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Queen Talks of 'Lax' Bankers and 'Toothless' Regulators behind Financial Crisis

THE DAILY TELEGRAPH: The Queen has spoken about "lax" City workers and a banking regulator which "didn't have the teeth" to intervene as she discussed the causes of the financial crisis during a visit to the Bank of England

With her face on every banknote and coin in circulation, it is only natural that the Queen takes a sharp interest in the nation's finances, as she showed on a visit to the Bank of England today.

Her Majesty suggested the financial crisis of 2008 had happened because the Financial Services Authority “didn’t have the teeth” to rein in the biggest risk-takers.

The Duke of Edinburgh, meanwhile, had a typically blunt piece of advice for the Bank’s executives: “Don’t do it again!”

The Queen and the Duke grilled Bank of England staff during a visit which included a tour of a vault stacked with £27 billion worth of bullion.

Suit Kapadia, one of the Bank’s financial policy experts, said he wanted to answer a question the Queen asked academics at the London School of Economics in 2008 about why no one saw the financial crisis coming.

“Oh!” said the Queen, looking slightly taken aback.

Mr Kapadia said the City had got “complacent” because it thought risk was being managed better than it was, and the financial system had become too interconnected.

The Queen agreed: “People got a bit lax … perhaps it was difficult to foresee.”

She asked if the financial system was less interconnected now and concurred with a suggestion that part of the problem had been the lack of powers given to the Financial Services Authority. “They didn't have the teeth,” she said. » | Gordon Rayner, Chief Reporter | Thursday, December 13, 2012

Google's Tax Avoidance Is Called 'Capitalism', Says Chairman Eric Schmidt

THE DAILY TELEGRAPH: Google chairman Eric Schmidt has insisted that he is "very proud" of the company's tax structure, and said that measures to lower its payments were just "capitalism".

Mr Schmidt's comments risk inflaming the row over the amount of tax multinationals pay, after it emerged that Google funnelled $9.8bn (£6.07bn) of revenues from international subsidiaries into Bermuda last year in order to halve its tax bill.

However, Mr Schmidt defended the company's legitimate tax arrangements. “We pay lots of taxes; we pay them in the legally prescribed ways,” he told Bloomberg. “I am very proud of the structure that we set up. We did it based on the incentives that the governments offered us to operate.”

“It’s called capitalism,” he said. “We are proudly capitalistic. I’m not confused about this.” » | Telegraph Staff | Wednesday, December 12, 2012

US Will Be 'First Among Equals' In 2030
THE DAILY TELEGRAPH: The USA will be "first among equals" by 2030, in a world where China is the top economy, according to an American intelligence report.

China will surpass the US as the largest economy in the 2020s, according to the National Intelligence Council, in its first assessment in four years.

But the study said that the United States, while weaker, will probably remain the top player in two decades thanks to its role in resolving global crises, its technological prowess and its "soft power" that attracts outsiders.

"The US most likely will remain 'first among equals' among the other great powers in 2030 because of its pre[-]eminence across a range of power dimensions and legacies of its leadership role," the report said.

"Nevertheless, with the rapid rise of other countries, the 'unipolar moment' is over and Pax Americana – the era of American ascendancy in international politics that began in 1945 – is fast winding down," it said. Read on and comment » | Tuesday, December 11, 2012

Overdose: The Next Financial Crisis

Dolce and Gabbana: Stylists to the Stars Face £320m Tax Fraud Case

THE SUNDAY TELEGRAPH: Domenico Dolce and Stefano Gabbana's next public appearance in Italy's fashion capital will be on Monday, with the start of a trial in which they are accused of evading more than €400 million in tax.

They are accustomed to bathing in the adulation of models and fashion critics as they parade down the catwalks of Milan.

But Domenico Dolce and Stefano Gabbana's next public appearance in Italy's fashion capital will take place under rather less glamorous circumstances, as the famed stylists face a trial for alleged tax avoidance on an epic scale.

Monday will see the start of a trial in which they are accused of evading more than €400 million in tax when they sold their D&G and Dolce & Gabbana brands to a holding company, Gado, which they set up in Luxembourg in 2004.

Prosecutors say the complex arrangement enabled the duo, whose friends and clients include Angelia Jolie, Scarlett Johansson, Monica Bellucci and Naomi Campbell, to avoid paying higher taxes in Italy and instead pay at a lower rate in Luxembourg.

Investigators say the price at which the companies were sold – €360 million – was about one third of their true market value. » | Nick Squires, Rome | Sunday, December 02, 2012