Banks rebuffed for scare stories on tighter regulation - papers

The banking sector's warnings that tighter regulation will throttle the recovery have been rejected by the body designing the new safeguards.

The Bank for International Settlements (BIS), the Zurich-based club for central banks, says rules requiring lenders to hold more cash on their balance sheets would have only a 'modest' impact on economic growth in the medium term, the Daily Mail reports.

Over the longer term the new regime would increase the wealth of nations by sparing taxpayers the cost of bailing out major lenders in another recession, it says.

Its assessment rebuts increasing warnings from banks which say the proposed reforms could shatter the fragile economic recovery.

Banks claim the flow of credit into the economy will be squeezed even further, should they be forced to raise their loss-absorbing cash cushions too quickly.

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Reverse takeover rules loosened

Reverse takeover rules are being loosened by the UK Listings Authority (UKLA) to make it easier for listed companies to buy larger unlisted or foreign businesses, the Financial Times reports.

Under previous UKLA rules, listed companies had to have their shares suspended until they could provide three years worth of fully audited financial data for the target.

However the new rules, quietly announced last month, state auditing is not necessary.

The previous practice of creating a new holding company - ‘topcos' - to take over both the acquirer and target has been banned.

Reports suggest Prudential's recent bid for AIG's Asian businesses could have been made easier by the new rules as shareholders had stood in the way of creating a topco.

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GM readying for biggst IPO in US history

General Motors has taken the first steps towards a stock market flotation worth up to $20bn, the Guardian reports.

An official application has been filed with the Securities and Exchange Commission for what would be one of the largest public share offerings seen in the US.

The carmaker is currently 61% owned by the US Treasury and filed for chapter 11 bankruptcy protection in June 2009.

The news comes on the back of a $1.6bn profit in Q2.

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UK company profits could suffer as Chinese costs soar

Rises in wages and production costs in China could mean lower profits for western companies with operations there,  the Telegraph reports.

A report from Credit Suisse suggests manufacturing wages have almost quadrupled over the past ten years, with many firms now considering relocating to countries such as Bangladesh, Vietnam and Indonesia.

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