Joe Bloggs is bankrolling the recovery of Northern Rock as Alistair Darling announced the stricken lender will be nationalised. Uproar ensued at the news; shareholders cried lawsuit, sterling fell against all but one of the 16 most traded currencies and Brown’s people became managers of assets worth £113bn and 6,500 staff. Darling said the intention was to sell the bank to a private bidder when markets improve, while Richard Branson’s defeated bid consortium said simply that it hoped the bank would “somehow find better fortune in the future”. Whether that fortune is at the end of a yellow brick road leading back to Branson’s pearly smile remains to be seen. Meanwhile, Lloyd’s of London white knight Ron Sandler has been installed as executive chairman on £90,000 a month, while ex-Swiss Re CFO Ann Godbehere joins as rescue CFO on £75,000 a month. That’s a lot of shoes – or a pensioner’s life savings.

e4.9bn jobsworths
An internal report prepared by Société Générale reveals that staff failed to dig deep enough into queries raised by Jérôme Kerviel’s trades “because this was not specifically part of their job description”, reports The Wall Street Journal. One employee who did so with considerable trepidation apologised to Kerviel for his “excessive zeal”.

Sarbox shield
Whistleblowers on corporate fraud at US-listed companies in the UK and beyond will be protected by the Sarbanes-Oxley Act, following a ruling that has gone against years of refusal by US courts to permit the legislation within Sarbox to be applied outside US jurisdiction.

FRC levy
The Financial Reporting Council is proposing a 10% hike in its annual levies based on market capitalisation of member firms, making the largest annual fee any UK listed company can pay £20,550 – as opposed to £18,600 the previous year. Aim and Plus Markets firms will pay 50% of that.

Permissive society
The Auditing Practices Board has recommended companies move to a ‘permissive’ regime for publication of preliminary announcements from a mandatory one. The APB said that these announcements should give details of any modification of the auditor’s report that was likely to be published with the annual report.

Pay back time
Virgin and British Airways are awaiting approval from a US court on a $200m plan to refund passengers who bought long-haul flights with them. The airlines admitted colluding to fix the price of fuel surcharges on long-haul tickets bought in the US or the UK between August 2004 and March 2006.
Cuban family business

Rate cut
The Bank of England’s Monetary Policy Committee voted eight-to-one to cut interest rates to 5.25% in February, the committee’s minute show. The notes discussed the committee’s belief that credit markets would continue tightening and the UK economy would follow. Observers believe there will be further cuts.

Suisse suckers
Credit Suisse said it suspended a handful of its traders as it looks into suspected market manipulation that led to the value of mortgage-backed bond investment being inflated by $2.85bn. The news came days after the bank announced losses to the sub-prime crisis of £1.8bn for the last quarter of 2007.

Bernanke’s crystal ball
US Federal Reserve chairman Ben Bernanke said growth in US exports and the country’s fiscal assistance package should shore up household and business spending through the credit crisis and well into the first part of 2008. Speaking before the US Committee on banking, housing and urban affairs, Bernanke hinted at further interest rate cuts, saying the Fed would “act in a timely manner as needed to support growth and provide adequate insurance against downside risks”.

Cuban family business
The appointment of Raul Castro as president and successor to his brother Fidel could open the door for Europe to do business with the country. Raul, temporary president since 2006 when Fidel became too ill, has said before that he thinks Cuba needs major economic and structural reform. Though American reaction to Fidel’s retirement was predictable – Dubya proffered his mantra about “helping the people of Cuba realise the blessings of liberty”, while his government said the 1962 trade embargo would not be lifted – the European Union indicated plans to create a new relationship with Cuba that had been stymied by Castro. EU commissioner for development and humanitarian aid Louis Michel is visiting Cuba this month and, on hearing the news of Castro’s retirement, said that Cuba’s recent move to sign international covenants on economic rights signalled a willingness to work with the EU – which could pave the way for Europe to start doing business there.

TECHNICAL UPDATE
Pensions: longevity
The Pensions Regulator says that it will more closely scrutinise scheme recovery plans where the mortality assumptions appear to be “weaker” than average, or where the assumed improvement in mortality “tends towards zero”.
www.thepensionsregulator.gov.uk

Pensions: accounting
The Accounting Standards Board published a consultation document on pensions valuation issues with a view to updating FRS 17. It suggests that scheme liabilities should be valued using a risk-free rate rather than a high-quality corporate bond rate. The consultation period is open until 14 July.
www.frc.org.uk/asb

Pensions: valuation
Pension schemes that use the iBoxx corporate bond index interest rate to value their liabilities received in aggregate a £12bn boost as a result of a reclassification of the index constituents, say actuarial consultants Hymans Robertson. On 31 December 2007 the yield on the index was 5.8%, but on 2 January 2008, following the change, it was 6.0%. The increase would have reduced scheme liabilities by 3% overnight.
www.hymans.co.uk

Tax
The government has back-tracked on some of its most contentious plans for information disclosure by non-domiciled UK residents. These include no longer asking for detailed information about offshore trusts; not taxing works of art brought into the UK for public display; and not taxing money brought into the UK to pay the £30,000 levy.
www.hmrc.gov.uk

Takeover disclosure
A number of companies have overlooked new disclosure requirements arising from implementation of the Takeover Directive, according to the Financial Reporting Review Panel, which has published a list of the key points to be disclosed in annual reports. It includes details of loss of office compensation to be paid to directors or employees in the event of a takeover bid.
www.frc.org.uk/frrp