Le crunch
France warning
The French equivalent of the Confederation of British Industry, MEDEF, has issued a warning that the country is facing an extreme economic crisis, saying that the risk level has risen "from a storm warning to a hurricane warning". MEDEF cites the economic policies of socialist president Francois Hollande and, in particular, the proposed hike in capital gains taxes to a top level of 62.2 per cent. The government is tightening its budget sharply, with majority of the contribution coming from higher taxes rather than spending cuts, which MEDEF believes is a recipe for further economic stagnation.
Spain’s pain
Bailout close
Spain is finally ready to formally request help from the European Union which would allow the European Central Bank to start buying up its sovereign debt. But the process is being held up by concerns over the implications for other enfeebled eurozone member countries, with Italy the main concern. Some commentators believe such a move would also result in a fall in borrowing costs for Italy, thus relieving some pressure, but others argue that it would simply open the door for an Italian request which could put intolerable strain on the eurozone's bailout mechanisms.
Bumi spat
Rothschild walks
Nat Rothschild, who founded the stock market vehicle which allowed Indonesian coal miner Bumi to come to London, has resigned from the board of the company amid recriminations over attempts by the Bakrie family to buy their assets back. Mr Rothschild said he had "lost confidence" in the board's ability to stand up for investors' interests and accused chairman Samin Tan of being determined to drive through Bakrie's proposal. Mr Tan hit back by accusing Mr Rothschild of being obstructive and hinting that Mr Tan could be jailed in the UK if accounting irregularities, which are being investigated, are proved.
RBS exit
But pain goes on
Royal Bank of Scotland this week announced its exit from the government's Asset Protection Scheme, the insurance policy put in place by the Treasury at the time of the credit crunch which allowed RBS and Lloyds Banking Group to cover potential losses from the 'toxic assets' that were infecting their balance sheets. Lloyds exited the scheme as quickly as possible and RBS is to pay the final £1.4bn instalment of the £2.5bn fee for the scheme this week. In the three-year period of the APS, RBS has managed to slash its toxic assets to £100m and is still selling them off. Meanwhile, the EU-mandated sale of 318 branches to Santander this week fell through, dealing a blow to sentiment towards RBS.
See: More pain for RBS
Pandit goes
Citigroup head resigns
Vikram Pandit, chief executive of US banking giant Citigroup, abruptly resigned from his post this week after five years in the job. His abrupt departure highlighted rifts in the boardroom at Citi as chief operating officer John Havens also resigned. Mr Pandit, who said he leaves the bank in "damn good shape" will be replaced by Mike Corbat, current head of Europe, Middle East and Africa. Only two of the men who ran Wall Street's giants during the banking crisis, JP Morgan's Jamie Dimon and Lloyd Blankfein of Goldman Sachs, remain in situ. This week Goldman announced it had more than doubled third-quarter revenues and posted a profit of $1.46bn during the period.
Russian readies
TNK sale
The group of oligarchs who own half of the Russian BP-TNK joint venture with the oil giant have agreed to sell their portion of the business for $28bn. The AAR consortium are selling their share of the business to Rosneft in a deal which BP says provides a "good price point" for its stake in the business. BP said earlier this year that it was looking to sell its portion of the business and it is conceivable that Roseneft may now pursue full control of the venture or it has been suggested that AAR may to buy BP's share.
