US, UK shareholders 'now to pay if bank fails'

LONDON: British and US banking regulators proposed on Monday a joint strategy to ensure that the bankruptcy of big banks won't spark a chain reaction of contagion throughout markets.

The two bodies, acting on behalf of the two largest financial centres in the world, stressed that under the proposals, shareholders and not taxpayers would bear the full costs, and top managers would be sacked.

At the Bank of England, the deputy governor for financial stability Paul Tucker said: "The 'too big to fail' problem simply must be cured. We believe it can be and that this joint paper provides evidence of the serious progress that is being made."

The British and US authorities said in a joint statement that the financial crisis had "driven home the importance of an orderly resolution process for globally active, systemically important, financial institutions" which have foundered.

They said that their solutions, which would target the parent of any finance house in trouble, "have been designed to enable large and complex cross-border firms to be resolved without threatening financial stability and without putting public funds at risk."

They said they had borne in mind work by the G20-backed Financial Stability Board on principles for dealing with failed financial institutions.

There has been widespread criticism of the way in which Lehman Brothers investment bank was closed down, triggering a massive crisis of confidence, and that in the disruption that followed some shareholders did not carry the full brunt of the costs and some managers held on to their boardroom jobs.

In the United States and in Europe, governments had to use taxpayers' funds to provide guarantees or new capital to financial institutions in trouble. Creditors lost money but most depositors were protected.

The objective is to minimise the dangers of so-called "systemic risk", when a sudden loss of confidence threatens to trigger chaos throughout the financial system as nearly occurred in 2007.

The strategy by the Bank of England and the US Federal Deposit Insurance Corporation is a response to the traumas and lessons of the financial crisis which followed.

The statement said that the British part of the strategy was intended to fit with the powers provided by the UK Banking Act of 2009 "and in anticipation of the further powers that will be provided by the European Union Recovery and Resolution Directive."

Britain, a member of the European Union but not of the eurozone, is campaigning hard on another front which has a bearing on bank resolution: this is progress towards an EU banking union, built initially around the 17 eurozone members with banking supervision vested in the European Central Bank.

Britain is concerned that this could become a back door way for eurozone and EU authorities to interfere in regulation of the financial sector in Britain in a way which would damage British interests.

The statement said that the proposals were based on a "top-down" strategy for dealing with financial firms in severe difficulty, whereby a single authority would apply its powers "to the top of a financial group, that is, at the parent company level" and across borders.

In the United States the measures would work in the context of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

"Such a strategy would apply a single receivership at the top-tier holding company, assign losses to shareholders and unsecured creditors of the holding company, and transfer sound operating subsidiaries to a new solvent entity or entities," said the statement.

Both the US and British approaches would "ensure continuity of all critical services performed by the operating firm(s), thereby reducing risks to financial stability."

The joint statement said: "The unsecured debt holders can expect that their claims would be written down to reflect any losses that shareholders cannot cover, with some converted partly into equity in order to provide sufficient capital."

Subsidiaries which were viable would be kept open and operating, "thereby limiting contagion effects and crossborder complications."

The statement also made clear that action to deal with financial firms in trouble "would be accompanied by the replacement of culpable senior management."

- AFP/ir

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Samsung video hints at big release at CES

Samsung's Galaxy S3

(Credit:
Josh Miller/CNET)

A teasing post on Samsung's site suggests a new product will be revealed at
CES 2013.

In a blog post and video, the electronics giant says that its customers should "get ready" for January 8 to 11 -- the dates of the Consumer Electronics show -- and should stay tuned to learn more.

The video doesn't give much away. But the phrase "the world is waiting" may be indicative of previous rumors concerning a potential successor to Samsung's Galaxy S3 smarphone, which debuted in May. The company actually quashed such rumors in September via Twitter.

The presumed the Galaxy S4 could potentially feature a quad-core processor and 13-megapixel camera, according to rumors. In addition, there is also word that the next-generation flagship model for the electronics giant may come equipped with an "unbreakable" screen. Below is the video:

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Plants Grow Fine Without Gravity

When researchers sent plants to the International Space Station in 2010, the flora wasn't meant to be decorative. Instead, the seeds of these small, white flowers—called Arabidopsis thaliana—were the subject of an experiment to study how plant roots developed in a weightless environment.

Gravity is an important influence on root growth, but the scientists found that their space plants didn't need it to flourish. The research team from the University of Florida in Gainesville thinks this ability is related to a plant's inherent ability to orient itself as it grows. Seeds germinated on the International Space Station sprouted roots that behaved like they would on Earth—growing away from the seed to seek nutrients and water in exactly the same pattern observed with gravity. (Related: "Beyond Gravity.")

Since the flowers were orbiting some 220 miles (350 kilometers) above the Earth at the time, the NASA-funded experiment suggests that plants still retain an earthy instinct when they don't have gravity as a guide.

"The role of gravity in plant growth and development in terrestrial environments is well understood," said plant geneticist and study co-author Anna-Lisa Paul, with the University of Florida in Gainesville. "What is less well understood is how plants respond when you remove gravity." (See a video about plant growth.)

The new study revealed that "features of plant growth we thought were a result of gravity acting on plant cells and organs do not actually require gravity," she added.

Paul and her collaborator Robert Ferl, a plant biologist at the University of Florida in Gainesville, monitored their plants from the Kennedy Space Center in Florida using images sent from the space station every six hours.

Root Growth

Grown on a nutrient-rich gel in clear petri plates, the space flowers showed familiar root growth patterns such as "skewing," where roots slant progressively as they branch out.

"When we saw the first pictures come back from orbit and saw that we had most of the skewing phenomenon we were quite surprised," Paul said.

Researchers have always thought that skewing was the result of gravity's effects on how the root tip interacts with the surfaces it encounters as it grows, she added. But Paul and Ferl suspect that in the absence of gravity, other cues take over that enable the plant to direct its roots away from the seed and light-seeking shoot. Those cues could include moisture, nutrients, and light avoidance.

"Bottom line is that although plants 'know' that they are in a novel environment, they ultimately do just fine," Paul said.

The finding further boosts the prospect of cultivating food plants in space and, eventually, on other planets.

"There's really no impediment to growing plants in microgravity, such as on a long-term mission to Mars, or in reduced-gravity environments such as in specialized greenhouses on Mars or the moon," Paul said. (Related: "Alien Trees Would Bloom Black on Worlds With Double Stars.")

The study findings appear in the latest issue of the journal BMC Plant Biology.

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Royal Hoax: DJs 'Shattered' After Nurse's Suicide

The two Australian radio DJs who prank-called the London hospital where Kate Middleton was being treated last week said they were "shattered" and "gutted" after the nurse who answered their call apparently killed herself.

Shock jocks Mel Greig, 30, and Michael Christian, 25, cried as they spoke to Australia's Channel 9 overnight in their first public interview since Jacintha Saldanha, 46, the nurse who last week connected the pair to the duchess' room, was found dead Friday morning.

"I'm shattered, gutted, heartbroken," Christian said. "Mel and myself are incredibly sorry for the situation and what's happened. I had the idea. … It was just a simple harmless phone call. It was going to go on for 30 seconds. We were going to get hung up on."

FULL COVERAGE: Royal Baby

The host of the "2Day" FM radio show pretended to be Queen Elizabeth and Prince Charles, asking for an update on Middleton's condition when they called up King Edward VII Hospital in central London. With no receptionist on duty overnight, Saldanha answered the prank call and put it through.

"It was just something that was fun and light-hearted and a tragic turn of events that I don't think anyone had expected," Christian said.

A Current Affair/ABC News

Jacintha Saldanha Dead: Could DJs Face Charges? Watch Video

Jacintha Saldanha Outrage: DJs Responsible for Prank Are in Hiding Watch Video

Saldanha was found dead Friday morning after police were called to an address near the hospital to "reports of a woman found unconscious," according to a statement from Scotland Yard.

Investigators have not said how she might have killed herself.

Greig cried today when asked about the moment she heard of the death of Saldanha, a mother of two.

"It was the worst phone call I've ever had in my life," she said through tears. "There's not a minute that goes by that we don't think about her family and the thought that we may have played a part in that is gut-wrenching."

The DJs said they never expected to get through to Middleton's nurse and assumed "the same phone calls had been made 100 times that morning," Christian said.

Grieg said, "We wanted to be hung up on with our silly voices and wanted a 20-second segment to air of us doing stupid voice. … Not for a second did we expect to even speak to Kate or even have a conversation with anyone at the hospital. We wanted to be hung up on."

The global backlash against the duo has been fierce, from online death threats to calls for prison time. Their radio station has announced it is banning phony phone calls altogether, and suspending advertising indefinitely.

Max Moore-Wilton, the chairman of Southern Cross Austereo, said in a letter Sunday to Lord Glenarthur, chairman of King Edward VII's Hospital, that the company is reviewing the station's broadcast policies, the AP reported.

"I can assure you we are taking immediate action and reviewing the broadcast and processes involved," Moore-Wilton said in the letter. "As we have said in our own statements on the matter, the outcome was unforeseeable and very regrettable."

Greig and Michael have been taken off the air, silenced indefinitely.

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Female lemurs avoid the wrong love in the dark

IT IS the ultimate voice-recognition system. Without ever meeting him, a female lemur still knows the call of her father.

The ability to identify family members is important to avoid inbreeding. For large-brained mammals like apes that engage in complex social interactions this is relatively straightforward. Now, a team has shown that nocturnal grey mouse lemurs appear to do the same, even though lemurs are reared exclusively by their mothers (BMC Ecology, doi.org/jvx).

Study leader Sharon Kessler of Arizona State University in Tempe, believes that the young lemurs may associate calls similar to their own, or to those of male siblings, with their fathers.

If you would like to reuse any content from New Scientist, either in print or online, please contact the syndication department first for permission. New Scientist does not own rights to photos, but there are a variety of licensing options available for use of articles and graphics we own the copyright to.

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Mandela "comfortable" after night in hospital

JOHANNESBURG: Nelson Mandela is comfortable, after a restful night in hospital for tests, the South African government said Sunday as the former president spent his second day in hospital.

President Jacob Zuma visited the country's first black president and said he had found him "comfortable, and in good care."

It was the second time the 94-year-old and increasingly frail Mandela had been hospitalised this year. While officials are trying to allay fears over his health, they are not releasing any details of his condition.

"I think he has had a restful night, the doctors are comfortable about it, they are continuing monitoring," Mac Maharaj, Zuma's spokesman and a former fellow prisoner with Mandela, told AFP.

The tests and medical attention were consistent with his age, he added.

Medical experts say there is nothing out of the ordinary for a person of Mandela's age to require in-patient attention from time to time.

"We need to understand that he is 94 years old, and that his state of health is not genuinely of a good quality, and that from time to time he is admitted to hospitals," Mark Sonderup, vice chairman of the South African Medical Association told AFP.

The anti-apartheid hero and Nobel Peace Prize laureate was flown from his home village of Qunu in the southeast of the country to a hospital in the capital Pretoria on Saturday.

The once spry boxer, who stayed fit during his 27 years in prison by doing calisthenics in his cell, has grown increasingly frail. But his stature as one of the world's most famous and loved public figures remains undimmed.

"We wish him as speedy recovery," said Ntanyongwana Mdzeki, an octogenarian neighbour of Mandela in Qunu village. "We still need him to be around because he changed our lives."

Mandela's former political colleague Ahmed Kathrada, another apartheid-era prisoner, also wished Mandela a speedy recovery.

"Even in such mundane times as routine hospital visits, you allow South Africans from across the length and breadth of this country to unite in concern for you," said a statement by the Kathrada foundation.

Keith Khoza spokesman of the ruling ANC party, which Mandela once led, said the party wished him well.

"He is in perfect health," he added. "Everything is well. It's just that he has to undergo these regular check ups."

Officials have refused to give more details about his condition or say in which hospital he is being treated.

Security appeared to have been beefed up however at 1 Military Hospital on the outskirts of Pretoria. Military police were searching the trunks of all the cars entering the hospital complex, according to an AFP photographer.

South Africa's military has in the past been responsible for Mandela's health.

The revered statesman has not appeared in public since South Africa hosted the FIFA World Cup final in 2010.

Madiba, as he is affectionately known by South Africans, has all-but retired from public life, choosing to live in his childhood hometown of Qunu in the rural Eastern Cape.

His last hospitalisation was in February when he spent a night in hospital for a minor exploratory procedure to investigate persistent abdominal pain.

In January 2011, Mandela had the country on edge when he was admitted for two nights for an acute respiratory infection. He was discharged in a stable condition for home-based care and intense medical monitoring.

Mandela has also had prostate cancer, for which he was successfully treated in 2001. He had cataract surgery in 1994, just months after he took office as president.

After years fighting white-only rule, he shared the Nobel Peace Prize with the last white president, FW de Klerk, in 1993.

A year later, he crowned his long fight against minority rule by becoming the country's first black president at the end of apartheid.

The last pictures of Mandela published in the media were in August when he received a visit from US Secretary of State Hillary Clinton at his home.

- AFP/xq

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Square launches gift cards

Twitter and Square founder Jack Dorsey at TechCrunch Disrupt in San Francisco in September.

(Credit:
Daniel Terdiman/CNET)

Square, a leader in mobile payments, today launched a gift card service tied to its Square Wallet program and that could be aimed at attracting some would-be Apple Passbook users.

The new service appears designed to let anyone purchase a gift card for friends or family at any of the more than 250,000 businesses nationwide that accept Square Wallet, an iOS and
Android app that lets users pay automatically with their mobile device. The recipient would then redeem the value of the gift using Square Wallet on their own device.

The value of a service like this is that it avoids the use of physical gift cards and lets merchants that accept Square Wallet easily set up the transaction with Square Register, a system that lets them take credit cards, track sales and inventory, and generate analytics.

The gift card business is estimated to be worth $100 billion annually, yet tens of millions of dollars of such gifts expire every day, according to CouponTrade.com. Apple has recently attempted to get in on the gift card game by letting iOS 6 users store the cards in Passbook. Square is clearly hoping it can be the digital gift card service of choice for millions of iOS and Android users. The San Francisco startup has been developing more and more ways for users to pay. It started by providing merchants with plug-in dongles for iOS devices that let anyone take credit cards, and then launched Square Wallet and Square Register.

The company, which is already processing more than $10 billion in annualized transactions, also recently launched a partnership that lets customers pay using Square Wallet at more than 7,000 Starbucks outlets in the United States.

CNET expects to have more detail from Square later today. Please stay tuned.

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Plants Grow Fine Without Gravity

When researchers sent plants to the International Space Station in 2010, the flora wasn't meant to be decorative. Instead, the seeds of these small, white flowers—called Arabidopsis thaliana—were the subject of an experiment to study how plant roots developed in a weightless environment.

Gravity is an important influence on root growth, but the scientists found that their space plants didn't need it to flourish. The research team from the University of Florida in Gainesville thinks this ability is related to a plant's inherent ability to orient itself as it grows. Seeds germinated on the International Space Station sprouted roots that behaved like they would on Earth—growing away from the seed to seek nutrients and water in exactly the same pattern observed with gravity. (Related: "Beyond Gravity.")

Since the flowers were orbiting some 220 miles (350 kilometers) above the Earth at the time, the NASA-funded experiment suggests that plants still retain an earthy instinct when they don't have gravity as a guide.

"The role of gravity in plant growth and development in terrestrial environments is well understood," said plant geneticist and study co-author Anna-Lisa Paul, with the University of Florida in Gainesville. "What is less well understood is how plants respond when you remove gravity." (See a video about plant growth.)

The new study revealed that "features of plant growth we thought were a result of gravity acting on plant cells and organs do not actually require gravity," she added.

Paul and her collaborator Robert Ferl, a plant biologist at the University of Florida in Gainesville, monitored their plants from the Kennedy Space Center in Florida using images sent from the space station every six hours.

Root Growth

Grown on a nutrient-rich gel in clear petri plates, the space flowers showed familiar root growth patterns such as "skewing," where roots slant progressively as they branch out.

"When we saw the first pictures come back from orbit and saw that we had most of the skewing phenomenon we were quite surprised," Paul said.

Researchers have always thought that skewing was the result of gravity's effects on how the root tip interacts with the surfaces it encounters as it grows, she added. But Paul and Ferl suspect that in the absence of gravity, other cues take over that enable the plant to direct its roots away from the seed and light-seeking shoot. Those cues could include moisture, nutrients, and light avoidance.

"Bottom line is that although plants 'know' that they are in a novel environment, they ultimately do just fine," Paul said.

The finding further boosts the prospect of cultivating food plants in space and, eventually, on other planets.

"There's really no impediment to growing plants in microgravity, such as on a long-term mission to Mars, or in reduced-gravity environments such as in specialized greenhouses on Mars or the moon," Paul said. (Related: "Alien Trees Would Bloom Black on Worlds With Double Stars.")

The study findings appear in the latest issue of the journal BMC Plant Biology.

Read More..

Colorado Springs Doctor Rescued from Taliban

Dec 9, 2012 6:34am

ABC

The American doctor rescued from the Taliban in Afghanistan Saturday by U.S. Special Operations Forces is the medical adviser for a Colorado Springs NGO, his employer confirmed today.

Dr. Dilip Joseph and two colleagues were kidnapped by a group of armed men while returning from a visit to a rural medical clinic in eastern Kabul Province, according to a statement from their employer, Colorado Springs-based Morning Star Development. The statement said the three were eventually taken to a mountainous area about 50 miles from the border with Pakistan.

Morning Star’s crisis management team in Colorado Springs was in contact with the hostages and their captors almost immediately, the statement said.

On Saturday evening in Afghanistan, two of the three hostages were released. Morning Star did not release their names in order to protect their identities. Dr. Joseph remained in captivity.

Gen. John R. Allen, the commander of U.S. forces in Afghanistan, ordered the mission to rescue Joseph when “intelligence showed that Joseph was in imminent danger of injury or death”, according to a military press release.

Morning Star said Joseph was in good condition and will probably return home to Colorado Springs in the next few days.

A Defense Department official told ABC’s Luis Martinez that Joseph can walk, but was beaten up by his captors.

Joseph has worked for Morning Star Development for three years, the organization said, and travels frequently to Afghanistan.

“Morning Star Development does state categorically that we paid no ransom, money or other consideration to the captors or anyone else to secure the release of these hostages,” the organization said.

Joseph can be seen here in a Morning Star Development video:

“Due to security concerns, some cannot be named but their help will never be forgotten. Among these who cannot be named we include all of the courageous members of the U.S. military who successfully rescued Mr. Joseph as they risked their own lives doing so,” the statement said.

SHOWS: World News

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Kenyan elephant numbers plummet by 1000 in four years

IT'S a case of up then down for Kenya's second largest population of elephants. After a promising growth spurt, the elephants are now dying faster than they are being born. The decline is being blamed on illegal poaching, driven by Asia's demand for ivory.

The Kenya Wildlife Service recently conducted a census of the Samburu/Laikipia population, the country's second largest. It found that the population lost over 1000 elephants in just four years, and now stands at 6361. Previous censuses in 1992, 1998, 2002 and 2008 had revealed a growing population, which appears to have peaked at 7415 in 2008.

Poaching is suspected. A July report by three conservation groups found that it has been on the rise across Africa since 2006. Poaching is also spreading eastwards from central Africa into countries like Kenya, says Richard Thomas of TRAFFIC in Cambridge, UK, one of the three groups that drafted the report. The July report found that more than half of all elephants found dead in Africa in 2011 had been illegally killed.

The rise in poaching appears to be driven by increasing affluence in China and Thailand, where ivory is often used to make religious sculptures and other decorations.

Organised criminal gangs have capitalised on this increased demand. "If it's worth someone's while to smuggle the ivory, they'll take the risk," Thomas says. There is evidence that gangs are moving into Kenya to hunt elephants.

If you would like to reuse any content from New Scientist, either in print or online, please contact the syndication department first for permission. New Scientist does not own rights to photos, but there are a variety of licensing options available for use of articles and graphics we own the copyright to.

All comments should respect the New Scientist House Rules. If you think a particular comment breaks these rules then please use the "Report" link in that comment to report it to us.

If you are having a technical problem posting a comment, please contact technical support.

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