USA Friday April 23 2010 USA $2.50 Canada C$3.00 Licence to killGeorge Soros on the Philip Stephens Britain’s election debate hidden dangers of financial derivatives is rewriting the political rules Comment, Page 9 Comment, Page 9

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● ● ● News Briefing Blankfein hears attack Only ‘bilking’ banks would be hurt Backing for ‘Volcker’ rule

Parties draw level after UK TV election debate David Cameron and Gordon Obama presses Wall St on reform Brown last night clawed back some political ground from the Liberal Democrats, in a closely fought television debate that Bankers influenced leaves the election wide open. ratings agencies, Page 4; Philip Stephens, Page 9; www.ft.com/ukelection investigation finds

Amazon sales rise 46% The top two US ratings Amazon’s global sales rose 46 agencies – Moody’s and per cent during the first Standard & Poor’s – were quarter, as resilient demand for unduly influenced by online goods was further investment bankers who paid boosted by sales of its Kindle their fees and wilfully ignored e-reader and its acquisition last signs of fraud in the lending year of Zappos, the online shoe industry in the lead­up to the retailer. Page 13 financial crisis, a congressional investigation has found, write Drilling rig sinks Stephanie Kirchgaessner and A drilling rig sank in the Gulf Kevin Sieff in Washington. of Mexico yesterday, E­mails and other documents extinguishing a fire that was released yesterday by the the worst such accident in the Senate subcommittee on region in over 20 years, leaving investigations, ahead of a full 11 workers still unaccounted report due today, showed that for. Page 5 positive ratings for complex mortgage­backed securities Nokia cuts guidance and collateralised debt Nokia cut profit guidance for obligations were sometimes its key mobile phone division used as a negotiating tactic yesterday after announcing a between the firms and bankers. delay to the launch of high-end “The credit rating agencies phones. Page 13; Lex, Page 12 allowed to impact their analysis, their Air traffic plan revived independence and their Proponents of a unified reputation for reliability,” said European air traffic control , Democratic senator system are seizing on the who heads the Senate panel. havoc wrought by volcanic ash In 2007, a Moody’s analyst to push an initiative long told a Merrill Lynch investment favoured by Brussels and the In the spotlight: ’ chief Lloyd Blankfein (centre) with , the bank’s president, prior to ’s speech at Cooper Union in New York Bloomberg banker that a rating could not airlines but resisted by be finalised until the “fee national governments. Page 4 issue” was resolved. The By Tom Braithwaite would hit the Senate floor on included trade unionists and against the SEC charges, disput- the contentious “Volcker Rule” banker responded: “We are OK Belgium coalition falls in Washington and Monday. students as well as bankers. ing them and saying the that bans deposit-taking banks with the revised fee schedule The Belgian government’s Simone Baribeau in New York Chris Dodd, Senate banking “I’m glad that the president is agency’s stance could “hurt from proprietary trading. . . . We are agreeing to this federal coalition collapsed committee chairman, and Rich- fulfilling his promise to crack America”. The provision, named after under the assumption that yesterday because of tensions President Barack Obama urged ard Shelby, his Republican down on Wall Street,” said Al He will face a Senate hearing former chair- . . . you will work with us between French and Dutch- a Wall Street audience that counterpart, are close to cutting Sharpton, civil rights activist. on Tuesday, with six current or man, could still be modified to further . . . to try to get some speaking factions threatening included Lloyd Blankfein of a deal that would ensure broad Mr Blankfein, chief executive former colleagues, including allow regulators discretion in middle ground with respect to the upcoming presidency of the Goldman Sachs to stop opposing bipartisan support on a bill. of Goldman, sat in the audience Fabrice Tourre, the employee whether to impose a sell-off, the ratings.” European Union. Page 2 financial reform ahead of the But Mr Reid said after months less than a week after the Secu- charged with failing to disclose according to people involved The same year, Moody’s first congressional vote on a of wrangling in Congress that rities and Exchange Commis- critical information to investors. with the legislative overhaul. chief credit officer told Ray Russia turnround landmark bill to tighten over- he would bring the first proce- sion charged his bank with The Senate investigations sub- “Some on Wall Street forgot McDaniel, chief executive, in an Russia’s return to the sight of the sector. dural motion next week fraud. He has defended Goldman committee said , that behind every dollar traded e­mail that pressure from international debt markets for Arguing that the Senate bill whether or not the Republicans chief financial officer of Gold- or leveraged, there’s a family bankers, issuers and investors, the first time in a decade, would only hurt banks “bilking had signed on. “The games of man, and Craig Broderick, chief looking to buy a house, or pay and “internal emphasis on raising $5.5bn at rates far lower people” out of money, Mr stalling are over,” he said. ‘Some forgot that risk officer, would testify along for an education, open a busi- market share”, constituted a than its emerging market Obama admonished the finance Bob Diamond, president of behind every dollar with Daniel Sparks, Michael ness, or save for retirement,” “risk to ratings quality”. peers, underpins the country’s industry in a speech near New Barclays, who also attended the Swenson, Joshua Birnbaum, Mr said Mr Obama. “What happens Mr Levin said the agencies’ turnround. Page 4 York’s financial centre for send- New York event, told Bloom- traded or leveraged, Blankfein and Mr Tourre. The here has real consequences outdated models were ing “battalions” of lobbyists to berg TV the industry was there’s a family timing could again be propitious across our country.” incapable of gauging high­risk Gaddafi building image Capitol Hill to fight the plans. “working very closely, very con- for Democrats as they try to mortgages. Even after Moody’s Saif al-Islam Gaddafi, son of Harry Reid, the Democratic structively” with Congress. looking to buy a push regulatory reform over the Obama v the banks, Page 3 and S&P adjusted those Colonel Muammer Gaddafi, leader in the Senate, said after “Unless your business model final hurdle. Editorial Comment, Page 8 models, documents show they Libya’s authoritarian leader, is the US president’s remarks that depends on bilking people, there house, or pay for Mr Obama restricted the room George Soros, Page 9 declined to re­evaluate the carefully fashioning an image the bill, designed to make the is little to fear from these new an education...’ for manoeuvre of his Demo- Lex, Page 12 riskiest products, largely at the as a defender of liberty and financial system safer and equip rules,” said Mr Obama, drawing Barack Obama cratic negotiators in the Senate Defensive Goldman, Page 15 behest of the banks. Page 4 reformist. Page 5 regulators with new crisis tools, applause from a crowd that by standing explicitly behind www.ft.com/obamabanks

Tomorrow Goldman roles Simon Schama on Greece edges nearer to bail­out Rothko’s return to as borrowing costs rise again Moscow Country’s finances are off in Greek government bonds fund’s experts in Greece would intensified, driving the yield on need “some days” to fix the res- FT Weekend worse than thought 10-year debt to 8.83 per cent, the cue terms. “There is no silver Life & Arts highest since 1998. bullet,” he said. By Kerin Hope in Athens, The turbulence spread to cur- The IMF is thought likely to Tony Barber in Brussels and rency markets where the euro insist on tougher conditions Goldman Sachs: Anousha Sakoui in fell to its lowest point against than Mr Papandreou has intro- the dollar since last May. duced to cut Greece’s budget banking titan A €40bn ($53bn) rescue of Mr Papandreou had hoped to deficit and stop its public debt Greece loomed closer after wrap up a deal with a visiting from soaring out of control. under another debt downgrade and IMF mission before activating Its team voiced doubts yester- news that the country’s finances the rescue package agreed in day about the quality of official Goldman Sachs was both an siege were worse than thought drove principle by eurozone leaders. Greek data after Eurostat, the underwriter and an investor in its borrowing costs even higher. The eurozone-IMF aid is European Union’s statistical Lloyds Banking Group’s vast FT Weekend A sharp fall in share prices on expected to be worth at least service, revised its estimate of refinancing last year, the FT has Analysis the Athens stock exchange and €42bn, with two-thirds coming the country’s 2009 deficit to 13.6 learnt, highlighting the potential fears that Greek banks are from the countries that share per cent of gross domestic prod- conflicts of interest at the heart about to face a funding crisis the euro with Greece and which uct from 12.7 per cent. of the investment bank’s Matthew Engel on raised expectations that George are demanding tough austerity A debt downgrade by Moody’s, business model. According to Papandreou, prime minister, measures and strengthened the credit rating agency, fol- four people involved, Goldman – politicians would bring forward a formal European supervision of Greek lowed. Moody’s cut its rating on a dealer manager on the debt appeal for help from Greece’s economic policies in return. Greek debt by one notch to A3. portion of the £23.5bn deal – trading eurozone partners and the Inter- The measures are stirring Additional reporting by Alan demanded last­minute changes national Monetary Fund. opposition from trade unions, Beattie in Washington to the structure of a deal it was places “It’s our historic obligation to which closed hospitals, stopped underwriting. This had the effect take decisions that will avert ferries sailing and picketed Shaky start and of benefiting its position as a FT Weekend the worst for Greece,” Mr hotels in Athens yesterday. Global insight, Page 2 bond investor. Comment Papandreou told his cabinet. Dominique Strauss-Kahn, IMF Markets, Page 22 His comments came as a sell- managing director, said the www.ft.com/greecedebt Report, Page 13

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APRIL 23 2010 Section:Front Time: 23/4/2010 - 00:29 User: robertss Page Name: 1FRONT USA-USA-02, Part,Page,Edition: USA, 1, 2