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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DJs 'heartbroken' and 'sorry' over prank gone wrong

STORY HIGHLIGHTS

• Michael Christian says he's "gutted, shattered and heartbroken"


• It's "gut-wrenching" that the prank apparently led to nurse's suicide, Mel Greig said


• Pair says decision to air recorded prank call was not theirs

(CNN) -- The two Australian radio personalities who made the prank phone call to a British hospital where the pregnant Duchess of Cambridge was admitted expressed deep remorse Monday for making the call, which led to the apparent suicide of a nurse who spoke to the pair.

Mel Greig and Michael Christian, both crying at times, told two Australian television shows Monday that their thoughts are with the family of Jacintha Saldanha, the 46-year-old nurse who put the prank call through to the ward where the duchess was.

Saldanha apparently committed suicide Friday.

"I'm very sorry and saddened for the family, and I can't imagine what they've been going through," Greig said on the program "Today Tonight."

Christian described himself as "gutted, shattered and heartbroken."

"For the part we played, we're incredibly sorry," Christian told "Today Tonight."

The pair said the idea for the call came out of a production meeting before their 2DayFM show, the idea being to capitalize on what was the hottest topic in the news, Catherine's pregnancy.

Both stressed that while they made the call to King Edward VII Hospital, they did not have a say on whether it went to air. The call was recorded and then went through a vetting process at their network, Southern Cross Austereo, before it was broadcast, they said.

"This was put through every filter that everything is put through before it makes it to air," Christian said in an interview with the program "A Current Affair."

But Christian said he did not know what that vetting process entailed.

"I'm certainly not aware of what filters it needs to pass through," he said.

"Our role is just to record and get the audio," Christian told "A Current Affair."

Greig and Christian said they never expected the prank call to be successful.

Death casts glare on 'shock jocks'

Posing as Queen Elizabeth and Prince Charles, the pair said they thought their bad accents would give them away and they'd be hung up on by whoever answered the phone at the hospital.

"We wanted to be hung up on with our silly voices," Greig said.

"We assumed that we'd be hung up on, and that would be that," Christian said.

But they were put through to the duchess's ward and given details of her medical condition.

"It was never meant to go that far. It was meant to be a silly little prank that so many people have done before," Greig said.

It was Saldanha who put the call through.

"If we played any involvement in her death, then we're very sorry for that," said Greig, who described how she found out about Saldana's apparent suicide.

"It's the worst phone call I've had in my life," she said, fighting tears.

"There's not a minute that goes by that we don't think about her family and what they must be going through, and the thought that we may have played a part in that is gut-wrenching," Greig said.

The pair have been taken off the air by their network, which has not said when they might return.

"I don't even want to think about going back on air, to be honest," Greig said.

"I'm still trying to make sense of it all," Christian said. "We're shattered. We're people, too."

Greig said she'd willingly face Saldanha's family if it would help bring them closure.

"If that's gonna make them feel better, then I'll do what I have to do," she said.

"I've thought about this a million times in my head, that I've wanted to just reach out to them and just give them a big hug and say sorry," Greig said. "I hope they're OK, I really do."

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N. Korea extends rocket launch window a week

SEOUL, South Korea North Korea on Monday extended the launch period for a controversial long-range rocket by another week, until Dec. 29, citing technical problems.

An unidentified spokesman for the North's Korean Committee of Space Technology told state media scientists found a "technical deficiency in the first-stage control engine module of the rocket." The statement didn't elaborate, but said technicians were "pushing forward" with final preparations for the launch.

North Korea is making its second attempt of the year to launch a rocket that the United Nations, Washington, Seoul and others call a cover meant to test technology for missiles that could be used to strike the United States. They have warned North Korea to cancel the launch or face a new wave of sanctions.

The North Koreans call the launch a peaceful bid to advance their space program, and a last wish of late leader Kim Jong Il, who died a year ago, on Dec. 17. North Korea is also celebrating the centennial this year of the birth of national founder Kim Il Sung, current leader Kim Jong Un's grandfather. An April launch broke apart seconds after liftoff.

The announcement of the planned rocket launch has sparked worry because of the timing: South Korea and Japan hold key elections this month, President Obama begins his second term in January, and China has just formed a new leadership.

The North had originally set up a 13-day launch window, starting Monday, but it announced early Sunday that it may delay the liftoff for unspecified reasons.

Experts in Seoul and Tokyo had speculated that technical glitches may have forced scientists to postpone the launch of the finicky three-stage rocket, its fifth attempt since 1998.

Temperatures in the border city of Sinuiju, near the launch site, dropped to 8.6 degrees Fahrenheit Monday morning, and the Korean Peninsula has been seized by early winter storms and unusually cold weather, the Korea Meteorological Administration said in Seoul.

Engineers can launch a rocket when it's snowing, but lightning, strong wind and freezing temperatures have the potential to stall liftoff, said Lee Chang-jin, an aerospace professor at Seoul's Konkuk University.

Snow covered the North's launch site last week, according to commercial satellite imagery taken by GeoEye on Dec. 4 and shared with The Associated Press by the 38 North and North Korea Tech websites. The road from the main assembly building to the launch pad showed no fresh tracks, indicating that the snowfall may have stalled the preparations.

Still, Japanese Prime Minister Yoshihiko Noda said Monday that his government would maintain vigilance. Tokyo has mobilized its military to intercept any debris from the rocket.

"At this moment, we are keeping our guard up," Defense Minister Satoshi Morimoto told reporters Monday. "We have not seen any objective indication that would cause us to make any change to our preparedness."

In addition to four failed launches, North Korea has unveiled missiles designed to target U.S. soil and has tested two atomic devices in recent years. It has not yet proven to have mastered the technology for mounting a nuclear warhead to a long-range missile, however.

A successful launch would mean North Korea could develop an intercontinental ballistic missile capable of striking the U.S. mainland within two to three years, said Chong Chol-Ho, a weapons of mass destruction expert at the private Sejong Institute near Seoul.

Six-nation negotiations to offer North Korea much-needed aid in exchange for nuclear disarmament have been stalled since early 2009.

Last week, U.S. Secretary of State Hillary Rodham Clinton said Washington was deeply concerned, and urged foreign ministers from NATO and Russia to demand that Pyongyang cancel its plans. Moscow joined calls on Pyongyang to reconsider.

China, North Korea's main ally and aid provider, also noted its concern, acknowledging North Korea's right to develop its space program but urging Pyongyang to harmonize the bid with restrictions, including those set by the U.N. Security Council.

International pressure and the prospect of dialogue may be a factor in the delay, analysts in Seoul said.

China must have sent a "very strong" message calling for the North to cancel the launch plans, said analyst Baek Seung-joo of the South Korean state-run Korea Institute for Defense Analyses.

North Korea may also be holding off if the U.S., its longtime Korean War foe, actively engages Pyongyang in dialogue, said Koh Yu-hwan, a professor of North Korean studies at Seoul's Dongguk University.

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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.

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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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Lagarde warns of 'zero' growth

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Authors exercise their "write" to self-publish

(CBS News) Even John Lennon - a Beatle - needed a publisher for his first book, "In His Own Write," back in 1964. Today authors nobody ever heard of can publish their OWN work all by themselves . . . IN THEIR OWN WRITE, as it were. Our Cover Story is reported now by Rita Braver:

Richard Paul Evans went from a 700-square-foot Salt Lake City house to a much larger one, all because of a little tale he wrote for his daughters.

Did he think he could sell it and that everyone would fall in love with his book? Negative, Evans said.

"The idea of being a novelist is really romantic, but it's kind of the same as being President of the United States - it's not gonna happen," he said.

But it DID happen for Rick Evans. You may remember "The Christmas Box," a mega hit 20 years ago.

Evans first printed only 20 copies of the book. But in the days before the Internet took off, friends started passing dog-eared copies around - and bookstores started asking for it.

"At that point I thought, you know, maybe I should send this to publishers, and they all quickly rejected the book," Evans said.

So Evans self-published, and only after his book hit the bestseller list did a major publisher buy it, for a reported $4 million! So in a way he became a godfather to a whole new generation of authors who are writing the next chapter in the saga of self-publishing.

Take Stephanie Bond, who's issuing her latest work right from her Atlanta home.

"This is actually a 'boxed set'" she was publishing, Bond said. It's called "Love Can Be Murder."

That's right, with just a few strokes Bond is creating an electronic book, or "e-book."

"That's it, I'll get an e-mail from Amazon saying, 'Your book is live and congratulations,'" Bond said.

It's one of the strongest trends in publishing, with estimates that more than 200,000 books were self-published last year - authors like Bond, by-passing the traditional publishing houses.

"For the longest time publishers have been able to dictate what is on the shelf," Bond said. "They've been the gatekeepers."

But not any more. Bond did have 60 books - mostly romance novels - published the traditional way, before she struck out on her own.

Was it a little scary? "It was," she said. "But at that point I really didn't have a choice. My publisher decided that they were going to drop the series that I had written, and I didn't have any money coming in."

But now, with romance one of the hottest categories for self-published books, her novels are flying off the virtual shelves. This past week a Bond book, "Stop the Wedding," was number 2 on Amazon's Kindle bestseller list.

Although she no longer gets advances, or upfront payments for her work, she gets royalties of up to 70 percent, instead of the 10-15 percent publishers usually pay.

And even with charging only 99 cents for some books, Bond says she made more than half a million dollars in the last year.

But not everyone sees this as a bonanza.

"When you price a book at 99 cents, $1.99, I personally think it devalues the author's time and effort," said Jamie Rabb, the chief of Grand Central Publishing, part of Hachette books. Her label puts out books by a lot of heavy hitters, and many lesser-known writers, too.

"There is almost a movement amongst some popular writers who are self-published to say, 'Don't go to publishers, they rip you off, they don't really promote your books unlike they're a really big seller.' Don't those authors have a point?" asked Braver.

"No, they don't," Rabb laughed. "I've worked in publishing a long time, and I see what happens to a book when it's acquired. First of all it's copyedited, it's proofread. They have a team of professional artists and markets that come up with a wonderful package, who try to figure out - even for books we don't spend a lot of money on - how to get them to the public."

But Raab is well aware that she is part of a shrinking industry, and even without the backing of a big-time publisher, a number of self-published authors are racking up huge sales.

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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.

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