Leading Financial Thinking BUSINESS WITH PERSONALITY www.london.edu/imp/ RIGHT TO REPLY TOP TIPS FOR THE STELIOS AND BARNIER TAKE US ON IN THE FORUM GRAND NATIONAL See Page 22-23 See Page 29 APPLEISSUE 1,610 THURSDAY 12 APRIL 2012 SUEDwww.cityam.com FREE OVER PRICE Peter Sands has put an end to speculation that he would like the Bank governor job OF E-BOOKS StanChart boss bows BY KASMIRA JEFFORD “Apple facilitated the publisher e-book retailers. out of governor race defendants’ collective effort to end A spokesperson for the DoJ said THE US GOVERNMENT sued Apple and retail price competition by coordinat- Apple, Macmillan and Penguin had five major book publishers yesterday ing their transition to an agency refused to engage in settlement talks. EXCLUSIVE His decision is a boost for Bank for colluding to fix the prices of e- model across all retailers”, said the Apple and Penguin could not be BY DAVID HELLIER deputy governor Paul Tucker, who books in a fight against growing com- complaint, which was filed by the reached for comment. Macmillan AND JULIET SAMUEL is seen by many as a favourite for petition from Amazon. antitrust division of the US depart- chief executive John Sargent denied in the role, which will become vacant The lawsuit filed in a New York dis- ment of Justice (DoJ). an open letter yesterday that the pub- PETER Sands, the chief executive of when incumbent Sir Mervyn trict court accused Apple and publish- US attorney-general Eric Holder lisher had conspired to raise prices. Standard Chartered Bank, last night King’s second term ends in June ing executives of “devising schemes” to claimed at a press conference yester- Meanwhile, a separate lawsuit was ruled himself out of the running for 2013. limit Amazon’s ability to discount e- day that top executives would meet on filed in Texas by several US states the job as the next governor of the Some of those who work closely books after the online retailer’s suc- a regular basis to discuss “confidential against the same publishers for similar Bank of England (BoE). with Sands say they first suspected cess at selling popular titles for just business and competitive matters – price fixing claims. The states reached Sands issued a statement to City his interest when he wrote an $9.99. including Amazon’s e-book retailing an agreement with Hachette and A.M. through a spokesman after open letter last month in which he It alleges that publishers Hachette practices” as part of a conspiracy to HarperCollins, who will together pay this newspaper spoke to a number was savagely critical of a new Bank Book Group, part of Lagardere; raise retail prices. up to $52m in damages. of people close to the banker. regulatory body that will oversee HarperCollins, owned by News Corp; Holder said that as a result of this Many had become convinced that the City. Holtzbrinck, owner of Macmillan; alleged conspiracy “we believe that Apple Inc he was lobbying hard for the Bank Sands’ letter triggered a debate Simon & Schuster, a CBS subsidiary; consumers paid millions of dollars 640 $ job. They suggested that Sands over bank regulation that pitted and Penguin, owned by Pearson, had more for some of the most popular 626.20 could come under pressure from him against Tucker. Those who agreed to switch to an “agency” busi- titles”. 635 11 Apr his board if he were to let the suggested that Sands wanted the ness model where publishers – rather Hachette, HarperCollins and Simon uncertainty continue any longer. job said that he has been lobbying than retailers – set “significantly high- & Schuster immediately settled with 630 A spokesman for the BoE said: chancellor George Osborne, who er” prices for e-books. the DoJ, which will continue to pursue “Peter has made it clear that he is has a major say in the decision, for The agreement between the firms, its case against Apple, Macmillan and 625 not interested in the Bank job.” some time. Last week, he was with which came as Apple prepared to Penguin. 620 A source close to the bank Osborne again in India, and joined launch its first iPad in 2010, also guar- This settlement prevents the publish- added: “He has a great job here, him at a dinner. ▲ anteed the technology giant a 30 per ers from making any further price-fix- this is a great company and he has ▲ cent commission on each e-book sold. ing agreements with Apple and other 3 Apr 4 Apr 5 Apr 10 Apr 11 Apr a huge job in a growth company.” ALLISTER HEATH & MORE: Page 2 Certified Distribution FTSE 100 ▲5,634.72 +39.19 DOW ▲12,805.39 +89.46 NASDAQ ▲3,016.46 +25.24 £/$ 1.59 unc £/€ 1.21 unc €/$ 1.31 unc 30/01/2012 till 26/02/2012 is 98,573 “Alpha-beta. Active-passive. Style-judgement. Core-satellite. Master the language, seize the opportunity.” Narayan Naik, Professor of Finance Investment Management Evening Programmes Equity Portfolio Management programme starts 25 September 2012 Visit www.london.edu/imp/ | Email fi[email protected] | Call +44 (0)20 7000 7397 Leading Financial Thinking THURSDAY 12 APRIL 2012 2 NEWS To contact the newsdesk email [email protected] We need an open contest to decide who will run the Bank HERE is no doubt that George dates at this stage. Rather than mere- Treasury to cancel all of the gilts would be no CDS trigger and no D Osborne’s most important ly privately lobbying the chancellor, owned by the Bank – in other words, from ratings agencies only interested Tdecision over the next few EDITOR’S we need the first ever open contest for admit that the Bank has permanently in failures to pay private investors). Of months will be who he appoints the governor’s job: the candidates created more money, and used that to course, the credibility of UK mone- as the next governor of the Bank of LETTER should now make their intentions pay off government debt. Do taxpay- tary and fiscal policy would be badly England. That job, which becomes clear and release manifestos for all to ers really need to be paying interest to shaken – but that is at it should be. vacant next year, is by a huge distance read. It is too important a job to be the Bank on the gilts that it holds? A We have a major problem – pretend- the most powerful unelected position ALLISTER HEATH decided behind closed doors by a few cancellation would cut the UK’s debt ing otherwise doesn’t help anybody. in the UK; its formal powers now span men in grey suits. to GDP ratio from 63 per cent to 41 monetary policy, financial regulation, per cent, and slash the interest bill on KEN’S TAXES macroprudential policies, lender of with extensive private sector experi- CANCEL THE BANK’S GILTS gilts from £50bn to £32bn per year. My issue with Ken Livingstone’s tax last resort and even fiscal policy of ence. Now that Sands has ruled him- Speaking of which, in theory the The Bank holds these gilts on behalf planning is that he is being hypocriti- sorts via QE. There need to be as many self out, the leading banking Bank of England will eventually sell of the Treasury, so the Treasury is pay- cal. You can’t rage against legal tax good candidates as possible. It is a candidate is Lord Green, formerly of back to the markets the £350bn or so ing interest to itself (and regardless of avoidance, as Ken has – and then prac- shame, therefore, that Peter Sands of HSBC. Osborne should definitely steer in gilts it will own as a result of quan- definitional niceties, the fact is that tice it yourself. Socialist tax lovers Standard Chartered has ruled himself clear of appointing somebody who titative easing (QE). Yet I doubt this the state is borrowing from itself). such as himself should actually relish out of the race, as we reveal today. hates banking. Previous governors quantitative tightening (QT) will ever As M&G’s Jim Leaviss points out, the handing their hard-earned cash over Osborne should either appoint the showed that one could have authority happen. The UK will still be borrow- gilt cancellation could take place to HMRC, not do their best to cut their charismatic Paul Tucker – the Bank’s over the City without being ideologi- ing too much for years to come. using the same process and precedent bills. I doubt the electorate will for- deputy governor, who would repre- cally opposed to it. Osborne should A more honest and preferable set with the cancellation of £9bn of give him for his double standards. sent continuity but be far more of a also avoid appointing another aca- option would be for the authorities to UK of gilts acquired from the Post traditional candidate, at ease with the demic economist. admit that the £350bn has been per- Office pension scheme in April 2012. [email protected] City – or he should bring in a banker It remains tricky to assess the candi- manently monetised and for the No default would take place (so there Follow me on Twitter: @allisterheath BY JULIET SAMUEL Arsenal would STANDARD Chartered chief executive Peter Sands yesterday became the first candidate to definitively rule himself be only other out of the race to succeed Mervyn King, Bank of England governor. His appearance on the scene and job for Sands exit leaves only two bankers as possible successors to King, whose final term as BY DAVID HELLIER governor ends in June 2013.