“Twilight Zone” reboot in the works from Bryan Singer, CBS Television Studios






LOS ANGELES (TheWrap.com) – Bryan Singer is about to enter “The Twilight Zone.”


The “X-Men” director is working on a reboot of Rod Serling‘s television series with CBS Television Studios, a spokeswoman for CBS Television Studios told TheWrap. Singer will develop and executive-produce the project, and could direct.






The project is currently in the very early stages.


The original “Twilight Zone” ran on CBS from 1959 to 1964, and the network revived the series in the 1980s. Most recently, the UPN ran a revival of the series, with Forest Whitaker hosting. That version, which launched in 2002, lasted one season.


Singer was also involved in the revival of another classic television series earlier this year, with NBC’s “The Munsters” revamp, dubbed “Mockingbird Lane.” Initially conceived as a series, “Mockingbird Lane” aired as a Halloween special for the network.


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Signs suggest better economy if ‘cliff’ is averted






WASHINGTON (AP) — Fresh signs of a strengthening U.S. economy on Friday suggested that if Congress and the White House can avert the “fiscal cliff,” the economic recovery might finally accelerate in 2013.


Consumers spent and earned more in November. And for a second straight month, U.S. companies increased their orders for a category of manufactured goods that reflects investment plans.






In light of the latest figures, some analysts said the economy could end up growing faster in the current October-December quarter — and next year — than they previously thought.


“I see momentum building,” said Joel Naroff, chief economist at Naroff Economic Advisors. “If Washington makes the moves it needs to make, then the economy should pick up speed next year.”


That’s a big “if.” House Republicans called off a vote on tax rates and left budget talks in disarray 10 days before the package of tax increases and spending cuts known as the fiscal cliff would take effect.


Still, helping lift the optimism of some analysts was a government report that consumer spending, which fuels about 70 percent of the economy, rose 0.4 percent in November compared with October. Spending had dipped 0.1 percent in October. But that decline was linked in part to disruptions from Superstorm Sandy.


Incomes rose 0.6 percent in November, the biggest gain in 11 months. It reflected a rebound in wages and salaries, which had been depressed in October. Damage from Sandy in the Northeast prevented some people from working at the end of October and reduced wages at an annual rate of $ 18 billion.


A separate report Friday showed that a category of durable-goods orders that tracks business investment surged 2.7 percent. That gain followed an upwardly revised 3.2 percent jump in October, the biggest in 10 months.


The back-to-back increases followed a period of weakness in so-called core capital goods that had raised concerns about business investment, a driving force in the economy.


The economy grew in the July-September quarter at a solid 3.1 percent annual rate. But some analysts said they thought growth would slow significantly in the October-December period. They predicted that consumers and businesses would cut back on spending because of worries about the fiscal cliff.


But after Friday’s reports, Peter Newland, an economist at Barclays Capital, said Barclays is raising its estimate of growth in the current quarter to a 2.4 percent annual rate, from a previous estimate of 2.2 percent.


Naroff said he thinks growth in the fourth quarter can reach a 2.6 percent annual rate. He said he expects growth to hit a rate of around 3.2 percent in the January-March quarter and 3.6 percent in the April-June quarter.


He said those estimates are based on his confidence that Washington policymakers will avert the sharp tax increases and spending cuts, which could trigger a recession if they remain in place for much of 2013.


Naroff said U.S. economic growth would benefit next year from a rebounding housing market, gradual hiring gains that will boost incomes and the likelihood that Europe’s financial crisis will ease and dampen U.S. exports less than in 2012.


But he said his optimistic forecasts would be derailed if the economy goes off the fiscal cliff in January, which could send shockwaves through financial markets.


“If the fiscal cliff is breached, the biggest concern is confidence,” Naroff said. “I remain hopeful that saner heads will prevail in Washington.”


Economists said the budget impasse and the uncertainty it’s created about tax rates are reducing consumer confidence. The University of Michigan said Friday that its index of consumer sentiment for December fell to 72.9, its lowest point since July. It was a sharp drop from the November reading of 82.7, a five-year high.


Chris G. Christopher Jr., senior economist at IHS Global Insight, said he still expected holiday retail sales to increase a respectable 3.9 percent this year over last year despite slumping consumer confidence. And he said spending momentum should continue into 2013 — as long as the fiscal cliff is resolved in a way that avoids damaging the economy.


“We are assuming that the fiscal cliff does get resolved, and if it does, we should see strong consumer spending and momentum for the economy in 2013,” Christopher said. “But if we go down the fiscal cliff, then the first quarter will not be pretty.”


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UK prosecutors consider charges over royal hoax call






LONDON (Reuters) – British detectives investigating the death of a nurse found hanged after she took a prank phone call at a hospital treating Prince William‘s pregnant wife Kate have passed an evidence file to prosecutors, police said on Saturday.


Public prosecutors must decide whether the case is strong enough to bring charges over a stunt that was condemned around the world and fuelled concerns about media ethics.






Indian-born Jacintha Saldanha, 46, was found hanging in her hospital lodgings in London, days after she answered the hoax call from an Australian radio station, an inquest heard.


She put the call through to a colleague who disclosed details of the Duchess of Cambridge‘s condition during treatment for an extreme form of morning sickness in the early stages of pregnancy.


“Officers submitted a file to the Crown Prosecution Service (CPS) for them to consider whether any potential offences may have been committed by making the hoax call,” London’s Metropolitan Police said in a statement.


A CPS spokesman confirmed it had received the file, but declined to comment on the timing or nature of possible charges.


“That is what we will be considering,” he said.


Prime Minister David Cameron has described the case as a “complete tragedy” and has said many lessons will have to be learned from the nurse’s death.


Australia’s media regulator has launched an investigation into the phone call. Southern Cross Austereo, parent company of radio station 2Day FM, has apologised for the stunt.


Britain’s own media is already under pressure to agree a new system of self-regulation and avoid state intervention following a damning inquiry into reporting practices.


The presenters who made the call, Mel Greig and Michael Christian, have apologised for their actions.


(Reporting by Peter Griffiths; Editing by Stephen Powell)


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North Korea’s first video game: A boring version of ‘Crazy Taxi’ that nitpicks your bad driving






In theory, a driving game set in North Korea could be fun — it could revolve around delivering kidnapped movie stars from the airport to Dear Leader’s headquarters, for instance. In reality, though, it looks as though playing a driving game set in North Korea is about as much fun as actually living in North Korea. Business Insider’s Gus Lubin has posted his first impressions of “Welcome to Pyongyang,” an online game that’s “produced by Nosotek, a western IT company based in North Korea,” and he’s found that it’s pretty lame.


[More from BGR: Years after cashing out, MySpace cofounder mocks people who work for a living]






The goal of the game is to drive around the North Korean capital of Pyongyang and become familiar with all the great tourist attractions it has to offer. But unlike action-driving classics such as Crazy Taxi and the Grand Theft Auto series, Welcome to Pyongyang is annoyingly authoritarian and won’t put up with you crashing into cars or mowing down civilians. To make matters worse, the game doesn’t even give you the satisfaction dying at the hands of bloody-minded authorities if you break the rules too often — rather, it sends out a fascistic meter maid to simply tell you that you have been “stopped for bad driving.” We’re not sure what the actual penalty is for reckless is in North Korea, but we get the feeling it’s more severe than getting nitpicked by an annoying digital character.


This article was originally published by BGR


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3-day trip becomes 3-week ordeal for 2 Jamaicans






SAN JUAN, Puerto Rico (AP) — It was supposed to be a three-day fishing trip at most. It turned into a three-week ordeal, drifting under an intense sun for hundreds of miles in the Caribbean in a small boat with a broken motor.


The two Jamaican fishermen survived by eating raw fish they caught and drinking water from melted ice they had brought to preserve their catch. The Colombian navy finally plucked them from the sea a week ago and delivered them home Saturday after treating them for severe dehydration, malnutrition and hypothermia.






Everton Gregory, 54, and John Sobah, 58, recounted their story in a telephone interview from Jamaica, while the boat owner and the men’s employer also provided details.


The men set off from Jamaica’s southeastern coast on Nov. 20. The water was glassy, the wind was calm and their boat was laden with 14 buckets of ice, 16 gallons of water and several bags of cereal, bread and fruit.


They headed to Finger Bank, a nearby sand spit 8-miles-long (13-kilometers) that is known for its abundance of fish like wahoo, tuna and mahi mahi. The owner of the 28-foot (8-meter) boat said she usually joins them on fishing trips, but she couldn’t go that afternoon.


After spending a couple of days around Finger Bank, the two men set off for home with their catch. But the boat’s engine soon died. The water was too deep to use the anchor and the current too strong to use the oars, so the boat slowly drifted away from Jamaica.


At first, the men got by on sipping the water and eating the food they brought with them. But days turned into weeks, and they began to eat the fish they had caught and drink the melted ice that had kept it fresh.


Gregory and Sobah kept eating raw fish and used a tarp to try to collect water, but the rain clouds remained at a distance.


Back home, friends and family called police and used their own boats to search the area where the men were last seen. The two fishermen work for the Florida-based nonprofit group Food for the Poor, which chartered a plane to search along Jamaica’s coast.


Marva Espuet, the owner of the boat, said she knew she had packed it with more food and water than needed for a three-day trip, but the thought provided little relief.


“If I had gone, there would have been two boats going,” said the 52-year-old woman, a longtime friend of both fishermen.


With searches proving fruitless, Sobah’s niece grew frantic, recalled Nakhle Hado, a fishing manager for Food for the Poor who helped lead the search. She “begged me that she wanted John back for Christmas,” Hado said.


Hado said some people believed the two men would never be found, but he and others didn’t give up. “My gut was telling me that they were still alive,” he said.


Hado said he had trained Gregory and Sobah on how to survive at sea.


“In case something happens, they don’t have to think twice. They know how to react,” he said. “It’s very important, their mental state.”


Gregory and Sobah finally ran out of fresh water and went several days without drink. A healthy human being can die from dehydration anywhere from three to five days without water.


Then on Dec. 12, a Colombian navy helicopter patrolling off the coast of that South American country spotted the men near Lack of Sleep cay, more than 500 miles (800 kilometers) from where they started. It took two days for a navy vessel to reach them because of bad weather. The men were hospitalized for several days at the Colombian island of San Andres before boarding a plane back home to Jamaica.


“It feels good,” Sobah told the AP in a brief phone interview after arriving.


Gregory said he had lost hope, but Sobah tried to keep him positive that they would be rescued. “I just had that belief,” Sobah said. “I believe in the Creator.”


Yet it is Gregory who plans to keep fishing despite the ordeal because he needs the job.


Sobah said he’s done. “I’m not going to go fishing again. No way.”


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Crafters send mittens with a message to Newtown






Chester Raccoon stood at the edge of the forest and cried. ‘I don’t want to go to school,’ he told his mother. ‘I want to stay home with you. I want to play with my friends. And play with my toys. And read my books. And swing on my swing. Please may I stay home with you?’” — “The Kissing Hand,” by Audrey Penn.


___






NEW YORK (AP) — Imagining the horror for Sandy Hook Elementary students when they walk into their new school for the first time, a Connecticut mom is relying on Chester of the children’s classic “The Kissing Hand” and the busy fingers of her fellow knitters to ease their way.


Kim Piscatelli of East Hampton, Conn., hit on the idea of sending a copy of the book for each of the kids and a pair of handmade mittens adorned with a heart in one palm, signifying the reassuring kiss left there by the mother of scared, sad Chester in the story written by Audrey Penn.


Piscatelli, a 40-minute drive from Newtown, sent out a call to her friends, who called on their friends. The project she thought up just Sunday spread quickly on Facebook and websites for knitters and crafters, with the first shipment of books and mittens scheduled to land in Newtown the first week of January.


“I thought, how are those families ever going to get back in a routine of sending their children to school? If there ever was a town that needed to know about that book, it was Newtown,” said an overwhelmed Piscatelli, who now has a warehouse stacked with 1,600 copies of the book and plenty of volunteers to sort, pack and ship.


Others are hurriedly making mittens, from California and Canada to Florida and the U.S. Virgin Islands, in time for the start of classes in a once-shuttered school in nearby Monroe. A knitters’ group in Georgia pulled an all-night “knitathon” for the cause, Piscatelli said.


The book’s publisher, Tanglewood Press, has donated the books, along with enough copies of a sequel dealing with Chester’s loss of a playmate for teachers to read aloud.


In “The Kissing Hand,” the tearful boy is heading off to school for the first time, but he begs his mother to stay home. She spreads his tiny fingers and kisses him square in the palm and tells him “whenever you feel lonely and need a little loving from home, just press your hand to your cheek and think, ‘Mommy loves you.’”


The story was first published in 1993 by the Child Welfare League of America, a Washington, D.C.-based coalition of agencies and organizations helping children at risk. Penn had tried and failed for years to get her story of Chester published, until a league official heard Penn read it and decided to take it on.


“At first, no bookstore, no wholesaler would carry it,” said Peggy Tierney, who worked at the league and took Penn with her after starting Tanglewood. “Then kindergarten teachers discovered it, word spread, people started going into stores trying to find copies, then everyone started carrying it, and by 1999 it was on the New York Times best-seller list.”


One of Piscatelli’s first stops in getting her mitten project off the ground was to contact Penn, who lives in Durham, N.C. She recalled reading the story to her own three kids when they were younger.


Penn, who lost a brother to drowning when she was 13, signed off on the combined book-mitten project as soon as Piscatelli contacted her.


“When I saw the news, my heart was just torn in half. I couldn’t breathe. I couldn’t breathe. Enough is enough is enough,” the writer said.


Penn’s 2009 sequel, called “Chester the Raccoon and the Acorn Full of Memories,” has Chester the boy raccoon working through the death of a friend, Skiddil Squirrel, who has an accident. Chester’s teacher tells his class Skiddil won’t return to school, so Chester and his mother venture to a butterfly pond where the squirrel loved to play to discover some acorns Skiddil left there have sprouted into young trees.


“I’ve been involved with so many parents who have lost children,” Penn said. “They just seem to reach out to me and say we love your book and your book has been a comfort.”


The writer hopes the children of Sandy Hook will “get a sense of some kind of security” from the mitten project. “They’ll have a way of keeping in tangible touch with someone at home, someone they feel very secure with.”


Meantime, Piscatelli and dozens of knitters who have contacted her through the project’s Facebook page are pressing on to get the books and mittens in the students’ hands. About 600 kids attended Sandy Hook when Lanza opened fire, but Piscatelli plans to share mittens and books with all the schoolchildren of Newtown.


“The original request was for hand-knit mittens with a heart knit in, embroidered on or sewn on,” she said. “The reality is we have people sewing polar fleece mittens, mittens made from recycled sweaters, store-bought mittens. Every pair of handmade or store-bought mittens will have a heart sewn on if it isn’t there when we receive them.”


Piscatelli has heard from other crafters who plan related Kissing Hand projects, including a group of schoolchildren in Mississippi making pillows.


“Everybody wants to help,” she said. “Everybody’s looking for some way to reach out.”


When a company called Oceanhouse Media learned of Piscatelli’s idea they released a digital version of “The Kissing Hand” early and free of cost in the iTunes app store. Piscatelli has also heard from the loved ones of grown-up volunteers on the ground in Newtown.


“I got a call from a woman who said my father is with the Red Cross,” Piscatelli said. “He’s a psychologist and is there now and I really think he needs a pair of Kissing Hand mittens.”


___


Follow Leanne Italie on Twitter at https://twitter.com/litalie


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Hurting Spaniards pin hopes on Christmas lottery






MADRID (AP) — After another brutal year of economic hardship, Spaniards across the country are hoping for relief when the country’s famed Christmas lottery — the world’s richest — pays out €2.5 billion ($ 3.3 billion) in tax-free awards on Saturday.


Almost everyone in the country of 46 million people will be glued to live TV to watch school children sing out the winning numbers for the lottery that pays out maximum prizes of €400,000 ($ 529,840) and many more for smaller amounts. The top prize is dubbed “El Gordo” (“The Fat One”) and is likely to be won by hundreds if not thousands of players.






Unlike other big lotteries that generate just a few big winners, Spain‘s lottery — now in its 200th year — has always aimed for a share-the-wealth-system rather than a single jackpot, and thousands of numbers yield at least some kind of return.


The Christmas lottery is so popular that there are frequently three €20 ($ 26) tickets sold for every Spaniard, and the lottery itself is the unofficial kickoff of the holiday season.


“A lot of people win,” said Pablo Foncillas, a marketing professor at the IESE Business School in Madrid. “It’s really common even if you don’t win to get a free ticket. So many people win that people just keep on playing. Everyone knows someone who’s won, even if it’s only a little bit.”


Hundreds of players lined up daily to buy tickets this week outside the Dona Manuelita lottery store in Madrid, which has often sold winning tickets. Before Spain’s property-led economic boom collapsed in 2008, they had hoped to win so they could buy a small apartment or a car. Now people said they need the money just to hang on to what they have and avoid being evicted or having cars repossessed.


Betting that tickets from Dona Manuelita stood a better chance of winning, unemployed construction company office manager Miguel Angel Ruiz drove 165 kilometers (102 miles) to buy for a pool of players including his wife and relatives.


“We’re buying more hoping we’ll hit it so we can emerge from poverty,” said Ruiz, 39. “Before the crisis, lottery winnings were to buy an apartment or a car, and now it’s to pay debts.”


Diego Sanbrano, let go from his waiter’s job two months ago, said the Spanish lottery isn’t about getting rich and never working again.


“It’s to pay off debts and straighten out your life,” he said. “You pay the mortgage and make the car payment, and then maybe you have a little left over to go somewhere on vacation.”


Since so many people chip in to buy tickets in groups, the top prizes frequently end up being handed out in the same small town or in one city neighborhood. Last year’s top winning number hit for 1,800 tickets in the northern town of Granen, population 2,000. Townspeople shared about €700 million ($ 925 million), and the rest of the €1.8 billion ($ 2.4 billion) was doled out in smaller prizes around Spain.


The Dec. 22 lottery began in 1812 and last year sold an estimated €2.7 billion ($ 3.6 billion) in tickets with per-capita spending of about €70 ($ 92) just for the Christmas lottery.


Spain holds another big lottery Jan. 6 to mark the Feast of the Epiphany. It is known as “El Nino” (The Child), in reference to the baby Jesus.


But the crisis will hit El Nino and all lotteries going forward. Until now, lottery winnings have been free from taxation. Waves of austerity measures imposed by the government this year to prevent Spain from asking for public finances bailout like those for Greece, Ireland and Portugal have translated into higher taxes. Lottery winnings above €2,000 ($ 2,640) will face a 20 percent tax in 2013.


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Windows already threatening iPhone in Southern Europe






Kantar Worldpanel’s report for November came out and much has been made of the iPhone market share surge in the United States. What I find interesting in the November numbers is just how ice cold the iPhone has gone in so many international markets, from Australia to Brazil to Southern Europe. The iOS market share showed hefty declines outside in many major markets: down 5.4 percentage points in Australia to 35.9% and down 1.6 points in Brazil to 1.6%. That’s right — the iPhone market share has halved in the most important South American market over the past year. And this happened while BlackBerry and Symbian market shares absolutely caved in. This should have been the period for Apple (AAPL) to pick up points while RIM (RIMM) and Nokia (NOK) floundered. Instead, the sky-high pricing of the iPhone models has effectively started reversing Apple’s market share gains across several major markets.


[More from BGR: Fan-made tweak gives Apple a blueprint for better multitasking in iOS 7 [video]]






In November, the burden of the stiff iPhone pricing was highlighted by how rapidly Windows has started closing the market share gap in Spain, Italy and France. Because Nokia has had trouble ramping up the production of the new Lumia 920 and 820 Windows models, it chose to crank out older Windows models like 800 and 610 for remarkably aggressive Christmas promotions. As European markets are now hitting 50% smartphone market penetration, consumer demand is shifting towards cheap models, and Apple cannot compete in the budget category. The new first-time smartphone buyers have a lot lower household income than the consumers who bought smartphones in 2010. In the recession-ravaged Europe, the upgrade cycle is lengthening and prepaid smartphones are a more important part of the overall product mix.


[More from BGR: RIM’s biggest problem: It’s still scrambling to catch yesterday’s hottest mobile app]


As a result, Windows market share in Italy hit a stunning 11.8% in November despite the razor thin availability of the Lumia 920. Windows has already erased most of the market share lead iPhone had in Italy. The iOS market share slipped to 20.6% during the last month. In Spain, Windows market share vaulted to 3% from 0.4% a year earlier while iOS share faded to 4.4%. As the affordable HTC (2498) 8S ramps up and the even cheaper Lumia 620 launches at the end of January, Windows may overtake iPhone in Spain already in February.


The strong performance Apple had in France and the United Kingdom kept its overall European market share climbing by 2.5 percentage points in November. But in Southern Europe, Latin America and parts of Asia, iPhone is slipping badly due to the lack of a low-end version. This is what is driving the Google (GOOG) Play revenue surge globally as Android apps now narrow the huge lead Apple built in the app market before the year 2012. Apple may well have to reconsider its iPhone pricing strategy in a fundamental way. Maintaining $ 620 ASP level globally could lead to a scenario where Android has 10-to-1 volume lead outside the United States and Northern Europe, and Windows actually has a shot at pulling well ahead of Apple in lower income countries from Spain to Brazil to South-East Asia.


This article was originally published by BGR


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Martha Raddatz, Hot Off Debate Performance, Promoted at ABC News






NEW YORK (TheWrap.com) – Martha Raddatz, widely praised for her moderation of the vice presidential debate in October, has been given an expanded role as ABC News’ chief global affairs correspondent. Jonathan Karl, meanwhile, will become the network’s new chief White House correspondent, filling the void left by Jake Tapper‘s exit to CNN.


Raddatz will replace Tapper as the primary substitute for George Stephanopoulos on “This Week” and will contribute regularly to the Sunday morning show’s roundtable. Karl will also serve as a substitute and regularly appear on the roundtable.






Tapper departed ABC in part because he has long been interested in hosting “This Week” full-time, but Stephanopoulos has no plans to give up the hosting job, a person familiar with the situation told TheWrap.


ABC News President Ben Sherwood announced the new assignments for Raddatz and Karl on Thursday, soon after CNN announced Tapper’s hiring.


Karl has investigated wasteful federal spending, covered elections, and served as the network’s senior national security correspondent.


Raddatz has reported from the Pentagon, the State Department, the White House, and from conflict zones worldwide, including Afghanistan and Iraq.


But she has been perhaps most celebrated for keeping the vice presidential debate between Joe Biden and Paul Ryan on course after the moderator of the first presidential debate, Jim Lehrer, was accused of letting the candidates run amok.


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Call for tougher banking reforms







Government plans to ring-fence the banks – trying to protect retail banking from the riskier investment side – “fall well short of what is required”, a report has warned.






The Parliamentary Commission on Banking Standards wants the government to “electrify” the fence so banks cannot make holes in it.


The government’s bank reforms will go before Parliament early next year.


The Treasury said it was committed to reforming the banking sector.


Vickers recommendations


The Parliamentary Commission on Banking Standards, known as the Banking Commission for short, was asked by Chancellor George Osborne to study the draft version of the government’s Financial Services (Banking Reform) Bill.


This follows last year’s recommendation by the Independent Commission on Banking, which was led by Sir John Vickers.


Sir John concluded that ring-fencing was the best way to protect “core” retail banking activities from any future investment banking losses, such as were seen during the global financial crisis.


The government’s proposed bill also spells out rules to protect depositors and prevent the use of taxpayer money for bailouts, thereby curtailing banks’ perception they are “too big to fail”.


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The bill hinges on three main aspects:


  • ring-fencing or protecting retail banking

  • ensuring that bank losses fall on bank creditors and not depositors or taxpayers

  • making banks better able to absorb losses

Ring-fencing would ensure that retail services of a struggling lender can be carried on independently and smoothly even if authorities let the rest of the group fail.


For example, in the case of a failing banking group, regulators could sell off its core activities – thereby maintaining continuity for depositors – while allowing the rest of the organisation to go through a bankruptcy process.


Secondly, the proposed bill wants to rank retail deposits (but not pension liabilities) ahead of the claims of other bank creditors in the event of a bank insolvency.


Thirdly, banks are to hold a sufficient capital buffer – as outlined by global regulators – which means that if banks do fail, losses can be absorbed by shareholders and other creditors rather than the taxpayer.


“Electrification”


Under the draft legislation, the Treasury would have the authority to decide which banks ring-fencing should apply to, as well as specific activities to be undertaken, within ring-fenced banks.


The Prudential Regulation Authority, which will become the UK’s regulator for deposit-taking institutions in April under the Bank of England, would have the power to ensure the ring-fenced bank to carry on with its business.


But there has been much debate over whether to enforce a full separation between retail and investment activities – that is, a break-up. The recommendation by Sir John stopped short of such action.


Andrew Tyrie, chairman of the Banking Commission, said that the “electrification” of the ring fence should include the regulator being able to force the full separation of a bank’s retail and investment divisions, if the lender was found to be trying to break the fence.


“The proposals as they stand [in the Bill], fall well short of what is required,” he said.


“Over time, the ring-fence will be tested and challenged by the banks. Politicians too could succumb to lobbying from banks and others, adding to pressure to put holes in the ring-fence.”


Continue reading the main story
  • The Parliamentary Commission on Banking Standards was appointed in July following the Libor scandal and other episodes that damaged the reputation of banks in the UK

  • It includes MPs and peers and is chaired by Andrew Tyrie, who also heads the House of Commons’ Treasury Committee

  • Members include the next Archbishop of Canterbury, Justin Welby

  • It heard evidence from major figures in the banking sector

  • Evidence included a warning from RBS boss Stephen Hester that ring-fencing banks’ retail and investment arms could increase the risk of institutions needing to be rescued

  • But Barclays chief executive Antony Jenkins told the commission that his bank was “embracing” the ring-fencing proposal

  • The commission has also heard from Paul Volcker, a former chairman of the US Federal Reserve, about his US proposals to ensure bank safety


He added: “For the ring-fence to succeed, banks need to be discouraged from gaming the rules. All history tells us they will do this unless incentivised not to.”


“That is why we recommend electrification. The legislation needs to set out a reserve power for separation – the regulator needs to know he can use it.”


Anthony Browne, the chief executive of the British Bankers’ Association (BBA), welcomed the report, but warned that uncertainty over banks’ prospects could have a negative impact on their ability to lend.


“The risk here is creating uncertainty. If it’s perpetually hanging over the banking sector that individual banks or the whole sector could be broken up at some point, then it’s going to be difficult to return to having an investable banking sector that can be customer-focused and globally competitive and do what it should be doing, which is lending to homeowners and businesses,” he said.


Ed Balls, Labour’s shadow chancellor said: “As Ed Miliband and I said at the Labour conference this year, if the letter and spirit of the Vickers proposals are not delivered and we do not see cultural change in our banks, full separation will be necessary.


“The Commission is clearly right to say the jury is still out and to demand a reserve power for full separation of the banks.”


‘Consensus commitment’



The Commission’s report comes a month after Mr Osborne urged its members not to send the government’s proposed reform “back to square one” by “unpicking” the consensus on how it should be carried out.


A Treasury spokesman said on Thursday evening: “The government is committed to reforming the financial sector and putting in place a regulatory structure that learns the lessons of the past and protects taxpayers in the future.”


“It has been committed to building consensus and has consulted widely on these reforms over the last two and half years. The Banking Reform Bill is the next step in that.


“The government is grateful to the Parliamentary Commission on Banking Standards for its scrutiny of the draft bill and notes that it, ‘welcomes the government’s action to bring forward legislation to implement a ring-fence’.”


The spokesman added that the government would study the report and respond in detail when the Financial Services (Banking Reform) Bill is formally introduced to Parliament early next year.


BBC News – Business





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