UK News

Insights from the UK and beyond

from Breakingviews:

UK banks need government to solve funding squeeze

By George Hay
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.The Bank of England is tooling itself up. The UK central bank announced on Dec. 6 a new facility to help domestic lenders if the euro zone crisis causes a fully-fledged freeze in short-term funding markets. But banks may still need more help.

The BoE already has two ways to combat liquidity squeezes. It allows banks to borrow against liquid collateral for three or six months through its Indexed Long-Term Repo (ILTR) auctions. And it allows desperate banks to swap illiquid collateral for gilts for up to a year via its Discount Window Facility (DWF) – in return for a fat fee and big haircuts.

In some senses, the new Extended Collateral Term Repo facility (ECTR) is a halfway house. It uses a similar auction structure to the ILTR but allows banks to pledge DWF-style collateral for a minimum fee of 125 basis points over the BoE’s base rate. As such it goes some way to filling the gap left by the now-defunct Special Liquidity Scheme (SLS), the crisis facility which allowed UK banks to swap illiquid mortgage-backed securities for liquid Treasury Bills for a period of up to three years.

However, the ECTR will only last for thirty days at a time. That may help avoid a collapse, but won’t provide much long-term reassurance. Contrast the BoE’s approach with the European Central Bank, which is currently being pressured to offer facilities that last for two or even three years. Even though the UK is not in the euro zone, its banks are suffering from the same long-term funding drought as their rivals on the continent. That’s worrying because, according to the BoE’s own figures, UK lenders have to roll over 140 billion pounds of term funding next year.

from Reuters Soccer Blog:

Time for UEFA to revert to goal difference in Champions League

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My head is hurting after all the mathematics that has been needed to work out qualification chances in the Champions League.

It is all because UEFA believes head-to-heads rather than goal difference in all group games should be the first deciding factor.

from Left field:

Spain, Nadal and the Davis Cup

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By Greg Rusedski

The Davis Cup final between Spain and Argentina was always going to be a great tie. The atmosphere was electric due to the huge Argentinian contingent in Seville who were present to support their team. Both the Spanish and Argentinian fans got into the tie and with 26,000 plus spectators the atmosphere was more like a football match.

The tie all depended on how well Juan Martin Del Potro played on the opening day. The feeling was that he had to win his opening match on day one for Argentina to have a chance to win the tie. No one was going to beat Rafa on clay, and the only player to have done so all year was Djokovic. The other problem for Del Potro was that Nadal and David Ferrer were 25 and 0 on clay in Davis Cup. Yes, Nadal and Ferrer were a little tired after the ATP World Tour Finals but playing on clay at home was a huge advantage. Nadal looked physically strong at the ATP World Tour Finals but was unlucky to have picked up a stomach bug and never recovered properly for the event. This was bad news for the Argentinians because he was going to take out his frustration on the clay courts of Seville.

from Breakingviews:

The real UK plan B: protecting against euro chaos

By Hugo Dixon and George Hay
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Pundits say Britain needs a plan B to boost growth. What it really needs is a contingency scheme to handle a euro explosion. The central planks should be for the government to keep adequate fiscal firepower in reserve to handle a crisis and to shore up the country’s banks.

from Breakingviews:

New London air hub plan needs public money to fly

By Robert Cole
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Heathrow is a jam-packed embarrassment for those who promote London as a global financial centre. A brand new four-runway hub in the Thames estuary east of the UK capital might relieve the squeeze. The idea is favoured by Boris Johnson, the mayor of London. Central government enthusiasm would be greater if all the funding could be raised from the private sector – although the UK government now says it will explore plans to maintain the UK’s aviation hub status.

from John Lloyd:

A deserving press

By John Lloyd
The opinions expressed are his own.

An inquiry under way in the Royal Courts of Justice London, just a few hundred yards from Fleet Street, once the heart of the British newspaper industry, is becoming -- in the low key way in which the British like to think they always do things (but often don't) -- a global event. It is the consequence of a crisis, as inquiries frequently are. But it will have consequences of its own: one of these may be to redefine journalism for the 21st century.

In July, the forward march of Rupert Murdoch and his son James through the British media and political establishment was halted -- cruelly, abruptly, with every sign of the chaos and clamor which his tabloids usually love, indeed often create. The efforts by his British newspaper subsidiary, News International, to lock in the narrative that phone hacking at the Sunday tabloid News of the World was the preserve of one "rogue" reporter in 2006 -- Clive Goodman, the Royal Correspondent, who had paid for his sins with a short sharp prison sentence -- fell apart. Like Marley's ghost from Dickens' "A Christmas Carol", the awful truth came through the door, dragging a clanking chain made up of mobile phones, mementos of the hackings into the private lives of this celebrity and that politician and, most horrible, of ordinary people, caught in some media storm, for a few days the biggest story in town, and thus regarded as fair game.

from FaithWorld:

Head of Irish Catholic Church agrees deal with sex abuse victim

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(Cardinal Sean Brady speaks during a news conference at the Vatican following a two-day meeting with Pope Benedict XVI February 16, 2010. REUTERS/Max Rossi)

The head of the Catholic Church in Ireland has agreed to a legal settlement over his role in administering an oath of secrecy to a teenage victim of clerical sexual abuse in 1975, the victim's lawyer said on Wednesday.

from Left field:

Watch out for Federer in 2012

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By Greg Rusedski

There was a lot going on in the press at The ATP World Tour Finals before the event started. The press asked Roger Federer who was the favorite for the event. The press had implied that Andy Murray was the favorite because of the three tournaments he had won in Asia. Federer answered this question by saying that neither he nor Novak Djokovic had played in Asia so how could he be the favorite? Federer came into this event having won the last two tournaments of the year, this event on five different occasions and also as the defending champion. This set up the tournament in a great way because the only way to settle this discussion would be on the court.

The two groups were Group A; Djokovic, Murray, David Ferrer and Tomas Berdych and Group B; Federer, Rafael Nadal, Jo-Wilfried Tsonga and Mardy Fish. Group B was the more interesting and stronger group.

from Felix Salmon:

Europe’s insoluble problems

Mohamed El-Erian is calling for massive recapitalization of the banking system:

The global financial system is being refined "day in and day out," El-Erian said, and as a result the balance between public and private is shifting and regulation is altering. "This is not being done according to some master plan," but in reaction to a series of crisis management interventions.

None of these piecemeal policy moves restored confidence in the markets, he said. What is needed is a coordinated and simultaneous set of policy actions globally in four areas: restoration of credit markets, elimination of deteriorating assets from balance sheets, injecting capital quickly into the banking system, and regulatory forbearance.

from Reuters Soccer Blog:

Why Chelsea should keep Andre Villas-Boas

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Three Premier League defeats in four games and Champions League last 16 qualification compromised. The last few weeks have been very tough for Chelsea coach Andre Villas-Boas.

Previous managers Jose Mourinho, Luiz Felipe Scolari, Avram Grant and Carlo Ancelotti were dismissed seemingly for less by ruthless owner Roman Abramovich.

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