A slew of data suggested that the British economy is recovering more robustly than had been thought. Indices of activity in manufacturing and services increased by the fastest rate in two years; a measure of business confidence was at its highest level since 2007; and a survey of credit conditions found a rise in demand for mortgages. Those figures gave Mark Carney a boost in his first week as governor of the Bank of England. Sober heads say the recovery is fragile, and point to the lack of investment.
Add Basel to the mix
The Federal Reserve issued rules that will compel American banks to follow the Basel 3 accords requiring them to hold more and higher-quality capital. The Fed also said it was planning even tougher requirements for eight systemically important banks, which may include a higher leverage ratio, a way of measuring how much equity banks have as a proportion of total assets.
The European Parliament voted narrowly against a measure to extend a cap on bankers’ bonuses to fund managers. Opponents of the plan argued that it would increase fixed costs on an industry that bore no responsibility for the financial crisis.
Zynga’s founder, Mark Pincus, stepped down as chief executive after a turbulent period at the online-gaming company, which is struggling to repeat the success of its desktop games on mobile devices. His replacement is Don Mattrick, who runs Microsoft’s Xbox unit and so may have learned a thing or two from the troubled launch of Xbox One.
Investors generally welcomed Nokia’s decision to buy Siemens’s share of the pair’s mobile-network equipment venture. The 1.7 billion euros(2.2 billion dollars) deal gives the Finnish company full control of Nokia Siemens Networks, which is a profitable business, in contrast to Nokia’s floundering mobile-phone division.
BlackBerry’s share price slumped by a third after it published disappointing quarterly earnings and revealed an 84m dollars loss. The smartphone-maker has revamped its range with touchscreen devices, but the 6.8m phones it shipped in the three months to June was below the 7.45m that had been forecast.
Stay of execution?
In a second vote the European Parliament decided to delay issuing more industrial permits to emit carbon. A glut of permits issued by Europe’s emissions-trading scheme has caused the price to sink, thus reducing the incentive for firms to cut carbon. But some argue that limiting the supply of permits will raise costs for businesses during the euro zone’s worst economic crisis. In April the parliament voted against the plan, bringing the ETS close to collapse.
Louis Freeh, the director of the FBI between 1993 and 2001, was asked to head an investigation into allegations of improper payments in the office that is processing claims against BP for the Deepwater Horizon oil spill. Last month BP ran newspaper advertisements stating its commitment to fork out for “legitimate claims”, but insisting that some losses were “inflated”.
A former chairman of Olympus, Tsuyoshi Kikukawa, and two other executives were given suspended prison sentences for trying to hide losses at the Japanese optical-devices company. The scandal came to light in 2011 when Michael Woodford, Olympus’s chief executive at the time, blew the whistle. Suspended sentences are often handed down in Japan for white-collar crime.
The chairman of CJ Group, a South Korean chaebol, was charged with embezzlement. Lee Jay-hyun is a grandson of Samsung’s founder. The government in Korea has promised to crack down on alleged mismanagement at the country’s powerful conglomerates.
America’s Commodity Futures Trading Commission indicted Jon Corzine on civil charges in relation to the 2011 bankruptcy of MF Global, a derivatives broker at which he was chief executive. The CFTC is charging Mr Corzine with a “failure to supervise diligently” when customer funds were misused to cover bets on debt. He says the allegations have no merit.
Steinway Musical Instruments agreed to be bought by Kohlberg & Company in a private-equity deal valued to the tune of 438m dollars. Steinway was founded in Manhattan by a German immigrant in 1853 and soon became the world’s most famous maker of pianos. It has factories in Queens in New York and in Hamburg.
Brothers who can spare a dime
Cameron and Tyler Winklevoss, entrepreneurial twins linked to the early days of Facebook, submitted a plan to regulators to set up an exchange-traded fund in Bitcoins. The virtual currency hit the headlines in April when prices soared and plunged. It is thought unlikely that regulators will approve the Winklevoss Bitcoin Trust.