PRESS DIGEST - Financial Times - June 16

The Financial Times

DARLING TO SIGNAL BIG REGULATORY SHAKE-UP

In his Mansion House speech on Wednesday night, Chancellor of the Exchequer Alistair Darling will confirm radical new reforms of the tripartite system, established by Gordon Brown in 1997. The current model divides responsibility among the Bank of England, the Financial Services Authority and Treasury for the aversion of a financial crisis. However, the chancellor will cite the recent collapse of Northern Rock (NRKx.L) and rapidly changing market conditions as indicators that changes to the system should go further than initially expected.

BUBBLE "CIRCUIT-BREAKERS" NEEDED

Paul Tucker, head of markets at the Bank of England, has called on regulators to design "credit-cycle circuit breakers" to slow the rate of lending from commercial banks when demand is too high. In remarks made to the Chatham House think-tank and released at the weekend, Tucker also pointed out that many financial institutions had been dealing with risks facing the markets by proceeding "on the basis that 'it couldn't happen' or indeed even after it began, 'wasn't happening'."

SMALL BUSINESSES FEAR JOB CUTS

A poll of 9,000 small companies by the Federation of Small Businesses shows almost 40 percent fear fuel prices will make it necessary to cut jobs over the next year. More than 80 percent said rising costs would make it more difficult for them to expand their businesses and hire more staff. John Wright, FSB chairman, said that while the issue was affecting every type of business in the UK, small companies were "reaching breaking point". He urged the government to use extra tax revenues from North Sea oil to fund a cut in fuel duty.

INSURERS STEP UP FLOOD COVER WARNING

The Association of British Insurers is to warn that unless there is better protection against flooding, half a million properties will be uninsurable and many new home owners will find it increasingly difficult to obtain cover. The ABI will also highlight the need for a long-term strategy for managing flood risk to guarantee widespread and affordable home insurance. The Environment Agency has identified 517,000 existing properties as being at a high risk of flooding, while some insurers are already considering excluding new homes and some businesses from an industry agreement to provide flood insurance.

GSK LEADS PACK IN AFFORDABLE DRUGS FOR THE POOR

The newly published Access to Medicines Index reveals that European pharmaceutical firms -- led by GlaxoSmithKline (GSK.L) -- outperform their American peers in the provision of affordable medicines to the poor. The Index is a measure of corporate responsibility, with rankings based on the independent assessment of company activity. The analysis rates GSK, with policies of price-cuts and researching drugs for use in the developing world, the highest. Merck (MRK.N), ranked third, is the only U.S. company among the top seven and there are no Japanese businesses present.

LIATAUD JOINS BALDERTON CAPITAL

The French founder of Business Objects has joined Balderton Capital, the London-based venture capital investor. Bernard Liataud, who sold Business Objects to SAP in January, will be appointed to the board of GDCM, a new venture whose software helps lower data centre consumption. He said: "I'm interested in building large companies, not just build start-ups fast and sell them to U.S. companies or large entities." Liataud appeared cautious over the emergence of Web 2.0 brands that have not yet found a successful business method. He said: "In general Web 2.0 companies suffer from getting to a scalable revenue model. Very few of them have found a formula."

FINAL INVESTMENT FOR 3i VENTURE ARM IN BONES

ApaTech, the synthetic specialist bone group, will raise on Monday 25 million dollars from 3i and a further 20 million dollars from U.S. firm Healthcor Partners, cashing-in on the fast-growing demand for its new silicon substance which encourages bone growth. Simon Cartmell, ApaTech's chief executive, praised the UK private equity group's final investment, saying that 3i has been the "driving force" behind his company and adding that he was confident of its continued backing. 3i is expected to strengthen Apatech's board by appointing Peter Chambre, former chief executive of Cambridge Antibody Technologies, as its non-executive chairman. Apatech's sales last year trebled to 15 million dollars while this year's are expected to double to about 35 million dollars.

WHEN KEEPING IT SIMPLE SHOWED OTHER BRANDS A CLEAN PAIR OF HEELS