Inside Business News

The Banking Services Authority's (FSA) ban on short-selling in banking stocks - in which traders attending to accumulation from falling allotment prices - came into force today. Here is a adviser to the practice.

What is abbreviate selling?

It is if anyone borrows shares in a aggregation and sells them in the achievement the prices will fall. The aim is to buy it aback at a lower amount in adjustment to acknowledgment the banal to the aboriginal buyer - pocketing the aberration as profit.

What absolutely has the FSA done?

It has banned traders from creating new abbreviate positions and accretion accepted ones in listed banking companies. The ban will abide in force until January 16 next year, but is accountable to analysis in 30 days' time.

The babysitter is aswell acclimation all investors "shorting" added than 0.25 per cent of a banking company's shares to acknowledge their positions on a circadian base from next Tuesday.

Why has it acted?

FSA arch controlling Hector Sants said the move is to "protect the axiological candor and superior of markets and to bouncer adjoin added alternation in the banking sector". It aswell follo ... Read more »

Alistair Darling will accept to bung a £20bn-plus "black hole" in Britain's accessible affairs if he presents his pre-Budget address next month. Expert assay of the latest abstracts shows that the accessible area arrears could anon access £100bn – the better aback the Second World War.

Public area net borrowing accomplished £10.4bn in June, the Office for Civic Statistics said yesterday, putting the arrears able-bodied on advance to hit £60bn or added this year, adjoin a anticipation of £43bn in the Chancellor's endure Budget. So far this budgetary year, accessible borrowing has been active at about 70 per cent, or £2.3bn a month, aloft endure year's levels. In March, Mr Darling, predicted that borrowing would be up by about 19 per cent.

Philip Shaw, a UK economist at Investec, said: "Public affairs are in abominable appearance and, with the abridgement falling into recession, the arrears will absolutely adulterate added next year. At some point this will accept to be addressed. No one is assuming taxes will acceleration or spending will be bargain at any time soon, at atomic not afore the election, but the day of reckoning is cat-and-mouse in the wings."

Th ... Read more »

Market capitalisation is not the alone affair demography a battering from the agitation in the banking area – cast ethics are aswell coast as once-stable institutions go to the wall.

Seven of the 10 top 50 brands that fell in amount in the year to June were banks. Between them their names absent added than $10bn (£5.5bn) of their cachet, according to the anniversary Interbrand survey, which uses approaching assets estimates, the role of the cast and all-embracing chump adherence assessments to body its alliance table.

Citi was the better loser, falling from 10th to 19th position as some $3.3bn was wiped off the amount of its brand. Merrill Lynch absent just beneath than $3bn, added than a fifth of its antecedent amount – which, with hindsight, looks like prescience. UBS absent added than $1bn and Morgan Stanley $1.6bn.

Because the calculations are alone to June, and do not yield into annual this week's confidence-shattering developments, the absolute account for the banks is even worse, said Rune Gustafson, arch controlling of Interbrand. "This was already a trend on the aback of the sub-prime mortgage problems and the acclaim crunch, and that will absolutel ... Read more »

The US government is alive on a plan to rid Wall Street of hundreds of billions of dollars of baneful mortgage investments, something it hopes will be a once-and-for-all band-aid to the acclaim crisis that has bedridden all-around banking markets.

Hank Paulson, Treasury Secretary, and Ben Bernanke, administrator of the US Federal Reserve, were affair aldermanic leaders endure night to advance the conception of a standalone investment car into which afflicted banks could unload their impossible-to-value mortgage derivatives.

The plan could be agnate to the conception of the Resolution Trust Corp that helped to advance the US out of the accumulation and accommodation crisis of the backward Eighties, by demography over afflicted assets.

Wall Street has afresh accounting down the amount of mortgage derivatives, alleged collateralised debt obligations, which are accoutrements of US home loans, back US abode prices began falling and Americans started behind on their mortgages in almanac numbers. Added than $500bn has so far been accounting off, but there is no accuracy still on the ultimate amount of these derivatives, and the ambiguity lies at the basis of the ac ... Read more »

Banco Santander, the buyer of Abbey, is said to be bent about the Government's accommodation to abandon antagonism rules for Lloyds TSB's £12bn takeover of Halifax Coffer of Scotland. Spain's better coffer has agreed to buy Alliance & Leicester but would accept advised a bid for HBOS instead if it had accepted the accord ability be allowed.

Santander was apparent as a abeyant applicant for HBOS in contempo canicule but absitively that abacus Britain's better mortgage lender to Abbey and A&L would accomplish it too big in the UK. Santander believed that its dive for A&L, accustomed by shareholders this week, was the better accord accessible for it to add to Abbey, which it bought in 2004. The Spanish coffer will now lag way abaft Lloyds-HBOS.

Sir Victor Blank, Lloyds TSB's chairman, said bygone that Lloyds had anticipation about accumulation with HBOS for abounding years but had affected the authorities would not acquiesce the conception of a UK cyberbanking giant. But the bazaar agitation engulfing HBOS this anniversary presented Lloyds with the adventitious to do the deal.

Big cyberbanking takeovers were in aftereffect barred in 2001 if the Anta ... Read more »

Suddenly activity is agitative for Lloyds TSB. For years, Britain's bigger accepted annual provider was the poor affiliation of British cyberbanking as its banal advance in UK retail and mid-level accumulated cyberbanking was outshone by fast-growing rivals benumbed the beachcomber of arrangement acclaim and globalisation.

Eric Daniels, the American arch executive, approved and accustomed little attention. His allocution of growing by architecture bigger compassionate of his UK barter seemed addled compared with the accelerated advance of rivals such as Royal Coffer of Scotland and HBOS.

But bygone Mr Daniels and his chairman, Sir Victor Blank, were able to affirmation absolution if they apparent the takeover of HBOS for a arrangement price.

Lloyds' relied chiefly on its retail drop abject for allotment and was costs its lending calmly in the broad money markets if necessary.

By contrast, HBOS had been in crisis of annoyed as its crumbling allotment amount drained the aplomb of broad and retail depositors. Andy Hornby, the adolescent HBOS arch executive, was affected to advertise to Lloyds, one of the big four UK banks that he had vowed to attempt wit ... Read more »

An aberrant crackdown on speculators bloodthirsty on falling allotment prices began on both abandon of the Atlantic yesterday, as Gordon Brown promised to "clean up the cyberbanking system" afterwards canicule of turmoil.

The Cyberbanking Services Authority (FSA) banned "short selling" of coffer shares from midnight endure night, afterwards warnings that the convenance helped ammunition bazaar agitation that affected the affecting £12.2bn takeover of HBOS by Lloyds TSB. This came as the New York Attorney appear his appointment had launched an analysis into actionable abetment to accumulation from abbreviate selling. The move is to bare whether speculators accept advance ambiguous advice or acted in concert to advisedly drive down allotment prices.

Wealthy barrier armamentarium traders, abundant users of the shorting strategy, accept sparked acerbity afterwards authoritative millions from the collapse in amount of UK cyberbanking stocks.

Until yesterday, shorting was not banned as it is admired as a accepted trading convenance in a abiding market. However, it has contributed to falling prices in the accessible cyberbanking stocks, banishment authoritative act ... Read more »

New mortgage lending alone to a three-year low in August as falling abode prices and an ambiguous bread-and-butter angle connected to alarm buyers abroad from the apartment market.

According to abstracts from the Council of Mortgage Lenders (CML), £21.8bn was lent in August, down by 12 per cent on the antecedent month, and down by 36 per cent on August endure year.

First-time buyers fabricated up about 10 per cent of the total, with a lot of of the money accounted for by humans remortgaging afterwards advancing to the end of their concise deals.

House prices are now falling at their fastest amount back the blast of the aboriginal 1990s and, according to Nationwide Building Society, accept collapsed by 10.5 per cent over the accomplished year.

Although the Government afresh appear measures to try to addition the apartment bazaar – including adopting the nil-rate brand assignment beginning from £125,000 to £175,000 – these are accepted to accept little aftereffect on the bazaar while the acclaim crisis continues.

The CML's administrator accepted Michael Coogan said: "These abstracts reflect the acute ambiguity for both lenders and consumers in th ... Read more »