| CREDIT FEARS: Banks concern as borrowing costs hit new high
There were signs of renewed credit fears among major banks today as borrowing costs in financial markets reached a two-month high. The rate at which banks lend to each other for three months reached nearly 6.4% today - its highest level since September 19. The increase - compared with the Bank of England's official 5.75% base rate -signals increasing caution among banks fearful of losses on investments linked to high-risk US mortgage debt. .
Opposing view: Let consumers choose
When it comes to cracking down on violations of consumer protectionlaws, we're all for it. The American Financial Services Associationstrongly opposes abusive practices and believes all credit consumersdeserve a clear disclosure of product terms. We disagree, however, with the suggestion that there is no role forcards with small lines of credit — even when they carry higher fees.Pricing for risk means that riskier customers (those with a limited orless-than-perfect credit history) typically pay a higher premium toborrow money. This is a fair method of compensating lenders forextending lines of credit that carry a higher probability of default. While many Americans qualify for credit cards with few or no fees, less creditworthy consumers may choose to have a basic card with a smaller line of credit and higher fees.
Virgin Money set to take over mortgage firms
VIRGIN Money has revealed it is in talks for the possible takeover of two mortgage distributors in Australia and has flagged that it wants to talk to more, as it attempts to build scale in its credit card and lending businesses. Chief executive of Virgin Money Australia David Wakeling said yesterday that one acquisition could involve a purchase price of several tens of millions of dollars while the second would be smaller, around several million. "There's recognition in Virgin that financial services is a scale game," Mr Wakeling said, "and we want to build our scale to be more competitive. It's the same realisation that underlies Richard Branson's attempts to rescue Northern Rock in the UK." The struggling British mortgage lender is under offer from Richard Branson, the swashbuckling founder of everything from airlines to health clubs and cosmetics to clothing, all under the Virgin Group brand.
AMD Sells 8.1 Percent Stake to Abu Dhabi
SAN FRANCISCO -- With oil prices surging and U.S. stock prices slumping, chip maker Advanced Micro Devices Inc.'s sale of an 8.1 percent stake to the Abu Dhabi government's investment arm represents the latest plunge by a wealthy Middle Eastern nation into a troubled U.S. corporation. It also raises fresh questions about the appropriateness of Middle Eastern firms owning large chunks of U.S. businesses that specialize in advanced technologies. .
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