Barclays: MPs query Bob Diamond evidence

MPs who questioned former Barclays chief executive Bob Diamond on the rate-rigging affair have expressed surprise at some of his evidence.

Mr Diamond called the behaviour of those responsible for the Libor rate-rigging at the bank "reprehensible".
But Andrew Tyrie, chairman of the Treasury Committee, said some of what the banker said seemed "implausible".
And another committee member, David Ruffley, said he was not satisfied with Mr Diamond's explanation.
During three hours of questioning by the Treasury Committee, Mr Diamond said he had only learned the true extent of the scandal this month.
He had felt "physically ill" when reading incriminating emails from traders that they had conspired to manipulate the Libor rate.
Mr Diamond said he "loved" Barclays and had resigned on Tuesday to protect its reputation: "I'm sorry, disappointed and angry."
But Mr Tyrie, who has been asked to lead a parliamentary inquiry into banking following the scandal, was sceptical about some of what he heard.
He told the BBC after the hearing: "We learnt that Bob Diamond says he didn't know anything about this until about month ago, which I find rather surprising.
"I think, cumulatively, the whole package looks somewhat implausible. And if it is plausible, it's only because there is something wrong with the culture of Barclays and, of course, it's the culture that needs to be put right."
In a separate BBC interview, committee member David Ruffley said: "Either [Mr Diamond] was complicit or, frankly, incompetent.
It was quite shocking testimony, in the sense that there was serious wrongdoing and he didn't know about it," the MP said. "Heaven knows what else was going on inside the bank."

 Clarify

In another development, the Bank of England's deputy governor, Paul Tucker, has asked to give evidence to the Treasury Committee in order to give his side of the story.
"Mr Tucker is keen to give evidence to the committee in order to clarify the position with regard to the events involving the Bank of England, including the telephone conversation with Bob Diamond on 29 October 2008," the Bank said in a statement.
John Mann, a Treasury Committee member, confirmed on the BBC's Newsnight that Mr Tucker would appear some time next week.
On Tuesday, Barclays released Mr Diamond's note of a conversation in 2008 with Mr Tucker.
In it, Mr Diamond wrote that Mr Tucker told him "senior figures within Whitehall" were concerned about why Barclays was setting its Libor rate at the "top end".
Subsequently, the Libor borrowing rates submitted by Barclays fell, potentially understating the extent of the bank's borrowing costs.
Banks borrow from each other daily, and report at what rate they got the money. A high rate can indicate a bank is having trouble borrowing money because it is in financial trouble.

 'A nod and a wink'

Mr Diamond told MPs that Mr Tucker had not identified these "senior figures" in Whitehall.

The former Barclays boss reiterated that he did not view his conversation with Mr Tucker as an instruction to change its rates submissions.
But Mr Tyrie suggested to Mr Diamond that the conversation with Mr Tucker could have been interpreted as "a nod and a wink".
"It reads that way to almost anyone who looks at it," said Mr Tyrie.
Mr Diamond has subsequently relayed his conversation with Mr Tucker to Barclays' chief operating officer Jerry del Missier.
But Mr del Missier, who also resigned on Tuesday, had "misunderstood" the conversation, and directed traders to take actions to lower Barclays' Libor rates.
The Financial Services Authority has investigated Mr del Missier's actions, and will take no further action.
Meanwhile, Chancellor George Osborne has directly accused members of Gordon Brown's government of involvement in the rate-rigging scandal.
Mr Osborne said the former prime minister's inner circle, including current shadow chancellor Ed Balls, had "questions to answer" over apparent pressure on Barclays to post lower Libor rates during the credit crunch.
The comments came in an interview for Thursday edition of the Spectator magazine.

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Latino Vote Coveted In 2012 Election

ALBUQUERQUE, N.M. — In New Mexico, Tomasita Maestas says she will pick the presidential candidate who has the best plan to fix education and the economy.
In Arizona, Mexican immigrant Carlos Gomez backs Republican Mitt Romney because he's more conservative on social issues than his Democratic opponent.
In Miami, Colombia native Luna Lopez probably will vote for President Barack Obama now that he's decided to halt the deportation of many illegal immigrants brought to the United States as children.
The reasons that Hispanics give for choosing between Obama and Romney are just as diverse as the countries that they or their ancestors once called home, suggesting there's no one-size-fits-all approach to courting the nation's fastest-growing minority group.
The Latino vote isn't monolithic or, really, a voting bloc. It includes a range of people with varying opinions. Among them are Republican-leaning Cubans in Florida, new Mexican immigrants and longtime descendants of Spanish settlers in the Southwest, and Democratic-tilting Puerto Ricans in the East.
Immigration policy would seem to be the natural top issue for these voters, except that nearly two-thirds of Hispanics are born in the U.S. Their priorities are the same as the general population – jobs, the economy, education and health care.
"We need to see more jobs here, that's my No. 1 priority and what I want to hear about," says Stefan Gonzalez, an almost 18-year-old from Denver, whose heritage includes Spanish, Mexican and Native American roots. Gonzalez, who works in a suburban Denver pawn shop, says he plans to vote for Obama this fall.
In Albuquerque, Ernest Gurule, an 84-year-old whose ancestors settled New Mexico in 1580, says his main issue is the federal health care plan upheld by the Supreme Court last week, and that he'll back Obama in part because of it. Also, the Democrat, adds: "It's too expensive to change horses midstream."
Democrats and Republicans are in a fierce race to figure out how to best reach Hispanics.

In the short term, these voters could decide the outcome in Nevada, Colorado, New Mexico, Florida and elsewhere. The long-term stakes are even bigger because Hispanics are projected to account for roughly 30 percent of the population by 2050, doubling in size and, potentially changing the national political landscape.
Like most minorities, Hispanics traditionally have leaned Democratic. But a recent Pew Research poll indicates that Hispanics also are the fastest-growing group of independent voters, with 46 percent now shunning a party label compared with 31 percent six years ago. Such results only underscore how diverse Hispanics are and the challenges for the political parties.
"It is going to be a very hard fight to win," says Jennifer Korn, the executive director of the Republican-based Hispanic Leadership Network, which was established to help bring more Hispanic voters to the GOP. "The more they assimilate, the more sophisticated they become and that's when they start dividing between parties."
For now at least, Obama and his Democrats have an advantage, with the latest polls showing 65 percent of Hispanics back Obama and 25 percent back Romney.
The Democrats' campaign has worked to keep that edge, helped by Obama's new immigration policy and the Supreme Court's decision to side with the administration on most of an Arizona law that many immigrants viewed as overly harsh.
His campaign has spent the past year setting up offices with grassroots outreach to Hispanic communities in the Southwest, as well as in important states such as Ohio, North Carolina, Pennsylvania and Florida.
Mindful of the diversity among Hispanics, Obama has custom-tailored his outreach, including tweaking Spanish dialect for different regions.
For instance, in Florida the campaign has two distinct outreach plans. One focuses on Cuban-Americans in Miami who tend to lean Republican and are less concerned about immigration; the other speaks to traditionally Democratic Puerto Ricans, who are U.S. citizens from birth, as well as new immigrants from Central America.
Obama also has promoted the new health law, which can resonate in states such as New Mexico, which has one of the highest rates of uninsured in the country.
Romney has plenty of ground to make up after a bruising primary season filled with tough rhetoric that even Republicans acknowledge turned off many Hispanics. He recently established a Hispanic advisory group that includes top elected Republican Hispanics.
During the primaries, the former Massachusetts governor pledged to veto legislation, known as the DREAM Act, that would give a path to citizenship to young immigrants who came to the United States illegally as children but have since attended school or served in the military. He has since toned down his anti-immigration stance, which included self-deportation, telling a Hispanic leadership gathering in Miami that he would address illegal immigration "in a civil but resolute manner."
Alexandra Franceschi, a spokeswoman for the Republican National Committee's Hispanic effort, made clear that the GOP outreach will focus broadly on the economy. "Hispanics are Americans and are facing the same issues as everyone else, chronically high unemployment, lower pay and rising health care costs," she said.
Republicans have noted that under Obama, the Hispanic unemployment rate is higher than the national average. And Hispanics' median household income fell 7 percent between 2000 and 2010, from $43,100 to $40,000, according to the Pew Hispanic Center.
What drives Hispanics to vote depends on who's asked.
Lopez, a 20-year-old new citizen and college student from Colombia, cites Obama's policy shift on deportation as reason she's likely to pick him when she casts her first vote in the country.
"The issue didn't directly affect me, but I have many family members and friends who it did," she said.
In Arizona, Gomez, a 43-year-old priest who immigrated to Phoenix 15 years ago, backed Obama's policy change. But Gomez says immigration isn't his priority because "immigrants will continue coming across the border no matter what we do." He says he's voting for Romney because, like him, the Republican opposes gay marriage and abortion rights.
In Albuquerque, Maestas, a 37-year-old mother and office manager, is focused intently on pocketbook issues. Immigration, she says, is only important to "a certain point" because "If you can't take care of your own, how are you going to take care of others?"

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Barclays settles allegations that it manipulated key lending rates

CFTC says scheme to manipulate rates was widespread at U.K. bank, including multiple traders and senior managers.

Fortune - U.K. bank Barclays agreed to pay $453 million to settle claims brought by U.S. and U.K. bank regulators and law enforcement officials that the bank participated in a scheme to fix two key lending rates, including the closely watched LIBOR, which affects as much as $350 trillion in loans and derivatives.
Of the $453 million paid by Barclays, $200 million was to the Commodity Futures Tradings Commission, which is the largest civil fine levied by that regulator in history. The bank agreed to pay another $160 million to settle charges brought by the U.S. Department of Justice, and nearly $93 million to the U.K. Financial Services Authority.

According to the settlements, Barclays bankers and traders regularly, and purposefully, misreported what it cost the bank to borrow money to an organization in London that tracks those rates. The settlement also says that Barclays colluded with other banks to manipulate their lending rates as well. The settlement says that the scheme was widespread at the bank, and included multiple traders on trading desks around the world. It also said multiple "senior managers" at the bank participated as well. No individuals were named in the settlements.
In a statement, Barclays CEO Bob Diamond said the conduct identified in the settlement did not meet the standards of his firm and that he and other top bank executives have volunteered to forgo their annual bonus for 2012. He said controls have been put in place to make sure similar actions don't happen again.
The CFTC settlement says the lending rate manipulation occurred over four years, and goes back as far as 2005, but intensified during the financial crisis. In late 2007 and 2008, the rate Barclays was being charged to borrow money began to rise. That fueled speculation that the bank was in trouble. As a result, according to the CFTC, senior bank officials told those responsible for reporting the bank's lending costs to submit a lower rate than the bank actually was paying. In late 2008, Tim Bond, who was Barclays chief strategist at the time, told Bloomberg television that he believed the overnight lending rates being reported by Barclays and others were made up.
It's not clear how much Barclays profited from the manipulation or how much it cost borrowers and others. Bank lending rates are used to calculate LIBOR, which is a key factor in other borrowing rates set by banks. For instance, many consumer lending rates, from those on home equity lines of credit to auto loans, are often based on LIBOR.
Banks also regularly sold derivatives to municipalities and pension funds based on LIBOR, and took the other side of those trades. According to the settlement, Barclays traders regularly coaxed bank officials to manipulate the lending rate they reported, sometimes up and sometimes down, in order to boost the value of their trades. Among the evidence the CFTC and others gathered against the bank include a number of e-mails in which traders appear to openly talk about the lending rate fixing scheme. For example, in one e-mail uncovered by the CFTC, a Barclays trader wrote to a submitter: "We have another big fixing tom[orrow] and with the market move I was hoping we could set [certain] Libors as high as possible."
Baltimore was sold as much as $300 million in LIBOR contracts. The city is the lead plaintiff in a class action against a number of banks, including Barclays. Baltimore's suit does not specify how much the city lost. But another case brought on behalf of beneficiaries of retirement accounts that owned LIBOR-based securities against a number of banks says the manipulation of the rate created "hundreds of millions, if not billions, of dollars in ill-gotten gains" for the banks.

"People taking out small business loans, student loans and mortgages, as well as big companies involved in complex transactions, all rely on the honesty of benchmark rates like LIBOR for the cost of their borrowings," says CFTC chairman Gary Gensler. "Banks must not attempt to influence LIBOR or other indices based upon concerns about their reputation or the profitability of their trading positions."
Regulators have been looking into allegations of LIBOR rate manipulation at Barclays and other banks for more than a year. Barclays is the first bank to settle charges, but Deutsche Bank has also disclosed that it has been the focus of investigations, and both banks have reportedly suspended dozens of traders related to the matter. Credit Suisse and UBS have also said that they are working with regulators on their LIBOR probes. CFTC officials thanked Securities and Exchange Commission officials in their press release, but declined to say whether the SEC would bring its own cases against Barlcays or other banks. CFTC officials also declined to say whether they would bring charges against individuals.

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"House prices are stabilising, says Nationwide"

House prices are stabilising, according to the latest monthly report from the Nationwide building society.

Prices across the UK rose by 0.2% in July, to £168,731, leaving them just 0.4% lower than a year ago.

The society said demand for homes was still sluggish, with completed sales still running at roughly half the level recorded before the banking crisis.

On Thursday, the Land Registry for England and Wales said average prices were unchanged, at £161,479.

The Nationwide's chief economist Robert Gardner said this stability reflected the "uncertain" state of the economy.

"House prices remain relatively high compared to incomes and, together with more demanding deposit requirements, this is dissuading, or at least delaying, some first-time buyers from entering the market," he said.
 
Down and up

Although prices are almost the same as they were a year ago, since July 2010 they have fallen and then recovered, according to the Nationwide's measurement.

Since December 2010, the average house price, not seasonally adjusted, has now gone up by 4%.

Economists often argue that the best guide to short-term trends is to compare the average price over the last three months with that of the previous three.

The Nationwide says on that basis, prices have risen by just 0.3%.

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"Nintendo shares plunge 20% after company reports a loss"

Shares in Nintendo have plunged on the Tokyo stock exchange a day after the company said it made a loss in the first quarter.

Its shares fell by 20% in early trading as investors reacted to the worse-than-expected earnings report.

On Thursday, Nintendo reported a net loss of 25.5bn yen ($324m, £201m) for the April-to-June quarter, its first-ever quarterly loss.

The company also cut its full-year profit forecast.

Nintendo said it now expects a net profit of 20bn yen for the year to March 2012, down 82% from its previous projection.

'Underweight'

Nintendo earnings were hit by weak sales of its new gadget, the handlheld 3DS console.

In an attempt to boost sales the company has announced huge price cuts.

The price in Japan will be about 40% less - retailing at 15,000 yen. In the US, the price will drop next month to $169.99 from $249.99.

However, analysts said the price cut may hurt the company's earnings even further.

"The timing of the 3DS hardware price cut is surprising, given the major in-house software releases," said Hiroshi Kamide of JP Morgan.

"We believe the 3DS will be a heavy weight on earnings over the medium term," he added.

JP Morgan also cut its rating on Nintendo from "overweight" to "underweight," saying the current situation was worse than feared and the outlook uncertain.

Tired customers?

To make matters worse for the gaming giant, industry watchers say sales of the 3DS are unlikely to turn around anytime soon.

"Software is a big problem. Right now there are not many games available for the 3DS," said David Abrams, of CAGCast Video Game.

Mr Abrams added that while the 3DS has had a lukewarm response, smartphones continue to capture an increasing share of the gaming market.

He said easy availability of games and their low cost meant more and more people were preferring smartphones over specialised gadgets.

"The question is, are people willing to spend a premium to play the next Mario game or would they spend that amount to buy close to 40 games on their smartphones," he said

Mr Abrams added that despite the launch of its latest version, the DS gadget has been losing its charm.

"The reality is that people may be tired of the whole DS concept. It has been around for almost seven years," he said.

"May be its not that exciting to people anymore," he added.

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"Japan's industrial output and household spending rise"

Japan's economy has continued to recover from the aftermath of the earthquake and tsunami, latest government data showed.

Factory output rose 3.9% in June from the previous month as supply chain concerns eased, while household spending increased by 0.8%.

Analysts said it showed the economy was recovering faster than expected.

The data comes a day after Japan reported a rise in retail sales for the first time since the 11 March quake.

"I thought we had to wait until the middle of next year for production to come back up to levels seen before the earthquake," said Seiji Adachi, of Deutsche Securities.

"But it now looks like manufacturing activities might go back to where they were as early as January-March next year," he added.
 
Strong forecast

Japanese manufacturers were hit hard by the devastation caused by the earthquake and tsunami.

Disruption to the country's supply chain saw some of the biggest manufacturers curb or suspend production.

However, as the infrastructure is restored, manufacturers are becoming increasingly optimistic.

According to a survey done by the Ministry of Economy, Trade and Industry, manufacturers expect output to rise 2.2% in July and 2% in August.

"Manufacturers' strong forecasts for July and August suggest the recovery in output remains on track," said Tatsushi Shikano, of Mitsubishi UFJ Morgan Stanley Securities.
 
Overcoming challenges

The recovery in the supply chain and factory output has come despite the manufacturers facing various challenges, not least a shortage of electricity.

Japan has been facing a power shortage after the twin natural disasters damaged the Fukushima Daiichi nuclear plant and forced the closure of various other nuclear plants in the country.

There were concerns that the electricity shortage would hit production, especially during summer months, when demand for power is at its peak.

However, analysts said manufacturers were able to overcome this shortage by implementing changes to their working hours.

"Power problems are having less of an impact than previously thought, thanks to companies' efforts to avoid operating during peak power demand hours," said Mr Shikano.
 
Currency woes

While the manufacturers have been able to overcome these challenges to get their production back on track, other factors continue to remain a threat.

The biggest amongst them has been a strengthening Japanese currency.

The yen, a traditional haven, has been rising against the US dollar in wake of the ongoing debt issues in the US and Europe.

A strong currency does not bode well for Japanese manufacturers as it not only make their goods more expensive to foreign buyers, but also hurts the companies' profits when they repatriate their foreign earnings.

"The yen's strength, if sustained for a long time, could dampen production in the longer term by hurting corporate earnings and thus their capital expenditure," said Mr Shikano


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US debt row: A crisis or a drama?

As worries over debts move from Europe to the US, the markets have reacted with only mild panic.
Economic problems in the US could be far more serious for the world economy than anything that could happen in Greece.

But some economists have suggested that an essentially political drama is being mistaken for an economic crisis.

The US government needs the permission of Congress to raise the ceiling on the amount of money it can borrow.

If Congress doesn't grant it - currently the deadline is 2 August - the government will hit the limit and may have difficulties in paying its bills.

But there is a wider economic problem behind the stalemate.

The US - like Greece - is spending far more than it earns through taxes.

The annual budget deficit has reached $1.5tn (£920bn) this year - just over 10% of GDP - and the country has amassed a national debt of around $14.3tn.

President Barack Obama and the Republican controlled House of Representatives both agree the US needs to borrow less in the future - they just disagree on how.

It's that argument which is delaying progress on lifting the current borrowing limit.

As a result, ratings agencies have suggested that they may downgrade US debt from its benchmark top-rated AAA status - unless the two sides agree on radical action to lift the limit and cut the deficit.
 
Default

The immediate worry for investors is that, if no deal is agreed by the 2 August, the US may find itself at risk of a so called technical default.

"The interests of voters and the interests of the markets are completely at odds," says Dr Pippa Malmgren from Principalis Asset Management.

Some members of Congress were elected promising not to allow the government to run a deficit.

"The market keeps being surprised when it shouldn't be. You will win votes if you shut the government down," she says.

But a failure to reach a deal by the deadline may not provoke panic.

"The 2 August deadline is not an absolute deadline, because tax revenues are pretty good so far," says James Knightley from ING.
 
Potential impact

If it does run out of money the government may stop paying wages and social security checks - a so-called 'shut down'.

Government last shut down under Bill Clinton in 1995 when non-essential government services stopped after similar failed negotiations over the budget.

That would hurt the fragile economic recovery - but many economists find it hard to believe the US would ever default and fail to pay its debts.

"I think the risk of that is almost zero," says Josh Feinman, global chief economist for DB Advisors.

"They'll keep paying the bond holders but they'll stop paying someone else." he added.

Not everyone agrees with Mr Feinman though.

The US needs to re-finance $1.7tn, or 12% of its total debt this year - that would be hard to do if it can't borrow fresh funds.

Fidelity, one of the largest private sector holders of US bonds, say they have been preparing for a possible default.

"We have re-positioned our portfolios to respond to [the threat of default] and that means we have raised our liquidity [cash] and adjusted our portfolio maturities past the early part of August," says Robert Brown, head of Fidelity's money-market business.

That means funds - which lend money to banks and businesses - are already holding more cash to prepare for a possible default.

This limits the amount they can invest - potentially driving up the cost of lending to businesses.

The cost will stay high until investors believe the crisis is solved on a long term basis.

With so much at stake some warn that, unless it is resolved soon, the political stand-off may undermine wider business confidence.

"We've got a melodrama here and we're going to have a panic for no good reason," warns Professor Peter Morici from the University of Maryland.

"If they do something at the eleventh hour they might not avoid panic. Companies are starting to hoard cash and delay hiring, that is the beginning of a crisis."

The economy could slow as companies panic over the uncertainties created by seemingly endless negotiations in Washington.
 
Downgrade

Even if the borrowing limit is raised, the US may have its top AAA credit rating downgraded.

Ratings agency Standard and Poor's has cut its outlook on the US's credit rating to negative.

Economists say agencies want a comprehensive deal to limit the US deficit over the long term.

"Agencies have said if we don't get the debt ceiling raised soon, coupled with an agreement in both houses of Congress to stop the debt ballooning, then we are going to downgrade the US," says Phillip Shaw from Investec.

Lowering the credit rating may make it harder for the government and companies to borrow money in the long term.

"You might see some impact outside of treasuries," warns Mr Feinman.

US debt would be less safe, so investors holding it would have less freedom to lend to other, riskier, companies.

"If you downgrade the US then they might have to sell some lower-rated stuff in order to keep the average credit quality."

But he doesn't think a downgrade makes any sense.

The US, he says, is not like Greece - it controls its own currency and can print as much as it likes to pay back debts.

"A credit rating is based on the chances [lenders] are going to get paid back. When you control your own monetary policy what does a rating even mean?" argues Mr Feinman.

Figures collated by ING show that 45% of US debt is held by the US government - which is unlikely to be unduly perturbed by a downgrade.

Even money-market funds such as Fidelity would not have to sell their debt, as US law makes government debt exempt from rules about diversification of risk.

Over the long term though the US may find it very hard to recover it's credit rating - should it need to.

"In my 16 years at Fidelity and at other firms, I've never seen an upgrade to AAA. We are the bellwether for safety and there are a lot of advantages that go with that," says Mr Brown.
 
Distraction

Some argue the episode is a distraction.

"The slowdown we are seeing in emerging and developed markets, together with the ongoing European crisis, is foremost in my thinking," says Rick Patel, portfolio manager at Fidelity International in the UK.

He sees the current uncertainty as investment opportunity.

"I've been investing in US treasuries largely because of the weakening growth outlook [in the US] which leads me to think treasuries are the way to go."

For others, the focus will soon return to Europe, where governments can't simply print money to get out of debt.

"Once the US story is complete and that is past we are going to revert to the eurozone story again," says Mr Knightley.

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"Public sector pensions: Extra payments revealed"

More than two million public service employees are being told how much extra they will be expected to pay in pension contributions from April 2012.

The extra contributions for NHS workers, teachers and civil servants come as the government looks to shave £1.2bn off its pension bill next year.

The maximum increase will be 2.4 percentage points from April.

But many more staff will now be asked to make smaller increases in their contributions than first thought.
 
Watered down

The proposals affect 2.5 million workers. They relate to NHS workers and teachers in England and Wales, and civil servants in England, Scotland and Wales.

The government has estimated that 750,000 staff earning less than £15,000 a year will not pay any higher contributions at all.

In general it has proposed that people earning between £15,000 and £21,000 (up from the previously suggested limit of £18,000) will pay 0.6 percentage points more from next April.

However, in two of the schemes for which detailed proposals have now been published, this aspect has been watered down.

For teachers, the Department for Education, in its own consultation response, has proposed that the 0.6 percentage point rise should apply to salaries up to £26,000.

This is designed to deter younger, newly-qualified, teachers from leaving the scheme.

For the NHS scheme, the 0.6% percentage point rise will apply to those earning up to £26,557.

Maximum contributions

The government wants those earning above these levels to pay larger increases of up to 2.4 percentage points more in 2012-13.

This, for example, would take the total contribution to a maximum of 5.9% for civil servants earning more than £60,000.

The highest paid NHS staff, such as doctors, now face a maximum contribution rate of 10.9% once they earn at least £110,273.

The highest paid teachers would pay a maximum 8.8% of their salaries into their scheme once they earn £112,000.

The additional contribution rates for civil servants, which have also been published, kick in at significantly lower salary levels than for teachers and NHS staff.

For example, at a salary of £30,000, teachers will pay additional contributions of 0.9 percentage points, but civil servants will face additional contributions of 1.6 percentage points.

However, civil servants' existing contribution rates are generally low in comparison.

More to come

The Treasury said that in the next financial year the proposals would save £530m in the NHS pension scheme, around £300m from the teachers' scheme and £180m in the civil service scheme.

The government had already said it was going to consult scheme-by-scheme on further increases in contributions in 2013-14 and 2014-15.

But a union leader accused the government of "playground games" by making the announcement on April's extra contributions now.

"These talks are being put in jeopardy by the crude and naive tactics of government ministers who do not seem to understand the word negotiate," said Dave Prentis, general secretary of Unison.


'Blatant tax'

The government is trying to implement the recommendations of Lord Hutton, the former Labour pensions minister.

His review of the public sector pension schemes, completed earlier this year, recommended higher contributions and the wholesale conversion of existing schemes from final-salary to career-average structures.

The Chief Secretary to the Treasury, Danny Alexander, has previously outlined plans for further additional contributions in later years, along with discussions about pension ages and structures.

However, these first proposals have prompted an angry response from a doctors' union.

"This is nothing about deficit reduction and the affordability of public sector pensions. This is just a blatant tax on pensions," Hamish Meldrum, the chairman of the British Medical Association, told BBC Radio 4's Today programme.

"As far as we know, this money is not going back into any pension scheme, it is going to the Treasury.

He said the NHS scheme went through a major reform three years ago, when contributions increased significantly.
 
'Difficult' negotiations

Mr Alexander said the details of April's rising contribution rates would be subject to 12 weeks of consultation, and added that they ensured that the government's contributions would be kept under control.

"These are difficult times for everyone - public sector workers included. We are ensuring that those with the broadest shoulders will bear the greatest burden," he said.

However, the union representing senior civil servants said the plans for contributions were "completely unjustified".

"These negotiations will be complex and difficult. However, if we are not able to reach agreement then industrial action is possible," said Jonathan Baume, the general secretary of the FDA union.


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"Sony makes a loss as quake and tsunami hit production"

Japanese electronics maker Sony swung to a loss in the April-to-June period after the earthquake and tsunami hit production at its factories.

The company reported a net loss of 15.5bn yen ($199m; £122m) for the quarter.

That was down from a 25.7bn yen profit during the same period last year.

Sony also cut its forecast for its full-year earnings by 25% to 60bn yen, from an original projection of a profit of 80bn yen.

The company said sales and profit "were mainly affected by the negative impact of the Great East Japan Earthquake as well as the deterioration of the electronics business environment, and unfavourable exchange rates".

Sony was not the only electronics company to see its results for the quarter hit by the natural disasters.

Also on Thursday, Panasonic reported a net loss of 30.4bn yen, compared with a 43.7bn-yen profit for the same period a year earlier.

And Sharp recorded a quarterly loss of 49.3bn yen, down from a profit of 10.7bn yen last year.

Switched off?

Sony reported sales of 732bn yen during the first quarter, a 17.9% decline from the same period a year earlier.

The company said various factors had contributed to the drop, not least the falling prices of Liquid Crystal Display (LCD) TVs.

Sony also warned that as economic woes in its key markets continued, it expected TV sales to fall even further.

"LCD TV unit sales for the fiscal year are anticipated to be below expectations," it said.
 
Tough market

However, analysts said that while demand from key markets had been falling, increased competition was also hurting the company.

"They are facing a lot of competition and also the strong currency. Competition is [increasing] globally," said Yoji Takeda of RBC Asia Equity Fund.

Mr Takeda added that for Sony to recapture its market share, it would have to come up with a range of more competitive products.

"The TV market is a very tough market because nobody is really making money and there is a lot of capacity available right now," he said.
Security costs

Sony also said that the cyber attacks that some of its networks were subjected to earlier this year - which led to network services being temporarily shut down - had led to higher costs to cover items such as better security measures.

These costs will be recorded in the July-to-September quarter, the company said.

Sony discovered in April that hackers had gained access to its PlayStation Network, which was then shut down worldwide for more than a month while the company reviewed its security procedures.

Its network services for Qriocity and Sony Online Entertainment were also attacked.


Mechanix Wear MMP-55-008 M-Pact Glove, Stealth Small

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"China fires top officials after railway crash kills 35"

China has fired three senior railway officials following a high-speed train crash that left 35 people dead.
The government has also halted services of 58 other trains and called for a nationwide safety check.

The accident is the latest in a series of problems for the high-speed network, which has been dogged by controversies, including accusations of corruption.

On Saturday, two train coaches fell off a bridge, after derailing close to Wenzhou in Zhejiang province.

The railway ministry said it had sacked the head of the Shanghai railway bureau, his deputy and the bureau's Communist Party chief.

"As leaders... they should take ultimate responsibility for the main cause of the accident," railways ministry spokesman Wang Yongping said.
Reliability concerns

The accident comes at a time when China has been spending billions of dollars to build a high-speed rail network across the country.

Last month it inaugurated the Beijing-Shanghai link, reducing the travel time between the two cities by half.

However, the project has come under fire for various reasons.

The first amongst those has been the high cost. The Beijing-Shanghai line cost 215bn yuan ($33bn; £21bn).

To make matters difficult for the authorities, the high-profile link suffered problems due to a series of power outages soon after its launch.

That raised doubts about the reliability of the high-speed network.

The latest crash has fuelled those concerns with questions being raised about safety.

However, Mr Wang of the railway ministry sought to quell fears.

"There will be many people who think that this is a safety problem caused by high-speed rail itself," he said.

"I should still say to people that China's high-speed rail technology is up to date and up to standard, and we still have faith in it."
Uncertain future?

While Chinese officials have reiterated their faith in the high-speed network, investor confidence in the sector has been dented.

Shares of Chinese rail equipment makers fell, as investors were concerned about the impact of the accident on companies associated with the sector.

Shares of China South Locomotive and Rolling Stock Corp Limited, the company that made the trains that collided, slumped as much as 16% to hit at 12-month low on the Hong Kong Stock Exchange.

China Northern Locomotive, another key player in the sector saw its shares fall 6.5% in Shanghai.

On the other hand, shares of Chinese airlines rose as investors picked up their stocks in the hope that people will prefer flights over rail travel in wake of the accident, thereby boosting the profits of the carriers.

Shares of Air China, China Southern Airlines and China Eastern Airlines all gained more than 4%.

Analysts said that markets were concerned that orders at the country's rail equipment makers may also be hit.

"Sentiment was dampened by the accident," said Mark Po of UOB Kay Hian.

"This is adding more uncertainties to the already weak sector as safety checks may delay the process of awarding contracts to the equipment providers," he added.

China is expected to spend up to 4tn yuan on its rail sector as part of its five year plan to 2015.

However, Mr Po said the accident could see that change.

"Nobody can tell whether these targets are still intact," he said.

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"The price of high-speed ambitions"

As China mourns lives lost in last week's high-speed rail crash near Wenzhou, there is also a tone of anger in the air.

"The people don't need this world number one or that world title. All we want is safety!," commented one reader of a news story posted on the popular Sina portal.

But the crash's other casualty is likely to be China's ambitions for its railway technology, which it has been developing rapidly and had high hopes of making an export success.

Before the crash, all talk had been of the government's drive to break records. The high-speed rail network was to be the largest in the world, as well as being completed in record time.

Those accolades are no longer being thrown around, as some blame that urgency and ambition for the death of at least 39 people.

The first of China's bullet-train lines opened in 2007 with plans to lay 16,000km (10,000 miles) of high-speed track by 2015, making it the biggest high-speed rail network in the world.

But the project has had its share of problems, even before the fatal crash.

First because of allegations of mass corruption that went all the way to top of the railway ministry, then later for delays caused by power shortages.

But some say that this latest incident could have been prevented, had authorities heeded the alarms raised.

"The Japanese say they have warned the Chinese for years about scaling up on this rapid pace," says Allistair Thornton from IHS Global Insight.

Japanese company Kawasaki, as well as Canada's Bombadier and Germany's Siemens are, in fact, the makers of the technology that China's network was based on.

Chinese companies say they have 'reinnovated' technology they gained the right to use after buying equipment from the foreign companies.

The other allegation is that the construction period was shortened unnecessarily.

"There is criticism on this kind of acceleration of the construction, experts warned there could be some problems in later operations," says Ingrid Wei, infrastructure analyst for Credit Suisse in Shanghai.

But Chinese companies were thinking even further ahead, past completion date.

Chinese train companies CSR Corp, CNR Corp and China Railway Group were hoping to sell the new technology to foreign countries, directly competing with the likes of Siemens and Bombadier.

But the crash has shaken public faith in China's rail system both inside and outside of the country.

Experts say that means potential clients such as Malaysia, Venezuela and Saudi Arabia who were looking into replicating China's rail expansion plans will be putting those ambitions on hold.

And potentially highly lucrative markets for China such as the US, will no longer be options.

"It's pretty hard to imagine any politician in the US signing on the dotted line for Chinese high-speed rail now. And so that's a huge market the Chinese were hoping to tap into and that's evaporated," says Mr Thornton.

That poses an even bigger financial problem for the state-owned rail companies.

The Chinese government has invested huge amounts of money into developing the high-speed rail network.

"It's not clear whether they will now be able to turn this into a profitable enterprise," says Mr Thornton.

Not least because ticket prices are too high for many Chinese consumers to afford. And after the crash, many others will be deterred from taking the high-speed trains.

However, Ms Wei says the high-speed rail network project is a state asset and will be strongly supported by the central government.

Before then, the government will have to answer some tough questions: why the systems failed and why safety was not the top priority.

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"S Korea's economic growth slows"

South Korea's economic growth slows on weaker exports

South Korea's economic growth slowed in the second quarter as exports and manufacturing weakened.

The annual rate of growth was 3.4% in the three months to the end of June, down from 4.2% in the previous quarter. Quarter-on-quarter growth was 0.8%.

The slowdown comes as demand from key markets such as the US and Europe has been hit by a slower economic recovery and debt concerns.

Analysts said Korea's outlook remained volatile due to issues in key markets.

"Export growth will ease as uncertain US economic prospects will leave us mainly reliant on demand from emerging markets and China, where demand again could be hit by a potential slowdown in exports to the US," said Ryan Oh of Samsung Securities.
Growing concerns

The slowdown in exports is the latest in a series of economic problems that have hurt the country's growth.

Exports from South Korea grew at an annual rate of 10.2% during the period, a decline from 16.8% in the previous three months.


While weak demand from key markets has hit growth, the sector has also been hurt by a strengthening currency.

The Korean won has risen more than 10% against the US dollar in past one year. A strong currency does not bode well for the export-dependent economy, as it makes Korean goods more expensive to foreign buyers.

At the same time, South Korea has been facing sluggish domestic demand and there have also been worries that rising levels of household debt may further slow growth.

Household debt has reached more than 800 trillion won ($750bn; £469bn).

Analysts said the combination of these factors poses a big threat to Korea's growth.

"Big risks remain [to Korea's economic growth] because domestic demand is not expected to show any sharp improvement in the near future," said Park Hee-Chan of Mirae Asset Securities.

Jun Min-Kyoo of Korea Investment & Securities added that the household debt was driving down demand in the housing sector and impacting construction activity in the country.
Balancing act

The slowdown in pace of growth comes at a time when Asia's fourth-largest economy has been trying to curb rising prices.

The Bank of Korea has raised the cost of borrowing 4 times in the last 8 months in an attempt to slow price growth.

The latest hike in June, pushed the central bank's main interest rate to 3.25%.

Despite hiking interest rates, the central bank has raised its projection for inflation, saying it expects consumer prices to grow by 4% this year, fuelling speculation that it may raise the cost of borrowing again in the coming months.

However, as the pace of growth slows, there are worries the central bank may have to rethink its monetary policy.

"The Bank of Korea is now concerned about the economy entering a [period of] slowing growth coupled with high inflation phase, which will make it difficult to decide on policy direction," said Samsung Securities' Ryan Oh.

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"Australia's inflation accelerates"

Australia's inflation accelerates on rising food prices

Australia's consumer prices rose more than forecast in the second quarter as high cost of food and fuel put pressure on inflation.

Prices rose by 3.6% in the three months to the end of June from the same period last year, latest data showed.

Food prices in the country have been rising in the aftermath of the devastation caused by floods and cyclones earlier this year.

Analysts said the data may force the central bank to raise interest rates.

"It's a nasty looking number," said Michael Blythe of Commonwealth Bank of Australia.

"It suggests the direction of the next rate move is going to be up, even if there is some uncertainty about when the Reserve Bank might pull the trigger," he added.
 
Inflation debate

The bigger-than-forecast rise in consumer prices has already triggered a debate in the country on the impact of rising price on the economy.

While the Reserve Bank of Australia (RBA) has maintained that keeping prices in check is one of its top priorities, it has left interest rates unchanged since November 2010.

Earlier this month, Glenn Stevens, the governor of RBA said "as the temporary price shocks dissipate, CPI inflation is expected to be close to target over the next 12 months,"

However, analysts said the latest figures indicate that the central bank may have to change its stand going forward.

"It's a high number... and back to back high core inflation numbers are not a great outcome for the RBA," said Ben Jarman of JP Morgan.

"It should make the RBA nervous and their own forecasts are bound to go higher," he added.

Adam Carr of brokerage firm ICAP added that consumer prices will continue to rise further.

"This is the exact reason I have been arguing that the RBA should hike rates because these surprises were always the risk," he said.

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";GE moves X-Ray unit to China to tap emerging markets"

General Electric (GE) said it is shifting the headquarters of its X-Ray unit to China, in an attempt to capture the fast-growing emerging markets.
The move comes as companies look to tap into emerging markets as demand from developed economies slows down.

The company said several senior officials of the unit will relocate to Beijing from the US over the next month.

GE Healthcare is the world's biggest maker of medical-imaging machines.

"I am keeping a globally distributed executive team," said Anne Legrande, vice-president of GE Healthcare Global X-Ray.
 
Growing importance

China is the second-largest and one of the fastest growing economies in the world.

Its rapid economic expansion has turned the country into one of the key markets for GE Healthcare.

The company's sales in China hit $1.1tn in 2010.

As the Chinese economy grows, the company is expecting the spend on healthcare to grow even further.

It has already announced plans to invest $2bn in China to expand its operations, including the building of innovation and development centres in the country.

"This is the first time a global product company is moving its headquarters to China," said Rachel Duan, chief executive of GE Healthcare China.

Overall, sales of GE Healthcare surged by 19% in the emerging markets in 2010.

Ms Duan added that the move to China will help the company concentrate on expanding its operations in emerging economies even more.

"As the company is going more global, it is important to be closer to our markets," she said.

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"Greece rating cut by Moody's amid default warning"

Credit rating agency Moody's has cut Greece's rating, warning that a planned debt swap would constitute a default.

The rating was cut another three notches from Caa1 to Ca - just two more notches shy of a default rating.

"The announced EU programme... implies that the probability of a distressed exchange, and hence a default, on Greek government bonds is virtually 100%," the agency said.

The debt swap would increase Greece's borrowing terms by up to 30 years.

However, a statement last week from the Institute of International Finance - a trade body representing global banks and other major lenders - conceded that the debt deal would cost private sector creditors an estimated 21% of the value of the Greek debts they currently hold.

It comes after another rating agency, Fitch, warned that it too expected the deal would mark a "selective" debt default by Athens.

The debt exchange with private sector lenders is part of a comprehensive package announced on Thursday by European leaders to shore up the euro and prevent the Greek debt crisis from spreading to other economies, notably Spain and Italy.

'Developing' outlook

As well as the private sector debt swap deal for Greece, European leaders also agreed last week to lengthen the repayment terms on existing bail-out loans, and lower the interest rate they were charging.

Unusually, Moody's assigned the rating a "developing" outlook, instead of the more typical "positive" or "negative" outlooks.

"Looking further ahead, the EU programme and proposed debt exchanges will increase the likelihood that Greece will be able to stabilize and eventually reduce its overall debt burden," the agency said.

However, Moody's said the debt exchange only offered the country limited relief, and did not make clear how quickly Greece might be upgraded from a default rating once it is complete.

"Our experience is that relatively small restructurings have often been followed by deeper defaults," said Alastair Wilson, managing director at Moody's.

The ratings agency also warned that Greece "will still face very significant implementation risks to fiscal and economic reform".

Austerity measures demanded by Greece's European partners and the International Monetary Fund remain highly unpopular among many of the country's voters, and face continuing street protests.
 

Precedent

The downgrade means Moody's has followed its counterpart Standard & Poor's in giving Greece the lowest rating of any country it rates in the world, falling below Cuba and Ecuador.

Moody's also had mixed messages for the prospects of other heavily-indebted eurozone countries.

"The support package for Greece also benefits all euro area sovereigns by containing the severe near-term contagion risk that would likely have followed a disorderly payment default or large haircut on existing Greek debt," it said.

However, the agency also noted that by agreeing to impose losses on Greece's private sector lenders, European leaders had set a precedent for the other rescued countries, Portugal and the Irish Republic.

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"South Korea and India sign nuclear deal"

South Korea's ambitions to enter the Indian energy market have received a big boost as the two countries signed a civil nuclear deal.

The agreement will allow South Korea to export its nuclear energy technology to India.

The deal comes at a time when India has been struggling to keep up its energy supply to meet the increased demand in wake of its rapid expansion.

South Korea is the ninth country to sign a nuclear deal with India.

"We look forward to the Republic of Korea becoming one more partner in the development of civil nuclear energy in India," said Sanjay Singh, Secretary (East), Ministry of External Affairs, India.
 
Win-win situation?

India's atomic energy market is estimated to be around $150bn (£97bn).

Last year India's lower house of parliament approved a law opening up the nuclear energy market to private investment.

It allowed foreign firms to build reactors as the country looks to increase its dependence on nuclear energy.

India is planning to set up some 30 reactors over as many years and get a quarter of its electricity from nuclear energy by 2050.

While the nuclear energy market in India is emerging, South Korea has seen the sector develop rapidly over the years.

Its nuclear plants supply almost one-third of the country's electricity.

As India looks to expand its nuclear energy market and Korea seeks to export its technology, the pact could benefit both nations in the long-run.

Mr Singh of India's external affairs ministry termed the deal as a "win-win" proposition for the two nations.

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"White Cube to open in Hong Kong as art market booms"

White Cube, the British art gallery best known for championing the work of Damien Hirst, will open its first overseas branch in Hong Kong.

The gallery will open early next year, said Tim Marlow, White Cube's director of exhibitions.

Mr Marlow said that the gallery chose Hong Kong due to its role as a hub for the region and its proximity to China.

In 2010, China became the second largest art market in the world, after overtaking the UK.

For China's freshly minted millionaires and billionaires looking to spend their wealth, art is a natural choice.

But they have tended to favour the art and antiques of their own country.

Mr Marlow doesn't think the confrontational nature of much Western contemporary art will make it a hard sell in Asia.

He says White Cube has already made a significant number of sales to collectors from the region, including pieces by Damien Hirst and brothers Jake and Dinos Chapman.

"Our mission is not to convert the region to Western art per se, but to forge a dialogue between the two," he said.

Mr Marlow said the gallery initially planned to show work by its existing, mainly British, contemporary artists but did not rule out representing artists from the region.

"We see Hong Kong as a place to base ourselves so we can become immersed in the culture," he says.

Auction sales in Hong Kong totalled $1.46bn in 2010, up 122% from 2009, according to Art consulting firm ArtTactic.

And Christie's said on Friday that sales in Hong Kong in the first half of the year were 60% higher than a year ago.

Art HK, the city's four-year old annual art fair, is now the biggest in the region and looks set to be even bigger next year following a takeover by the organisers of the world's most influential modern art fair, Art Basel.

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"Easyjet raises profits forecast"

Shares in budget airline Easyjet have risen 18% after it raised its profit guidance for the year.

Revenue in the three months to June was up 23% on a year ago to £935m after it increased its number of flights.

The firm said its new strategy, which includes appealing to more business customers, was seeing "good progress", with a 20% increase in business passengers seen in the quarter.

The airline now expects a full-year profit of between £200m and £230m.

Analysts had forecast a £179m profit.

Easyjet said passenger numbers had increased 17.3% compared with the same quarter a year earlier.

As well as running more flights, this growth was largely due to the comparable quarter in 2010 being affected by the Iceland volcano and ash cloud.

Excluding the impact of the volcano, there was an 8.8% growth in passengers.

Easyjet's load factor, which shows how full its planes are, improved slightly by 0.2 percentage points to 86.3%.

The airline also said it had sold 75% of seats for the key summer season.

Shares in Easyjet ended Friday trading up 55.30 pence at 368p.

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"Prince Andrew to stand down as UK trade envoy"

The Duke of York is to stand down as the UK's trade envoy.

Buckingham Palace has confirmed that Prince Andrew will give up his title as Britain's "special representative" for Trade and Investment.

The prince has been criticised over his friendship with controversial figures, including convicted sex offender Jeffrey Epstein, an American financier.

The prince has held the role as UK envoy from 2001 - his remit was to promote UK business interests abroad.

His friendship with Mr Epstein, who was sentenced to 18 months in prison in 2008 for soliciting a minor for prostitution, led to calls for Prince Andrew to step down from his role in March, but Prime Minister David Cameron gave him his full backing.

The prince's judgement has also been questioned for holding meetings with Libyan leader Col Muammar Gaddafi's son Saif, and for entertaining the son-in-law of Tunisia's ousted president Zine El Abidine Ben Ali at Buckingham Palace.


'Evolution'

The prince's relations with Timor Kulibayev, the son-in-law of the President of Kazakhstan, have also previously been questioned. Mr Kulibayev purchased the duke's Sunninghill Park home for £3m more than its £12m asking price in 2007.

And in November 2010 a hitherto secret cable published on Wikileaks revealed a US ambassador wrote that the Duke of York spoke "cockily" during an official engagement, leading a discussion that "verged on the rude".

There have also been long-running complaints about the lavish nature of his official foreign trips.

A Buckingham Palace spokeswoman said the prince would "continue to support business in the UK", adding that he "will not have a specialist role as defined by government but will undertake trade engagements if requested".

In his 2011 annual review, published on Thursday, the duke said: "As the evolution of my role continues apace and in order to reflect the changes I have outlined, I have decided that the label I gave myself when I began this role of Special Representative has served its purpose and is no longer necessary to the work that I do today and, more importantly, in the future."

Prime Minister David Cameron said he would like to thank the duke for the "major contribution he has made over the last decade to UK trade".

"I am certain that he and others in the Royal Family will continue to support and promote British business interests both at home and overseas," he added.


'Inevitable'

The BBC's royal correspondent Peter Hunt said it was his friendship with Mr Epstein's that had "sealed the fate of a senior royal whose judgement has been called into question more than once", and it had been "inevitable" that Prince Andrew would step down since March.

Matters had been made worse when his former wife Sarah Ferguson admitted having accepted £15,000 from Mr Epstein, to help pay off her debts, he said.

"In the four months since these facts became public, royal and government officials have been grappling with the challenge of what to do with the Duke of York."

But our correspondent said there would undoubtedly be some supporters who thought Prince Andrew had opened doors only a royal could open, and said he worked hard for British business.

Former trade minister Lord Digby Jones said although Prince Andrew's title was going, his job would be "very much the same", and "the next natural step".

"With one big add on, a bit less travelling and a lot more working with apprenticeships and young people in Britain to get them skilled up to make stuff the UK can sell round the world," he said.

"[Prince Andrew has] put the country first and it's important we, as business, say, let's use what he can do to actually create some profit, employ some people, pay some tax," he said.

The UK's trade envoy worked for UK Trade & Investment (UKTI), which reports jointly to the Foreign Office and the Department for Business, Innovation and Skills.

Prince Andrew did not receive a salary but has had his expenses and travel costs paid.

In his annual review of the financial year ending on 31 March, it was revealed that he visited 15 countries in 2010/11.

He carried out 616 engagements, of which three-quarters were trade-related.

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"Ecclestone 'admits payment' at heart of Formula 1 trial"

Formula 1 supremo Bernie Ecclestone has admitted to a newspaper that he paid $44m (£27m) to a former banker in 2006.

Gerhard Gribkowsky, who faces trial in Germany, stands accused of corruptly accepting the money. But Mr Ecclestone denies it was a bribe.

Mr Ecclestone told the Daily Telegraph that he paid the money because Mr Gribkowsky "threatened" him with trouble with the Inland Revenue.

The payment came during the sale of the sport in 2006.

In return for the payment to Mr Gribkowsky, who was in charge of the sale of German bank BayernLB's stake in F1, prosecutors allege Mr Ecclestone received $41.4m in commissions from the bank, as well as a large payment to a family trust.

In the Telegraph interview, Mr Ecclestone avoided accusing Mr Gribkowsky of blackmail and denied the money was a bribe.

"I never bribed anybody or paid any money to anybody in connection with the company," he told the newspaper.

F1 sale

The allegations revolve around the sale of BayernLB's stake in Formula 1 to private equity group CVC Capital Partners, which still owns the commercial rights to the sport.

A court will now decide whether Mr Gribkowsky will stand trial on the charges.

Mr Gribkowsky's lawyer was contacted but declined to comment.

Mr Ecclestone confirmed to BBC Sport the comments attributed to him by the newspaper.

CVC said it had no knowledge of any alleged payments to Mr Gribkowsky.

The firm bought majority control of F1 from Bernie Ecclestone's family trusts and a group of investment banks.

Mr Ecclestone remains F1's chief executive and retains a large shareholding in the sport.

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