Wednesday newspaper round-up: Bank regulation, Rio Tinto, Marks & Spencer

8th Jul 2009 06:17

Banking executives will have their pay linked to long term profitability under new rules designed to prevent a repeat of last year's financial meltdown.Alistair Darling will tell MPs today that salaries will be aligned to the earnings and overall financial health of institutions when he presents his long-awaited reforms to the system of banking regulation, the Times reports.The FT adds that Alistair Darling will outline a tough regulatory regime for the financial services industry that would impose heavier capital and liquidity standards on banks that pose the greatest risk to the financial system. The chancellor will instruct the Financial Services Authority to draw up stricter rules for the riskiest banks and financial institutions.The European Union is considering a voting structure for its new apparatus of financial regulation that would make it almost impossible for Britain to block measures, even if they pose a major threat to the City of London. EU leaders agreed in June to create three supra-national bodies with a full-time staff to oversee banking, insurance, and securities. These will have binding powers to impose rules for the first time, limiting the UK's Financial Services Authority to "day-to-day" management, the Telegraph reports.Meanwhile, a draft European Union law that would subject hedge funds to new regulatory controls needs "major surgery" before Britain can support it, Lord Myners, a UK Treasury minister, said on Tuesday, reports the FT.Rio Tinto's iron ore sales team has been arrested in Shanghai, threatening a diplomatic rift between Australia and China. Officers from China's Public Security Bureau are also reported to have raided the mining giant's Shanghai offices and removed computers used by each of the four executives who have been detained since Sunday, the Times reports.Marks & Spencer is braced for up to half its shareholders to call today for Sir Stuart Rose to step down early as its executive chairman. Sir Stuart will try to face down hostile investors amid growing concern about his role as both chairman and chief executive. The swell of opinion against Sir Stuart gathered momentum yesterday, with the Universities Superannuation Scheme joining his critics, the Times reports. Four ex-directors of MG Rover, who are facing the threat of a Serious Fraud Office investigation into their activities around the time of the carmakers' collapse, today accused the Gordon Brown of "pulling the plug" on MG Rover. In a dossier issued by their PR advisers, Media House, the so-called Phoenix Four - John Towers, the chairman, Nick Stephenson, John Edwards and Peter Beale - who ran MG Rover for five years before its collapse, place the blame for its failure squarely at the feet of the government, the Times reports. CVC, the private equity firm that owns Formula 1, said it was shocked by comments made by motor racing boss Bernie Ecclestone that apparently supported Adolf Hitler. The 78-year-old billionaire caused outrage at the weekend when he praised the Nazi dictator's ability to "get things done". His comments, in a newspaper interview, were a huge embarrassment to CVC, which invests money on behalf of Jewish funds, the Telegraph reports.Housebuilders are "drip-feeding" homes on to the market to prevent further falls in prices, industry experts claimed yesterday. They said that the practice ? to avoid flooding the market ? was widespread among large-scale builders such as Barratt and blamed a lack of competition among the developers of large sites for the problem, the Times reports. Hank Greenberg, the former chief executive of insurer AIG on Tuesday prevailed in a high-profile legal battle with his former company after a federal jury ruled in his favour over claims related to a $4.3bn lawsuit. The jury ruled that Mr Greenberg's private investment firm, Starr International Company (Sico), did not breach a trust when it terminated a long-term compensation plan at the insurer four years ago and was not liable for about $4.3bn worth of shares held for that programme, the FT reports.Palm, the latest company to challenge Apple's dominance of the smartphone market, yesterday launched its potential "iPhone killer" in Europe, with the two devices expected to clash over the Christmas period. The Palm Pre was officially unveiled in the UK with Palm confirming it had signed an exclusive contract with O2, the operator that also has exclusivity for the iPhone, the Independent reports. Beijing automotive Industry Corporation's €660m (£570m) bid for GM Europe (GME) includes plans to open an Opel factory in China and build a dealership network, but has little detail on the future of Vauxhall jobs in the UK. BAIC wants to sell 500,000 specially revamped GME models - including the Corsa, Zafira and Astra - in China by 2015, the Independent reports.