Bank Of England Powers Increase Amid Overhaul

The Bank of England is to become one of the world's most powerful central banks as the biggest overhaul of financial regulation for 16 years takes effect.

Sweeping changes are undoing the system set up by former Prime Minister Gordon Brown when he was Chancellor in 1997.

The Financial Services Authority (FSA) is being replaced by three new bodies - the Financial Policy Committee (FPC), the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA).

The new system comes instead of the so-called Tripartite structure of the FSA, Treasury and Bank of England, which was blamed for being "asleep at the wheel" during the 2008 financial crisis.

George Osborne hopes the new system will fix financial regulation

With both the FPC and the PRA sitting within the BoE, it will take on vast new powers and responsibility not just for regulating lenders, but also spotting and preventing possible financial shocks.

It marks a return of regulatory powers to the central bank, which were taken away from it on gaining independence in 1997.

Chancellor George Osborne is hoping the shake-up will plug the gap that previously existed in the Tripartite system, with no one taking responsibility for monitoring risks to the financial system as a whole, such as the lending boom.

He has previously criticised the structure for being "incoherent" and "without clear lines of accountability".

This perceived lack of oversight was blamed for excessive lending that sparked a sub-prime mortgage crisis and in turn the credit crunch and banking meltdown.

The system brought in by ex-PM Gordon Brown will be swept away

The changes also hope to address the FSA's self-proclaimed "light touch" regulation, which saw the watchdog fail to rein in the banks.

It has since admitted mistakes were made in the run up to the collapse of Northern Rock, while it appeared woefully inept in preventing the banking scandals that have emerged in recent years - such as the Libor interbank rate-rigging affair and the mis-selling of payment protection insurance (PPI).

As the pillar of the incoming regime, the FPC will take the broadest overview of financial regulation.

The PRA will ensure banks and insurers have enough capital and liquidity, while the FCA will protect consumers by promoting effective competition and regulating all financial services firms.

PRA chief Andrew Bailey has already promised a more intrusive approach to regulation of the 1,700 financial institutions under his remit.

Incoming bank chief Mark Carney recently outlined his thinking for MPs

His counterpart at the FCA, Martin Wheatley, has also pledged to clean up the sector with new powers to suspend or ban products and issue fines.

But there are concerns the BoE will become too powerful, given that it also has responsibility for monetary policy in the UK.

In a stark warning, the former head of Germany's central bank said recently it risked impacting its independence.

Ex-Bundesbank boss Axel Weber, who currently chairs Swiss group UBS, said he "flatly refused" taking on a regulatory remit when he was head of the bank due to concerns over independence.

The man wielding the BoE's new powers will soon be Mark Carney, who is currently Canada's top central banker. He takes over from governor Sir Mervyn King in July.

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Apple Apologises Over China Customer Service

The chief executive of Apple has announced plans to alter its iPhone warranty policies in China following weeks of criticism by the country's media.

Tim Cook apologised for confusion over its after-sales service in China - its second-largest market, where iPhones, iPads and iPods are considered aspirational products.

Government-controlled media across the country had attacked Apple's "arrogance" and accused it of "throwing its weight around".

It said faulty iPhones were only repaired under its one-year service policy - not replaced as in other countries - and its warranty was shorter than elsewhere.

In response, Mr Cook issued an apology on the company's Chinese website, highlighting the importance of the market to the world's largest technology company.

Apple's opened its flagship Asia store in Beijing in October

"We are aware that owing to insufficient external communication, some consider Apple's attitude to be arrogant, inattentive or indifferent to consumer feedback," he said

"We express our sincere apologies for causing consumers any misgivings or misunderstanding."

Apple would offer full replacement of faulty iPhone 4 and 4S purchased in China, along with a new one-year warranty, Mr Cook said.

The iPhone 5 already has a similar warranty in place.

He added that he has "much to learn about operating and communicating in China."

Mr Cook had previously said the world's second-largest economy is a crucial market for the company.

In the first quarter, revenue from Greater China - which includes Taiwan and Hong Kong - hit $7.3bn (£4.8bn) - up 60% from a year before.

The popularity of Apple products flies in the face of China's attempts to push its own brands and develop internationally competitive companies.

Following the anti-Apple campaign, thousands of Chinese defended the company on the internet.

The accused the media of hypocrisy, highlighting that it kept silent when Chinese companies were implicated in other scandals.

China's state broadcaster CCTV was also accused of paying celebrities to post online comments against Apple, in what appeared to be a grass-roots campaign.

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PRA Covers Cypriot Deposits In UK Accounts

Britain's new banking watchdog has said that local deposits in an ailing Cypriot bank would be transferred and given protection of up to £85,000.

The Bank of England's new Prudential Regulation Authority (PRA) said UK deposits in the Cyprus Popular Bank UK, operating under the name of Laiki Bank UK, would be moved to the Bank of Cyprus UK.

The transfer would allow the Bank of Cyprus UK to offer deposit protection under Britain's banking rules.

The switch in accounts follows a bail out the government of southern Cyprus and restructuring of its banking sector, amid an unprecedented two-week closure of branches.

"The agreement does not affect access to bank accounts," the PRA said in a statement.

"And therefore all customers who had an account with Laiki Bank UK will be able to access funds as normal and do not need to do anything."

The move was prompted by an order of the Cypriot Central Bank on the troubled southern part of the island because of difficulties in its bloated financial sector.

Cyprus has agreed to make local depositors contribute to a financial rescue in order to secure 10bn euros (£8.5 bn) in loans from the eurozone and the International Monetary Fund.

Cypriot President Nicos Anastasiades has defended the bailout deal, saying it had contained the risk of national bankruptcy.

Greek Cypriots and expatriates have expressed anger at the price attached to the rescue - the winding down of Laiki - the island's second-largest bank - and an unprecedented raid on deposits over 100,000 euros (£85,000).

The move by Britain's PRA means insured and uninsured deposits of £270m in some 15,000 accounts now come under the added protection of UK law.

:: On April 1 the PRA took responsibility from the Financial Services Authority for regulation and supervision of some 1,700 banks, building societies, credit unions, insurers and major investment firms.

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Cyprus Bank Deposits 'To Lose 60% Of Value'

Savers with more than 100,000 euros in the Bank of Cyprus could lose up to 60% of their deposits, two senior officials have warned.

The Central Bank official and the Finance Ministry technocrat said sums held at the country's largest lender will  lose 37.5% of their value after being converted into bank shares.

And the pair said the deposits could lose up to 22.5% more in value, depending on an assessment by officials who will determine the exact figure aimed at restoring the troubled bank back to health.

Both figures were speaking to the Associated Press on condition of anonymity because they are not authorised to publicly discuss the issue.

Cyprus' President Nicos Anastasiades

It comes after Cyprus agreed on Monday to make depositors contribute to a financial rescue in order to secure 10 billion euros (£8.5 billion) in loans from the eurozone and the IMF.

Cypriot President Nicos Anastasiades defended the bailout deal, saying it had contained the risk of national bankruptcy.

"We have no intention of leaving the euro," the conservative leader told a conference of civil servants on Friday in the capital, Nicosia.

"In no way will we experiment with the future of our country," he said.

Cypriots have expressed anger at the price attached to the rescue - the winding down of the island's second-largest bank, Cyprus Popular Bank, also known as Laiki, and an unprecedented raid on deposits over 100,000 euros.

Under the terms of the deal, the assets of Laiki bank will be transferred to Bank of Cyprus.

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Cyber Currency Surge Amid Eurozone Crisis

By Siobhan Robbins, Sky News Reporter

As the eurozone is rocked by the crisis in Cyprus, a cyber currency called Bitcoin has seen a surge in popularity from people looking for an alternative place to invest their money.

Bitcoins are basically virtual money which can be earned or bought. They were created four years ago by a hacker who remains anonymous.

There are no banks to control them, people just exchange them directly with each other over the internet. That makes them difficult to tax, trace or freeze.

In the last month, the Bitcoin has more than doubled in value.

It is claimed the surge is partly down to people in cash-strapped countries including Spain and Greece turning to Bitcoins in the hope of protecting their money.

Amir Taaki has helped develop the Bitcoin since it was created by a hacker

Amir Taaki, who has helped to develop it in the UK, told Sky News he believes it is a purer alternative to traditional banks.

"There are so many things that are wrong and broken with banks. Primarily, the biggest problem is I have to trust them and I have no other option.

"Bitcoin is a basic system where I can choose how much trust I put in other people.

"There is no central bank or central authority controlling it. Everyone that participates in the network is upholding the network and it's not a theoretical concept but a billion dollar market with charts and graphs and people are using it.

"Because it's decentralised and runs off a mathematical algorithm it means it can't be corrupted."

The premises where the digital currency is being developed

The huge spike in value makes it an attractive investment for some, but currency experts like Simon Smith from FxPro warns against that.

"It's totally unsafe. They might as well burn their money in a pile as far as I'm concerned. Yes, Bitcoin has doubled in value over the last month but it has every sign of being a bubble."

Bitcoin has reached an all-time high, trading at almost £60. Its market value is now more than £500m.

Some restaurants and shops already accept Bitcoin as payment and its supporters claim that in the future it will be dispensed from ATMs like pounds and euros.

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George Osborne Banking Shake-Up Takes Effect

The Bank of England is becoming one of the world's most powerful central banks as the biggest overhaul of financial regulation for 16 years takes effect.

Sweeping changes are undoing the system set up by former Prime Minister Gordon Brown when he was Chancellor in 1997.

The Financial Services Authority (FSA) is being replaced by three new bodies - the Financial Policy Committee (FPC), the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA).

The new system replaces the so-called Tripartite structure of the FSA, Treasury and Bank of England, which was blamed for being "asleep at the wheel" during the financial crisis.

With both the FPC and the PRA sitting within the Bank, it will take on vast new powers and responsibility not just for regulating lenders, but also spotting and preventing possible financial shocks.

George Osborne hopes the new system will fix financial regulation

It marks a return of regulatory powers to the Bank, which were taken away from it on gaining independence in 1997.

Chancellor George Osborne is hoping the shake-up will plug the gap that previously existed in the Tripartite system, with no one taking responsibility to monitor risks to the financial system as a whole, such as the lending boom.

He has previously criticised the structure for being "incoherent" and "without clear lines of accountability".

This perceived lack of oversight was blamed for excessive lending that sparked a sub-prime mortgage crisis and in turn the credit crunch and banking meltdown.

The system brought in by ex-PM Gordon Brown will be swept away

The changes also hope to address the FSA's self-proclaimed "light touch" regulation, which saw the watchdog fail to rein in the banks.

It has since admitted mistakes were made in the run up to the collapse of Northern Rock, while it appeared woefully inept in preventing the banking scandals that have emerged in recent years - such as the Libor interbank rate-rigging affair and mis-selling of payment protection insurance (PPI).

As the pillar of the incoming regime, The FPC will take the broadest overview of financial regulation.

The PRA will ensure banks and insurers have enough capital and liquidity, while the FCA will protect consumers by promoting effective competition and regulating all financial services firms.

Incoming bank chief Mark Carney recently outlined his thinking for MPs

PRA chief Andrew Bailey has already promised a more intrusive approach to regulation of the 1,700 financial institutions under his remit.

His counterpart at the FCA, Martin Wheatley, has also pledged to clean up the sector with new powers to suspend or ban products and issue fines.

But there are concerns the Bank will become too powerful, given that it also has responsibility for monetary policy in the UK.

In a stark warning, the former head of Germany's central bank said recently it risked impacting its independence.

Ex-Bundesbank boss Axel Weber, who currently chairs Swiss group UBS, said he "flatly refused" taking on a regulatory remit when he was head of the bank due to concerns over independence.

The man wielding the Bank's new powers will soon be Canada's current top central banker Mark Carney, who takes over from governor Sir Mervyn King in July.

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Post Office Staff On Strike Over Closures

Thousands of staff in the country's biggest post offices are striking in a row over jobs, pay and closures.

Members of the Communication Workers Union (CWU) in around 370 so-called Crown offices were mounting picket lines in protest at plans to close or franchise 70 branches.

The union said the walkout was "solidly" supported by thousands of its members, with picket lines set up outside post offices across the country.

The Post Office said that out of the 370 Crown branches, 10 were closed all day and more than 250 closed at lunchtime.

But it said that the 166 Crown branches that have external ATMs will be fully stocked for customers to withdraw cash on Saturday.

The union organised the strike because it believes 800 jobs are at risk and also staff had not received a pay rise for two years.

The Post Office put forward the restructuring plan because Crown branches were losing £40m a year and accused the union of ignoring the "harsh realities" the company faces.

Dave Ward, the CWU's deputy general secretary, said: "Our post office members are standing up against destructive plans which would slash 20% of the Crown network and are simply asking for fair treatment and job security.

"The Post Office's plans are short-sighted and would rob the network of the most productive offices while simultaneously putting hundreds of jobs at risk and potentially damaging local economies.

"We'd like to see a better vision for a successful network which maintains services in the heart of communities alongside quality jobs."

The strike follows a ballot of workers in which 88% of those who voted demanded action.

Kevin Gilliland, network and sales director at the Post Office, said: "We regret any disruption to services the CWU's call for strike action may cause to customers. Crown branches are currently losing £40m per year and this is being subsidised by public money. This cannot continue.

"The Post Office is transforming its network to improve customer experience and in turn bring in new business. We are committed to the Post Office remaining a key part of UK high streets and our plans ensure this will happen."

He said the closures - which do not apply to smaller sub-Post Offices - affect less than 1% of the total network. At the same time as closing some branches, the Post Office was planning to improve the 300 other Crown offices.

The union said it was receiving strong public support for its campaign, with petitions circulating in areas affected by the proposals.

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Cyprus Bank Deposits 'To Lose 60% Of Value'

Savers with more than 100,000 euros in the Bank of Cyprus could lose up to 60% of their deposits, two senior officials have warned.

The Central Bank official and the Finance Ministry technocrat said sums held at the country's largest lender will  lose 37.5% of their value after being converted into bank shares.

And the pair said the deposits could lose up to 22.5% more in value, depending on an assessment by officials who will determine the exact figure aimed at restoring the troubled bank back to health.

Both figures were speaking to the Associated Press on condition of anonymity because they are not authorised to publicly discuss the issue.

Cyprus' President Nicos Anastasiades

It comes after Cyprus agreed on Monday to make depositors contribute to a financial rescue in order to secure 10 billion euros (£8.5 billion) in loans from the eurozone and the IMF.

Cypriot President Nicos Anastasiades defended the bailout deal, saying it had contained the risk of national bankruptcy.

"We have no intention of leaving the euro," the conservative leader told a conference of civil servants on Friday in the capital, Nicosia.

"In no way will we experiment with the future of our country," he said.

Cypriots have expressed anger at the price attached to the rescue - the winding down of the island's second-largest bank, Cyprus Popular Bank, also known as Laiki, and an unprecedented raid on deposits over 100,000 euros.

Under the terms of the deal, the assets of Laiki bank will be transferred to Bank of Cyprus.

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Cyber Currency Surge Amid Eurozone Crisis

By Siobhan Robbins, Sky News Reporter

As the eurozone is rocked by the crisis in Cyprus, a cyber currency called Bitcoin has seen a surge in popularity from people looking for an alternative place to invest their money.

Bitcoins are basically virtual money which can be earned or bought. They were created four years ago by a hacker who remains anonymous.

There are no banks to control them, people just exchange them directly with each other over the internet. That makes them difficult to tax, trace or freeze.

In the last month, the Bitcoin has more than doubled in value.

It is claimed the surge is partly down to people in cash-strapped countries including Spain and Greece turning to Bitcoins in the hope of protecting their money.

Amir Taaki has helped develop the Bitcoin since it was created by a hacker

Amir Taaki, who has helped to develop it in the UK, told Sky News he believes it is a purer alternative to traditional banks.

"There are so many things that are wrong and broken with banks. Primarily, the biggest problem is I have to trust them and I have no other option.

"Bitcoin is a basic system where I can choose how much trust I put in other people.

"There is no central bank or central authority controlling it. Everyone that participates in the network is upholding the network and it's not a theoretical concept but a billion dollar market with charts and graphs and people are using it.

"Because it's decentralised and runs off a mathematical algorithm it means it can't be corrupted."

The premises where the digital currency is being developed

The huge spike in value makes it an attractive investment for some, but currency experts like Simon Smith from FxPro warns against that.

"It's totally unsafe. They might as well burn their money in a pile as far as I'm concerned. Yes, Bitcoin has doubled in value over the last month but it has every sign of being a bubble."

Bitcoin has reached an all-time high, trading at almost £60. Its market value is now more than £500m.

Some restaurants and shops already accept Bitcoin as payment and its supporters claim that in the future it will be dispensed from ATMs like pounds and euros.

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Weather: Economy Hit By Spring Snowstorm

By Nick Martin, Sky News Correspondent

Britain's fragile economy has been hit hard as a result of the spring snowstorm with some businesses reporting a slump in trade.

Some high street retailers say the cold snap kept customers away during what should have been the run-up to a busy Easter weekend.

Kingfisher, the owner of B&Q, reported a 13% drop in trade, while Next said it had seen a fall in sales during the bad weather.

Experts say the costs to the economy of the unseasonable weather could run into billions of pounds and threaten to impact on economic growth figures.

Some towns were cut off by the snow for up to a week making trading difficult on the high street.

In the Derbyshire town of Bakewell, which was badly affected by the snow, businesses were hoping the cleared roads would encourage locals and tourists back into the town.

Zoe McBurnie, owner of the Bakewell Tart and Coffee Shop, told Sky News that takings had dropped by £10,000 in just one week.

"The recession hasn't been too bad to us but the snow has been completely devastating.

"One minute you're busy and the next there's no-one coming in because the town is cut off by snow."

Some of the biggest losses were on farms where hundreds of livestock, including sheep, lambs and cattle, were claimed by the snow drifts.

On Nigel Birch's farm near Monyash in the Peak District, three calves lay dead on the yard, victims of the worse snowstorms there for 50 years.

Hundreds of sheep had to be taken inside and fed on expensive corn feed whilst stocks of silage were running low.

As lambing season enters full swing, newborns were left shivering in freezing conditions and had to be kept under heat lamps.

"This has been a very difficult week - one I want to forget," Mr Birch said.

"We've lost cattle, we're paying for new hay, feed and silage and in the end I think this spell will cost us between £5,000 and £10,000."

Tourism was also badly affected as roads became impassable and families chose to cancel holidays.

Nikki Dick, a B&B owner, said her diary was empty as guests were reluctant to book or could not get to her because of blocked roads.

"If I look at last year's diary for the same time it is full. This year we have a few bookings, but after that there's nothing.

"People have panicked and thought they're best to stay away.

"But the snow has been cleared, and we're all here open for business," she said.

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