Darling to tell banks and regulators 'no excuses' - papers

Bank boardrooms have to be the first line of defence against future failures and they should not use the excuse of complex financial products to shield them from blame, Alistair Darling will tell the City on Wednesday, according to The Telegraph .

The Chancellor will warn that national regulators also need to keep their own house in order rather than look to new European Union and worldwide watchdogs to monitor their behaviour.

Mr Darling will say: "I strongly believe that the process of learning lessons has to start in the Boardroom. Bank boards must have the right people, skills and experience to manage themselves effectively.

"Their focus must be long-term wealth creation, not short-term profits."

Many Labour MPs believe Mr Darling has proved an understated, steadying hand during the financial and banking crisis. Full story...

THE CHIEF EXECUTIVE of Royal Bank of Scotland said yesterday that the global financial economy had "turned a corner" but that the full impact of losses from loans secured against property in the banking sector could take years to untangle, says The Times.

In a speech to the property industry in London, Stephen Hester, the former chief executive of British Land who took over from Sir Fred Goodwin at RBS in October 2008, said: "The world has turned a very important corner and we have moved from an extraordinary case of fear of unprecedented financial meltdown to a conventional recession."

He attributed the change in outlook to government action but warned that early signs of recovery were insecure and would depend on a fall in demand for credit from borrowers. Mr Hester acknowledged that there were signs of green shoots, but said: "Sometimes the first green shoots suffer from frost and are the first to die."

He said that as long as there were higher levels of borrowing than saving, a recovery in the banking sector and the wider economy was not guaranteed. Full story...

BARCLAYS IS under fire from several of its big shareholders who are questioning the huge pay-outs to staff at its fund management arm BGI following the sale of the business last week to BlackRock for $13.5bn, reports The Guardian.

Bob Diamond, BGI's chairman, is in line for a payout of £22m, while the arm's chief executive Blake Grossman will collect around £55m under the terms of the deal announced last week.

Speaking anonymously, one institutional shareholder with a £500m investment in Barclays said: "The BGI management incentive scheme is overly generous to staff, and to its senior executives most of all. You could argue that Barclays investors are being shortchanged."

Several other institutions expressed reservations about "the windfall" for 400 top executives who own roughly a 10% stake in BGI. One said: "Incentives are one thing, but the scale in this instance takes the breath away." Full story...