is working out what it would take to make someone ineligible to work in banking. There's a lot of work that needs to be done," he said.

Chaired by Andrew Tyrie, the Conservative MP who also chairs the Treasury Select Committee, the Commission is likely to consider the creation of a banking standards body and a requirement for bankers to possess formal qualifications.

Lord Hunt and the BBA both declined to comment.

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Ofgem Pledges To 'Simplify Energy Market'

Ofgem has published plans that it says will create a "simpler, clearer and fairer" energy market.

The regulator outlined a range of measures including scrapping confusing tariffs and forcing suppliers to tell consumers the cheapest deal available.

It comes after the Prime Minister took the sector by surprise when he vowed to introduce laws to make energy suppliers give customers the best value tariffs - rather than simply inform consumers what is available, as unveiled by Ofgem.

Energy Minister John Hayes later insisted the Government was only considering introducing such a law.

Ofgem also extended proposals unveiled last year to simplify tariff structures and limit the numbers of different tariffs offered across the whole market.

It proposed that suppliers offer four core tariffs per fuel type - electricity and gas - cutting out the "baffling" array of deals currently on offer.

So-called "dead" tariffs that are no longer available will be banned to reduce the risk of people paying too much, Ofgem said.

It also wants to stop price increases or other changes to fixed-term tariffs, and introduce new ways of helping consumers switch energy accounts.

The watchdog's chief executive, Alistair Buchanan, said the proposals followed input from thousands of consumers.

"Our plans will put an end to consumers being confused by complex tariffs and will usher in a simpler, clearer, fairer and more competitive energy market for all consumers," he said.

"I am glad to say suppliers have already responded with some initiatives, but these don't go far enough. 

"Ofgem is determined to press forward with proposals to deliver for consumers the most far-reaching shakeup of the retail energy market since competition was introduced."

The executive director of consumer group Which?, Richard Lloyd, broadly welcomed the proposals.

"Along with the Prime Minister's promise to ensure suppliers put their customers on their lowest tariffs, this is another big step towards helping people get the best price for their energy," he said.

"Our own research shows the market is far too complicated, with only one in 10 people able to find the cheapest deal.

"These proposals will boost customer power, making it much easier to shop around, and should increase the pressure on the energy companies to keep their prices in check."

The Energy Secretary Ed Davey said he had been pushing for the measures for some time.

"They represent a big step forwards in reforming our energy market to help millions of households get a better deal on their energy bills," he said.

""I want an energy market where the suppliers have to work hard to win your business, and then work hard to keep it."

But the shadow energy and climate change secretary, Caroline Flint, argued that Ofgem's proposals were "only tinkering at the margins".

"It is deeply disappointing that after spending nearly two years putting these proposals together Ofgem has once again ducked the opportunity to get tough with the energy giants," she said.

"We need to open up the books of the energy companies, but these reforms do nothing to improve the transparency of the prices these firms charge their customers."

Ofgem is legally required to go through an extensive consultation process but wants to start to introduce its reforms by summer 2013.

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Public Sector Net Borrowing Falls To £12.8bn

Public sector net borrowing falls to £12.8bn in September - the lowest figure for the month since 2008.

The Office for National Statistics' data, which excludes financial interventions like bank bailouts, is £0.7bn lower than in September last year.

The figures will be welcome news for Chancellor George Osborne, who is attempting to reduce the deficit in the current tax year to £120bn, from £121.6bn a year earlier. 

But despite September's improvement in borrowing, the public finances continue to be worse off year on year.

Total Government spending continued to rise - by 3.7% to £52.5bn, including a 1.6% rise in social benefits such as unemployment claims.

Analysts broadly welcomed the data but warned the Chancellor is still likely to miss his borrowing targets.

"September's UK public finances brought some better news for the Chancellor after the run of poor borrowing numbers earlier in the year," Martin Beck, an economist at Capital Economics, said.

"Nevertheless, if the trend in the first six months of the fiscal year continues, it still looks like borrowing for 2012/13 will overshoot the OBR's forecast by about £7bn.

"Given this deterioration and increasing concerns over the true impact of deficit reduction on the economy, the Chancellor may be compelled to alter his fiscal rules."

Mr Osborne will present an update of the Government's budget plans in his Autumn Statement on December 5.

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EU Agrees On Bank Supervisor After Compromise

European leaders have agreed to create a supervisor for all eurozone banks in 2013, after a disagreement between France and Germany threatened to derail the deal.

By the end of a two-day summit of European leaders in Brussels, a 120bn euro (£97.5bn) package of measures to boost growth had also been unveiled.

It included using proceeds from a proposed tax on financial transactions to tackle youth unemployment - currently running at 50%.

After 11-hours of negotiations over a bank supervision deal, a European Commission (EC) spokesperson said there had been an "agreement on a political framework for the end of 2012 and a gradual implementation in 2013."

The deal represents a compromise between Germany and France, which disagree on how best to support the region's banking system.

France wanted the watchdog to be up and running for all 6,000 banks in the 17 euro countries by January next year, while Germany thought implementation should be slower, involving only the biggest bank groups at first.

Chancellor Angela Merkel called the timetable "very ambitious," adding that Europe needed "quality before speed", and a watchdog "worthy of the name".

But France's President Francois Hollande said it was "a good deal".

The agreement includes something for both countries: all 6,000 banks will be included, but there is no firm deadline for the single supervisor to be up and running.

It is crucial to the eurozone's future as leaders agreed in June that, once the body is in place, failing banks will be able to tap its new debt rescue fund.

The European Stability Mechanism (ESM) will help failing banks directly, meaning they do not have to place more strain on Governments' finances.

But not all European countries are convinced the supervisor is a good thing.

Those that belong to the EU but do not use the euro – such as the UK - are nervous that the new system would see investors flock to eurozone banks because they look safe.

Some are also concerned that the eurozone countries will vote as a group on regulations that affect all EU members.

At the end of the summit, David Cameron warned he would veto the EU's 2014-20 budget if it included increases in spending at a time when member state budgets are being cut.

The Prime Minister said: "We can't have EU spending going up and up.

"It would not be acceptable to see a huge increase in spending when budgets are being cut."

The 27 members of the EU meet next month to agree on 2014-20's 1trn euro (£0.8trn) budget proposed by the EC.

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Rabobank Quits Cycling Over Armstrong Scandal

The Lance Armstrong doping scandal has prompted one of cycling's biggest sponsors to cut its ties with the sport.

Rabobank had sponsored a professional cycling team for the last 17 years, but claimed the Armstrong affair was "the straw that broke the camel's back".

The US Anti-Doping Agency last week published an investigation into the cyclist after former teammates exposed what it described as "the most sophisticated, professionalised and successful doping programme that sport has ever seen".

The Dutch bank's announcement came a day after its team suspended their Spanish rider Carlos Barredo as the International Cycling Union (UCI) launched a doping case against him.

"We are no longer convinced that the international professional world of cycling can make this a clean and fair sport," bank board member Bert Bruggink said in a statement.

"We are not confident that this will change for the better in the foreseeable future.

"What the Usada showed us is that international cycle racing is not only sick but also at the highest level within cycling, including a number of the relevant authorities, including checks on the use of doping," he added.       

In a statement, UCI said it "understands the context" which led Rabobank to make the decision.

But British cyclist David Millar criticised the move, saying on Twitter: "Dear Rabobank, you were part of the problem. How dare you walk away from your young clean guys who are part of the solution. Sickening."

The Rabobank team have won 23 Tour de France stage wins since their sponsorship began in 1996, most recently by Luis Leon Sanchez in Saint-Flour in 2011.

Mr Bruggink added: "Cycling is a beautiful sport, which millions of Dutch people enjoy and a large number of those Dutch people are clients of Rabobank.

"But our decision stands: we are pulling out of professional cycling.

"It is painful. Not just for Rabobank, but especially for the enthusiasts and the cyclists who are not to blame in this."

The news comes two days after Nike terminated its contract with Armstrong, as he stood down as chairman of his Livestrong cancer-fighting charity.

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HSBC Suffers 'Large Scale' Cyber Attack

Banking giant HSBC has revealed some of its websites were subjected to a "large scale" cyber attack that disrupted its online services on Thursday, but assured its customers their data was not compromised.

In a statement, HSBC said its servers came under a "large scale denial of service attack" that affected a number of sites around the world, although it did not give further details as to the nature or whereabouts of the problem.

It said: "This denial of service attack did not affect any customer data, but did prevent customers using HSBC online services, including internet banking. We are taking appropriate action, working hard to restore service.

"We are pleased to say that some sites are now back up and running. We are cooperating with the relevant authorities and will co-operate with other organisations that have been similarly affected by such criminal acts."

The statement added: "We apologise for any inconvenience caused to our customers throughout the world."

It gave no indication as to who was thought to be behind the attack.

Later, HSBC reported that its sites were back up and running and thanked customers for their patience.

A denial of service attack typically involves sites being saturated with requests.

The Inquirer website reported that the Anonymous group had claimed it was behind the incident.

It said a Twitter account called @Fawkessecurity had claimed it was responsible and had posted a statement to Pastebin.

This said: "As some of you may be aware HSBC bank suffered several DDoS attacks on the named sites in the past hours us.hsbc.com hsbc.co.uk hsbc.com hsbc.ca they were all brought down by #FawkesSecurity.

"The proof is all in our Twitter account, Targets, time and date :) @FawkesSecurity."

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World's Oldest Vauxhall Car Up For Sale

The world's oldest Vauxhall is being put up for auction, after being owned by the same family for more than a century.

The 1903 two-seater 5hp veteran is expected to fetch between £60,000 and £80,000 when it is sold by Bonhams next month.

Vauxhall's managing director Percy Kidner bought the motor car new in November 1903, and the family of its second owner - who acquired it the following year - have owned it since.

It was used regularly until around 1920 and underwent major refurbishment in 2001.

The director of the Bonhams UK Motor Car department, Tim Schofield, said: "This is the first time in 108 years this historic landmark vehicle has been offered on the open market.

"We believe it is the oldest surviving Vauxhall, which makes it a very important motor car and a great addition to what is shaping up to be a fantastic auction at our flagship saleroom in early November."

It is one of several classic cars to be auctioned on November 2, ahead of this year's London to Brighton Veteran Car Run.

Other vehicles include a 1904 Richard Brasier - which has an estimated value of between £220,000 and £300,000 - a 1904 Wolseley and a 1904 Wilson-Pilcher.

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Exclusive: Debt Collector Eyes Deal

By Mark Kleinman, City Editor

Britain's biggest debt recovery specialist is being courted about a merger that would create a financial services powerhouse, I have learned.

Arrow Global, which is majority-owned by a fund managed by the taxpayer-backed Royal Bank of Scotland (RBS) and has £7bn under management, is in talks to be bought by TDR Capital, the private equity firm which owns Lowell Group, another major debt collector.

Discussions between the two sides have been taking place for several months as part of an auction process initiated by the RBS Special Opportunities Fund. Goldman Sachs has been appointed by RBS to oversee the sale process for Arrow, which has 3.8m customer accounts.

If TDR does trump rival bidders for Arrow Global, it plans to merge it with Lowell, creating a company with £13bn under management, according to people close to the process. TDR acquired Lowell last year from Exponent Private Equity, another buyout firm.

Among the other bidders vying to buy Arrow is JRJ Group, a financial services-focused private equity firm which owns assets in areas such as commodities broking. JRJ was founded by a group of heavyweight executives including Jeremy Isaacs, the former head of Europe, Asia and the Middle East at Lehman Brothers.

A decision is expected to be made about the winning bidder for Arrow Global before the end of the year.

The RBS Special Opportunities Fund is a private equity vehicle managed by the bank but in which it has only a minority stake. People close to RBS said that a sale of Arrow Global was likely to be "reputationally helpful" given the controversy that stalks debt collection businesses.

Manchester-based Arrow Group, which recently negotiated a new £110m debt facility, claims to be "committed to facilitating positive outcomes, and strongly believes that what is good for the customer is also good for business". The company is run by Tom Drury, the former chief executive of Shanks, the waste management group.

Its chairman is Sir George Mathewson, the former chief executive and chairman of RBS, who has been a prominent figure in the debate about the reshaping of Britain's banks.

Arrow Global's asset portfolio consists of consumer and commercial credit including credit card, personal loan, retail, motor, mortgage, telecommunication and utility receivables. More than 80 per cent of Arrow Global's assets are in the UK with the remainder in continental Europe.

RBS, TDR. JRJ and Arrow Global all declined to comment.

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Google Beats Rivals With Low Price Laptop

Google is launching its new low-priced Chromebook laptop as rivals Microsoft and Apple prepare to release their latest gadgets.

The lightweight computer will sell in the UK for around £200 and $249 in the US. It will go on sale early next week.

It is being made in a partnership with Samsung, which also makes smartphones and tablet computers that run on Google's Android software.

The laptop, which does not have a hard drive, will run on an operating system revolving around Google's Chrome Web browser.

It functions like a terminal dependent on an Internet connection to get to information and applications stored in large data centres run by Google or other technology providers.

It is the least expensive Chromebook that Google has released in the two years that it has been working on the product line.

Google and Samsung released a slightly more sophisticated Chromebook priced at $449 (£280) in the late spring.

Now it appears to be trying to get ahead of its rivals.

Microsoft is poised to release Windows 8, a dramatic makeover of its famous operating system, on October 26.

And Apple says it plans to show off a new product Tuesday. The event is widely expected to be the coming-out party for a slightly smaller version of its iPad.

"This is a big step in the journey for us," said Sundar Pichai, Google's senior vice president of Chrome and apps. "I think it's generally an exciting time in the computing industry."

Despite the low price, the new Chromebook will face a tough time winning over consumers because it is notset up like a traditional PC with a hard drive, said Gartner analyst Carolina Milanesi.

"A lot of people are going to see it and think, 'Once I have it, what exactly do I do with it?'" Milanesi predicted.

Like tablets, the discount Chromebook will rely on a computer chip design known as ARM, instead of Intel microprocessors. The ARM architecture is more energy efficient, extending the duration of batteries between charges.

With an 11.6in (29.46cm) screen, the new Chromebooks also will have a larger display than tablets selling in the same price range.

The laptops will be set up to automatically use all of Google's services, including its search engine, Gmail and YouTube video site.

Google also is offering 100 gigabytes of free storage on computers kept in its eight data centres.

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BP Hones Tie-Up With Russia's Rosneft

By Mark Kleinman, City Editor

BP is in talks to secure an indemnity against legal claims from a group of Russian oligarchs as part of a £16bn deal that would cement a partnership between two of the world's biggest oil companies.

BP and Rosneft, the Kremlin-backed oil giant, are this weekend locked in talks aimed at finalising what will become one of the most significant alliances ever struck in the energy industry.

I understand that part of the discussions is focused on securing an indemnity for BP against ongoing litigation from the oligarchs who own AAR, BP's existing Russian partner.

The oligarchs, who include some of Russia's most powerful businessmen, own the remaining 50% of TNK-BP. As Sky News revealed this week, they have struck a preliminary agreement to sell their shares to Rosneft.

It is unlikely that Rosneft would fully cover future legal claims against BP made by the oligarchs, but analysts believe AAR would be unlikely to pursue any action if BP strikes a formal deal with Rosneft that has the backing of Vladimir Putin, the Russian president.

People close to the talks between BP and Rosneft cautioned that there "remain a lot of moving parts", and that an announcement as early as Monday looked possible, but unlikely.

The broad thrust of the partnership currently being discussed would see BP selling its 50% stake in TNK-BP to Rosneft for $27bn (£16.8bn).

The Russian company would pay between $11bn (£6.8bn) and $13bn (£8.1bn)  in cash, with BP taking a stake of between 16% and 20% in Rosneft.

BP executives are leaning towards taking a larger shareholding in Rosneft because they believe it would signal an irrevocable commitment to the British company's presence in Russia.

BP would also gain either one or two seats on Rosneft's board.

An indemnity against legal action from the oligarchs is seen as an important, but not pivotal, issue by BP.

BP declined to comment.

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