PRESS DIGEST - Financial Times - March 31

Financial Times

BROWN AND BUSH PLAN JOINT BANK WATCHDOG

Gordon Brown and George W. Bush have agreed to increase cooperation over the crisis in the financial markets by setting up a joint UK-U.S. working group to develop proposals to regulate and monitor the banking system. The working group will comprise senior treasury and regulatory figures from London and Washington. Chancellor of the Exchequer Alistair Darling and U.S, Treasury Secretary Hank Paulson have also discussed a UK proposal for a system of "individually tailored" international supervision for leading banks and financial institutions with significant cross-border activity.

FINANCE SECTOR PREPARES FOR "LONG SIEGE"

The CBI and PwC will report on Monday financial services institutions are cutting jobs and investment plans in preparation for a "long siege" as they believe they have not yet felt the worst of the credit squeeze. In a quarterly survey, conducted just before the Bear Stearns implosion, the majority of respondents said they thought market conditions would deteriorate, with 90 percent of them saying they saw little hope of a return to normality within the next six months. Fears of growing funding constraints and a prolonged slump in demand are spreading gloom to areas relatively insulated from the immediate problems in the credit markets. Twenty-five percent of respondents said they had cut jobs over the last few months, and a third said they planned to reduce headcounts in the next quarter.

HOUSE PRICES CONTINUE TO SLIDE

A survey from property information group Hometrack has found house prices fell by an average of 0.2 percent in March. The survey, coupled with data released by Nationwide last week, shows this was the sixth consecutive month in which house prices slowed and also suggests London house prices may come under pressure. The average agreed price on a property sold was 93.5 percent of the price asked. Hometrack are forecasting a 17 percent drop in transactions over 2008 from that of last year.

FAILURE TO INFLUENCE EU LAW COSTLY FOR BUSINESS

A study by the British Chambers of Commerce, in collaboration with the London and Manchester business schools, has found that ministers' failure to engage early in the EU decision-making process and influence new laws has added 45 billion pounds to the burden on British business over the past 10 years. The study finds a disconnect between UK efforts to assess the impact of EU legislation and the actual process of adopting and implementing those laws. The report concludes efforts by UK authorities to estimate in advance the financial impact of EU legislation are deeply flawed.