LONDON // British banks should be required to insulate consumer units from their investment banks to shield customers and taxpayers from the consequences of a financial crisis, according to a government-appointed commission.
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Banks with consumer and securities units will have to separately capitalise them by 2019 under proposals made today in a 360-page report by the Independent Commission on Banking. The plans will cost as much £7 billion, the report said.
"The commission believes that ring-fencing would achieve the principal stability benefits of full separation but at lower cost to the economy," the commission said in the statement.
The government last year asked John Vickers, 53, a former Bank of England chief economist, to chair a commission considering ways to enhance competition and reduce the risks posed by the financial sector. Since 2007, the British state has been forced to spend, pledge and loan 850 billion pounds to rescue British banks, according to National Audit Office.
Chancellor of the Exchequer George Osborne welcomed the final recommendations, the government said in an e-mailed statement.
"The chancellor considers it to be an impressive report and an important step towards a new banking system that supports lending to businesses and families, supports the economy and jobs, but doesn't cost the taxpayer billions of pounds when it goes wrong," the statement. In July, Osborne said he backed the proposals following the commission's interim report.
Once the recommendations are implemented, the so-called ring-fenced units will include all checking accounts, mortgages, credit cards and lending to small- and medium-sized companies, the report said. As much as a third of U.K. bank assets, or 2.3 trillion pounds, will be included, the document said.
Trading and investment banking activities will be excluded from the ring-fence, the report said.
"Barclays will be the bank that is hit the most by this," followed by Royal Bank of Scotland Group Plc, said Shailesh Raikundlia, a banking analyst at MF Global Ltd. in London. Both London-based Barclays and Edinburgh-based RBS operate investment banks.
The commission stuck to its argument that Lloyds be forced to sell additional branches beyond the 632 required by European Union regulators. Rather than detail how this should be done, the commission recommended that the government negotiate with Lloyds to create a "strong challenger" bank.
There is "a real danger" that Lloyds's current asset programme "will fall back into the range of small banks that have not exerted a strong competitive constraint in the past," the report said.
Ring-fenced banks should have an independent board, the report said. Unless the protected part of the bank is the majority of the lender, most directors in the insulated bank should be independent non-executives, it said. The protected lender will make its own disclosures to regulators, it said.
HSBC Holdings Plc, Barclays, Lloyds, RBS, Santander U.K. Plc and Nationwide Building Society should hold more than 3 per cent extra capital, on top of the 7 per cent recommended by the Basel Committee on Banking Supervision under the so-called Basel III agreement, the report said. Cooperative Bank, Clydesdale Bank and the lender that Lloyds is selling should hold 1 per cent to 3 per cent extra.
"Smaller ring-fenced banks should have correspondingly smaller ring-fenced buffers," the report said.
The requirements should be seen as a minimum, and could be boosted by the 2.5 per cent surcharge for globally important banks, in line with Basel III recommendations, the report said.
Howard Mustoe // Bloomberg News
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
Guns N’ Roses’s last gig before Abu Dhabi was in Hong Kong on November 21. We were there – and here’s what they played, and in what order. You were warned.
- It’s So Easy
- Mr Brownstone
- Chinese Democracy
- Welcome to the Jungle
- Double Talkin’ Jive
- Better
- Estranged
- Live and Let Die (Wings cover)
- Slither (Velvet Revolver cover)
- Rocket Queen
- You Could Be Mine
- Shadow of Your Love
- Attitude (Misfits cover)
- Civil War
- Coma
- Love Theme from The Godfather (movie cover)
- Sweet Child O’ Mine
- Wichita Lineman (Jimmy Webb cover)
- Wish You Were Here (instrumental Pink Floyd cover)
- November Rain
- Black Hole Sun (Soundgarden cover)
- Knockin’ on Heaven’s Door (Bob Dylan cover)
- Nightrain
Encore:
- Patience
- Don’t Cry
- The Seeker (The Who cover)
- Paradise City
Dr Amal Khalid Alias revealed a recent case of a woman with daughters, who specifically wanted a boy.
A semen analysis of the father showed abnormal sperm so the couple required IVF.
Out of 21 eggs collected, six were unused leaving 15 suitable for IVF.
A specific procedure was used, called intracytoplasmic sperm injection where a single sperm cell is inserted into the egg.
On day three of the process, 14 embryos were biopsied for gender selection.
The next day, a pre-implantation genetic report revealed four normal male embryos, three female and seven abnormal samples.
Day five of the treatment saw two male embryos transferred to the patient.
The woman recorded a positive pregnancy test two weeks later.
West Asia rugby, season 2017/18 - Roll of Honour
Western Clubs Champions League - Winners: Abu Dhabi Harlequins; Runners up: Bahrain
Dubai Rugby Sevens - Winners: Dubai Exiles; Runners up: Jebel Ali Dragons
West Asia Premiership - Winners: Jebel Ali Dragons; Runners up: Abu Dhabi Harlequins
UAE Premiership Cup - Winners: Abu Dhabi Harlequins; Runners up: Dubai Exiles
UAE Premiership - Winners: Dubai Exiles; Runners up: Abu Dhabi Harlequins
Ads on social media can 'normalise' drugs
A UK report on youth social media habits commissioned by advocacy group Volteface found a quarter of young people were exposed to illegal drug dealers on social media.
The poll of 2,006 people aged 16-24 assessed their exposure to drug dealers online in a nationally representative survey.
Of those admitting to seeing drugs for sale online, 56 per cent saw them advertised on Snapchat, 55 per cent on Instagram and 47 per cent on Facebook.
Cannabis was the drug most pushed by online dealers, with 63 per cent of survey respondents claiming to have seen adverts on social media for the drug, followed by cocaine (26 per cent) and MDMA/ecstasy, with 24 per cent of people.
COMPANY%20PROFILE
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Killing of Qassem Suleimani
Farasan Boat: 128km Away from Anchorage
Director: Mowaffaq Alobaid
Stars: Abdulaziz Almadhi, Mohammed Al Akkasi, Ali Al Suhaibani
Rating: 4/5
Business Insights
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COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
Simran
Director Hansal Mehta
Stars: Kangana Ranaut, Soham Shah, Esha Tiwari Pandey
Three stars
The biog
Name: Timothy Husband
Nationality: New Zealand
Education: Degree in zoology at The University of Sydney
Favourite book: Lemurs of Madagascar by Russell A Mittermeier
Favourite music: Billy Joel
Weekends and holidays: Talking about animals or visiting his farm in Australia
Killing of Qassem Suleimani
ICC men's cricketer of the year
2004 - Rahul Dravid (IND) ; 2005 - Jacques Kallis (SA) and Andrew Flintoff (ENG); 2006 - Ricky Ponting (AUS); 2007 - Ricky Ponting; 2008 - Shivnarine Chanderpaul (WI); 2009 - Mitchell Johnson (AUS); 2010 - Sachin Tendulkar (IND); 2011 - Jonathan Trott (ENG); 2012 - Kumar Sangakkara (SL); 2013 - Michael Clarke (AUS); 2014 - Mitchell Johnson; 2015 - Steve Smith (AUS); 2016 - Ravichandran Ashwin (IND); 2017 - Virat Kohli (IND); 2018 - Virat Kohli; 2019 - Ben Stokes (ENG); 2021 - Shaheen Afridi
THE SPECS
Engine: 1.5-litre turbocharged four-cylinder
Transmission: Constant Variable (CVT)
Power: 141bhp
Torque: 250Nm
Price: Dh64,500
On sale: Now
