Financial Times Summary

Fri 24 Oct 2008

French banks
President Nicolas Sarkozy on Thursday said France would set up a new “strategic investment fund” to stop French companies from falling into the hands of foreign “predators”. The new fund will be operated by Caisse des Dépôts et Consignations - the country’s existing sovereign wealth fund - but would be “more active, more offensive, more mobile” in defence of French industrial assets, Mr Sarkozy said.
Wall Street
US stocks were mixed in volatile trade on Thursday as traders weighed some relatively upbeat corporate earnings with an unexpectedly big jump in unemployment benefit data. By mid-morning in New York the S&P 500 hovered around the gain line, up 0.1 per cent at 898.0 having earlier risen and fallen as much as 1.5 per cent. The Dow Jones Composite Index was 0.2 per cent higher at 8,536.34 but the Nasdaq Composite Index was down 0.6 per cent at 1,606.74.
Lloyds TSB
Banks warned yesterday it was "inevitable"that businesses would fail in the coming recession, as the government failed to extract any concrete pledges from lenders to improve their treatment of small companies. Bank executives including Eric Daniels, chief executive of Lloyds TSB, John Varley, chief executive of Barclays and Gordon Pell of RBS, met Alistair Darling and Lord Mandelson at 11 Downing Street yesterday for talks on lending practises in the credit crisis.
Goldman Sachs
Goldman Sachs plans to cut 10% of its workforce in response to the economic environment, with New York and London set to be the hardest hit. The cutbacks are a sharp U-turn for Goldman, which has been adding employees over the past year in spite of the global turmoil. "No one is immune," said a senior executive at one of Goldman's competitors. "The markets have spared no one".
Credit Suisse
Credit Suisse on Thursday confirmed that writedowns in the value of its leveraged loans and mortgage-backed securities and “exceptionally adverse” trading conditions pushed it into a third-quarter loss. Switzerland’s second-biggest bank said its net loss for the period amounted to SFr1.26bn ($1.1bn, €843m) compared with a profit of SFr1.3bn a year ago.
Babcock & Brown
Babcock & Brown on Thursday said it was in talks with unnamed parties, including private equity firms, about forming a “strategic relationship” amid concerns about its business model. Shares in Babcock & Brown, which have fallen more than 90 per cent this year as debt becomes scarce and asset values plunge, rose 12 per cent on the news to end the session 17 cents higher at A$1.57.
AIG
AIG is to freeze about $19m in compensation payments to Martin Sullivan, the former chief executive of the stricken insurance group, it was revealed on Wednesday night. Andrew Cuomo, the New York attorney general, said the group, which was rescued by the US government last month, has also agreed to freeze about $600m of deferred compensation and bonuses due to executives of AIG Financial Products, whose losses precipitated the group’s collapse.
Lehman Brothers
Britain’s Pension Protection Fund may have a seat at the Lehman Brother's creditor’s table in the US when it comes to divide the proceeds of the liquidated group among lenders, according to the administrator of its UK pension fund.The PPF said on Wednesday that the Lehman Brothers Pension Scheme had entered the stage where a full accounting of assets and liabilities takes place to determine whether there is enough money to ensure all guaranteed benefits are paid.

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