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Welcome to Peston’s Picks - the home of my reports and analysis of the issues in business that matter to us all
10:09 UK time, Wednesday, 7 November 2012
My colleague Stephanie Flanders, who knows miles more than I do about American politics, will doubtless write the definitive piece about what Obama's re-election means for the US and global economy.
I would just make a few bloomin' obvious points (please don't say "as always").
11:12 UK time, Monday, 5 November 2012
Many business leaders who see themselves as cheerleaders for George Osborne's attempts to reduce public spending as a share of GDP, or the value of what the UK produces each year, are concerned about the least ambiguous manifestation of austerity: sharp cuts in public-sector investment.
Their view is that with the economy still in the doldrums (although out of recession) and with the government apparently able to borrow huge sums at record low interest rates, this would be the appropriate moment for the public sector to improve the wealth-generating infrastructure of the UK.
15:16 UK time, Wednesday, 24 October 2012
Hector Sants, who recently quit as the UK's top financial regulator, said on Wednesday that he wished "bankers had been more honest".
Speaking at the Said Business School, Mr Sants - who was chief executive of the Financial Services Authority from July 2007 to July 2012, and was an investment banker for most of his career - said that he did not mean that most of them had deliberately lied to him and his colleagues.
20:00 UK time, Tuesday, 23 October 2012
The governor of the Bank of England has given his starkest warning that banks in what he calls the advanced economies, including British banks, still have too little capital to absorb potential losses on bad loans. And he says that the economy will remain weak till they raise the needed capital.
Sir Mervyn King also made clear that he is implacably opposed to what has become known as "helicopter money", or the creation of new money by the Bank of England for writing off government debt, or funding tax cuts, or paying for public spending.
09:26 UK time, Tuesday, 23 October 2012
One of the fault lines in the coalition has for some time been over the extent to which banks should be compelled to lend, especially to small businesses, rather than just being encourage to do so.
My understanding is that Vince Cable, the Business Secretary, remains concerned that the UK's economic recovery will remain insipid for months and years, unless and until banks provide the credit required by growing businesses.
09:29 UK time, Monday, 22 October 2012
As I understand it, the reason there has been a delay in the announcement of BP's sale of its half share in TNK-BP to Rosneft is that the deal is significant enough to require the formal approval of Vladimir Putin.
Which is expected from the president of Russia in the course of today, probably this morning. But oil executives are incredibly superstitious about taking any future event in Russia for granted.
09:13 UK time, Friday, 19 October 2012
Whether we like it or not (some don't) the City of London and financial services is important to the UK economy. Depending on what you include in that industry, it represents between 8% and 14% of national output or GDP - and banks and banking are (again for better or worse) the core of the City.
When the entire banking system went to the brink of collapse, and in the process hobbled our economy for years to come, we learned the hard way that proper regulation and supervision of our banks (which was so singularly absent for years) is of the greatest national importance.
16:20 UK time, Thursday, 18 October 2012
I asked the boss of one of the UK's biggest energy companies what would happen if they were forced by the government to give all their customers the lowest tariff they offer.
"It is very simple" he said. "If we could not adjust charges depending on how people pay, we would have to raise our basic price".
08:55 UK time, Thursday, 18 October 2012
It is pretty certain that BP will today be offered $28bn by Rosneft, the state-controlled Russian energy giant, for its half-share in TNK-BP (as much as anything at all is certain in this extraordinary soap opera).
You might think that being offered a tidy sum for an asset that has caused BP quite a few headaches in recent years is good news. And you would probably be right.
07:04 UK time, Wednesday, 17 October 2012
Royal Bank of Scotland has moved a step nearer financial rehabilitation and eventual privatisation by withdrawing from the Asset Protection Scheme, an insurance scheme created by the government in 2009 by which losses on RBS's worst loans and investments would have been taken by taxpayers.
In practice, RBS has been able to sell or offload the £280bn of loans and investments put into the scheme without having to transfer any losses to taxpayers. And it has paid £2.5bn for the protection.
15:48 UK time, Saturday, 13 October 2012
In a way the mystery is why it has taken so long for RBS's sale of 316 branches to Santander to collapse.
It has been clear almost from the start in 2009, when the European Commission obliged RBS to dispose of these branches as a way of injecting greater competition into the small-business banking market, that it would be a nightmarishly difficult deal to execute.
09:38 UK time, Friday, 12 October 2012
Talking of the possible need for even more unconventional economic policies (as Adair Turner has been doing), to ward off the risk of the UK economy turning Japanese and stagnating for decades, something pretty odd and unconventional has been happening in the regulation of banks, for just that reason.
In the last few weeks, the soon-to-be-disbanded Financial Services Authority has told banks that any extra lending they make to the UK economy - to businesses and households - can be provided without incurring any additional capital charge. Which in theory should significantly reduce the costs for banks of lending.
21:30 UK time, Thursday, 11 October 2012
Lord Turner warns that the process of businesses, households, banks and the government trying to cut their big debts built up in the boom years, what is known as deleveraging, may bear down on the British economy's ability to grow for many years yet.
He is also concerned that quantitative easing, or the purchase by the Bank of England of government debt, may be becoming less and less effective in promoting a recovery.
14:30 UK time, Wednesday, 10 October 2012
Here is the tactful statement from BAE Systems and EADS explaining why they have buried their plans to merge:
"Notwithstanding a great deal of constructive and professional engagement with the respective governments over recent weeks, it has become clear that the interests of the parties' government stakeholders cannot be adequately reconciled with each other or with the objectives that BAE Systems and EADS established for the merger."
07:51 UK time, Wednesday, 10 October 2012
BAE and EADS could well abandon their plan to merge tomorrow, depending on the outcome tonight of make-or-break talks between the British, German and French governments.
It all hinges on whether France and Germany agree to significantly limit their power to influence the merged companies.
07:23 UK time, Wednesday, 10 October 2012
For all the flak thrown at the boards of BAE and EADS in recent days, they do not believe their plan to merge the huge defence and aviation companies is dead. But are they right?
Well-placed sources tell me that they are likely to decide tomorrow night to request a 14-day extension to the timetable for getting all the necessary ducks in a row - which is an essential pre-condition of them coming out of purdah and announcing the detailed terms of the marriage they seek.
16:50 UK time, Tuesday, 9 October 2012
I have learned a bit more about the mistakes made by the Department for Transport in overseeing the contest to win West Coast Main Line rail franchise.
As I understand it, the entire bidding process was flawed - and that all four of the bidders were given erroneous information by civil servants when preparing their bids.
09:43 UK time, Friday, 5 October 2012
After we learned in 2007 and 2008 that banks in general had far too little capital as a protection against losses on their loans and investments, you would probably think that by now it would be difficult to find examples of banks continuing to lend several hundred times the sums they hold in reserves to protect depositors and taxpayers against the risk of picking up the bill when borrowers default.
You might think that, but according to the banking team at Morgan Stanley you would be wrong.
15:50 UK time, Wednesday, 3 October 2012
In awarding a contract to run a public service, such as a railway, there is a balance to be struck between making the contract long enough to encourage serious investment and not so long that the forecasts built into bids for the contract become highly speculative.
What the Department for Transport appears to have got chronically wrong in the case of the West Coast Main Line franchise is its assessment of the risk that attaches to projections by bidders of revenues in the latter years of the 15-year franchise.
08:22 UK time, Wednesday, 3 October 2012
Tesco is paying a big price to fix its UK business. The cost of hiring 8,000 additional staff to provide better service to customers is largely responsible for a fall of 11.6% in pre tax profits, to £1.7bn
There are signs that the investment is paying off, in that underlying sales in British supermarkets grew very slightly in the second three months of the year - having fallen in the previous three months.
Robert has won numerous awards for his journalism, including Journalist of the Year, Specialist Journalist of the Year and Scoop of the Year (twice) from the Royal Television Society, Performer of the Year from the Broadcasting Press Guild, and Broadcaster of the Year and Journalist of the Year from the Wincott Foundation.
Prior to joining the BBC, he was political editor and financial editor of the Financial Times, City Editor of the Sunday Telegraph and a columnist for the New Statesman and Sunday Times.
He broadcast and published a series of influential reports about the causes and consequences of the global financial crisis.
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