RBS plans ‘bad bank’
The Royal Bank of Scotland (RBS) is to create an internal “bad bank” to fence off its riskiest assets, part of measures designed to heal its relationship with the British government and speed up its eventual privatization. Britain is keen to offload its stakes in the bank and British-backed rival Lloyds Banking Group as soon as possible, having pumped a combined ￡66 billion (US$106 billion) into the banks to keep them afloat in the 2008 financial crisis. “I think it does make it easier to sell off the bank and get our money back,” British Chancellor of the Exchequer George Osborne told the BBC on Friday, adding that a sell-off was unlikely to begin before the next election in 2015.
Barges for parties: report
Google Inc’s mysterious barges, which prompted fevered speculation about everything from offshore data centers to floating research labs, may serve a more prosaic role as upscale party venues and showrooms. The multistory vessels made out of stacked shipping containers, one moored in the San Francisco Bay and the other in the Portland, Maine, harbor, are invitation-only luxury showrooms for Google Glass wearable computers and other gadgets, according to San Francisco local TV station KPIX. The structures will feature a top-floor “party deck,” with “bars, lanais and other comforts,” according to the report, which cited unnamed sources.
US production runs strong
The US manufacturing sector expanded at its fastest pace in more than two years last month, according to an industry report, signaling a strong start to fourth-quarter factory activity despite the US government shutdown. The Institute for Supply Management said on Friday its index of national factory activity rose to 56.4 last month, its best showing since April 2011, handily beating expectations of a slight slowdown in the growth rate. Last month was the fifth in a row of quicker growth in the goods-producing sector, according to the institute’s data. “It certainly was a surprise, and a good one. We don’t get that many of those on the data stream of late,” said Art Hogan, managing director at Lazard Capital Markets in New York. Analysts expected weak economic data readings after the partial US government shutdown through the first 16 days of last month.
Fitch upgrades Spain
Fitch Ratings said on Friday it was upgrading the outlook on Spain’s investment-grade “BBB” rating to “stable” thanks to progress in reforms and improved export performance. “Spain has improved its policy track record,” said Fitch in a statement, adding that significant reforms made in the labor market, pension system and financial sector “should put the economy on a surer footing.” The improved outlook, which reduces the immediate risk that Spain will lose its investment-grade rating, came days after the country confirmed it had crawled out of a two-year recession with 0.1 percent growth in the third quarter. That growth was due in no small measure to improved export performance and Spanish firms having improved their competitiveness by trimming wages. “Spain’s balance-of-payments adjustment within the eurozone is proceeding at a faster pace than expected,” Fitch said.