Finance Matters

• 27Jul

  IMF grants Sri Lanka $2.6bn loan

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  From The BBC:

  The International Monetary Fund has approved a $2.6bn (£1.6bn) loan to help Sri Lanka weather the global economic crisis and rebuild war-torn regions.The first $322m tranche of the 20-month loan is available immediately, with the rest subject to quarterly reviews. Britain and the US abstained from the vote, citing humanitarian concerns during the government’s recent fighting against Tamil Tiger rebels. Colombo says the money will be used to start the country’s “healing process”. Sri Lanka’s Enterprise Minister, Anura Priyadarshana Yapa, said the money would pay for post-war reconstruction work in the north and east of the island – areas previously controlled by the rebels. “We have completely destroyed one of the worst terrorist outfits in the world and it is time to start the reconciling and healing process in our country,” Mr Yapa told Reuters news agency on Friday. Humanitarian concernsThe loan comes two months after the government crushed the Tamil Tiger rebels, ending Sri La…

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• 27Jul

  Microsoft in new EU browser offer

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  From The BBC:

  Microsoft has made a new proposal to European competition regulators that it hopes will end their row over the firm’s Internet Explorer web browser.It proposes that European buyers of its new Windows 7 operating system will be offered a list of potential browsers when they first install the software. The move comes a month after Microsoft said European buyers of Windows 7 would have to download a web browser. Brussels ruled in January that pre-bundling Explorer hurt competition.
  Microsoft said its proposal meant that users would be able to “easily install competing web browsers, set one of those browsers as a default, and disable Internet Explorer” from a “ballot screen” of alternative browsers. “We believe that if ultimately accepted, this proposal will fully address the European competition law issues relating to the inclusion of Internet Explorer in Windows,” said Microsoft general counsel Brad Smith. ‘Investigate'”The Commission welcomes this proposal, and will now investigate its…

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• 27Jul

  Football fans’ savings account rates miss their goal

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  From The BBC:

  Interest rates on savings accounts aimed at football club supporters are much lower than last season, analysis has found.Clubs receive a payment each year from building societies which run “affinity” savings accounts aimed at their fans. But the average interest rate paid to savers with accounts has dropped from 2.47% at the start of last season to 0.19% now, according to Moneynet.co.uk. But the proportion given to clubs has remained relatively steady. Financial supportClubs promote soccer saver accounts to their fans, with many offering incentives such as tickets or club shop discounts to anyone who deposits a certain amount of money.
  “Affinity accounts won’t provide savers with a best buy return on their money, but many supporters are happy to sacrifice a higher rate of interest in return for being able to do their bit for their team,” said Andrew Hagger, of Moneynet. He said the accounts had followed the general trend of falling interest rates, with the biggest drops seen on return…

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• 27Jul

  Safety of savings to be tightened

  Money No Comments

  From The BBC:

  Savers will be compensated faster for lost savings if a bank, building society or credit union goes bust, the City watchdog has announced.The Financial Services Compensation Scheme protects up to £50,000 per saver per institution if a bank goes under. Now the Financial Services Authority (FSA) has announced that from 2011, compensation will be paid within 20 days, or preferably within a week. The banking crisis prompted many savers to spread their funds for safety. Since queues formed outside Northern Rock branches in 2007, the rules about deposit protection have come under scrutiny.
  The Financial Services Compensation Scheme (FSCS) charges a compulsory levy on the UK’s financial services industry that would cover compensation for savers if a UK bank were to go bust. Tough testThe compensation scheme has been tested following the collapse of high-profile banks such as Icesave.
  At present, payouts for savers with failed banks can take up to six weeks. The new rules would mean th…

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• 27Jul

  Ban on raiding funds to pay fines

  Money No Comments

  From The BBC:

  Insurance companies have been told by the City watchdog that they must no longer fund compensation from their with-profits investment funds.Fines and compensation from operational failures might previously have come from surpluses in policyholders’ funds. But the Financial Services Authority (FSA) has ruled that shareholders must pick up the bill from 31 July. However, the consumers’ association Which? has said the new rules have been watered down from earlier proposals. It wanted the rules to cover retrospective cases of mis-selling. SurplusesSurplus funds, known as inherited states, have been built up over many decades in the “with-profits” funds of life insurance companies. They have been used to pay compensation and fines, of millions of pounds, imposed on companies as a result of policies being mis-sold. A Which? spokeswoman said that consumers were effectively paying for the companies’ mistakes. Any mis-selling that occurs after 31 July could no longer be compensated using funds…

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• 27Jul

  ‘Customers pay’ as banks rebuild

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  From The BBC:

  Banks and building societies are trying to rebuild their profits at the expense of customers, according to Moneyfacts.The price of borrowing has continued to rise significantly, even though the Bank of England’s base rate has stayed at a record low, new figures show. Mortgage rates have seen the sharpest rise. Three months ago, the price of a typical two-year fixed mortgage was 4.65%. Now it’s 5.17%. Interest rates on credit cards have also risen, though by a smaller amount. The charges on cash loans have been steady since the start of the summer, although they are up by more than 2% since this time last year. Rebuilding ProfitsMost experts believe that banks are using the relatively low level of competition in the mortgage market to rebuild their profits.
  At the moment just eight or nine big lenders are supplying the vast majority of mortgages. Michelle Slade, of the financial information website Moneyfacts, said lenders’ potential profit margins were the largest they had seen since…

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• 27Jul

  EDF fined £2m for ‘poor’ service

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  From The BBC:

  EDF Energy Networks has been fined £2m for poor customer service, industry regulator Ofgem has said.It said that the company had failed to meet the required timescales for connecting customers. EDF had taken steps to improve its connections service but this should have been done earlier, Ofgem said. Electricity companies have to provide an offer to property developers about the cost and details of connecting new premises to the network within 90 days. The company, which completed more than 10,000 connection projects last year, said it “greatly regretted” the delays. DevelopersEDF Energy Networks has three electricity distribution networks and is the monopoly provider in certain areas of the country.
  If new homes or business premises are built, the developer makes a request to the company for these properties to be connected to the electricity network. As part of its licence, EDF Energy Networks is required by the regulator to make an offer on the cost and details of the connecti…

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• 27Jul

  Savings ‘postcode lottery’ claim

  Money No Comments

  From The BBC:

  Customers have faced varying rates of return on their savings depending on where they lived in the UK, an academic has claimed.Banks and building societies based in Northern Ireland, Yorkshire and the east and north of England offered lower returns between 1992 and 2006. Better deals were available in the North East and South West of England and the Midlands. John Ashton, of the University of East Anglia (UEA), assessed 1,225 accounts. “The findings indicate that geography is only one of many factors which influence interest rates set by banks,” said Dr Ashton, of the Economic and Social Research Council Centre for Competition Policy at UEA. Account accessThe academic, whose research was published in the Applied Economics Letters journal, points out that many of these financial institutions had different business models. Using data from financial information service Moneyfacts, he analysed instant access and notice deposit accounts from 167 providers. Most providers offer the same inte…

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• 27Jul

  Fuel scheme ‘failing the poorest’

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  From The BBC:

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  Mervyn Kohler, Age Concern and Help the Aged: “It is absolutely scandalous”
  A scheme aimed at improving households’ fuel efficiency and cutting fuel poverty is “failing the poorest and most vulnerable”, MPs have said.Nearly a fifth of the funding for the multi-million pound Warm Front scheme was going to households that were already energy efficient. And £15m was spent on measures that did little to pull households out of fuel poverty, the committee of MPs said. The government is aiming to end fuel poverty in England by 2016. ‘Focus’More than four million UK households are estimated to be in fuel poverty – defined as a household that spends more than 10% of its income on energy bills.
  But the Public Accounts Committee report concludes that only a third of the genuinely fuel-poor qualified for help under the Warm Front scheme. This was partly because they needed to claim all benefits to be eligible for the Warm Front…

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• 27Jul

  Ofwat calls for lower water bills

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  From The BBC:

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  How a water meter and rainwater butts can result in bills of £10 a month
  Water companies’ bids to raise prices between 2010 and 2015 have been snubbed by regulator Ofwat, which wants average household bills to fall instead.Taking out the impact of inflation, the regulator wants the typical bill in England and Wales cut by £14 to £330. According to the regulator, the proposals will allow water companies to invest £21bn in improving services over the next five years. But companies suggest that customers might suffer as a result of the plans. Every five years, Ofwat sets limits on prices that water companies in England and Wales can charge.
  Water and sewerage services in Scotland and Northern Ireland are regulated separately. ‘Value for money’Water companies submitted their business plans to Ofwat in April, and the regulator has now set price limits as well as suggested investment levels for each individua…

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