UK banks ‘may need more capital’















Sir Mervyn King: “This problem is manageable, but it requires some action now”



Major UK banks may need to raise more capital as protection against possible future losses, the Bank of England’s Financial Policy Committee has said.


Bank governor Sir Mervyn King said there were “good reasons” to think current capital ratios did not give an accurate picture of financial health.


His comments came as he presented the Bank’s Financial Stability Report.


The report suggested that the ‘Big Four’ UK banks need £5bn-£35bn of new capital.


However, BBC business editor Robert Peston said, “the precision of this calculation is somewhat to be questioned because it is based on 2011 data and also because it excludes the banks’ huge financial trading activities”.


The main UK banks include HSBC, Barclays, Royal Bank of Scotland and Lloyds.


‘Immediate attention’ needed


Sir Mervyn said: “UK banks currently report substantial buffers over the minimum level allowed”.


Continue reading the main story

Sir Mervyn and his colleagues on the FPC may today have engineered yet another significant delay to the moment when taxpayers can celebrate severing the ties that bind us to Lloyds and RBS”



End Quote



“But, in judging whether banks are adequately capitalised, we need to ensure that reported capital ratios do in fact provide an accurate picture of banks’ health. At present there are good reasons to think that they do not.”


He said there were three reasons why the Bank of England thought that the banks were not strong enough.


“First, expected future credit losses may be understated. Second, costs arising from past failures of conduct may not be fully recognised. And third, the risk weights used by banks in calculating their capital ratios may be too optimistic”.


Sir Mervyn added: “The problem is manageable, and is already understood at least in part by markets. But it does warrant immediate attention.”


Mis-selling costs


Inadequately capitalised banks hold back economic recovery and undermine investor confidence, he added.


The Bank is being granted greater regulatory oversight over banks from next year when it takes over the Financial Services Authority. One of its primary roles will be to make sure UK banks have sufficient capital to support the economy, said Sir Mervyn.


Adequate capital levels are also needed in the face of rising costs related to banking scandals.


This year, HSBC and Barclays were respectively hit by penalties over money-laundering and the alleged rigging of the Libor rate.


Meanwhile the banks have set aside billions of pounds to cover claims for payment protection insurance (PPI) mis-selling.


“In recent years, UK banks have also underestimated and underprovisioned for costs for conduct redress, notably for payment protection insurance (PPI) mis-selling,” the stability report said.


“In 2012, the number of identified conduct issues has grown and it seems likely that banks could face additional sizable costs.”


BBC News – Business


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Noisy city: Cacophony in Caracas sparks complaints












CARACAS, Venezuela (AP) — This metropolis of 6 million people may be one of the world’s most intense, overwhelming cities, with tremendous levels of crime, traffic and social strife. The sounds of Caracas‘ streets live up to its reputation.


Stand on any downtown corner, and the cacophony can be overpowering: Deafening horns blast from oncoming buses, traffic police shrilly blow their whistles and sirens shriek atop ambulances stuck in bumper-to-bumper traffic.












Air horns routinely used by bus drivers are so powerful they make pedestrians on crosswalks recoil, and can even leave their ears ringing. Loud salsa music blares from the windows of buses, trucks with old mufflers rumble past belching exhaust, and “moto-taxis” weave through traffic beeping high-pitched horns.


Growing numbers of Venezuelans are saying they’re fed up with the noise that they say is getting worse, and the numbers of complaints to the authorities have risen in recent years.


One affluent district, Chacao, put up signs along a main avenue reading: “A honk won’t make the traffic light change.”


“The noise is terrible. Sometimes it seems like it’s never going to end,” said Jose Santander, a street vendor who stands in the middle of a highway selling fried pork rinds and potato chips to commuters in traffic.


Prosecutor General Luisa Ortega recently told a news conference that officials have started “putting an increased emphasis on promoting peaceful coexistence” by punishing misdemeanors such as violations of anti-noise regulations and other minor crimes. That effort has translated into hundreds of noise-related cases in recent years.


Some violators are ordered to perform community service. For instance, two young musicians who were recently caught playing loud music near a subway station were sentenced to 120 hours of community service giving music lessons to students in public schools.


Others caught playing loud music on the street have been charged with disturbing the peace after complaints from neighbors. Fines can run as high as 9,000 bolivars, or $ 2,093.


On the streets of their capital, however, Venezuelans have grown used to living loudly. The noisescape adds to a general sense of anarchy, with many drivers ignoring red lights and blocking intersections along potholed streets strewn with trash.


“This is something that everybody does. Nobody should be complaining,” said Gregorio Hernandez, a 23-year-old college student, as he listened to Latin rock songs booming from his car stereo on a Saturday night in downtown Caracas. “We’re just having fun. We’re not hurting anybody.”


Adding to the mess is the country’s notoriously divisive politics, which regularly fill the streets with marches and demonstrations.


On many days, the shouts of protesters streaming through downtown can be heard from blocks away, demanding pay hikes or unpaid benefits.


And the sporadic crackling of gunfire in the slums can be confused for firecrackers tossed by boisterous partygoers.


It’s difficult to rank the world’s noisiest cities because many, including Venezuela’s capital, don’t take measurements of sound pollution, said Victor Rastelli, a mechanical engineering professor and sound pollution expert at Simon Bolivar University in Caracas. But Rastelli said he suspects Caracas is right up there among the noisiest, along with Sao Paulo, Mexico City and Mumbai.


Excessive noise can be more than simply an annoyance, Rastelli said. “This is a public health problem.”


Dr. Carmen Mijares, an audiologist at a private Caracas hospital, said she treats at least a dozen patients every month for hearing damage caused by prolonged exposure to loud noises.


“Many of them work in bars or night clubs, and their maladies usually include temporary hearing loss and headaches,” Mijares said. For others, she said, the day-to-day noise of traffic, car horns and loud music can exacerbate stress and sleeping disorders.


Several cities have successfully reduced noise pollution, said Stephen Stansfeld, a London psychiatry professor and coordinator of the European Network on Noise and Health.


One of the most noteworthy initiatives, Stansfeld said, was in Copenhagen, Denmark, where officials used sound walls, noise-reducing asphalt and other infrastructure as well as public awareness campaigns to fight noise pollution.


But such high-tech solutions seem like a remote possibility in Caracas, where streets are literally falling apart and aging overpasses regularly lack portions of their guard rails. Prosecutors, angry neighbors and others hoping to fight the noise will have to persuade Venezuelans to do nothing less than change their loud behavior.


For Carlos Pinto, however, making noise is practically a political right.


The 26-year-old law student and his friends danced at a recent street party to house music booming from woofers in his car’s open trunk, with neon lights on the speakers that pulsed to the beat.


When asked about the noise, he answered: “We will be heard.”


___


AP freelance video journalist Ricardo Nunes contributed to this report.


___


Christopher Toothaker on Twitter: http://twitter.com/ctoothaker


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Italian tax police probe Google Italy again












ROME (Reuters) – Italian police launched a new tax probe into Google Italy this week after earlier investigations found the group had failed to declare income and still owed sales tax, an economy ministry document showed on Wednesday.


The earlier probe, which was launched by Italian financial police in 2007, found that Google had developed a system to transfer profits from its Italian operations to Ireland so it could benefit from a more favorable tax regime.












The investigation is the Internet search giant’s latest entanglement with European tax authorities, following problems in France and Britain over its Irish strategy.


In Italy, investigations of the years 2002-2006 found that Google had failed to declare at least 240 million euros ($ 310 million) of income to authorities and owed more than 96 million euros in sales tax, according to the ministry’s response to questions in parliament.


It said police had launched a new probe on Monday to check the company was meeting its fiscal obligations in Italy.


Google said in a statement that it complies with tax law in every country in which it operates.


“We are confident we comply with Italian law,” a spokeswoman said, adding the firm would cooperate with authorities and answer any questions for the investigation.


Italian officials have stepped up tax surveillance and collection efforts in recent months as part of government efforts to bring Italy’s huge public debt under control.


Police have also been assessing the practices of other multinational online businesses who are managing to shift profits made in Italy into countries where they can pay less tax, the ministry said.


($ 1=0.7746 euros)


(Reporting By Danilo Masoni, Giuseppe Fonte and Catherine Hornby; Editing by Mike Nesbit)


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Sculptor Gormley wants us to get inside his head












LONDON (Reuters) – Britain’s foremost living sculptor Antony Gormley wants us to get inside his head with his latest work “Model”, a 100-tonne steel maze of cubes and squares, dark corners and splashes of light on show at the White Cube gallery in London.


The giant grey-black work, based on a human form lying down, is entered via the right “foot”, and combines the fun of an adventure playground with the unnerving quality of a labyrinth often plunged into darkness.












For the first time, the Turner Prize-winning artist who has always been preoccupied with the human form allows us to get inside, and draws parallels between the body and the architectural spaces we inhabit.


“I think we dwell first in this borrowed bit of the material world that we call the body,” Gormley told Reuters, standing beside the imposing structure made up of interlocking blocks.


“It has its own life that is unknowable. But the second place we dwell is the body of architecture, the built environment,” he added.


“We’re the most extraordinary species that decided to structure our habitat according to very, very abstract principles of horizontal and vertical planes.”


Model has plenty of surprises. The more nimble visitor can crawl through its left “arm”, which is a passage around three feet high, or clamber on to a roof bathed in light.


“There are places that you wouldn’t necessarily know are there,” Gormley said. As if to prove his point, he disappeared into a large raised “aperture” invisible in the darkness.


Sound also plays a part, with the resonance of voices and rumble of footsteps giving clues to the size of each space.


PLAYGROUND


The artist said he encouraged people to explore the work rather than just look, unlike most sculptures which are strictly off-limits.


“Psychological architecture suddenly starts to reverberate with human life,” he explained, adding that the sense of unease when entering the dark spaces was part of its appeal.


“I think creepiness is good,” he said in the pitch-black “head”. “I think it’s necessary to get under people’s skin. You don’t want them to easily ingest or accept something.”


Several times he referred to the Seagram murals of American painter Mark Rothko, works that inspired him as an artist and which he had in mind while making Model.


“Their surfaces give you this idea of space, or an invitation, they seat you at a threshold and allow you to dream of what exists beyond that threshold,” he said.


“You could say this is the literal version of that.”


Gormley, born in 1950, won the Turner Prize in 1994 and is probably best known for his 20-metre high public “Angel of the North” sculpture located near Newcastle in northern England.


He would not say what price the White Cube gallery had put on Model, and the gallery itself could not immediately provide a figure when asked, but Gormley has become one of the most sought-after British artists at auction.


A life-size iron maquette for Angel of the North fetched 3.4 million pounds ($ 5.4 million) at an auction at Christie’s in October last year.


Early critical reaction to Model was mixed.


“We think of the pyramids, of tombs in lightless spaces,” wrote Michael Glover in the Independent. “We have entered this space hoping for a visceral response of some kind, but it never quite happens.”


Model is on display at White Cube, Bermondsey, until February 10, 2013.


(This story has fixed typos in paragraph six)


(Reporting by Mike Collett-White, editing by Paul Casciato)


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Flu Has Little to Do With Cold Weather












Although most children grow up hearing that they’ll catch the flu if they play in the snow without a scarf, weather has very little to do with which regions get more flu, doctors say.


“It’s actually not that predicable,” said Dr. Jon Abramson, who specializes in pediatric infectious diseases at Wake Forest Baptist Health in North Carolina.












Mississippi has had the most reported cases of influenza-like illness in the United States so far this season, according to the Centers for Disease Control and Prevention. Even though Mississippi had an average temperature of 53.3 degrees this month, it is the only state in the country with a flu-like activity level of “high.” Louisiana and Alabama are right behind it with moderate activity levels. Most other states — with colder climates — have had lower levels.


Click here to read about flu facts and fiction.


Abramson said the flu season tends to start in October and last through April, mostly coinciding with the school year rather than the temperature. He said studies have shown that the flu spreads mostly from school-age children, who often have poorer hygiene and catch the virus because they are in close contact with one another. Then, they pass it along to adults.


Weather becomes a contributing factor mostly because it forces children indoors, where they mix together and spread germs, said Allison Aiello, a professor and epidemiologist at the University of Michigan’s School of Public Health.


Scarves, hats and gloves are useless if you come in contact with someone with the flu and either breath in their virus or touch a surface with the virus and touch your mouth, Aiello said.


“You can tell you mom it’s OK for you to go outside with no hat on,” she laughed, adding that even her own relatives remind her to put on a hat to avoid getting the flu. She said weather can perhaps make people more susceptible, but it can’t give them the virus.


Since Sept. 30, about 2,400 influenza cases have been reported to the Centers for Disease Control and Prevention, including 28 cases of H1N1. Despite its tropical temperatures, even Hawaii has reported flu cases this season.


Abramson said his North Carolina hospital has already had 25 influenza cases this season. In contrast, by the same time last year, the same hospital didn’t have a single case.


“This is the South. It’s fairly warm, so you wouldn’t expect it this early,” he said. “It doesn’t seem to behave exactly by the coldness.”


The flu can spread any time of year, Abramson said, citing this summer’s swine flu outbreak. The H3N2V strain jumped from 29 to 145 cases in less than a week in August of this year, with most of them in Indiana and Ohio.


The best way for families to protect themselves is to encourage hand-washing and get vaccinated.


Click here to read about other flu-fighters.


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New home sales stagnant, cast shadow on housing












WASHINGTON (Reuters) – New U.S. single-family home sales fell slightly in October and the prior month’s pace of sales was revised sharply lower, casting a faint shadow over one of the brighter spots in the U.S. economy.


The Commerce Department said on Wednesday sales dropped 0.3 percent last month to a 368,000-unit annual rate, while September’s sales pace was revised to 369,000 from 389,000.












The housing sector has been a point of relative strength this year in an economy beset by flagging business confidence and cooling demand from abroad.


A report last week showed a surprisingly sharp gain in home resales in October, while data this week showed prices for single-family homes have risen continuously since February.


Economists expect home construction to add to economic growth this year for the time since 2005.


Wednesday’s data did not change the view that housing is still in recovery mode, although the pace of new home sales in October was below the level of May, suggesting little upward momentum.


“It’s just that progress will be slow,” said Yelena Shulyatyeva, an economist at BNP Paribas in New York.


U.S. homebuilder stocks fell, even as broad market indexes rose slightly.


While weakness in business spending has been restraining growth, most recent data has suggested housing is gaining momentum. Consumer confidence has also been more bullish.


Wednesday’s report showed the median sales price for a new home in October was 5.7 percent higher than a year earlier, but the pace of year-over-year price gains slowed for a second straight month.


Some analysts suggested the decline in sales in October might be partially due to a mammoth storm that slammed into the U.S. East Coast at the end of October. New sales plunged 32.3 percent in the Northeast, which bore the brunt of the storm.


“Some of this could potentially be Hurricane Sandy,” said Megan McGrath, an analyst at MKM Partners in Stamford, Connecticut.


However, the Commerce Department said the storm did not affect data collection at all and its impact on the pace of sales was likely “minimal.”


Economists polled by Reuters had forecast sales rising to a 390,000-unit rate last month from September’s previously reported 389,000-unit rate.


To provide support for the housing market, the Federal Reserve has kept interest rates at rock-bottom levels since 2008. In September, it launched an open-ended program to buy mortgage-backed securities, driving mortgage rates to record lows.


In a separate report, data from the Mortgage Bankers Association showed an index for home purchase loans, a leading indicator of home sales, rose 2.6 percent last week to its highest level of the year.


(Additional reporting by Gabriel Debenedetti in New York; Editing by Andrea Ricci)


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Rapper PSY wants Tom Cruise to go ‘Gangnam Style’












BANGKOK (AP) — The South Korean rapper behind YouTube’s most-viewed video ever has set what might be a “Mission: Impossible” for himself.


Asked which celebrity he would like to see go “Gangnam Style,” the singer PSY told The Associated Press: “Tom Cruise!”












Surrounded by screaming fans, he then chuckled at the idea of the American movie star doing his now famous horse-riding dance.


PSY’s comments Wednesday in Bangkok were his first public remarks since his viral smash video — with 838 million views — surpassed Justin Bieber‘s “Baby,” which until Saturday held the record with 803 million views.


“It’s amazing,” PSY told a news conference, saying he never set out to become an international star. “I made this video just for Korea, actually. And when I released this song — wow.”


The video has spawned hundreds of parodies and tribute videos and earned him a spotlight alongside a variety of superstars.


Earlier this month, Madonna invited PSY onstage and they danced to his song at one of her New York City concerts. MC Hammer introduced the Korean star at the American Music Awards as, “My Homeboy PSY!”


Even President Barack Obama is talking about him. Asked on Election Day if he could do the dance, Obama replied: “I think I can do that move,” but then concluded he might “do it privately for Michelle,” the first lady.


PSY was in Thailand to give a free concert Wednesday night organized as a tribute to the country’s revered King Bhumibol Adulyadej, who turns 85 next month. He paid respects to the king at a Bangkok shopping mall, signing his name in an autograph book placed beside a giant poster of the king. He then gave an outdoor press conference, as screaming fans nearby performed the pop star’s dance.


Determined not to be a one-hit wonder, PSY said he plans to release a worldwide album in March with dance moves that he thinks his international fans will like.


“I think I have plenty of dance moves left,” he said, in his trademark sunglasses and dark suit. “But I’m really concerned about the (next) music video.”


“How can I beat ‘Gangnam Style’?” he asked, smiling. “How can I beat 850 million views?”


___


Associated Press writer Thanyarat Doksone contributed to this report.


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Google Breaks All Android App Reviews, Threatens Android Fans’ Safety












“A Google User” is now the number one Android game and app reviewer on Google Play, Android’s version of Apple’s App Store. That’s because every single one of the millions of existing reviews, possibly including yours, has had its author replaced with this nameless, faceless person.


Screenshots taken by Jeremiah Rice of the Android Police blog show this prolific (but completely generic) author has taken over the Google Play store. Meanwhile, if you visit the store on your Android smartphone or tablet you won’t see a name attached to most reviews at all; just the review’s title, and the device that the game or app was run on.












Believe it or not, this is all intentional. It’s the start of a new Google policy … one which may threaten some Android fans’ safety or privacy.


​Google+, whether you like it or not


Google now requires you to have a Google+ (pronounced “Google Plus”) account in order to leave reviews on Google Play, the Chrome Web Store, and Google Maps. No reason for the switchover is given in the pop-up which explains this; you simply click “Continue” if you want your reviews tied to your Google+ account, and if you don’t want them linked you don’t write them at all. If you don’t have a Google+ account, you have to sign up for one before you can write a review.


​Why Google is Plus-ifying everything


Google’s success as a company is determined by how many ads it sells. Google’s share of the ad market is being eaten into by Facebook, which has essentially “walled off” a huge part of people’s day-to-day lives in a place Google can’t index or sell any ads on. For better or for worse, Google’s execs feel that what they need to do to compete is copy Facebook, in the form of Google+.


Why? Because if everyone is “Plusing” things instead of “Liking” them, and if everything people do shows up on Google+ instead of Facebook, then now Google (instead of Facebook) knows what you’re doing online and where you’re doing it — and that gives it a much better position from which to display and sell ads.


​Why this is a problem for many


Besides the obvious privacy concerns (although Google offers limited tools to manage how much it tracks you), Google+’s “real names” policy is dangerous to anyone whose safety is jeopardized by attaching their given name to their online activities. This includes women who are victims of stalking, minors who are victims of abuse, transgender persons in transition, and dissidents in repressive political or religious regimes. By requiring a Google+ account to use more and more of its services, Google is forcing these people to choose between excluding themselves and running the risk of having ​all​ of their Google services terminated for a “real name” policy violation, including their personal Gmail accounts.


Google+ policy allows for pseudonymous accounts, if you’re widely known by that pseudonym online. Everyone’s Google+ page, however, has a button to report what anyone feels is a suspicious name, which puts marginalized persons like those listed above at the mercy of every “troll” who comes by.


Jared Spurbeck is an open-source software enthusiast, who uses an Android phone and an Ubuntu laptop PC. He has been writing about technology and electronics since 2008.
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Disney Channel to debut ‘Sofia the First’ Jan. 11












NEW YORK (AP) — Disney says its animated children‘s series “Sofia the First” will premiere Jan. 11 on the Disney Channel and Disney Junior networks.


Created for kids ages 2 to 7, “Sofia the First” is about a young girl who becomes a princess and learns that honesty, loyalty and compassion are what makes a person royal.












Sofia is voiced by “Modern Family” actress Ariel Winter, and her mother is played by “Grey’s Anatomy” star Sara Ramirez.


Last week’s premiere of the “Sofia the First” animated movie drew a total audience of more than 5 million viewers. It was the year’s top-rated cable TV telecast among kids ages 2 to 5.


In the series’ debut episode, Sofia strives to become the first princess to earn a spot on her school’s flying derby team.


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Infected and unaware: HIV hitting America’s youth












CHICAGO (Reuters) – More than half of young people in the United States who are infected with HIV are not aware of it, according to a new report by government health officials that zeroes in on one of the remaining hot spots of HIV infection in America.


Young people ages 13 to 24 account for 26 percent of all new HIV infections, according to the report by the U.S. Centers for Disease Control and Prevention, which was released on Tuesday.












“Given everything we know about HIV and how to prevent it in 30 years of fighting the disease, it’s just unacceptable that young people are becoming infected at such high rates,” CDC Director Dr. Thomas Frieden said on a conference call with reporters.


Every month, 1,000 young people in America become infected with HIV, an incurable infection that costs $ 400,000 to treat over a lifetime, Frieden said. If left untreated, HIV infection leads to AIDS and early death.


“The data are stark and worrying,” Dr. Kevin Fenton, director of the National Center for HIV/AIDS, Viral Hepatitis, STD and TB Prevention at the CDC, said in a telephone interview.


In 2010, 72 percent of the estimated 12,000 new HIV infections in young people occurred in young men who have sex with men, and nearly half of new infections were among young, black males.


“We are particularly concerned about what is happening with HIV among young black and bisexual men,” Fenton said. “They account for 39 percent of all new infections among youth and more than half of new infections among young men who have sex with men.”


Fenton said the proportion of young people infected with HIV has remained relatively stable during the last few years, but infection rates appear to be increasing in these populations.


And because many of the newly infected gay or bisexual males are just beginning to explore their sexuality, stigma and homophobia are making HIV testing and treatment far more challenging.


Although the CDC and the American Academy of Pediatrics recommend routine screening for HIV starting in the early teens, “too few young people are getting tested,” Frieden said.


Only 13 percent of all high school students and only 22 percent of sexually active high school students have ever been tested for HIV, the CDC found.


The figures for young adults aged 18 to 24 are not much better, with only 35 percent of people in this age group reporting ever having been tested for HIV.


Frieden said one reason for the higher rates of infection among young gay and bisexual men of all races was a higher rate of risky behaviors compared with their heterosexual peers.


According to the report, a large analysis of risk behaviors among high school students revealed that gay and bisexual males are much more likely to have multiple sex partners, to inject illegal drugs and to use alcohol or drugs before sex. They are much less likely to use condoms.


And because so few get tested, HIV-infected people under age 25 are significantly less likely than those who are older to get and stay in care, and to have their virus controlled at a level that helps them stay healthy and reduce their risk of transmitting HIV to partners.


The CDC also found that many young men who have sex with men are less likely than others to have been taught about HIV or AIDS in school.


“We have to correct a lot of myths and misconceptions,” Frieden said. “It is astonishing the level of ignorance about basic physiology that may high school and middle school students have.”


To address some of the issues, the CDC is funding a program that targets both at-risk youths and the homophobia and stigma in the community that drives them underground.


In September, Georgia, a state where new HIV infections among those 13 to 24 years old exceed the national average – accounting for as many as one-third of all new HIV infections – won a grant as part of a pilot project to find better ways of targeting these at-risk youth.


“We think that it’s really critical that the discussions we have about HIV prevention and access to HIV become fully integrated into the social fabric of the youth culture,” Dr. Melanie Thompson, of the Georgia Department of Public Health, said in a telephone interview.


Care and Prevention in the United States, known as CAPUS, is a three-year program led by the CDC and other government agencies aimed at reducing HIV and AIDS among racial and ethnic minorities in the United States. It focuses on addressing social, economic, clinical and structural factors influencing HIV health outcomes.


“It is a huge challenge,” said Thompson, “but I think if we do this from the point of view of trying to end an epidemic that is decimating our young people, and do it in a way that is science-based, I think we can make progress.”


(Reporting by Julie Steenhuysen; Editing by Maureen Bavdek and Leslie Adler)


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