News in Brief: London Stock Exchange, BoE, bonus recoup, FCA, oil investments

News in Brief

London Stock Exchange in merger talks with Deutsche Börse

The London Stock Exchange is in talks to merge with Germany’s Deutsche Börse in a £21bn deal that would seal an alliance first discussed at the turn of the millennium.

The LSE said it was in detailed discussions with its German rival about an all-share merger, reported the Guardian.

Under the proposed structure, the balance of ownership favours Frankfurt, with Deutsche Börse shareholders owning 54.4% of the combined company and LSE shareholders holding 45.6%. However, the merged company’s board will have equal numbers of members from each business.

‘BoE could cut interest rates to zero but not below’

The Bank of England could cut interest rates to zero, but will seek to avoid following Sweden, Denmark and the eurozone by setting negative interest rates to boost growth and inflation.

Mark Carney, the bank’s governor, said Threadneedle Street had “no intention and no interest” in implementing negative interest rates and would adopt the full range of the bank’s other powers to deal with a downturn in the economy, reported the Guardian.

He said: “If we were in a position where the economy needed additional stimulus ... we could cut interest rates towards zero. We could engage in additional asset purchases, including a variety of assets.

“We could also provide a perspective where we could adjust our policy horizon – in other words we could shorten our policy horizon over which we wanted to return inflation to target,” he added.

Standard Chartered plans bonus recoup after loss

Standard Chartered is considering clawing back bonuses from about 150 current and former senior staff, its new chief executive said after reporting its first annual loss for more than a quarter of a century.

Bill Winters told analysts that the emerging markets bank had established “accountability reviews” to investigate if bonuses can be recouped from any people found to be responsible for compliance and risk-management breaches, reported the Financial Times.

Shares in Standard Chartered fell sharply after it blamed the cost of a new restructuring plan and multibillion loan impairments for a pre-tax loss of £1.07bn ($1.5bn) in 2015.

The bank has already clawed back some bonuses and Mr Winters said it would do so again for “clear-cut cases of malfeasance” or “gross negligence” such as overstating earnings when knowing they should be lower.

Wealth management firm fined £1.2m by FCA

The Financial Conduct Authority (FCA) has fined WH Ireland £1.2m for not having the right systems in place to prevent market abuse.

The broker and wealth management firm has also been stopped from taking on new clients for 72 days, reported the BBC.

The FCA said the company had failed to act on previous advice and had not put controls in to prevent or detect insider trading.

The fine relates to failures between January and June of 2013.

The city watchdog had identified problems at WH Ireland in August 2013.

Oil & Gas UK warns investment ‘collapsing’

Investment in new oil and gas projects in the North Sea is “collapsing”, according to a new report.

Oil & Gas UK said the industry is expected to approve less than £1bn of spending on new projects in comparison to a “typical” £8bn a year in the last five years (23 February 2016).

It adds exploration remains at an all-time low “with no sign of improving” and warns production could halve by 2025 if companies do not spend enough money, reported

The trade body claims if the current oil price continues through 2016, 43% of UKCS oil fields are likely to be operating at a loss despite significant cost reductions.