assistance with collection accounts

ATHENS -(Dow Jones)- European Central Bank funding to Greek financial institutions eased to EUR95.9 billion by end of August from EUR96.2 billion in July, according to Bank of Greece (TELL.AT) data Thursday.

The central bank balance sheet reveals that lending to Greek credit institutions fell 0.3% at the end of August from the previous month.

Greek banks have received an additional EUR46.2 billion in funds since the start of the year.

Greek banks are highly dependent on liquidity from the ECB because they have suffered deposit outflows since the start of the year and have also been from frozen out from lending in interbank markets due to the local sovereign crisis.

nick.skrekas@dowjones.com

Copyright © 2010 Dow Jones Newswires

INTERLAKEN, Switzerland -(Dow Jones)- Executives from some of the world's largest derivatives exchanges said Thursday that technology partnerships have largely replaced the role that mergers and acquisitions once played in interconnecting global trading markets.

"Technology is the great innovator," and can "almost replace M&A in connecting clients and allowing flow," said Robert Ray, managing director of international products and services for the CME Group Inc. (CME). "That at the end of the day is the value proposition."

Garry Jones, head of global derivatives for NYSE Euronext (NYX), said exchanges "are not going to pay a lot for a franchise, and you might scrap the technology platform afterwards because you figure yours is probably better. So perhaps it doesn't make sense."

Observers have for years speculated about a potential tie-up between Germany's Deutsche Boerse AG (DB1.XE) and NYSE that would conclude a wave of consolidation in recent years that created some of the world's largest exchanges.

Jones said his company in part sought licensing agreements and other partnerships with exchanges, including its competitors, in an effort to connect his company to different markets and other trading firms.

"The biggest thing is that we want to be at the center of financial communities," Jones said. "Exchanges all around the world can trade on local markets. They are all going to be connected and all going to use their technology."

NYSE Euronext is the owner of the New York Stock Exchange and four European exchanges. The company is trying to bolster a technology unit that sells services to traders and other exchanges and to expand its derivatives business in an effort to diversify from its core cash equities operations.

Chicago-based CME is meanwhile waiting for approval from the Financial Services Authority to launch a U.K.-based clearing unit--an effort to attract European clients to the technology-intensive business of settling a trade after it is ordered.

Ray and Jones were speaking to journalists following a panel discussion at a derivatives industry conference in Interlaken, Switzerland.

Like mergers, licensing agreements between global exchange players such as the NYSE and Deutsche Boerse and smaller exchanges from Bombay to Warsaw underscore efforts to increase the so-called "interconnectivity" between trading platforms and to improve market efficiency and pricing.

"When you run a global business it consists of a variety of regional markets," said Andreas Preuss, chief executive officer of Deutsche Boerse's derivatives unit Eurex. "I believe that the strength of all of our organizations will be measured best by the ability to cope with and develop regional specifics."

Preuss, however, said it was too broad to say that technology could replace mergers altogether.

Derivatives industry executives are meeting in Interlaken this week as they prepare for an onslaught of new regulation to be implemented from the Dodd-Frank bill in the U.S. and European Union legislation that will be unveiled next week.

New regulation is expected in particular to impact the so-called over the counter derivatives market, which takes place "off exchange" between broker banks and their clients.

Regulators want market participants to settle more of such trades on established trading venues that act as central counterparties and limit the kinds of market risks deemed responsible for the financial crisis.

Anticipating a growing market for clearing such trades, established bourses like the CME and NYSE are rushing to expand their settlement services as the new rules take shape.

Executives warned against the build-up of giant clearing ventures, however, which would concentrate risk and create a less specialized or nimble market in the wake of the crisis.

"If clearing houses are expected to clear everything, than they will clear nothing very efficiently," said Michael March, director of business development at LCH Clearnet Group Ltd., the world's leading clearer of interest rate swaps.

Copyright © 2010 Dow Jones Newswires

BOSTON -- The financial sector was again leading U.S. stocks higher early Thursday after the Labor Department estimated initial jobless claims declined 27,000 to 451,000 in the latest week. The Financial Select Sector SPDR Fund rose 1.7% in the early going following its 1% gain on Wednesday. Morgan Stanley was the financial-sector ETF's top performer Thursday morning as the stock added nearly 4%.

Copyright © 2010 MarketWatch, Inc.

By Edward Taylor and Padraic Halpin

FRANKFURT/DUBLIN, Sept 9 (Reuters) - Ireland's efforts tocontain the damage from struggling Anglo Irish Bank andGermany's Commerzbank warning it may have to raise capitalshowed on Thursday why jitters persist over Europe's banks.

Less than two months after bank stress tests were meant toallay those fears, tougher new Basel III capital rules due onSunday have rekindled concerns over the weakest players.

The impact of new bank rules on lending and falteringeconomic recovery have added to investor doubts.

Commerzbank, Germany's second largest, said on Thursday itmay need to raise new equity and take other steps as it aims torepay almost 20 billion euros ($25.41 billion) it owes to thegovernment.

"It will most likely not be one flower but a bouquet," ChiefExecutive Martin Blessing said of the steps required if the bankis to meet its repayment target of 2012.

A day earlier, European Central Bank Executive Board memberJuergen Stark warned German lawmakers that the country's bankswere undercapitalised, comments which hit the euro.

With Irish taxpayers out of pocket a similar amount, FinanceMinister Brian Lenihan faced increasing pressure to spell outhow the government would contain the problems of nationalisedAnglo Irish, a concern that dented demand for Irish Treasurybills on Thursday.

BASEL III

Though long in coming, the pending Basel III rules have alsocaused concern, as bankers brace for higher capital requirementsand tougher penalties if they fall short of them.

Banks now operating with an effective minimum core Tier 1capital ratio of about 2 percent of top quality capital arebracing for that figure to rise to 7 to 9 percent, officials andregulatory sources have said.

That is expected to include a minimum base core Tier 1capital ratio of 4.5 to 6 percent and an additional "buffer" of2 to 3 percent. Any bank that fails to keep above that wouldhave to curb payouts such as bonuses and dividends.

Analysts expect most of Europe's leading banks to be finewith that but a climate of increasing regulation, both in Europeand globally, coupled with fears over an economic slowdown,spell trouble for some.

European Union finance ministers this week agreed to asweeping overhaul of how the bloc's financial industry ispoliced while the European Central Bank said it would continueto dismantle its support for the sector in 2011.

The latter is a worry for banks with capital shortfalls cutoff from normal interbank lending and being supported by theECB, which Commerzbank's Blessing noted was a reality faced byhalf of Germany's banks.

"In the short and medium term I do not expect a creditcrunch due to Basel III. In the long run the various regulatorymeasures could make investments in banks less attractive," saidDeutsche Postbank Chief Executive Stefan Juette.

"That would make it harder for banks to raise capital in say2015 or 2018. As a result of that banks might be able to do less(lending)."

Deutsche Bank board member Juergen Fitschen told bankersgathered in Frankfurt that the risk of a credit crunch in thereal economy had not abated, noting rising demand for loansspurred by a rebound from the global financial crisis.

"I presume that tensions will rise as demand for creditrises. I'm not convinced there won't be a squeeze in demand forcredit," Fitschen said.

Economists fear that recovery in Europe's biggest economyand elsewhere will be stifled this year as banks keep morecapital and limit lending to comply with the new rules.

Yet regulators are confident that the new Basel capitalrules -- which are aimed at making banks resilient enough tocope with another crisis -- will improve financial systemstability without crimping lending.

"An ambitious reform, which is given a long enoughtransition period, can deliver a financial system that is moresustainable than the current without restricting banks' lendingability too much," ECB Governing Council member Erkki Liikanensaid.

European bank shares were up 2.45 percent by 1312 GMT,helping recover losses sustained earlier this week.

(Additional reporting by Arno Schuetze, Andreas Rinke andJosie Cox in Frankfurt; writing by Steve Slater; Editing byJason Neely and Huw Jones)

NEW YORK -(Dow Jones)- UBS Wealth Management Americas, a unit of UBS AG (UBS), announced plans to open a new brokerage complex in New York City, led by former Morgan Stanley (MS) veteran William "Bill" Van Scoyoc.

In an internal memo reviewed by Dow Jones Newswires, David McWilliams, Eastern Division Director for the UBS unit, said Scoyoc was named complex director of the location and will report to Chris Amo, Regional Director for the Metropolitan Region.

The new Manhattan complex, located at 101 Park Avenue, will begin serving clients early in the fourth quarter.

In the memo, McWilliams said UBS "looked closely at our footprint to determine if there were opportunities for growth in markets that are underserved by UBS or that represent a growing target client base," adding that New York City was identified as one of these markets.

Most recently, Scoyoc was a complex manager for Morgan Stanley Smith Barney's 1211 Avenue of the Americas complex, the memo said. UBS said that location had 90 financial advisers, generating more than $80 million in revenues.

Scoyoc worked at Morgan Stanley and the firm's joint venture with Smith Barney for nearly 11 years, according to Financial Industry Regulatory Authority records.

Copyright © 2010 Dow Jones Newswires

(Updates prices, adds jobless claims, trade data)

By Rodrigo Campos

NEW YORK (Reuters) - U.S. stocks were set to openhigher Thursday after data showed the U.S. economy may seemore growth than economists have anticipated.

New claims for unemployment insurance fell more thanexpected last week to their lowest level in two months and theU.S. trade deficit narrowed more than forecast in July asexports shot to their highest level since August 2008, paintinga rosier picture for economic growth.

"The recovery is not falling apart and continued growth isthe most likely outcome," said Zach Pandl, economist at NomuraSecurities International in New York."

"This (data) is generally a bond negative and positive forstock prices."

Fears of a double-dip recession have kept investors at bayand the stock market in a tight trading range for severalmonths.

S&P 500 futures rose 8.7 points and were above fairvalue, a formula that evaluates pricing by taking into accountinterest rates, dividends and time to expiration on thecontract. Dow Jones industrial average futures gained 60points and Nasdaq 100 futures added 13 points.

Volume is expected to be low again as the Jewish New Yearis celebrated and many market participants stay on thesidelines. The six lowest volume days of the year have come inthe last month.

Oil rose 1.5 percent to $75.75 a barrel, drawing somestrength from an initial report of falling U.S. inventories.Industry data late Wednesday surprised the market withindications of a decline in U.S. fuel stockpiles, which havehit record levels, but government statistics for release Thursday could contradict those figures.

Goldman Sachs Group has been fined 17.5 millionpounds ($27 million) by a UK financial regulator for failing todisclose it was under fraud investigation by its U.S.counterpart. Its shares rose 1.3 percent in premarket trade to$149.42.

(Editing by Padraic Cassidy)

MADRID -- European stock markets added to earlier gains after weekly U.S. jobless claims fell more than expected. Banks and miners remained in the lead for Europe where indexes doubled percentage gains from just ahead of the data. The Stoxx Europe 600 index rose 0.9% to 264.68 points, while it was up just 0.4% pre-data. France's CAC-40 index jumped over 1% higher to 3,719.56, while Germany's DAX-30 index rose 0.8% to 6,218.45. FTSE 100 rose 1.1% to 5,491.90.

Copyright © 2010 MarketWatch, Inc.

William Wright and Lauren Willington Of FINANCIAL NEWS

Investment bankers appear to demonstrate no unique talent or outperformance when they are promoted to run the banks at which they work, according to analysis by Financial News.

The question of whether investment bankers are any good at running entire banks was triggered by the elevation this week of Bob Diamond to become chief executive of Barclays PLC (BCS), and the creeping takeover of the banking industry by his counterparts elsewhere.

But, while those investment bankers who are promoted to run their groups are clearly talented at running investment banking divisions, they have a mixed track record when they get promoted.

In a sample of 12 investment bankers promoted to be group chairman or chief executive, half oversaw a rise in their bank's share price on their watch, and seven out of 12 can take at least some credit for their bank's share price outperforming the broader banking industry, as measured by the Bloomberg 500 European banks index.

The best performer was serial bank chief executive Oswald Grubel, the former chief executive of Credit Suisse Group (CS), who was brought out of retirement last year to help rescue its arch rival UBS AG (UBS). If you had invested $100 in Grubel in January 2003, when he was appointed as co-chief executive of Credit Suisse, sold your shares when he left Credit Suisse in May 2007, and then reinvested in him in February last year when he joined UBS, you would today have $708, not far short of double the $393 you would have if you had invested in the European banks index over the same period.

The worst performer - although he was dealt something of a bad hand - is Vikram Pandit, who has overseen a share price collapse of 89% on his watch at Citigroup Inc. (C) since December 2007, while the S&P 500 has dropped 28% over the same period.

His former chairman, Sir Win Bischoff, presided over a collapse of 93% in his brief tenure at Citigroup between December 2007 and February 2009, but this was only 44 percentage points below the market. Bischoff has fared better at Lloyds Banking Group PLC (LYG), with the shares rising 3% on his watch and beating the industry average by 10 percentage points.

Top of the class among the incumbent chief executives is Brady Dougan, appointed just before the crisis in May 2007, who has seen shares in Credit Suisse drop by 42% on his watch, but he has beaten the market by 19 percentage points. He is just ahead of Josef Ackermann at Deutsche Bank AG (DB), whose shares are down 38% since he was promoted in May 2002, just 8 percentage points better than the market.

Of course, this analysis is severely limited. It makes no attempt to normalise for what might otherwise have happened had a non-investment banker been appointed chairman or chief executive instead, and takes no account of the likely increased share price volatility of a bank that has a big enough investment banking unit to warrant promoting the head of that business to run the whole group.

But it is clear at least that the answer is unclear. While 56% of Financial News readers said in a survey this week that investment bankers are the best people to become chairman or chief executive of a bank, the more accurate answer appears to be that there is little immediate evidence that they are better.

Website: www.efinancialnews.com

Copyright © 2010 Dow Jones Newswires

(Updates prices, adds byline)

By Rodrigo Campos

NEW YORK (Reuters) - U.S. stock index futures rosefor a sixth day in seven Thursday ahead of weekly dataexpected to show a tick down in applications for unemploymentinsurance.

Data on claims for jobless benefits for the week endedSept. 4 is due at 8:30 a.m. , and economists in aReuters survey forecast a total of 470,000 new filings comparedwith 472,000 in the prior week.

Also due at 8:30 a.m. is U.S. July international tradedata, with economists in a Reuters survey forecasting the tradedeficit to shrink to $47.3 billion from $49.9 billion in June.

"Investors are betting that we are probably not far from aneconomic rebound, and with (Treasury) bonds offering not muchof a yield the risk-reward profile in equities is becomingappealing," said Andre Bakhos, director of market analytics atLek Securities in New York.

S&P 500 futures rose 4.2 points and were above fairvalue, a formula that evaluates pricing by taking into accountinterest rates, dividends and time to expiration on thecontract. Dow Jones industrial average futures gained 28points and Nasdaq 100 futures added 7.75 points.

Volume is expected to be low again as the Jewish New Yearis celebrated and many market participants stay on thesidelines. The six lowest volume days of the year have come inthe last month.

S&P futures are up 5.5 percent in the last seven sessions,the best such performance since mid-July.

The moving average convergence divergence chart of S&P 500futures turned increasingly bullish after the MACD line movedabove the zero line, confirming last week's call on a shift inmomentum.

Oil rose 0.4 percent to about $75 a barrel, drawing somestrength from an initial report of falling U.S. inventories.Industry data late Wednesday surprised the market withindications of a decline in U.S. fuel stockpiles, which havehit record levels, but government statistics for release Thursday could contradict those figures.

Convenience store operator 7-Eleven is the mystery thirdparty that offered to buy Casey's General Stores Incfor $40 a share, or $2.03 billion, a source familiar with thesituation said Wednesday. The bid exceeds the $38.50 a shareoffered by Canada's largest convenience store chain,Alimentation Couche-Tard Inc, which has beenembroiled in a hostile takeover bid for the smaller rival sinceApril.

Goldman Sachs Group has been fined 17.5 millionpounds ($27 million) by a UK financial regulator for failing todisclose it was under fraud investigation by its U.S.counterpart.

European stocks edged higher with miners and banks up as aEuropean Central Bank member expressed optimism on the eurozone economy, though gains were capped by weaker retailersafter gloomy updates.

U.S. stocks rose Wednesday as investors latched ontopositive news out of Europe. (Editing by Padraic Cassidy)

LONDON -(Dow Jones)- The U.K. Treasury said Thursday it has picked Robert Chote to become the new head of the Office for Budget Responsibility pending parliamentary approval.

Chote is the director of the influential think tank, the Institute for Fiscal Studies. He is a former adviser to the International Monetary Fund and was the Economics Editor of the Financial Times in the mid-1990s.

If confirmed by parliament's Treasury Select Committee, Chote will replace Alan Budd who was the OBR's first chairman.

Treasury Chief George Osborne set up the OBR when he took office in May and tasked the agency with policing the government's fiscal proposals.

He gave the OBR power to set the economic and borrowing forecasts that lie at the heart of the U.K.'s budget plans.

Copyright © 2010 Dow Jones Newswires

FRANKFURT -(Dow Jones)- UniCredit SpA (UCG.MI) would be interested in parts of Germany's BHF-Bank, such as the wealth management business, Theodor Weimer, chief executive of UniCredit's German unit, UniCredit Bank AG, said Thursday.

However, speaking at a banking conference, Weimer noted that the seller, Deutsche Bank AG (DB), has said it wants to sell BHF-Bank as a whole.

While the bank currently doesn't see any other takeover targets in the German banking market, it is monitoring developments, and regulatory changes, for potential takeover targets in the medium term, Weimer said. Takeover targets could also be outside retail banking, he added.

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).

Weimer reiterated that UniCredit made a bid for SEB's German retail operations, but said the bank's bid was "significantly below" the EUR555 million that Santander paid.

He said UniCredit perceived the price paid as being too high for about 1 million retail customers, considering that UniCredit only generates around EUR400 revenue per customer in the German retail business and a profit of less than EUR40 per customer.

Separately, Weimer told Dow Jones Newswires in an interview that he doesn't expect a credit crunch in Germany as a result of new capital rules that will likely be agreed by global bank regulators this weekend.

Global bank regulators are expected to reach a deal on tougher requirements for the world's largest banks, known as Basel III, at a meeting Sunday. The talks are being led by the Basel Committee on Banking Supervision.

Copyright © 2010 Dow Jones Newswires

LONDON -- Fiscal consolidation across the 16-nation euro zone won't begin until next year, Fitch Ratings said Thursday in a report. "While all member states are responding to varying degrees to the imperative to put credible medium-term fiscal consolidation programs in place, substantive fiscal tightening remains limited to Greece, Spain, Portugal and Ireland," said Paul Rawkins, senior director in Fitch's Sovereign Group. The report also focused on the convergence between European sovereign and bank credit risk in the first half of 2010 and warned that banks and sovereigns are likely to become growing competitors for funds as both seek to meet refinancing needs.

Copyright © 2010 MarketWatch, Inc.

The Bank of England kept interest rates at 0.5 percent for the 18th month in a row and announced no new quantitative easing purchases, in a widely expected decision on Thursday.

British inflation was 3.1 percent in July, well above the central bank's 2 percent target, but the BoE said last month this was mostly due to temporary factors while future growth was likely to weaken, making rate rises inappropriate for now.

None of the 60 economists polled by Reuters last week had forecast a change in policy and most do not see interest rates rising until the second quarter of next year at the earliest.

"The economy does not yet have the ability to stand on its own two feet, particularly with the uncertainties over the effects of the forthcoming fiscal squeeze, and accordingly the first rise in rates looks some way off," said Investec economist Philip Shaw.

As usual, the central bank issued no statement alongside the policy announcement made after the nine-man Monetary Policy Committee's Sept. 8-9 meeting. Financial markets were unmoved.

The BoE cut rates to a record low of 0.5 percent in March2009 and started buying financial market assets -- mostly gilts-- with newly-created money, a scheme which topped out at 200billion pounds ($309 billion) at the end of January.

When minutes to this month's meeting are published on Sept.22, many economists expect it to show a repeat of August's discussion, in which Andrew Sentance was the sole policymaker to vote for a rise in rates, as he has been since June.

Shaw said there was a chance one or more MPC members could have voted for an increase in quantitative easing this month, as concerns that the U.S. economy is stalling have increased since August's meeting.

"If there is to be a move over the coming months, it is more likely to take the shape of a resumption of quantitative easing than higher rates, despite Sentance's recent position," he said.

Although British consumer price inflation is well above its target, last month the BoE forecast it would slow sharply due to slack in the economy, once the effect of past sterling weakness and ongoing sales tax rises fades.

Despite the strongest growth in nine years in the second quarter, the BoE has said growth is likely to fall due to government spending cuts and weak overseas demand.

Britain's goods trade gap widened to the largest on record in July, official data released earlier on Thursday showed, and PMI industry surveys for the services, manufacturing and construction sectors all point to weaker GDP growth.

However, it is unclear whether growth will simply slow to along-term trend rate of around 0.5 percent from Q2's 1.2percent, or whether even more sluggish growth will set in for the long haul as the government slashes spending over the next five years. (Reporting by David Milliken, editing by Mike Peacock)

NEW YORK (Reuters) - U.S. stock index futures rosefor a sixth day in seven on Thursday ahead of weekly data thatwas expected to show a tick down in applications forunemployment insurance.

* Data on claims for jobless benefits for the week endedSept. 4 is due at 8:30 a.m. EDT (1230 GMT) and economists in aReuters survey forecast a total of 470,000 new filings comparedwith 472,000 in the prior week.

* Investors will also keep an eye on July internationaltrade data. Economists in a Reuters survey forecast a $47.3billion deficit compared with a $49.9 billion deficit in June.

* "Investors are betting that we are probably not far froman economic rebound, and with bonds offering not much of ayield the risk-reward profile in equities is becomingappealing," said Andre Bakhos, director of market analytics atLek Securities in New York.

* S&P 500 futures rose 3.8 points and were abovefair value, a formula that evaluates pricing by taking intoaccount interest rates, dividends and time to expiration on thecontract. Dow Jones industrial average futures gained 28points and Nasdaq 100 futures added 7.75 points.

* Volume is expected to be low again as the Jewish New Yearis celebrated and many market participants stay on thesidelines. The six lowest volume days of the year have come inthe last month.

* Oil rose 0.6 percent to above $75 a barrel, drawing somestrength from an initial report of falling U.S. inventories.Industry data late on Wednesday surprised the market with newsof a decline in U.S. fuel stockpiles, which have hit recordlevels, but government statistics for release on Thursday couldcontradict that.

* Convenience store operator 7-Eleven is the mystery thirdparty that offered to buy Casey's General Stores Incfor $40 a share, or $2.03 billion, a source familiar with thesituation said on Wednesday. The bid exceeds the $38.50 a shareoffered by Canada's largest convenience store chain,Alimentation Couche-Tard Inc, which has beenembroiled in a hostile takeover bid for the smaller rival sinceApril.

* Goldman Sachs has been fined 17.5 million pounds($27 million) by a UK financial regulator for failing todisclose it was under fraud investigation by its U.S.counterpart.

* European stocks edged higher with miners and banks up asan European Central Bank member expressed optimism on theeconomy, though gains were capped by weaker retailers aftergloomy updates.

* U.S. stocks rose on Wednesday as investors latched ontopositive news out of Europe. (Reporting by Rodrigo Campos, Editing by Chizu Nomiyama)

Stocks in London turned higher on Thursday, with shares of ARM Holdings soaring on news of a new processor and miners also up, helping to compensate for weaker retail stocks after disappointing sector news.

The FTSE 100 index rose 0.9% to 5,476.28 in afternoon trading, with other European stock markets also rebounding.

"It's been the miners and bankers that have turned the FTSE around this morning," said Yusef Heusen, senior sales trader for IG Index.

The Bank of England left interest rates unchanged at a record low 0.5% as expected. It also kept its bond-buying program at 200 billion pounds ($309 billion).

Data showed that Britain's seasonally-adjusted deficit on trade in goods widened to a record ��8.7 billion in July from an upwardly revised ��7.5 billion in June.

A shot in the ARM

Shares of ARM Holdings (ARMHY) shot up to an 8-year high on Thursday, bouncing up 4.4% and helping drive gains for the FTSE 100.

The company unveiled a new high-end core processor -- the Cortex-A15 -- that promises to "dramatically accelerate" capabilities for mobile, consumer and infrastructure applications, the company said in a statement.

Didier Scemama, an analyst with Royal Bank of Scotland, said in a research note that the new processor will allow ARM to address new markets like PCs, servers and routers, where it previously "lacked the horsepower." On the CPU front, the analyst said, it offers up a challenge for Intel Corp. (INTC).

"In smartphones the Cortex A-15 further pushes the performance envelope which will likely encourage smartphone chip makers to adopt the Cortex A-15 in next generation products," Scemama said, reiterating a buy rating on the stock.

Miners and banks up, retailers weak

Mining stocks rose. Xstrata advanced 3.5%, Vedanta Resources gained 3.5% and Lonmin added 2.6%.

Banks also chipped in, regaining some ground after falling in the last few sessions.

Royal Bank of Scotland (RBS) rose 2.5% and Barclays (BCS) traded up 2%.

Meanwhile, the U.K. Financial Services Authority fined Goldman Sachs Group Inc. (GS) about $27 million for failing to disclose information about a fraud probe by the U.S. Securities and Exchange Commission.

On the downside, retailers remained weak, and with good reason.

Shares of Home Retail Group slipped 3.8%, posting the biggest decline in the FTSE index. The company said it expects benchmark pretax profit for the first half to decline by between 20% and 25%. It also reported drops in comparable sales at its Argos and Homebase stores.

Also in the sector, shares of William Morrison Supermarkets dropped 0.8% after the food retailer reported a nearly 8% drop in fiscal first-half net profit. The firm said it expects low market growth to continue in the second half of the year, with further pressure on consumers.

Among small-cap stocks, shares of software firm Aveva Group PLC dropped 4% after UBS downgraded its rating on the stock to sell from neutral.

Copyright © 2010 Dow Jones Newswires

* Dublin sells 400 million euros of T-bills, low end ofrange;

By Andras Gergely and Padraic Halpin

DUBLIN, Sept 9 (Reuters) - Ireland sold 400 million euros oftreasury bills on Thursday, the low-end of its target range asit sought to keep the costs down by restricting supply while itworks out the final cost of bailing out its banks.

A day after presenting a compromise plan to deal withnationalised Anglo Irish Bank, Dublin sold 150 million euros offive-month treasury bills and 250 million euros of seven-monthpaper, at the bottom of the 400 million to 600 million targetrange.

Average yields of 1.925 and 2.19 percent marked a lower costthan at an auction two weeks ago. Bid-to-cover ratios alsostayed strong at 9.4 and 5.4 respectively as Ireland graduallyreduces the amount of debt it has sold from the total 1.2billion euros at its July auctions.

"They restricted the supply slightly to make sure they hadgood bid-to-cover ratios and to ensure lower yields to show thatconfidence in Ireland is still solid," said Brian Devine,economist at NCB Stockbrokers.

"As clarity comes through the banking sector things shouldimprove further on the yield front," Devine added.

Earlier on Thursday, Finance Minister Brian Lenihan said thegovernment would produce definite figures on the cost ofgradually winding down Anglo Irish before the start of October.

Dublin rushed into outlining a compromise solution for thetroubled lender on Wednesday as tension on its debt marketscontinued to rise, but it failed to put either a price or anexact timeframe on burying the fiscal and economic deadweight.

The state's troubles with Anglo have re-ignited fears of afull-blown Irish debt crisis and weighed on the euro and otherEuropean sovereign borrowers in recent weeks.

"We are all working together to ensure that definite figureswill be produced before the beginning of October," Lenihan toldnational broadcaster RTE.

With treasury bills mostly bought by domestic investors,analysts said the T-bill auction was insufficient evidence of areal improvement in international sentiment towards Ireland.

"What we need to see is a return of demand from overseas and80 percent of bonds are held internationally," said AlanMcQuaid, chief economist at Bloxham Stockbrokers.

NO SILVER BULLET

The premium investors demand to hold Irish 10-year paperover German bunds dropped by three basis points to around 376basis points, just 13 bps off a euro lifetime high hit onTuesday.

Lenihan acknowledged that Wednesday's decision did not givecomplete clarity to investors but he believed bond markets wouldwait for the final bailout bill to be worked out.

"Of course yesterday was not a silver bullet but it's animportant step in building up confidence," he said.

"We will deal with this matter in a matter of weeks and Ibelieve taken together with the announcement on the guarantee offunding that the bond markets will wait weeks as well."

Yielding to political pressure, Lenihan has ditched AngloIrish's ambitions to carve out of what is left of the bank afunctioning niche lender when it transfers 36 billion euros inproperty loans to Ireland's state-run bad bank.

Instead, Anglo's remaining loans of around 38 billion euroswill be housed in an asset recovery bank, where they will beworked out over a period of time or sold off while its depositswill be put into a state-backed bank.

Analysts debated how the cabinet's plan differed from a fullwinding down that had looked increasingly likely in recent days.

"I prefer to use the word workout but you can call it a winddown if you like," Lenihan said.

Irish bank stocks were largely unchanged after Wednesday'sannouncement but shares in Allied Irish Banks rose on Thursdayafter Lenihan said sales of its assets in the United States andPoland were at an advanced stage.

Ireland's second-biggest bank needs to raise 7.4 billioneuros in capital before the end of the year and Lenihan saidbidding for its 70 percent stake in Polish lender Bank ZachodniWBK had closed with a number of substantial bids received. (Additional reporting by Carmel Crimmins; Editing by PatrickGraham, Greg Mahlich)

By Harpreet Bhal

LONDON, Sept 9 (Reuters) - European shares rose on Thursday,with a key index holding above a resistance level, as banksgained after positive comments on the economy by a EuropeanCentral Bank policymaker helped bolster investors' confidence.

By 1101 GMT, the pan-European FTSEurofirst 300 index of topshares was up 0.5 percent at 1,076.90 points, after rising 1percent in the previous session.

The Euro STOXX 50, the euro zone's blue chip index, rose 0.5percent to 2,766.77 points, climbing above its 50 percentFibonacci retracement of a fall from an April high to a May lowat 2,737.62 points.

Banks were among the biggest gainers, with Barclays, SocieteGenerale and Credit Agricole adding 1.5 to 2.2 percent, shakingoff losses from the previous session.

ECB Governing Council member Yves Mersch said the euro zoneis on the brink of a sustainable recovery and the central bankis likely to discuss removing some support measures at itsDecember meeting.

By contrast, the OECD said global recovery looks to beslowing more than expected as growth weakens in rich economies,and stimulus should be extended or stepped up if the slowdownendures.

Analysts said investors were likely to focus on the pace ofeconomic recovery in Europe and the United States in the nearterm for direction for equities.

"The ECB and the Fed could start their stimulus exitprogramme by mid next year and until then we will be in await-and-see mode", said Heinz-Gerd Sonnenschein, equitystrategist at Deutsche Postbank in Bonn, Germany.

"There is no clear direction at the moment. While companiesare reporting good numbers, there are still concerns over theeconomic situation in southern Europe and in the U.S., and Iexpect that the market will move sideways in the near term."

Bucking a stronger banking sector, French insurer Axa fell1.5 percent after Australia's competition regulator blockedNational Australia Bank's $12 billion bid for AXA Asia Pacific for a second time, dashing NAB's efforts to cement itsdominance in the world's fourth-largest wealth managementmarket.

BOE DECISION

In a widely expected move, the Bank of England kept interestrates at 0.5 percent for the 18th month in a row on Thursday andannounced no new quantitative easing purchases.

Across the Atlantic, data likely to generate interestinclude U.S. weekly jobless claims at 1230 GMT, with economistsin a Reuters survey forecast a total of 470,000 new filingscompared with 472,000 in the prior week.

On the downside, utilities E.ON and RWE dropped around 1percent after German newspapers, citing an agreement between thegovernment and energy firms, reported that a nuclear compromisereached on Sunday could entail higher costs for utilities thanpreviously known.

British retailers Home Retail fell 4.5 percent after itforecast a 20 to 25 percent fall in first-half profit and afull-year outcome in the bottom half of the current analystrange.

Across Europe, Britain's FTSE 100, Germany's DAX andFrance's CAC rose 0.5 to 0.9 percent. (Editing by Hans Peters)

By Narayanan Somasundaram

SYDNEY, Sept 9 (Reuters) - National Australia Bank's (NAB) $12 billion bid for AXA Asia Pacific has been blocked for asecond time, dashing its efforts to cement its lead in theworld's fourth-largest wealth management market.

The Australian competition regulator's decision clears theway for Australia's second-biggest fund manager AMP to takeanother tilt at AXA Asia Pacific, after its cash and share offerwas trumped by NAB in December.

The ruling dealt another blow to French insurer AXA SA's plans to expand in Asia. It was to pick up its unit'sfast-growing Asian assets as part of the bid with NAB, lookingto get a tighter grip on the region's booming markets.

"It is AXA's strategy of redeploying in Asia that is atstake," CA Cheuvreux analyst Jean D'Herbecourt said in a note."AXA now has to re-open negotiations with AMP that will need tobe validated by an independent board of AXA APH."

AXA Asia Pacific shares tumbled as much as 10 percent tolevels not seen since it was put in play last year as investorsbet NAB would give up its nine-month fight for the company.

"It is time for NAB to move away from this bid. It has beennearly a year and they don't need more distractions," said TomElliot, managing director at hedge fund MM&E Capital.

Australia's top four banks are looking to increase theirsway over the $1.2 trillion wealth market, seen growing morethan 10 percent annually for the next five years on compulsorypension contributions.

WHAT NEXT?

AXA SA, which owns 51 percent of AXA Asia Pacific, said itwas reviewing its options on how to expand in Asia. An agreementbetween AXA SA, its unit and NAB expires on Thursday.

An unsourced Australian Associated Press report said AMP maymake a fresh bid for AXA Asia Pacific as early as Friday. An AMPspokeswoman declined comment, only saying the AXA unit remainedof strategic interest at the right price.

"We don't know what our next steps are, it's too early tosay," an AMP spokeswoman said.

Moreover, with a 25 percent fall in its share price so farthis year, AMP may struggle to come back with an acceptable bid.

"It's hard for them to do a deal that would satisfy theboard," said Rohan Walsh, investment manager at Karara Capital.

NAB, led by Cameron Clyne, a former rugby player and keen ocean swim racer, could contest the ruling, but analysts andinvestors expect the lender to bow out of what would have beenthe second-largest deal in Australia's financial industry.

"We expect that NAB, after consideration, will likely letthe deal rest now rather than challenge via the courts,"Citigroup analyst Craig Williams said.

NAB shares rose as much 4.6 percent to a one-month high onrelief it would not have to raise more equity. AXA Asia Pacificshares trimmed some losses to end down 6.6 percent at A$5.08,well below NAB's A$6.43 a share offer. AMP shares were steady.

AXA SA shares fell 1.9 percent to 12.77 euros in a firmerParis market.

NOT ENOUGH

The Australian Competition and Consumer Commission lastmonth agreed to consult the market on NAB's undertaking to sellAXA Asia Pacific's North Platform, which administers A$1.36billion, to smaller wealth manager IOOF Ltd.

The regulator had blocked the deal in April in favour ofAMP's offer, citing concerns over competition in retailinvestment platforms -- a portal that binds the wealth manager,financial products and customers.

"The ACCC ... remains opposed because it would be likely toresult in a substantial lessening of competition in the relevantretail investment platform market," ACCC Deputy Chairman PeterKell said in a statement.

A combined NAB-AXA Asia Pacific would have a 21 percentshare in the retail funds market and 15 percent of the wholesalefunds market, almost twice the size of the nearest competitor.

If AMP does not come back with an acceptable bid, AXA SA mayagain try to buy out minority shareholders in its Australianunit, which manages A$78 billion and last year reported itsbiggest profit since 2003. Its two previous attempts failed.

"They (AXA SA) are obviously still interested in the Asianassets. I'm not very sure what could be done on that front,"Karara Capital's Walsh said.

For NAB's Clyne, who at 42 is the youngest of Australianbank CEOs, the challenge is to explain to investors why hepursued a deal that looked a tough sell to regulators.

JPMorgan and Nomura are advising NAB, while Macquarie isadvising AXA Asia Pacific. Deutsche Bank is on France's AXA'sside, while AMP is backed by UBS and Greenhill Caliburn. (Additional reporting by Sonali Paul and Miranda Maxwell inMelbourne, Caroline Jacobs in Paris; Editing by Lincoln Feastand David Holmes)

LONDON -(Dow Jones)- The U.K. financial regulator confirmed Thursday that it fined Goldman Sachs Group Inc (GS) GBP17.5 million--one of the biggest fines in the U.K. banking industry--for failing to disclose details about Fabrice Tourre, the London-based trader at Goldman who was accused of fraud in an April lawsuit by the U.S. Securities and Exchange Commission.

Tourre was being investigated by the SEC over his role in the creation and sale of a synthetic collateralized debt obligation called Abacus 2007 AC-1.

Unlike securities that are backed by actual mortgages, the synthetic CDO represented a bet on a set of "reference" mortgage-backed securities. The SEC alleges Tourre didn't tell clients that a hedge fund helped select the reference securities and was betting against them.

Goldman agreed in July to pay $550 million to settle the SEC civil charges, but Tourre is fighting the allegations.

The FSA said Thursday that the SEC began making enquiries about Abacus in August 2008. Tourre then transferred to Goldman Sach's office in London in November 2008.

The FSA said Goldman "did not have effective systems and controls in place to ensure that relevant information about the SEC investigation was shared between Goldman Sachs & Co and the people within (the U.K. unit) Goldman Sachs International, who needed to know about it."

"In particular, GSI did not have effective procedures in place to ensure that its compliance department was made aware of the SEC investigation so that it could consider whether any notifications needed to be made to the FSA in compliance with GSI's regulatory reporting obligation," the FSA said.

Goldman is expected to acknowledge its error in not informing the FSA about Tourre's case, the Wall Street Journal reported Thursday.

The largest fine by the FSA, worth GBP33.32 million, was levied against a J.P. Morgan Chase & Co. (JPM) unit in June for failing to separate client money from the firm's.

"We have repeatedly stressed the importance of firms self-reporting regulatory issues to the FSA in a timely way. GSI did not set out to hide anything, but its defective systems and controls meant that the level and quality of its communications with the FSA fell far below what we expect of an authorized firm," said Margaret Cole, Managing Director of Enforcement and Financial Crime at the FSA.

"This penalty should send a message, particularly to the senior management of large institutions, of the need to have their firm's U.K. reporting obligations at the forefront of their minds," Cole said.

(David Enrich and Brett Philbin contributed to this article.)

Copyright © 2010 Dow Jones Newswires

HONG KONG -(Dow Jones)- Hong Kong's securities regulator said Thursday it has banned a former managing director at Bank of America-Merrill Lynch from re-entering the securities industry after he was found to have concealed losses on a trading book for a year.

The Securities and Futures Commission said in a statement the disciplinary action follows its investigation that found Jugurtha Harchaoui had falsely marked a trading book in exotics options between December 2007 and October 2008 by manipulating the volatility marks in the valuation model, as well as by altering pricing parameters. This concealed actual losses in the account as the value of the trading book was inflated by US$25 million.

The SFC also found that Harchaoui tried to cover up his actions by instructing a junior trader on his team to use a manipulated computer program to mark the book on a daily basis during a two-month sick leave period, the statement said.

"In deciding the disciplinary action, the SFC took into account the dishonest nature of Harchaoui's conduct and the fact that he abused his seniority by instructing his subordinate to implement his mis-marking activities," the statement said.

Mark Tsang, a spokesman for Bank of America-Merrill Lynch in Hong Kong, declined to comment. Harchaoui couldn't immediately be reached for comment.

The SFC earlier took action against the U.S. investment bank in relation to regulatory issues arising out of the same incident when it fined two units of the company HK$3.5 million (US$449,000) for "systems and controls failings."

The SFC said May 31 it found that Merrill Lynch (Asia Pacific) Ltd. and Merrill Lynch Futures (Hong Kong) Ltd. didn't have adequate internal controls procedures in place to manage mis-marking risks.

In the May statement, the SFC said Merrill Lynch accepted that its systems and controls fell short of those expected in respect of the trading book. The regulator added it believed the bank's misconduct wasn't intentional and that Merrill Lynch had taken steps to address the weaknesses in compliance.

Copyright © 2010 Dow Jones Newswires