Goldman to lift £1m cap on UK bonuses

Goldman Sachs is lifting the £1m bonus cap imposed on its 100 London-based partners last year as the firm begins to hand out multi-million pound payouts to staff around the world.

Despite a 38% fall in earnings last year, the company's bonus pool was cut by only 5% to $15.3bn, with its 35,700 employees around the world set to receive an average bonus of £268,000, the Guardian reports.

Last year Labour demanded that Goldman in London reduce bonuses as it imposed a tax on payouts of more than £25,000. Goldman said the tax had cost it $465m.

Meanwhile, British banks are attempting to negotiate a ‘peace deal' with the government over measures to make bonuses more transparent.

Royal Bank of Scotland and Barclays, which have big investment banking divisions, fear that disclosure of star traders' pay could lead to a "witch-hunt" and that the vilification of individuals in the media could drive some out of Britain, the Financial Times reports.

Former Bear Stearns trader pleads guilty in insider trading case

Danielle Chiesi, the former Bear Stearns analyst who compared insider dealing to an orgasm, has pleaded guilty in the latest chapter of the biggest case of fraudulent trading in decades.

Chiesi, who was a consultant for Bear Stearns' New Castle Funds, was arrested by the US authorities in October 2009 and is accused of earning more than $4m (£2.5m) by trading on insider information, the Guardian reports.

She and Raj Rajaratnam, co-founder of the Galleon Group hedge fund, are charged with illegally using tips from company executives, hedge fund officials and other insiders to earn $60m in illegal profits.

US prosecutors allege the pair profited from insider information from companies including Google and chip maker Advanced Micro Devices.

World will be forced to depend on OPEC oil, believes BP

Oil majors will have to share more power with state energy companies as the world becomes increasingly dependent on Iraq and Saudi Arabia for fossil fuels, according to a new analysis of the market by BP.

The firm believes OPEC, the 12-member cartel of oil-producing countries, is about to enter a new age of dominance over the market, the Telegraph reports.

BP's forecast shows that over the next 20 years OPEC will become as powerful as it was in 1970s - the decade when the cartel presided over a series of oil shocks and shortages - and its share of global production is likely to rise from 40% to 46% over the period.

Meanwhile, an American trading group is reportedly building up a "huge" physical position in North Sea oil, driving up London Brent prices above $98 a barrel.

Hetco, which is part-owned by US oil and gas group Hess Corp, is said to have taken control of eight North Sea Forties oil shipments and two Brent cargoes - and it is believed to be in the market for more.

The move would give Hetco more influence over the price of oil for immediate delivery.

Brazil raises interest rates to battle dollar and inflation

Brazil has raised interest rates sharply, following China, India and host of countries across the emerging world in acting to curb inflation and counter the flood of dollar liquidity from the US.

Alexandre Tombini, the new head of Brazil's hawkish central bank, kicked off his tenure by raising the key Selic rate a half point to 11.25%, despite fears that this will push the over-valued real to extreme levels, according to the Telegraph.

Brazil faces an acute dilemma since high rates have made it the darling of the global "carry trade", attracting US, European and Japanese funds chasing yield.

The country's trade deficit doubled last year to $71bn, and there is evidence that the strong real is letting Asian exporters eat into Brazil's industrial base.