MPs says no improvement since NRock - papers

Nearly two years on from the collapse of Northern Rock, financial regulation in Britain "remains in a muddle" according to a damning report.

The Daily Telegraph reports the House of Commons' Treasury Select Committee report, which is the fourth and last to come out of a nine-month investigation by the Committee, dismisses the Treasury's recent White Paper on banking and regulatory reform as "largely cosmetic".

The White Paper, which Alistair Darling unveiled last month, was billed as the Government's road map for rebuilding Britain's financial system.

The Committee found it inadequate. The report said: "Where responsibility lies for strategic decisions and executive action was, and remains, a muddle."

With thinly veiled criticism of the Government's plan for a new Council for Financial Stability, the report added: "Merely re-branding the Tripartite Standing Committee will do little in itself." Full story...

HERMITAGE CAPITAL, a London fund manager, has started legal proceedings in the US that will seek to connect Renaissance Group, a leading Moscow investment bank, to alleged fraud and money laundering involving the theft of hundreds of millions of dollars from the Russian Treasury, The Times writes.

The case, launched on Wednesday in the US District Court in New York, asserts that senior officers and former senior officers of Renaissance, including Stephen Jennings, currently chief executive, had "working relationships" with Dmitry Klyuyev, a convicted fraudster and alleged owner of USB, an obscure Russian bank.

USB, Hermitage asserts, was instrumental in orchestrating a series of complex frauds, one of which involved the theft of $230 million (£140 million) from the Russian Treasury via companies stolen from Hermitage.

The fund manager has asked the US District Court to order RenCap Securities, the US brokerage arm of Renaissance, to produce documents that Hermitage believes will help to prove, in the Russian courts, the existence of a gigantic conspiracy involving criminals, bankers and government officials bent on stealing from the Russian state. Full story...

BRITISH AIRWAYS posted a first quarter pre-tax loss of £148m this morning as the airline warned of "considerable uncertainty" over the timing of an industry recovery.

BA underlined why it has just raised £680m to bolster its balance sheet and is scrapping short-haul meals, with figures for the three months to 30 June showing a 12.2% decline in revenue to £1.9bn.

This pushed the airline from a pre-tax profit of £37m in the same period last year to a loss of £148m. Willie Walsh, BA chief executive, said trading conditions remained "very challenging" with "no visible signs of improvement."

The loss follows an even deeper pre-tax deficit of £331m at BA between January and March this year, when high fuel prices and a weak pound ramped up costs.

BA said there was a glimmer of hope for the airline as it reported that passenger numbers had stabilised over the past three months and were showing "some signs of improvement" as the peak travel season begins. Full story...