Full refund within 30 days if you're not completely satisfied.
April 13 - 19 2011
μWorld News PAGES 14-17
μComment PAGES 18-21
μObituaries PAGES 22-23
μExpat Life PAGES 30-32
Morley faces jail Former Labour minister pleads guilty over expenses
WORLD NEWS P14
Large aftershock hits Japan Residents and nuclear workers forced to flee to higher ground
A just heart The lawyer who quit his career to improve prisons in Africa
Hollywood’s mystic poet Tim Robey on Terrence Malick’s new film, ‘The Tree of Life’
11 7 13 14 38 41 6 8 17 21 39 47
Bonus Ball 45
Bonus Ball 22
There were no winners of Saturday’s £6.7m jackpot and no winners of Wednesday’s £2.3m prize
μEDITORIAL OFFICE: 111 Buckingham Palace Road, London SW1W 0DT. Tel (Int 44) 207 931 2000. Email email@example.com μADVERTISING: For details of local offices, contact Julie Bridge, Tel (44) 207 931 3290. Email firstname.lastname@example.org. For further information from any advertiser in this issue, please email your contact details, the advertiser(s) and issue date to email@example.com μSUBSCRIPTIONS: Weekly Telegraph Subscriptions, 3rd-4th Floor, Victory House, Meeting House Lane, Chatham, Kent ME4 4TT. Tel (44) 1622 335080. Fax (44) 1634 815163. (Office hours: 09.00-17.00 GMT.) Email firstname.lastname@example.org μDELIVERY INQUIRIES: Australia: Network Services. Contact MAGSHOP. Tel: 136 116. Email email@example.com Canada: Vito Petrucci. Tel 001 416 585 3131. Fax 001 416 5855 476. Email firstname.lastname@example.org Denmark: Bjarne Balle-Christiansen. Tel 0045 3327 7724. Fax: 0045 3296 8682. Email email@example.com Germany: Frank Blumhofer. Tel 0049 6105 925 573. Fax 0049 6157 804 599. Email firstname.lastname@example.org Hong Kong: Jeff Law. Tel 00 852 2756 8193. Fax 00 852 2799 8840. Email Jefflaw@foreignpress.com.hk Kenya: Shadrack Ochanda. Tel 0025 425 40280. Fax 0025 425 40295. Malaysia: Peter Lee. Tel (03) 7981 8563. Fax (03) 7981 9613. New Zealand: Netlink Subscriptions. Tel 0064 9 308 2871. Philippines: Denis Catangay. Tel 832 5383. Fax 831 3256. Email email@example.com Singapore: Doreen Tan. Tel 6282 1960. Fax 6382 3021.Email Doreen@carkitfe.com South Africa: Global News, 74 First Road, Kew 2090, South Africa. Tel: (011) 8872670/1. Fax 0865117067. Email: firstname.lastname@example.org Thailand: Khun Tai. Tel (02) 887 3331. Fax (02) 887 2259. United States: Marlon Johnson. Tel 1800 933 2147. μNEWSSTAND INQUIRIES: The Publisher, 111 Buckingham Palace Road, London SW1W 0DT. Tel (44) (0) 20 7931 3447 Š The Weekly Telegraph (USPS#006819) is published weekly for US$218 a year by Telegraph Media Group Ltd, 111 Buckingham Palace Road, London SW1W 0DT, England. Periodicals postage paid at Newark, NJ. POSTMASTER: Send all address changes to The Weekly Telegraph, c/o SDS Global Logistics, 263 Frelinghuysen Ave, Newark, NJ 07114-1539.
μDATA PRIVACY: When you respond to Telegraph Media Group Limited’s competitions, offers or promotions, we may use your information for marketing purposes. We will contact you by mail or telephone to let you know about any of our special offers, products and services which may be of interest to you unless you have asked us not to. We will only contact you by email, text message, or similar electronic means with your permission. We will only pass your name on to third parties if you have consented for us to do so. In some cases our special offers, products and services may be provided, on our behalf, by our partners. If you have agreed to be contacted by us, your personal information may be passed to our partners; however, in all such cases we remain a data controller of your personal information. When responding to competitions, offers or promotions by postcard, if you do not wish for your details to be used by us to send you special offers, please make this clear by stating “No Offers”. We respect your data privacy. You may modify your preferences or get further information by writing to us at Data Privacy, Telegraph Customer Service, Victory House, Meeting House Lane, Chatham, Kent ME4 4TT or by email to data. email@example.com.
By Rupert Neate and Philip Aldrick BRITAIN’S banks were told on Monday that they must massively increase their capital reserves to protect savers and taxpayers from another financial crisis.
As The Telegraph went to press, the Independent Commission on Banking (ICB) was expected to recommend that banks hold £10 of shareholder equity for every £100 lent out.
Currently, the banks must hold a minimum of 7pc equity. The ICB was expected to say that lenders who qualify as “too big to fail” should hold a further 2pc-3pc – taking the minimum core equity requirement to 10pc.
Banks’ investors are likely to demand the banks operate on a further 2pc “cushion”, which will raise the effective capital requirement to at least 12pc. They are operating on an average of 10pc currently.
Credit Suisse has estimated Britain’s biggest banks will need to raise £15bn over the next two years to meet the requirements, likely to be adopted by regulators as part of the Basel III banking rules. The money could be raised by limiting payments to shareholders and staff through lower dividends and bonuses.
Danny Alexander, the Chief Secretary to the Treasury, told the BBC’s Andrew Marr Show on Sunday: “We set up this Commission because we have a serious problem which has caused enormous damage to our economy. [Banks’] balance sheets are five times the size of the British economy. We have to act on that and we certainly intend to.”
The ICB also recommends banks be forced to “ringfence” their retail operations from their riskier investment banking divisions in order to shield savers from so-called “casino banking”.
This will cost banks money as they will not be able to move capital around as easily.
Britain’s biggest lenders have warned George Osborne, the Chancellor, that if he forces them to adopt such tough requirements they may relocate overseas.
However, a source close to the ICB told The Telegraph that the banks were “peddling myths” about the effect of the rules on the UK’s ability to compete internationally.
“We wouldn’t be recommending anything that would have a hugely negative effect on the UK banks’ competitiveness,” the source said. Mr Osborne is said to take the banks’ threats to leave the UK “with a pinch of salt”.
The ICB report also recommends moving ordinary
THE SHAPE OF UK BANKING
Current accounts >> Market share
12pc Santander 14pc HSBC
8pc Other 7pc
5pc 13pc Santander
7pc Santander 18pc HSBC
>> UK retail banking versus investment banking
UK retail banking income
Investment banking income
Sources: TSC, 2010 annual reports savers up the creditor hierarchy to ensure financial market creditors can incur losses in the event a bank runs into trouble without enforcing the same “haircuts” on depositors’ money.
Sir John Vickers, chairman of the Commission, has suggested that Lloyds Banking Group should sell off more branches than the 600 mandated by Brussels to improve competition.
The Commission has expressed “cause for regret” over the Labour government’s decision to allow Lloyds to take over HBOS at the height of the crisis, but does not recommend that the takeover be unwound.
The final report will be published in the autumn. ÞOne of the world’s largest credit ratings agencies,
Moody’s, said it was reviewing the credit status of British banks and warned that it was preparing to reduce the rating awarded to many institutions.
These ratings are crucial for banks and building societies as they determine the price of borrowing for banks on international financial markets.
Banks with a lower credit rating will pay more – and the extra costs will be passed on to consumers who will face higher mortgage, loan and credit card rates.
Moody’s decided to intervene ahead of the publication on Monday of an interim review of Britain’s banks after ministers said financial institutions should not be “too big to fail”.
Moody’s said up to 18
institutions, including many smaller building societies, could see their debt ratings cut following the review.
The credit ratings agency is then expected to reduce the credit ratings of larger institutions.
Smaller banks are likely to be more vulnerable to downgrades. The larger banks would still be assumed to benefit from some level of tacit government support, “at least for now”, Moody’s said.
Borrowers were last week spared an increase in the Bank of England base rate, although rises are expected before the summer to help curb inflation. The European Central Bank increased rates for the first time in almost three years.
Portuguese bail-out: Page 33