House price rise disguises regional differences

Land Registry figures show house prices rose by 2.5% in London in March alone, whereas Middlesbrough saw 5.1% fall

House prices in England and Wales increased by 0.1% in March, according to the latest Land Registry report, but the headline figure disguised a mixed pattern of rises and falls around the regions.

London continued to record the strongest growth, with prices rising by 2.5% in March alone. The annual rate of price growth in the capital hit 9.6% and the average price reached £374,568. In contrast, prices in Middlesbrough fell by 5.1% in March and were down 16.5% year-on-year to an average of £69,049.

Across England and Wales prices were up by 0.9% on March 2012, but in Yorkshire, the east Midlands and the north-east and north-west of England prices were lower than in March 2012. The biggest faller is the north-east where values have dropped by 5.5% to an average of £97,033.

In Kensington and Chelsea the average property price is now £1.1m – 12.2% higher than in March 2012

The Land Registry's data showed strong sales of homes worth £1m or more in January, with the number increasing by 28% on the same month of the previous year at 610. The number of £2m-plus properties changing hands was up 52% at 140; of these 113 were in London. In Kensington & Chelsea, the UK's most expensive neighbourhood, the average property price is now £1.1m – 12.2% higher than in March 2012.

Figures for property purchases registered in March underline the huge differences of prices being paid around the regions, with the 47,600 registrations ranging from £14,000 to £12.5m.

In recent years the London property market has been buoyed by overseas investors seeking a safe haven for their money. The recent weakness of the pound and events in other countries have bolstered demand even further, and only recently the UK's most expensive home went on sale at a reported £250m.

Giles Hannah, managing director of estate agency VanHan, said cash was continuing to come into the capital from domestic and overseas buyers.

"International buyers, particularly from Asia, are fuelling demand for best-in-class properties and are snapping them up at 10%-14% discounts as a result of the weakness of sterling compared with their own currencies," he said.

"UK-based buyers are also highly active and are seeing investment in London property as an alternative to a pension, and a way of maintaining and growing their wealth."

He added: "We have also witnessed a rise in French high net worth families relocating to London owing to the increased taxes in France, creating a shortage of supply in the £5m-plus bracket and fuelling price rises."

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Article source : http://www.guardian.co.uk

UK economy is vulnerable after credit rating fall, warn former chancellors

Kenneth Clarke and Lord Lawson predict longer-term problems for currency and economy after Moody's AAA rating downgrade

Two previous Conservative chancellors possess given serious warnings about the Uk economic system as the authorities braced by itself for your pound to slide following a loss of britain's coveted Bbb credit score.

Sterling is anticipated to be able to tumble towards some other main stock markets as the financial markets respond to Moody's choice upon Friday night time to cut the national credit history, regularly employed by the actual chancellor, George Osborne, in order to validate his difficult monetary actions, simply by 1 level .
Whilst obviously supporting from the coalition's austerity plan regarding deep public investing slashes, the 2 senior Conservatives, Kenneth Clarke as well as Master Lawson, each informed that the United kingdom had been prone.

Minister without portfolio, Ken Clarke and another former chancellor Lord Lawson warn that sterling Moody's AAA rating, repeatedly used by George Osborne to validate his austerity measures, fell to AA1

Clarke, right now reverend without portfolio within the case, looked after Osborne's previous promises that the united state's monetary policy could be assessed on its credit rating, arguing in which issues with the global economy and also within the eurozone experienced pressed recuperation "several years" beyond exactly what have been expected on the common election this season.

"It looked completely sensible to me at the time,Inches Clarke advised the Sky Media Murnaghan programme. "It might now if it were not for the undeniable fact that it is quite apparent that the global monetary and economic crisis is persisting, it's even worse as compared to we believed, numerous a lot more a long time are required."
Talking for a passing fancy programme, Lawson said it has been essential which ministers and the Bank of Great britain made absolutely no ideas they would like to view a more weakening of the price of the particular lb : which may aid increase exports by making Uk items less costly with regard to overseas consumers - in the event this motivated "a run on sterling".

"That would not be smart, that will not sensible, that will 't be beneficial," mentioned Lawson. "But I can't believe that Henry Osborne would like which."
The pound has recently come under serious pressure this season as traders questioned great britain's popularity like a safe haven from the monetary problems inside the eurozone, falling 7% in the course of 2013 to close from $1.516 from the All of us money upon Friday night. Sebastien Galy, mature currency strategist from Société Générale, forecasted it might glide to be able to $1.Fifty within the next few days, so when low as $1.Fouthy-six in the long run.

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Money may be tight, but 'smart aid' to developing countries can really work

Far from creating dependency, strategic assistance from the west can help developing countries to help themselves

A lot of water has passed under the bridge since Britain hosted the G8 summit at Gleneagles in July 2005. Life was sweet when the leaders of the world's most powerful western economies pledged themselves todebt relief and aid to help poor countries. Growth was strong, asset prices were rising, and the financial crisis was two years away.

In 2013 it will, once again, be Britain's turn to chair the G8, but the mood will be quite different when leaders meet at Lough Erne in Northern Ireland this summer. The talk will be of fiscal cliffs, the euro's struggle for survival, high energy prices and the struggle to ensure financial solvency. One thing is certain: there will be no repeat of the commitment to double aid within five years. Money is tight.

Back in 2005, the pressure on Tony Blair came from only one source: the Make Poverty History (MPH) coalition that saw Gleneagles as an opportunity to cajole the G8 into making binding pledges on development. David Cameron has a more difficult task this year – for in addition to the lobbying by MPH2, he is coming under fire from aid sceptics who challenge the logic of a government that is cutting public spending at home massively increasing public spending abroad.

The thrust of the argument from the anti-aid lobby is as follows: aid does not work because it traps countries in a culture of dependency. Much of it is either wasted or siphoned off by corrupt regimes, so the taxes of poor people in rich countries ends up bankrolling the lavish lifestyles of rich people in poor countries.

In Britain, lobbying by powerful and arrogant charities has led to an increase in the aid budget so big that the Department for International Development (DfID) does not know what to do with its embarrassment of riches. Aid has become a gigantic racket and should be pared back to genuine humanitarian relief. That will leave space for the private sector to power development, the only sure way for countries to escape poverty.

The anti-aid lobby is livid that Cameron, the chancellor, George Osborne, and the development secretary, Justine Greening, are making good on the promise made by the last Labour government to raise the aid budget to 0.7% of national income in 2013. Given the precarious state of the UK's public finances, the assumption was that the prime minister and his cabinet colleagues would eventually renege on the pledge. They deserve credit for not doing so.

Here's why. Firstly, the anti-aid brigade mounts what is largely a straw man argument. Nobody at DfID, Oxfam, the World Bank or any other body involved in development would ever say that aid alone is the answer to tackling poverty. It has always been seen as part of the solution, along with the right macroeconomic policies, private sector investment, boosting trade and, in Africa, encouraging regional integration.

Secondly, both sides of the aid debate would agree on the need to tackle waste and corruption. Conservative ministers here have been acutely aware of the need to maintain public support for a rising aid budget during a period of austerity, which was why Greening's predecessor, Andrew Mitchell, undertook reviews of bilateral and multilateral spending and insisted on better value for money.

Whereas Labour favoured general budget support for poor countries – giving governments more control over their own spending – the coalition has preferred to finance specific projects.

Greening has insisted that a minister must sign off spending on any development project costing more than £5m rather than the previous limit of £40m. She has announced the end of UK aid to India; stopped money for Rwanda amid evidence that it has been used to finance rebel forces in the Democratic Republic of the Congo; and has suspended all direct aid to Uganda after reports of misuse. This would appear to be the zero-tolerance approach the aid sceptics are urging. Certainly, it is hardly consistent with the lurid stories of DfID sitting idly by while taxpayers' money is being siphoned off into numerous Swiss bank accounts.

However, corruption is not going to be tackled simply by turning off the flow of official western assistance. It will also require action against tax havens, against the arms trade and against multinational companies guilty of bribery. The aid sceptics tend to be far less vociferous about these issues.

Thirdly, there is plenty of evidence to show aid is working. The charity One has compiled a list of 14 African countries – including Ethiopia, Tanzania, Malawi and Senegal – that shared some characteristics in the period after 2000: they qualified for debt relief; they weren't dependent on extractive industries; they were not embroiled in civil conflict.

On average, in these countries aid flows increased threefold between 2000 and 2010, but there was no sign that official assistance crowded out private investment. Far from it, foreign direct investment increased fourfold over the same period. Growth averaged 5.5% between 2000 and 2011, an impressive performance given the meltdown in the global economy that followed the financial crisis of 2007.

In 2002, there were 300,000 people receiving HIV/Aids medicine; today the number exceeds 8 million. As a result of international aid efforts, the number of Africans with access to a bed net has increased from 3% to 50% in a decade. Spending on vaccines, bed nets and nutrition has meant child mortality in sub-Saharan countries has dropped by 41%. Education is seen – rightly – as the key to competing in the global economy, and over the past decade 51 million more children are in primary school because of the resources provided by debt relief and aid.

DfID funds a scheme in Sierra Leone called Making it Happen, where skilled health workers from Britain share their expertise with doctors, nurses and midwives in an attempt reduce high levels of infant and child mortality.

Far from creating a dependency culture, this is an example of "smart aid": the provision of know-how and best practice that will help Sierra Leone help itself. There are similar UK government initiatives to sponsor technology transfer and to boost private sector investment in infrastructure.

Smart aid': Nigerian pupils work on computers at LEA primary school in Abuja. The school is a pilot site for the 'one laptop per child' project, which aims to provide children a means to express their potential. 

All these seem worthy uses of the 70p in every £100 of national income that the government allocates to help countries far less fortunate than our own.

It is certainly strange that the government is making life more difficult for poor people in the UK at the same time it is trying to improve the lot of even poorer people in the rest of the world. The disparity between welfare policy at home and welfare policy abroad has certainly made the attacks of the anti-aid lobby more politically potent.

But it is not coalition policy towards countries facing what Jamie Drummond co-founder of One, calls the three extremes – extreme poverty, extreme climate change and extremist ideology – that is incomprehensible. It is the rest of it.

Article source : http://www.guardian.co.uk

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Entrepreneur, VC offers shortcuts to help startups be more successful

Suggesting there are shortcuts entrepreneurs can take to improve their chances of success would appear to refute Malcolm Gladwell’s popular “10,000 hours” theory.

But instead of picking a fight with the “Outliers” author, entrepreneur and fund manager Mark Hopkins is just trying to be provocative to get people to pick up his own book: “Shortcut to Prosperity: 10 Entrepreneurial Habits and a Roadmap For An Exceptional Career”.

“I’m not at all refuting Gladwell’s 10,000 hours,” confessed Hopkins, 53, who actually references Gladwell in the book. “The shortcut is really a way to get people to pick up the book and for me to say: ’If you do these things then you have a good shot at it, but it’s going to be a lot of work.’”

As far as the 10,000 hours goes, Hopkins has put in his time as an entrepreneur. After a career with Hewlett-Packard (NYSE:HPQ), Hopkins started his own medical device manufacturing company – Peak Industries – in 1996 and sold it nearly a decade later in 2004 for $44 million to Delphi (NYSE:DPH).

After that success, Hopkins, who describes himself as an “operations guy,” was looking to share his knowledge with other entrepreneurs and started up his own Denver, Colorado-based private equity firm – Crescendo Capital Partners.

“The motivation there was to continue to be involved in small businesses that we thought we could help,” said Hopkins, who targets companies with market capitalizations of $20 million or less in the health services industry.

Since starting the firm five years ago, Hopkins has switched from early-stage companies to more mature businesses: “We’re taking larger positions in small, boring, mature companies that we think we can help grow and operate better.”

He said one of the most important things successful companies share is what he refers to as “creative tension,” which emanates from founders who have a clear vision about where they are and where you want to be.

“Any entity that doesn’t have that clearly in mind is going to be wandering in the wilderness.”

The following is an abridged version of the conversation between Hopkins and Reuters Small Business:

What are some key takeaways for entrepreneurs from your experience and from your book?

The most fundamental thing about successful startups has to do with people. Startups only survive if they do something better, faster and cheaper than the other guys that are out there. The best indicator of whether you are able to do that or not, is the strength of the people you’re able to hire and how well they work together as a team. Do what you have to do to get the best people on the team and then use trust to cement their relationship. Teams that trust each other way outperform teams that don’t.

Every startup has a core group of leaders who are going to make great sacrifice and spend an inordinate amount of time with each other to make an organization a success. Choose them wisely. A good partner means someone who shares your values, balances your strengths, will work as hard as you do and is fun to be around. If you can do those things, you’ve got a wonderful opportunity to be successful.

Where do you see private equity right now and where it’s heading?

I see two different worlds in private equity. I see the really large private equity entities in the world – the multi-billion-dollar companies that are doing multi-billion-dollar deals – and that’s all about asset utilization and somebody having a better way to utilize assets that are captured in a big company. That’s not the world I play in. I play in the world that makes much smaller investments in arenas that we’re familiar with where it’s pretty clear to us how to operate those companies better.

I’m pretty bullish about private equity, because I always think there will be companies that are under-utilizing their assets. The amounts of leverage you’ll be able to attract through debt is going to be a lot different going forward than it has in the past, but that’s not necessarily a bad thing. It puts more of a premium on operating, which is more fundamentally helpful to the company.

A lot of private equity firms have been pretty outspoken about where they sit on the whole fiscal cliff debate. What’s your take on it?

I have a pretty moderate take on it. We’ve got spending problems that we fundamentally have to understand and begin to take actions to address. On the other hand we are historically gathering revenues that are under what it takes as a percentage of GDP to run our country the way we want to run it. We need both parties to come together. Somebody, or some group of people, has got to stand up. I listened to Erskine Bowles (Democratic co-chair of President Obama’s National Commission on Fiscal Responsibility and Reform with Republican Senator Alan Simpson) on a call the other day and was super impressed – he’s a Democrat I could believe in. I’ve heard Senator Simpson talk and I can say the same thing about him. If somebody would embrace the recommendations from a balanced set of knowledgeable guys like that, I think we can get this thing done.

Article source :http://uk.reuters.com

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Small businesses face holiday expense filing crunch

While many of us are making merry, it’s hardly the most wonderful time of the year for the accounting staffs at many small businesses.

A rush by employees to submit their expense claims so they can be reimbursed before the holidays, makes today the busiest expense-filing day of the year, according to data from online accounting services firm Concur (NASDAQ: CNQR).

New Year new Passion 

On this day U.S. small businesses will process more than twice as many expense reports as the daily average. That’s a lot of unhappy accountants.

Putting off those expenses has a whole host of repercussions, including paying more money in federal and state taxes.

“It’s like sitting in a car and letting someone drive you down the Autobahn going 80 miles an hour with their eyes are closed,” said Nicole Fende, a financial consultant and president of the Small Business Finance Center. “You’re going to crash and it’s going to be bad.”

Fende added that every dollar not expensed costs a business roughly $1.35 in taxes. That figure is derived from adding up the 15 percent in Federal Insurance Contributions Act (FICA) taxes businesses pay to cover Medicare and Social Security costs, and the average 20 percent due in state and federal income taxes.

“If you have a dollar of income and you’re not offsetting it with a dollar of expense, the government will tax it at your effective tax rate,” said Fende, who added there are ways small businesses and self-employed individuals can mitigate this crunch.

Like we do with our children, Fende said offering a reward, or treat, is a good way to get employees to do something they don’t want to do, like filing boring expense reports.

For self-employed individuals, giving yourself a new book or even just a chocolate after the task is completed can make you “more likely to do it next time you’re required.”

If that doesn’t work the Web is full of free and paid services that small business owners can use to outsource the pain of accounting.

Concur offers subscribers the ability to take pictures of receipts with their iPhone and Android devices and submit them electronically, allowing employees to toss away their paper copies.

“That’s helped us to get rid of a whole lot of filing cabinets,” said Christian Metcalfe, co-founder of Seattle, WA-based data analytics startup Context Relevant, which uses Concur for all its accounting needs.

“In the ‘Moneyball’ example, this helps us keep our money on the field and be more efficient in how we’re running our business.”

Metcalfe, whose company is also paid by Concur to organize its data, said no software will eliminate employee procrastination when it comes to filing expense reports on time, but cloud-based services can offset the incidence of paper claims piling up on accountants desks.

Concur, also based in the Seattle area, estimates that inefficient manual expense filing is costing U.S. firms as much as $2 billion annually in additional processing costs.

That calculation is based on a recent study by the Aberdeen Group that showed it costs the average U.S. company $18 to process each expense report. The study also found that cost drops below $8 per report by automating the process through web-based applications.

Xero, a New Zealand-based accounting software firm with more than 110,000 paying customers, also offers the ability to scan receipts by phone and is attempting to get a foothold in the lucrative U.S. small business market.

Jamie Sutherland, who heads Xero’s U.S. operations, said the ability to “knock off” expense reports on the fly from such exotic locations as a cab or airplane makes the process more enjoyable.

“It makes it a little bit more fun and sexy to do expense management.”

However some small business owners remain reticent to try the new technology, preferring to store receipts in a shoebox and hand it over to an actual accountant.

Howie Statland, 41, who sells vintage guitars at New York-based Rivington Guitars, has an iPhone, but has yet to use it to scan a receipt or submit an expense.

“This is the only way I know how right now.”

Article source :http://uk.reuters.com

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UK service sector contracts for first time in two years

'Very disappointing' fall in activity in dominant economic sector raises fears Britain is headed for triple-dip recession

A shock fall in activity in Britain's services sector at the end of last year has put the economy on the road to a triple-dip recession, as economists predict the UK will be stripped of its triple-A credit rating.

The services sector – including banking, retail and travel – accounts for three-quarters of the UK economy

The services sector – which accounts for three-quarters of Britain's economic output – shrank for the first time in two years in December, suggesting the UK economy contracted in the fourth quarter. If output drops again over the next three months, the UK will fall into its thirdrecession in five years – an unprecedented triple dip.

Howard Archer of IHS Global Insight said: "This is undeniably a very disappointing survey that fuels fears the economy suffered a renewed dip in GDP in the fourth quarter. Given the dominant role of the services sector and the fact that it has recently been the healthiest part of the UK economy on the output side, the reported fall in activity in December is a significant blow for growth hopes."

The data came out as Citi released a report suggesting the UK economy will disappoint again this year and could lose its prized triple-A credit rating. Michael Saunders, economist at Citi, said Britain is likely to suffer from weak growth, inflation will stay stubbornly high, and the government will fail to make a substantial dent in the deficit. "With the public debt/GDP ratio set to surge further in coming years, we think the UK will lose its AAA rating in 2013," he said.

The closely watched CIPS/Markit purchasing managers index (PMI) for services dropped from 50.2 to 48.9 in December, below the 50 mark that separates expansion from contraction. It is the lowest reading since April 2009 and substantially undershot analyst forecasts of a rise to 50.5.

The survey snuffed out the glimmer of hope offered by data released earlier this week that showed a surprise jump in factory activity in December. But manufacturing accounts for just 10% of the economy and that release was followed by a dreary set of figures from the construction industry, which shrank much faster than expected. Markit said overall the PMIs suggest the UK economy contracted by 0.2% in the last quarter of 2012.

Chris Williamson of Markit said the weakness in services could continue into 2013. "Bad weather is likely to have played a role in dampening service sector activity in December, but the fact that incoming new business dropped for a second successive month suggests that underlying demand remains very weak and that activity may continue to fall in the new year."

Poor trading meant companies chose not to replace leaving employees, which led to a slight decline in staff numbers. Williamson said that means UK unemployment could soon start to rise again, as private sector lay-offs add to public sector job cuts.

The news will reignite the debate over whether the Bank of England is likely to expand its quantitative easing (QE) programme to try to kickstart the economy.

Archer said: "While the weak services purchasing managers' survey is unlikely to prompt the Bank of England's monetary policy committee into taking any stimulative [action] at its January meeting next week, it does reinforce our belief that further QE is more likely than not over the coming months. For now though, the MPC is likely to sit tight given current increased inflation concerns and signs that the Funding for Lending Scheme could be having a beneficial impact."

There was better news out of the US, where employers added 155,000 jobs in December, slightly ahead of expectations. But analysts said it was not enough to make a big difference to the unemployment rate.

Article source : http://www.guardian.co.uk

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Smartphone sales to hit 1bn a year for first time in 2013

Accountant Deloitte predicts the smartphone will become a mass market phenomenon and an everyday object worldwide

The smartphone is predicted to become a mass market phenomenon this year, with annual shipments soaring to 1bn globally for the first time, although a fifth of the devices will rarely be used to go online.

In 2013 the smartphone will become an everyday object worldwide, according to a study by accountants Deloitte, bringing the number of active phones with either a touch screen or an alphabet keyboard to 2bn by the end of the year.

Despite soaring sales of smartphones, research suggests one in five owners will rarely, if ever, use them to access the internet

The everyday accessibility of what was once a luxury device will be made possible by falling prices and better mobile networks. The average selling price of an iPhone has remained above $600 (£370), puttingApple's gadgets out of reach for most buyers, but high performingsmartphones with good cameras, bright screens and fast processors are now available for a fraction of that cost from other makers such as HTC and Nokia.

Deloitte estimates 500m phones have already been sold for $100 or less, and initiatives to create $50 devices for emerging markets are under way.

However, research in several countries suggests one in five owners of these sophisticated portable computers rarely or never connect to the web. Hundreds of millions may not even bother to subscribe to a data package from their mobile network.

These devices will not be idle, but their owners will use them for the traditional mobile activities of text messaging, voice calling and taking the occasional photo.

"They are like [traditional] feature phones in a smartphone casing," said the report's author, the Deloitte telecoms research head Paul Lee. "Smartphone penetration goes up but data plan penetration doesn't go up as quickly. Not every mobile will be used in the same way."

Many phones in use will be older hand-me-downs, whose software is out of date and cannot cope with new applications and website graphics.

Older owners may have been put off going online by reading about high bills in the press, and many may be wary of the complicated data tariffs on offer. For many of those living outside cities, 3G internet connections are still hard to come by.

Article source : http://www.guardian.co.uk

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Banks given four more years to introduce minimum liquidity standards

Bank of England governor Mervyn King says concessions will allow banks to use reserves to help struggling economies grow

Banks have won significant concessions from global regulators after being granted four more years to introduce watered-down measures designed to make them less vulnerable to Northern Rock-style runs and financial shocks.

As well as extending the time limit on compliance, the Basel committee of banking supervisors has relaxed proposals setting out the range of assets banks must hold as a buffer against the threat of a collapse.

The British banking industry described the changes, secured after lobbying, as a "Twelfth Night present". Mervyn King, governor of theBank of England and chair of the committee's oversight body, denied that the agreement was a weakening of earlier proposals: "For the first time in regulatory history, we have a truly global minimum standard for bank liquidity."

The standards are intended to allow a bank to survive a 30-day crisis by retaining a minimum amount of cash and liquid or easy-to-sell assets, as an insurance against the mass withdrawal of deposits and funding freeze that crippled Northern Rock or a systemic crisis of the kind triggered by the Lehman Brothers collapse.

Stefan Ingves, left, chair of the Basel committee on banking supervision's governing body and Mervyn King of the Bank of England

The new rules will not be imposed in January 2015, as intended under an earlier draft, but will be phased in over four years by 2019. King indicated that the concessions would allow banks to use their reserves to help struggling economies grow, rather than have them tied up in meeting the new global banking guidelines, dubbed Basel III.

"Importantly, introducing a phased timetable for the introduction of the liquidity coverage ratio … will ensure that the new liquidity standard will in no way hinder the ability of the global banking system to finance a recovery," he said.

The Basel group includes representatives from the 27 major financial centres – including the UK, Japan, China and the US – and it agreed a first draft of liquidity rules in 2010. The draft triggered fierce lobbying by the banking community because it required the buffers to comprise government bonds and the highest grade of corporate bonds.

Banks warned that it might choke off a global economic recovery by squeezing lending to households and businesses. They added that focusing the buffers on government bonds would force them to buy even more sovereign debt, tying their fortunes more closely to a state's solvency – a concern exacerbated by the mounting eurozone crisis.

King said the new liquidity coverage ratio (LCR) was more "realistic", although he denied that the changes represented a weakening of the proposals.

He added that the agreement would protect taxpayers from the consequences of a banking crisis, saying it was a "clear commitment to ensure that banks hold sufficient liquid assets to prevent central banks from becoming lenders of first resort".

Under the deal, banks will only have to meet 60% of the LCR obligations by 2015. A study by the Basel committee in 2011 found more than 200 banks had a total shortfall of €1.8tn (£1.4tn) in meeting the 2010 LCR. The way in which the buffer is calculated has also been changed in a way that will benefit many banks, analysts said.

King added: "The committee and the regulatory community more generally felt it was appropriate to broaden the class of liquid assets. That doesn't mean to say it's a loosening of the whole regime."

Simon Hills, executive director of the British Bankers' Association, said allowing mortgage-backed securities in the liquidity buffer would help kick-start that particular market, which has been moribund since the 2007-09 crisis. Mortgage-backed securities have been classed as "liquid" under the new guidelines even though their lack of liquidity from 2007 on was a key factor in the banking crisis, a recurrence that Basel III hopes to prevent.

During times of stress, the Basel committee said, national regulators could allow banks to drop below the minimum liquidity requirement.

The UK Financial Services Authority signalled last summer it would consider relaxing liquidity rules – which required UK banks to hold a buffer of £500bn of government bonds and other instruments – amid concerns that banks were restricting lending to businesses and households.

The financial policy committee, responsible for overseeing financial stability and chaired by King, had considered whether liquidity rules should be relaxed altogether.

UK banks have been concerned about the liquidity rules since they were first suggested in the wake of the 2008 banking crisis and could have required banks to hold up to three times the level of the assets that they held in the past.
Article source : http://www.guardian.co.uk

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stock markets surge on compromise

FTSE 100 breaches 6000 level for the first time since July 2011, while Dow Jones opens sharply higher

US President Barack Obama said he had fulfilled a campaign promise to make the US tax system fairer with a deal to avert the fiscal cliff crisis that passed after a fierce duel in Congress

Global markets have surged on the first trading day of the new year in relief that the US had stepped back from the fiscal cliff, propelling theFTSE 100 above 6000 for the first time since July 2011.

After weeks of worry, the US Senate and House of Representatives finally passed a compromise bill to water down the combined tax hikes and spending cuts, which had been due to come into effect this month, avoiding the prospect of the world's biggest economy moving back into recession.

Asian markets led the way, with Hong Kong rising 2.9% to its highest level since June 2011.

In London, the FTSE 100 closed up 129.5 points, or 2.2%, at 6027.37. Banking shares were among the biggest risers on relief over the US agreement, with Barclays 5% higher and Lloyds Banking Group up 4%. Mining shares were also boosted by growing optimism about the prospects for the global economy, with the sector accounting for eight of the 10 risers in the leading index.

US investors have also reacted positively to the late night agreement, despite worries the deal could see the country's credit rating lowered. The Dow Jones Industrial Average has opened up 224 points, or 1.7%, higher at 13,326.

In Europe, Germany's Dax and France's Cac have both risen more than 2%. Even the struggling eurozone countries have been lifted, with the Athens market up 3.8%, Italy 3.6% higher and Spain adding 3%.

But some cautioned that Tuesday's US agreement had merely delayed a decision for two months, and predicted further volatility to come.

Mike van Dulken, head of research at Accendo Markets, said: "We are back near the highs of last Thursday when 6000 was almost missed by just a whisker. Some may be disappointed that the initial reaction to thefiscal cliff deal has not taken up back there quicker, however, optimists must bear in mind that the deal has only bought an extra two months and pessimists should remember that full volume trading may take a few more days to resume."

Simon Denham at Capital Spreads said: "The problem is that all the US has managed to do is take a leaf out of the European's books by kicking the can down the road. Spending cut delays for a couple of months means that more negotiations will take place in only a few weeks time and we will have to go over the same old ground again."

Meanwhile, Lee McDarby at Investec Corporate Treasury, pointed out an additional element in the next set of US discussions: "A final note on the cliff for now is that when negotiations re-open in a few weeks' time they will have to cater for the US debt ceiling, which wasn't addressed in the bill passed on Tuesday and is set to be reached mid-February. It appears the US government is going to have a busy and challenging beginning to 2013."

Article Source : http://www.guardian.co.uk

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Solutions for retaining assets after a client dies

BY MATTHEW HALLORAN

Research tells us that 90 percent of heirs will reject their parents' financial advisors, and 70 percent of widows will change advisors after their husband's death. Can you afford that level of loss

I thought through my coaching clients for the last 10 years and realized that I have heard this excuse too many times.

I remember talking to a client and he was very upset. He had lost one of his largest clients. I asked him what happened and he said that the husband died and the spouse transferred her money to another advisor, saying, "You only talked to my husband when we came for our reviews."

How often do you lose the assets after your clients die? For those of you who are being honest with yourself, this happens a lot and you know it. But this article is supposed offer solutions, not a mean coach opening up an old wound. So what do you do?

You learn how to talk to them or hire a professional. There are people out there who are trained in these issues, and one of my clients is a pro. In fact, she is one of the chosen few who can handle really tough family issues - addiction, lifestyle issues, and entitlement issues. I have learned a lot about her technique over the time we have worked together and I wanted to share some of her insights. I would refer financial advisors to her at a moment's notice.

I asked her to give the top 10 things she could share without making all the advisors that read this guilty of practicing psychology without a license. Here is what she said.

1. Define your client. If you want to retain assets over the long-term, then your relationship must extend to present and future stakeholders.

2. Serve your client. Check your behaviors. Whom do they suggest your client is? With whom do you speak the most? Whom do you contact with questions or recommendations? Saying the couple or the family is your client is not enough. Your actions must reflect the same.

If your attention is skewed, you are missing the opportunity to develop a relationship with the other member(s) of the couple or family, and they will likely move the assets when the person they view as your client dies.

3. Know your client. If you are working with a couple or a family, you must get to know each person individually. Know their priorities, preferences, dreams and fears. Your job is not to reconcile differences. Your job is to know them and develop a plan comprehensive enough to honor them.

4. Understand your client. Hearing is not enough. You must understand. To understand, you must listen -- actively. Active listening means listening to understand, not to respond. Park your thoughts. You can come back to them. Listening in order to understand is one of the greatest services you can offer your clients.

5. Put purpose first. Your technical expertise makes you shine at offering solutions. But this expertise can also create blinders. You may be too quick to hear objectives and match them with methods. This challenge is exacerbated by clients' expectations that you want to hear their goals, and their lack of understanding of what their true goals are.

The purpose is the meaning, significance, or "why" behind the client's goal. Once their purpose is known, the true goals can be determined. What to do and how to do it will then follow.

6. Embrace resistance. Do you have clients who have yet to implement their plan in some way? Indeed, we've all been there. Investigate the disconnect behind the procrastination. It could be a warning sign that an important part of their purpose has not been met, or that they have lost sight of how the action steps promote their purpose.

7. Go wide. Your client is more than their financial assets. Each has social, intellectual and spiritual capital, as well. Capture and utilize those resources. Most Baby Boomers and their parents are more concerned with leaving an emotional inheritance than a financial one. Help them plan for these priceless assets, too.

8. Address the elephants. Addiction. Entitlement issues. Resentments. Unprepared heirs. As their trusted advisor, you know the issues that linger and drain life from your clients. Money won't solve these. Indeed, it often makes them worse. Listen as clients speak about the issues. Engage them in exploring options. Do not ignore the elephants merely because they are outside your expertise.

9. Do no harm. Know the limits of your expertise. Know when to refer or bring in an expert. Connect them with resources and encourage them to press on to address known challenges.

10. Collaborate. Embrace the wisdom and expertise of others. Communicate openly with your clients' other advisors. Exchange ideas and seek to reach consensus before sharing recommendations with your client. Meet jointly with your client and their advisors. The return on this investment will be increased clarity of communication, greater efficiency, and client appreciation for a streamlined process.

Article source :http://www.accountingtoday.com