assistance with collection accounts

(Recasts with more Weber quotes, Unicredit, analyst comment)

By Sakari Suoninen and Andreas Framke

FRANKFURT, Sept 8 (Reuters) - Talks on the way banks aroundthe world gird themselves for shocks can be wrapped up at theweekend, the head of Germany's Bundesbank Axel Weber said onWednesday, warning no country should stand in the way of a deal.

Bankers and investors are eagerly awaiting details of thenew standards which will determine how much more of a capitalcushion banks will have to set aside as a safety net and lessenthe need for government bailouts in a future crisis.

"Hopefully we will bring the negotiations to a conclusion atthe weekend in Basel," Weber, who is also a member of theEuropean Central Bank's Governing Council, said at the first dayof the annual Banks in Transition conference that will attracttop executives from the financial world. [ID:nLDE6810X0]Germany has been pushing for global rulemakers on the BaselCommittee to give its state-backed banks more time to adapt toits higher standards but Weber signalled the country was nowresigned to a deal that may not be totally to its liking.

"In this weekend's negotiations, we want to decide the finalpackage," Weber said.

"No country will be able to push through its nationalposition, there will be compromises and everyone will have to beready to move away from their negotiating position," Weberadded.

The Basel Committee of central bank and regulatory officialsagreed a proposal for tougher new global bank capital rules onTuesday but kept the details confidential until Sunday.[ID:nLDE6861DD]

The recommendations go to the committee's oversight body,the Group of Governors and Heads of Supervision (GHOS), chairedby European Central Bank President Jean-Claude Trichet, whichmeets in the Swiss city on Sunday.

READJUSTING EXPECTATIONS

Banks and investors in their shares are on tenterhooks asthe final deal will have a direct impact on returns.

Alessandro Profumo, chief executive of Italian bankUnicredit <CRDI.MI>, said because Basel III negotiations havenot yet been concluded "it is impossible to say what will be theimpact on profitability for our banks".

"We have to readjust our expectations in terms of return onequity," Profumo said.

Details of the new levels and how much time banks will haveto comply may be revealed after Sunday's meeting.

The heads of the Group of 20 leading countries, who calledfor the new rules, hold a summit in November to formally signoff on Basel III.

The impact of the new rules will largely hinge on when theytake full effect.

"We expect an implementation target of between 2013 and2016, depending on the state of the economy in November, whenthe decision is likely to be taken," analysts at BernsteinResearch said in a note to clients.

Credit Suisse analysts said if, as a leak of draft Basel IIIproposals to Germany's Die Zeit newspaper this week showed, thenew standards will be tougher than expected, a longer phase-into 2018 would compensate for this.

"Putting together a timeline... demonstrates that the sectoris still on a path where regulation is unlikely to be aconstraint on its capital management policy," the bank added.

Weber warned it was too early to declare the financialcrisis over, saying markets remained characterised byuncertainty and that setbacks could not be ruled out.

He backed German government plans for dealing with insolventbanks and urged regulation to be globally applicable.

For an overview of regulation stories see [ID:nLDE64915B]

(Additional reporting by Marc Jones and Jonathan Gould)

(Writing by Huw Jones; Editing by Patrick Graham,huw.jones@thomsonreuters.com; + 44 207 542 3326))

PARIS -(Dow Jones)- French lender BNP Paribas S.A. (BNP.FR) Wednesday said it's reorganizing its Global Equities and Commodity Derivatives business.

MAIN FACTS:

- More autonomy is given to the regions in line with BNP Paribas CIB's regionalisation. Edward Speal, newly appointed, heads the Americas Region and Pierre Rousseau heads the Asia Pacific Region. Yann G�rardin and Olivier Osty will manage the European Region.

- The activity will be organized around four newly formed businesses: Commodity Derivatives,managed by Amine Bel Hadj Soulami, Market Liquidity Provider headed by Olivier Osty, Structured Equity managed by Nicolas Marque, newly appointed and Flow & Financing under Emmanuel Heurtier, again newly appointed.

- New positions are created to enhance the sharing of know-how whilst maintaining the highest standards in terms of risk management and business ethics: Jacques Vigner is appointed Global Chief Operating Officer/Strategy & Risk, Valerie Rabault is appointed head of market prospective & business risk and Constance Chalchat is appointed head of communication & people development.

- With the objective of better addressing specific regional and local needs, an entity dedicated to emerging markets is created.

- .

- By Paris Bureau, Dow Jones Newswires; +331-4017-1765; elena.berton@dowjones.com

Copyright © 2010 Dow Jones Newswires

LONDON -(Dow Jones)- Standard Chartered PLC (STAN.LN), a retail, commercial banking, and financial services company announced Wednesday it has appointed Varun Malhotra as Co-Head of Global G10 Swaps/Bonds in its MENA Financial Markets Business.

MAIN FACTS:

-Most recently, Varun was Head of $ Swaps/Bonds Trading for Europe at Citibank London and had been responsible for growing that business over the past 6 years that he was there.

-The company also appointed Noyan Ayhan as the Head of Turkey Rates and FX trading.

-Previously, Noyan was Head of Turkey Trading at Morgan Stanley.

-John Banerjee also joins the FX team with 20 years of experience on the buy and sell side as a highly successful global Macro trader.

-The company also appointed Jeroen Beaard as a Senior Trader on the G10 and Short Term Interest Rates Trading (STIRT) desk focusing on FX Swaps where he was a top 3 market maker in the EONIA market, OIS and FRA trading.

-Previously Jeroen spent 9 years at Rabobank trading EUR and JPY and STIRT products.

-Ali Mohri also joins the Bank as a Trader on the G10 and STIRT desk focusing on GBP and $ OIS's and FRA's as well as FX swaps.

-Shares at 1002 GMT down 32 pence, or 1.73%, at 1822.50 pence.

Copyright © 2010 Dow Jones Newswires

LONDON -(Dow Jones)- Virgin Atlantic and labor leaders Wednesday resolved a dispute over time off for pilots, averting strikes and maintaining its record of no industrial action in its 26-year history.

Virgin Atlantic said it clarified to union negotiators the minimum number of days off pilots are allowed to take, and made no changes.

Under the terms of an agreement, pilots are entitled to a minimum of 120 scheduled days off each year, equivalent to an office worker's weekends and bank holidays but without the same predictability.

Jim McAuslan, general secretary at the British Airline Pilots' Association, or Balpa, said, talks were "frank, to the point and creative," and were never about money but about lifestyle.

Both sides hinted that their relationship and communication may have deteriorated, which in part may have led to tensions escalating and the union threatening strikes.

McAuslan said the union now was happy with the ground that's been laid out for its future relationship with the airline.

"In our discussions with the company we have identified a range of relationships and processes that can be improved," he said. "We are looking forward to working with Virgin Atlantic on these matters to ensure that our industrial relations are on a more professional and progressive footing."

A spokesman for Virgin Atlantic echoed that opportunities "to modernize the relationship" had been identified, adding it is very pleased to have "rapidly resolved this situation without impact on our pilots, customers or operation."

The agreement will be a relief to passengers and the airline. Industrial action by pilots has a crippling impact on an airline's operations. Their skills aren't as easily replaceable as, for example, cabin crew, and wet-leasing planes that come staffed with pilots and cabin crew is expensive.

Many airlines have faced the threat of strikes, some of which have played out, as a result of airlines attempting to restructure during the downturn.

Most notably, rival British Airways PLC (BAY.LN) still faces the threat of further costly industrial action by its cabin crew, who Monday voted in favor of another strike ballot. Talks between BA and union representatives have dragged for 19-months and come to very little. Those strikes have cost the airline in excess of GBP150 million this year.

Copyright © 2010 Dow Jones Newswires

LONDON -(Dow Jones)- Aviva Investors, the global asset management business of Aviva PLC (AV) said Wednesday it has appointed Pat O'Brien as CEO of Aviva Investors North America, effective Sept. 7.

MAIN FACTS:

-O'Brien will have overall responsibility for Aviva Investors operations in the U.S. States and Canada, reporting to Chief Executive Alain Dromer.

-O'Brien will be based in Chicago, Illinois.

-Since 2000 O'Brien has worked for Evergreen Investment Management, the asset management subsidiary of the Wachovia Corporation, initially as President, Institutional Asset Management and between 2008 and 2009 as Head of International for Wachovia Global Asset Management.

Copyright © 2010 Dow Jones Newswires

By Carmel Crimmins

DUBLIN, Sept 8 (Reuters) - Ireland's cabinet was nearing adecision on how to deal with troubled Anglo Irish Bank onWednesday, officials said, after an extension of state supportfailed to soothe fears the lender could drive its economy deeperinto crisis.

Irish bond spreads stayed at euro lifetime peaks and sharesin its top two banks dropped sharply amid continuing uncertaintyover the final bill for bailing out Anglo [ANGIB.UL], and theburden it will place on Irish public debt levels.

Finance Minister Brian Lenihan is briefing colleagues at acabinet meeting this morning on what should be done with thebank after two days of talks with European Commission officials.

A junior minister said a final decision was in the offingbut he gave no clarity on whether that would be on Wednesday.

"We are coming to endgame here," Eamon O'Cuiv, the ministerfor social protection, told Newstalk Radio.

Depending on what is agreed, a cabinet statement may beissued this afternoon, a source said.

Lenihan and Prime Minister Brian Cowen have insisted thatthe cost of dealing with the Irish banks' decade-long propertybinge is manageable because they are spreading the costs outover 15 years and the state has no immediate fundingrequirements.

But analysts said they need to be more specific.

"They will have to put clarity on the language and clarityon the numbers. This business of saying it's manageable is notgoing to wash with the markets," said Alan McQuaid, economistwith Bloxham Stockbrokers in Dublin.

"The market is saying, 'You are trying to juggle too manyballs, you're weighed down by Anglo and you are not going to beable to generate enough economic growth and implement fiscalausterity and meet budget targets by 2014, it's justimpossible,' that's what the market is telling you."

Despite its lauded programme of fiscal austerity, thestate's bailout of Anglo has saddled Ireland with by far theworst budget deficit in the European Union.

A STAY OF EXECUTION?

Lenihan on Tuesday extended a guarantee for short-term bankliabilities, including corporate and interbank deposits, untilthe end of the year to prevent a possible withdrawal of fundsout of Irish banks.

But the extension, while welcome in the short-term, wasviewed as a stay of execution by investors who are wonderingwhat will happen at the end of the year.

"People are thinking, 'What happens after the end of theyear?'," said one dealer. "At the end of the year are they goingto have to extend it again?"

Anglo Irish and Allied Irish Banks <BKIR.I>, which needs toraise 7.4 billion euros in additional capital before the end ofthe year, had asked for the guarantee to be extended but thegovernment applied it to the entire sector fearing otherwisethere would be capital flight between banks.

The move makes it more difficult for Bank of Ireland<BKIR.I>, which has already raised capital from private sourcesto meet tough new regulatory requirements, to distinguish itselffrom its more stretched rivals and its shares fell nearly 7percent, making it the top loser on the index <.ISEQ>.

The government charges a fee for the guarantee and NCBStockbrokers estimated the extension would cost Bank of Ireland100 million euros until the year end.

Allied Irish was 2.1 percent lower in a market 1.3 percentweaker.

The premium investors demand to hold Irish 10-year paperover German bunds was at 389 basis points<IE10YT=TWEB><DE10YT=TWEB>, the same level as Tuesday when theyhit a new euro lifetime high, indicating continuing investornervousness.

(Writing by Carmel Crimmins; editing by Patrick Graham)

TOKYO, Sept 8 (Reuters) - The Tokyo Stock Exchange may limita proposed extension of its trading hours for fear of curbingactivity from traders that typically buy and sell large blocks ofshares out-of-hours, a senior official from the bourse said onWednesday.

Pension funds, insurance companies and other so-called blocktraders use the exchange's out-of-hours trading system during its90-minute midday break and after it closes for large volumetrades.

These transactions, which could have a major impact on shareprices during normal business hours, account for about 10 percentof the bourse's trades.

"If we eliminated the lunch break it may make it difficultfor block traders to operate," TSE Senior Executive OfficerTomoyoshi Uranishi told Reuters in an interview.

"If you sold 10 billion yen ($120 million) of shares in ablock the price would drop and you wouldn't be able to trade atthe price you wanted."

The TSE in July said it would consider lengthening itstrading hours, including scrapping its midday break, in a bid toboost volumes and fend off growing competition from rivalexchanges in Asia.

Unlike the New York Stock Exchange or bourses in Europe,where big trades are done off-exchange in "dark pools" that hidesell and buy prices, the TSE remains Japan's dominant venue fortrading shares.

Its 95 percent market share compares with around 50 percentfor the NYSE and Nasdaq combined.

The TSE on Friday concludes hearings about the views ofinstitutional and retail investors on the proposals, and willmake a final decision on the extension by year-end.

So far, most institutional investors, which dominate trading,have expressed opposition to the plan, with some concerned itwould increase staffing costs.

Retail investors, however, support extended hours, accordingto a source at the TSE who spoke on condition he wasn'tidentified.

The debate has resurfaced as Japan frets about its waningclout in Asian financial markets amid the rise of China and otherfaster growing economies, and as the bourse seeks to boost itscorporate value ahead of its own planned public listing.

The latest proposal is the third time since 2007 that theexchange has offered to stay open longer.

Cash trading at the TSE begins at 9 a.m. and ends at 3 p.m.(0000-0600 GMT) with a lunch break from 11 a.m to 12:30 p.m. (Editing by Joseph Radford)

HONG KONG -(Dow Jones)- Bank of China Ltd. (3988.HK) said Wednesday the China Banking Regulatory Commission approved its planned rights issue of Shanghai-listed A shares and Hong Kong-listed H shares.

Bank of China, the country's fourth-largest lender by assets, said in August its shareholders approved its plan to raise up to CNY60 billion from a rights issue in Shanghai and Hong Kong in order to strengthen its capital base after a surge in lending last year.

Bank of China said earlier it will issue up to 1.1 rights shares for every 10 existing Shanghai-listed A share and Hong Kong-listed H share.

Copyright © 2010 Dow Jones Newswires

FRANKFURT -(Dow Jones)- Italian bank UniCredit SpA (UCG.MI) is focusing on expanding its German operations organically, Chief Executive Alessandro Profumo said Wednesday.

If acquisition opportunities were to arise the bank would look at them, but it would be very cautious in terms of the price it would be willing to pay, Profumo told a banking conference.

UniCredit expects "very good growth in Germany, mainly due to its corporate business," Profumo said.

Earlier this year, UniCredit lost out on the German retail operations of Swedish bank Skandinaviska Enskilda Banken AB (SEB-A.SK), which were bought by Spanish peer Banco Santander SA (STD).

Copyright © 2010 Dow Jones Newswires

By Victoria Thieberger

MELBOURNE, Sept 8 (Reuters) - Foster's Group Ltd,Australia's largest brewer, rejected a private equity offerworth up to $2.5 billion for its wine business as too cheap,sending its shares up as much as 6 percent on hopes of higherbids.

Investors were surprised by the approach for the world'ssecond-largest wine business, which has cost Foster's billionsof dollars in writeoffs and is now being split from thelucrative beer business. It also raised speculation that suitors for the combinedgroup, which has a market value of about $11 billion, might nowstep forward.

"This puts the whole company in play. If you are one of thebig brewers, you probably didn't want to be saddled with a winebusiness you didn't understand or want," said Tom Elliott,managing director of hedge fund MM&E Capital.

"Now you know there are potential buyers out there, you canmake a bid for the whole company knowing that you can offloadthe wine business to private equity or someone else," he said.

Investors have been focusing on potential buyers for thebeer business, which enjoys some of the highest profit marginsin the brewing world.

Late last month, sources said brewing groups SABMiller andJapan's Asahi Breweries were looking at the company's beeroperations, valued at more than $10 billion, but no firm bidshave emerged.

The ailing wine business, with vineyards from California'sNapa Valley to the Hunter Valley near Sydney, had been seen asthe unwanted child and Foster's said on Wednesday it wouldcontinue to work on splitting the beer and wine units. It didnot identify the private equity company that made the approach.

Sales of Foster's wine, including Beringer, Penfolds andWolf Blass, have been hit by a deep U.S. recession and a trendaway from low-end, bulk wines in Australia. The strong Aussiedollar has also been a drag, slashing the value of U.S.earnings.

Foster's shares closed up 4.5 percent at A$6.34 on volumealmost four times its average over the past 30 days in abroader market down 0.8 percent.

BIG WRITEDOWNS

The wine business, known as Treasury Wine Estates, isvalued at A$3.1 billion on Foster's books, or about half whatthe company spent on wine acquisitions in a rapid expansion asit sought to offset flat demand for beer.

Foster's spent over A$6 billion building its wine business,which ranks behind Constellation Brands Inc, with itsacquisitions of California's Beringer Wine Estates in 2000 andAustralia's Southcorp in 2005.

Foster's has been overhauling the wine unit over the pastyear, selling unprofitable vineyards, changing U.S.distributors and focusing on higher-margin wines above $8 abottle.

Analysts value the business at A$1.7 billion to A$3.5billion.

Foster's was formed in the 1880s, when the first Foster'sLager was brewed -- becoming one of Australia's top brands --and the Mildara Winery was established.

KEEN ON WINE

Foster's said the offer, worth A$2.3 billion-A$2.7 billion($2.1 billion-$2.5 billion), was highly conditional andrequested exclusivity, which it said reduced the value of theproposal.

The offer "significantly undervalues" the wine business andits future prospects.

A deal for the wine unit would have been the largest buyoutby a private equity firm in the Australian market since 2007.

The major international private equity firms represented inAustralia either declined to comment or did not return calls.They included Blackstone, KKR, Carlyle, TPG and CVC.

Bain & Co in New York did not return calls seeking comment.

International private equity firms have shown renewedinterest in cheap Australian assets this year, snapping uphospital owner Healthscope in July for A$2 billion.

Foster's spokesman Troy Hey declined to comment on theidentity of the suitor, because the matter was confidential.

Banking sources said that TPG could be interested in buyingback some of the assets it previously owned -- it owned about55 percent of Beringer with some partners when it sold toFoster's for A$2.6 billion, including debt.

Beringer itself was established in California's Napa Valleyin the 1870s.

Foster's said it is continuing with its plans to separatelylist its beer and wine businesses in 2011 but left the dooropen to other offers.

"The one positive side is (it shows) people could genuinelybe interested in the wine business. At least that'sencouraging," said Argo Chief Executive Jason Beddow, whichowns Foster's shares.

Earnings from the wine business rose 21 percent to A$221million for the year to June 2010, but a massive A$1.3 billionwritedown on the wine assets, the third for the unit, marredthe group's bottom line.

Foster's has hired Gresham Advisory Partners and GoldmanSachs to advise on the demerger. (Editing by Balazs Koranyi, Dhara Ranasinghe and LincolnFeast)

By Sakari Suoninen

(releads, adds comments, detail)

FRANKFURT, Sept 8 (Reuters) - Negotiations on the way banksaround the world gird themselves for shocks can be wrapped up atthe weekend, European Central Bank Governing Council member andBundesbank head Axel Weber said on Wednesday.

Bankers and investors are eagerly awaiting details of thenew rules which will determine how much of a capital cushionbanks will have to set aside as a safety net.

"Hopefully we will bring the negotiations to a conclusion atthe weekend in Basel," Weber said at the first day of the annualBanks in Transition conference that will attract top executivesfrom the financial world. [ID:nLDE6810X0]Central bank and regulatory officials agreed a proposal fortougher new global bank capital rules on Tuesday but kept thedetails confidential until Sunday. [ID:nLDE6861DD]

The recommendations by the so-called Basel Committee go tothe Group of Governors and Heads of Supervision (GHOS), chairedby European Central Bank President Jean-Claude Trichet, whichmeets in the Swiss city on Sunday.

The recommendations govern how much extra capital banks willhave to hold in future to avoid governments having to bail outthe sector in the next crisis.

They also cover arrangements for phasing in higher standardson the quality of capital banks must hold in future.

Weber, seen as one of the ECB's heavyweight policymakers,also delivered a cautious message on the euro zone economy, butrebuffed the idea of the bloc falling back into recession.

"I do not share fears of a double recession or deflation,"he said.

He warned, however, that it was too early to declare thefinancial crisis over, saying markets remained characterised byuncertainty and that setbacks could not be ruled out.

He backed German government plans for dealing with insolventbanks and urged regulation to be globally applicable.

For an overview of regulation stories see [ID:nLDE64915B] (Writing by Marc Jones; Editing by Michael Shields)

LONDON -(Dow Jones)- Shares in U.K. oil and gas company Dana Petroleum PLC (DNX.LN) held their position marginally above a hostile bid by Korea National Oil Corp. of 1800 pence a share Wednesday after Dana said KNOC's GBP1.87 billion offer significantly undervalues the company.

While analysts said the muted reaction of Dana's shares indicates the market is far from convinced by the company's arguments in favor of a higher offer price, it will still stymie KNOC's efforts to buy shares in the market and quickly take control of the U.K. firm.

At 0801 GMT shares in Dana were trading flat from Tuesday's close at 1808 pence in a broadly lower London market.

In a document released to the stock market Wednesday, Aberdeen, U.K.-based Dana cited the asset valuation of an independent expert, its own forecasts for oil production growth, details of the acquisition of two new North Sea oil fields plus exploration updates to try and convince the market of its value.

Dana said it would be fairly valued at between 2270 pence and 2465 pence a share, and that it sees "major additional upside" after taking into account the new value created from the acquisition and the expert's advice. KNOC's offer values Dana at 1800 pence per share.

Aug. 24, the Korean oil national submitted a 'no increase' statement to the U.K. Takeover Panel, which prevents it from raising its offer unless a competitive bid is launched, it obtains a recommendation from Dana's board or it becomes aware of material new information. Under the U.K. takeover code KNOC would be unable to buy shares above its offer price without raising its bid.

However, KNOC will still be able to try and gain irrevocables at its offer price. It has already secured letters of intent in support of its 1800 pence a share bid, although it remains to be seen whether investors will translate this into firm support while Dana's share price remains above this level.

According to details provided by Dana Wednesday, an independent assessment of the company, based on the average analyst forecast oil price prior to the details of the North Sea oil fields acquisition, valued the company at about 2120 pence a share.

Adding the value from an acquisition boosts the value of Dana to between 2270 pence and 2465 pence a share, Dana Chief Executive Tom Cross said on a conference call with reporters.

The 2120 price recommended by the expert represents a roughly 18% premium to KNOC's current offer, Dana added in a statement, and noted that it sees KNOC's offer as "opportunistic and inadequate."

"We are expecting a proper value discussion with KNOC," said Cross. Investors should focus on the value the new information demonstrated, Cross said, as opposed to the share price in a range of 990 pence and 1500 pence prior to KNOC's approach.

Dana Wednesday provided details of its GBP240 million acquisition of Petro-Canada U.K., a unit of Suncor Energy Inc (SU.T), which gives it access to two North Sea oil fields.

It also highlighted its belief that Dana is in a phase of "transformational growth," expecting to boost production to a pro-forma rate of approximately 70,000 barrels of oil equivalent per day, from its 2009 average rate of 38,653 barrels.

Dana said it believes that two wells it is currently drilling, Anne Marie and Cormoran, could, if successful, create considerable additional upside.

"These two prospects alone are valued at 585 pence per share unrisked, based on the independent expert's asset valuations," Dana said, but people familiar with the situation said the Suncor deal was already priced into KNOC's offer.

Analysts said the market is taking a muted view of Dana's defense. Evolution Securities, in a note to clients Wednesday, said it believed the defense document would "prove futile."

The details of the defense had largely been anticipated by the market, and investors have so far been skeptical of the value any third-party report can provide. KNOC said recently that nearly 50% of Dana's investors had indicated their readiness to accept 1800 pence for their shares.

"What are we going to take more seriously: GBP18 in cold hard cash or the views of a supposedly independent company paid for by Dana to come up with a favorable view?" one major investor said, before having seen the document.

KNOC didn't immediately comment on the Dana document.

(David Winning contributed to this report.)

Copyright © 2010 Dow Jones Newswires

FRANKFURT -(Dow Jones)- Tighter standards for banks' capital and liquidity won't hurt the economy, European Central Bank governing council member Axel Weber said Wednesday.

Weber told a banking conference that the lengthy transition phase foreseen by international regulators working on the new requirements will help to ensure that banks don't find themselves too overburdened and unable to lend to the real economy.

"The real challenge lies in bringing harmonized international rules into line with differing national circumstances," Weber said.

He reminded his audience that the aim of greater systemic stability was no end in itself, and that the economic costs of the 2007-2008 banking crisis had been immense.

German regulators had publicly expressed reservations about the preliminary agreement reached by international regulators in July on new standards for bank capital and liquidity. The Bank for International Settlements' committee of Governors and Heads of Supervision intends to agree a more detailed version of the requirements next week. The Group of 20 industrial and developing nations had given the BIS and Financial Stability Board the task of developing new rules to prevent another crisis by the time of a meeting of the G20 heads of government in November. Weber said that the process is "on track" and that there will be no slippage in developing the new standards.

Other elements of that mandate are proving harder to implement, however. FSB chairman Mario Draghi admitted last week that it won't be possible to solve the issue of banks that are "too big to fail" by November.

Elsewhere in his speech, Weber repeated that he sees no risk of a double-dip recession or of deflation, in view of the robust development of the real economy so far this year. As reported, the German economy grew by 2.2% in the second quarter, its fastest rate in 20 years. Officials expect it to slow down in the second half, but still consider growth of 3% as possible.

"I expect moderate growth combined with price stability," Weber said.

Nonetheless, he said that it is too early to call an end to the financial crisis, saying its effects will still be felt for years to come.

Website: www.bundesbank.de

geoffrey.smith@dowjones.com

Copyright © 2010 Dow Jones Newswires

By Atul Prakash

LONDON, Sept 8 (Reuters) - European shares slipped onWednesday, pressured by weaker financials, as renewed concernsabout the health of the European banking system promptedinvestors to shun riskier assets.

At 0817 GMT, the FTSEurofirst 300 index of top Europeanshares was down 0.3 percent at 1,059.12 points after falling 0.4percent on Tuesday.

Financials were the top losers, with the STOXX Europe 600banking index down 1 percent. National Bank of Greece slipped9.4 percent, Allied Irish Banks was down 1.5 percent andBarclays fell 3 percent.

NBG unveiled a plan on Tuesday to raise 2.8 billion euros($3.6 billion) via a rights issue, a convertible bond, and thesale of a stake in its profitable Turkish unit.

British business minister Vince Cable said Bob Diamond'srise to the top post at Barclays highlighted the task thegovernment faced trying to make the banking sector safer.

"Due to the financial crisis, the capital base of thebanking system in Europe is still rather narrow. This bankingscare probably will go away again, but in the meantime it couldstill create some damage for a couple of days," said Luc VanHecka, chief economist at KBC Securities.

"The underlying fabric of the economy seems to be a bitbetter now. The idea that we would inevitably slide into adouble-dip kind of scenario has weakened somewhat."

Worries about Europe's banks resurfaced on Tuesday, when theWall Street Journal reported some major lenders had understatedholdings in potentially risky government debt during "stresstests" designed to test their ability to weather crises.

Sentiment worsened further after Ireland extended itsguarantees for short-term bank liabilities amid fears over theescalating cost of bailing out nationalised lender Anglo IrishBank.

"The European sovereign debt crisis has not yet beenresolved as austerity programs remain insufficient to restorefiscal stability, interest rate gaps to German Bunds are back toMay levels and the differences in growth rate and indebtednessare deepening," Bernstein said in a research note.

Economic numbers also did not help, as figures showed Germanexports fell on the month in July after two months of stronggains.

OILS UNDER PRESSURE

Energy stocks lost ground as crude oil prices fell for athird straight session on strong petroleum stockpiles. RoyalDutch Shell, Tullow Oil and StatoilHydro shed 0.4-0.7 percent.

Dana Petroleum rejected a weeks-old hostile 1.67 billionpound ($2.6 billion) bid from Korea National Oil Corp, citing anindependent valuation that the British explorer was worthconsiderably more. Its shares were little changed.

Miners remained under pressure after Australian PrimeMinister Julia Gillard won backing from two independent MPs onTuesday to clinch a parliamentary majority and form thecountry's first minority government since World War Two.

The fragile Labor government said on Wednesday it couldadjust a planned profits-based tax on mining companies to bendto the demands of the independent MPs giving it a slender gripon power, but mining stocks tracked wider market weakness.

BHP Billiton, Anglo American, Antofagasta, Xstrata, and ENRC fell 0.7-2.2 percent.

Rio Tinto was down 1.8 percent. Its representatives are inRussia to visit potash producer Uralkali which is seen as apotential acquisition target for the mining giant, Vedomostireported on Wednesday.

Across Europe, the FTSE 100, Germany's DAX and France's CAC40 fell 0.6-0.8 percent. The Thomson Reuters Peripheral EurozoneCountries Index was down 0.9 percent. (Reporting by Atul Prakash; Editing by Dan Lalor)

FRANKFURT -(Dow Jones)- Tighter standards for banks' capital and liquidity won't hurt the economy, European Central Bank governing council member Axel Weber said Wednesday.

Weber told a banking conference that the lengthy transition phase foreseen by international regulators working on the new requirements will help to ensure that banks don't find themselves too overburdened and unable to lend to the real economy.

"The real challenge lies in bringing harmonized international rules into line with differing national circumstances," Weber said.

He reminded his audience that the aim of greater systemic stability was no end in itself, and that the economic costs of the 2007-2008 banking crisis had been immense.

German regulators had publicly expressed reservations about the preliminary agreement reached by international regulators in July on new standards for bank capital and liquidity. The Bank for International Settlements' committee of Governors and Heads of Supervision intends to agree a more detailed version of the requirements next week.

Website: www.bundesbank.de

geoffrey.smith@dowjones.com

Copyright © 2010 Dow Jones Newswires

By Silke Koltrowitz

ZURICH, Sept 8 (Reuters) - Swiss luxury goods groupRichemont's five-month sales jumped 37 percent, beatingforecasts and confirming a rebound in the sector as wealthyAsians splash out again on top-end watches and jewellery.

Richemont, normally cautious in its outlooks, said onWednesday net profit for its first half to September should besignificantly higher than last year.

However, the strong Swiss franc would lead to a higher costof sales in the second half for the maker of Cartier watches,Montblanc pens and Chloe handbags.

"The improved trading environment is certainly welcomed.However, it is far too soon to draw any conclusions about thesustainability of the economic recovery," chairman and chiefexecutive Johann Rupert said.

Peers like Swatch and LVMH have also reported double-digitgrowth in watch and jewellery sales in the first half and Swisswatch exports rose almost 20 percent between January and July,after the worst slump in decades.

Weak U.S. economic data have raised concerns the world'slargest economy may slip back into recession and weigh on theglobal economic recovery.

CHRISTMAS

Richemont shares were down 1.6 percent to 41.18 Swiss francsat 0815 GMT, underperforming a flat European personal andhousehold goods index.

Investors were taking profits after recent strong gains, aZurich-based trader said. Richemont shares have risen almost 7percent this month, hitting a two-month high earlier this week.

"Provided the macroeconomic outlook does not deteriorateahead of the key Christmas period, in particular in Asia, webelieve the company could deliver a stronger than expectedmargin recovery in the next couple of years," Citi analystThomas Chauvet said in a note to clients.

While revenue in Asia-Pacific and the Middle-East continuedto grow, sales in other regions remained below prior recordlevels, reflecting the ongoing difficulties in westerneconomies, the world's second largest luxury goods group said.

"Richemont is clearly ahead of expectations and especiallyEurope with an organic growth of 15 percent was a surprise. Itis a very strong set of sales figures and it is obvious that thefirst-half result will be very strong," Vontobel analyst ReneWeber said, reiterating his "Buy" rating on the share.

Richemont stock, which has gained more than 20 percent thisyear, trades at 16.7 times estimated March 2012 earnings, apremium to Swatch Group at 15.4 times estimated 2011 earningsbut at a discount to LVMH at 17.3.

Sales rose 37 percent at actual exchange rates from April toAugust, ahead of a forecast of 26 percent in a Reuters poll. Thecompany provided no overall sales figure.

Excluding the acquisition of Net-a-porter.com and inconstant currencies, sales were up 22 percent, also above the 16percent rise forecast. (Editing by David Cowell and Dan Lalor)

HONG KONG, Sept 8 (Reuters) - Hong Kong stocks snapped afive-day gaining streak on Wednesday, tracking a drop on WallStreet on Tuesday, with China Mobile slumping after news ofVodafone Group Plc <VOD.L> selling its stake in the company at adiscount.

The benchmark Hang Seng Index <.HSI> fell 1.46 percent to21,088.86, pulling back from a one-month high. The ChinaEnterprises Index <.HSCE> fell 1.5 percent to 11,776.72.

China Mobile Ltd <0941.HK, which has a 9 percent weighting onthe Hang Seng Index, slumped 3.8 percent dragging othertelecommunications shares lower. [ID:nTOE68702E] (Reporting by Vikram Subhedar; Editing by Chris Lewis) (vikram.subhedar@thomsonreuters.com; +852 2843 6975; ReutersMessaging: vikram.subhedar.reuters.com@reuters.net))

BEIJING, Sept 8 (Reuters) - China must not overlook potentialsystemic risks in its banking system and has to keep up withglobal financial regulatory changes to meet new challenges, thetop banking regulator said in remarks published on Wednesday.

Liu Mingkang, head of the China Banking RegulatoryCommission, also said there was a need to improve the stresstests that the agency has been conducting to assess the abilityof banks to withstand an increase in bad loans.

Chinese banks weathered the global financial crisis well, butLiu said the country's regulatory framework was not up to thechallenges posed by the latest changes sweeping global finance.

"The possible exposure of the banking sector to systemic riskshould not be neglected," Liu told a recent meeting of industryofficials.

Chinese media reported earlier this week that the CBRC mightorder banks to set aside 2.5 percent of their total loans asreserves to counter bad debt risks. [ID:nTOE68605O]

Liu said banks urgently needed to pay greater attention tothe quality of their loans, rather than the quantity.

The regulator, whose remarks were posted on his agency'swebsite, www.cbrc.gov.cn, offered no specific details.

Like their European and U.S. peers, Chinese banks haveundergone regular stress tests to assess the quality of theirloans to industries including property and infrastructure.

The results showed that banks could withstand a fall in homeprices of up to 50 percent without a substantial rise in theirbad loan ratios.

Many economists and industry analysts are sceptical that thetests were rigorous enough.

"Banks are still weak in liquidity risk management and theyneed to improve their stress tests in terms of the tools andtechniques used and the application of the results," Liu said.

He added that financial reforms now being negotiated byglobal regulators must be adapted to meet China's own nationalconditions, with a focus on capital adequacy and risk management. (Reporting by Langi Chiang and Simon Rabinovitch; Editing byAlan Wheatley)

* Shares jump 6 pct on hopes for higher bid (Adds link to CEO profile, share volumes

By Victoria Thieberger

MELBOURNE, Sept 8 (Reuters) - Foster's Group Ltd,Australia's largest brewer, knocked back an offer worth up to$2.5 billion for its wine business as too cheap, but theapproach could flush out offers for the entire group.

The bid by an unidentified private equity company for theworld's second-largest wine business pushed Foster's shares up6 percent on hopes of better offers. Investors also speculatedthat suitors for the combined group, which has a market valueof about $11 billion, might now step forward.

"This puts the whole company in play. If you are one of thebig brewers, you probably didn't want to be saddled with a winebusiness you didn't understand or want," said Tom Elliott,managing director of hedge fund MM&E Capital.

"Now you know there are potential buyers out there, you canmake a bid for the whole company knowing that you can offloadthe wine business to private equity or someone else," he said.

Investors have been focusing on potential buyers for themore lucrative beer business, which is seen as a cash cow withsome of the highest profit margins in the brewing world.

The ailing wine business, with vineyards from California'sNapa Valley to the Hunter Valley near Sydney, had been seen asthe unwanted child and Foster's said on Wednesday it wouldcontinue to work on splitting the beer and wine units.

Sales of Foster's wine, including Beringer, Penfolds andWolf Blass, have been hit by a deep U.S. recession and a trendaway from low-end, bulk wines in Australia. The strong Aussiedollar has also been a drag, slashing the value of U.S.earnings.

Foster's shares closed up 4.5 percent at A$6.34 on volumealmost four times its average over the past 30 days in abroader market down 0.8 percent.

BEER BUYERS

Foster's shares also spiked late last month after sourcessaid brewing groups SABMiller and Japan's Asahi Breweries werelooking at the company's beer operations, valued at more than$10 billion, but no firm bids have emerged.

The wine business, known as Treasury Wine Estates, isvalued at A$3.1 billion on Foster's books, or about half whatthe company spent on wine acquisitions in a rapid expansion asit sought to offset flat demand for beer.

Foster's spent over A$6 billion building its wine business,which ranks behind Constellation Brands Inc, with itsacquisitions of California's Beringer Wine Estates in 2000 andAustralia's Southcorp in 2005.

Foster's has been overhauling the wine unit over the pastyear, selling unprofitable vineyards, changing U.S.distributors and focusing on higher-margin wines above $8 abottle.

Analysts value the business at A$1.7 billion to A$3.5billion.

Foster's was formed in the 1880s, when the first Foster'sLager was brewed -- becoming one of Australia's top brands --and the Mildara Winery was established.

KEEN ON WINE

Foster's said the offer, worth A$2.3 billion-A$2.7 billion($2.1 billion-$2.5 billion), was highly conditional andrequested exclusivity, which it said reduced the value of theproposal.

The offer "significantly undervalues" the wine business andits future prospects.

A deal for the wine unit would have been the largest buyoutby a private equity firm in the Australian market since 2007.

The major international private equity firms represented inAustralia either declined to comment or did not return calls.They included Blackstone, KKR, Carlyle, TPG and CVC.

Bain & Co in New York did not return calls seeking comment.

International private equity firms have shown renewedinterest in cheap Australian assets this year, snapping uphospital owner Healthscope in July for A$2 billion.

Foster's spokesman Troy Hey declined to comment on theidentity of the suitor, because the matter was confidential.

Banking sources said that TPG could be interested in buyingback some of the assets it previously owned -- it owned about55 percent of Beringer with some partners when it sold toFoster's for A$2.6 billion, including debt.

Beringer itself was established in California's Napa Valleyin the 1870s.

Foster's said it is continuing with its plans to separatelylist its beer and wine businesses in 2011 but left the dooropen to other offers.

"The one positive side is (it shows) people could genuinelybe interested in the wine business. At least that'sencouraging," said Argo Chief Executive Jason Beddow, whichowns Foster's shares.

Earnings from the wine business rose 21 percent to A$221million for the year to June 2010, but a massive A$1.3 billionwritedown on the wine assets, the third for the unit, marredthe group's bottom line.

Foster's has hired Gresham Advisory Partners and GoldmanSachs to advise on the demerger. (Editing by Balazs Koranyi, Dhara Ranasinghe and LincolnFeast)

LONDON, Sept 8 (Reuters) - European shares inched higher inearly trade on Wednesday as a rise in defensive stocks such aspharmaceuticals outpaced weaker banks, which slipped on renewedconcerns about their health.

At 0710 GMT, the FTSEurofirst 300 index of top Europeanshares was up 0.1 percent at 1,062.43 points after falling 0.4percent in the previous session.

Financial stocks were among the top losers, with the STOXXEurope 600 banking index falling 0.5 percent. Barclays, AlliedIrish Banks and Bank of Ireland fell 1.3 to 1.5 percent.

"Due to the financial crisis, capital base of the bankingsystem in Europe is still rather narrow. This banking scareprobably will go away again, but in the meantime it could stillcreate some damage for a couple of days," said Luc Van Hecka,chief economist at KBC Securities.

"The underlying fabric of the economy seems to be a bitbetter now. The idea that we would inevitably slide into adouble-dip kind of scenario has weakened somewhat."

Bund futures extended the previous session's rally onworries about the European banking sector and after Irelandextended on Tuesday its guarantee for short-term bankliabilities, including corporate and interbank deposits, as thegovernment sought to reassure investors.

(Reporting by Atul Prakash)