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Triple Crunch Log                                                                                                            

“They call it Basle III. …we experience it as a sharp kick to the crotch.” So writes John Lanchester in the Guardian. “There have been exactly no new laws targeting the causes of the crash. The systemic risks are the same as they were two years ago. …The banks always win. Once the banks got through the immediate post-Lehmans bailout crisis, they launched a fightback that has seen them win every battle since. They are now so confident that they no longer bother pretending to care what politicians or the public think. Last week's announcement that Bob Diamond is to be the new chief executive of Barclays was a symbolic highpoint of this process: the poster boy for casino banking appointed to be the head of one of Britain's biggest banks. … It sticks two fingers up, follows it up by a kick to the crotch, does a victory dance, then posts the footage on Facebook.” As for Basle 3: “The new level of super-safe capital reserve – "core tier one capital", as its known – was set at 4.5%, way below the figure for which the British and American governments had been arguing. So yet again the banks won.”834

Vince Cable warns bankers to unlock flow of credit: Banks have no 'excuse to restrict credit', after stock market jubilation greets the news that Basel III rules will not come into force until 2019. Cable: "Our big UK banks are already well capitalised – above the level recommended by Basel – so the new rules should not by used by banks as an excuse to restrict credit. This is a crucial issue. Small and medium-sized enterprises are fundamental to the recovery and to tackling unemployment. Without access to credit on reasonable terms, their contribution to the recovery risks being choked off.”835

Bankers fear race to toughen Basel III. FT: “Top bankers in the UK, US and Switzerland are braced for their national regulators to impose tougher capital requirements than those required by Sunday’s landmark global agreement, even as investors bid up bank shares on relief that the standards were not more rigorous.”836

“Financial markets are still ruled by instant gratification.” Guardian: “There were four big economic shifts that helped cause the credit crunchand the recession that followed; from regulated to de-regulated markets; from manufacturing to finance; from west to east, and from labour to capital. There was also a deep cultural change, affecting Britain and the US in particular, which we will return to at the end. … But patience does not always triumph. When impatience takes control, we save less and borrow more. We take snap decisions, thinking little about long-term consequences. This sort of behaviour, as Haldane noted, reaches its apotheosis in the financial markets. "Most traders' brains harbour the impatience gene. Often they harbour little else." So, it would be a real sign of progress if there was evidence that the gods of the financial markets were re-learning the virtue of patience, thus setting an example to mortals. The sad fact is nothing has changed. The business-as-usual mindset makes the case for reform even more compelling.837

Mining and oil groups dig in for prospect of unlimited liability under new Bribery Act. FT: “The UK’s strict new bribery law is prompting a nervous flurry of preparation among London’s multinational mining and oil companies, which now face unlimited liability for failing to prevent corrupt acts of any employee round the world. This month the ministry of justice is set to consult with UK companies about the new UK Bribery Act, which will come into force in April 2011. … the guiding principles are clear. Raising anti-bribery standards above even those of the US Foreign Corrupt Practices Act (FCPA), the UK act will expose UK-registered companies to unlimited criminal liability for any employee or contractor’s acts of bribery. Unlike FCPA in the US, the UK’s Bribery Act makes no distinction between petty corruption – such as greasing the palm of a customs officer – and grand corruption such as the pay-off of a government minister.838

The best “ethical solar panel” buys are GB Sol, Solarcentury, SolarWorld and Yingli Solar, Ethical Cunsumer magazine concludes. The magazine screens for associations with environmental controversy in other areas, association with the arms trade, and the toxicity of panel manufacturing. On the latter, “it's vital that the workers involved are adequately protected and aren't exposed to undue health risks. Disappointingly the vast majority of the companies that we surveyed failed to guarantee that such policies were in place. The result was that virtually every company we surveyed received a bottom rating for their supply chain policy. The one notable exception was perhaps surprisingly, the Chinese company Yingli, which scored a middle rating because it is alone in adopting an internationally recognised management system for protecting workers' rights, the SA8000.839

Saudi reveals large unconventional gas reserves. Khalid al-Falih, chief executive of Saudi Aramco, tells the FT that the kingdom could hold hundreds of trillions of cubic feet of unconventional gas resources such as shale gas, more than doubling its proved reserves of 280,000bn cubic feet. FT: “International companies, which have been shut out of Saudi Arabia’s oil production for decades, have been looking over the past five years for natural gas in the kingdom’s Empty Quarter desert, with largely disappointing results. …. However, the methods used in the US, including the injection of large volumes of water to crack the rock and allow the gas to flow out, may not be suitable for the deserts of Saudi Arabia. “We’re talking to our IOC [international oil company] partners about bringing their knowledge to bear,” Mr Falih said. … The kingdom faces growing energy demand, particularly for electricity during the summer, which it is meeting by burning crude oil in power plants.840

14.9.10. Number of world’s hungry falls 10% this year, says UN – though far behind the Millennium goal. The number of chronically hungry people takes its first fall since 1995. But the FAO warns that the global agreement to cut the percentage of people suffering from hunger by 2015 is in jeopardy because cerial, meat and sugar prices have pushed global food prices to a two-year high. FT: “One target of the Millennium Development Goals, agreed by world leaders a decade ago, is to halve the proportion of undernourished people in developing countries by 2015, setting a goal of 10 per cent. But the FAO said on Tuesday that the percentage was still far above the MDG target, falling this year to 16 per cent, down from 18 per cent last year.841

BP cited by DECC inspectors for safety lapses in North Sea. FT: “All but one of BP’s five North Sea installations inspected in 2009 were cited for failure to comply with emergency regulations on oil spills, raising questions about the company’s ability to manage a disaster in the area. Offshore inspection records – obtained by the Financial Times under the UK’s Freedom of Information Act – report that BP had not complied with rules on regular training for offshore operators on how to respond to an incident. Inspectors from the Department of Energy and Climate Change, the UK government body monitoring compliance with companies’ approved emergency plans, also cited BP for failing to conduct oil spill exercises adequately. … Shell was also cited for breaching these rules regarding training with five of 27 inspections in the past five years – including one dated July 2010 – suggesting officers had not been trained adequately.842

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