An international trade war is threatening to erupt over an American plan that would force Barclays and Deutsche Bank to pump more cash into their Wall Street operations. Daniel Tarullo, a governor of the Federal Reserve, wants tougher capital and liquidity rules for all foreign banks operating in America. Tarullo, who is overseeing the implementation of the Dodd-Frank banking regulation reforms, is expected to push for the rules to be implemented at a Fed board meeting in Washington this week. The rules would put foreign banks at a competitive disadvantage to big American rivals, according to senior financiers and analysts. José Manuel Barroso, the president of the European Commission, is prepared to wade into the dispute, sources close to the situation said. Officials in Brussels have mooted a tit-for-tat retaliation against American banks operating in the European Union, writes The Sunday Times. The Treasury is warning this weekend that failure to stick to George Osborne's austerity plans may cost taxpayers tens of billions of pounds if Britain's AAA credit rating is cut. The Chancellor's officials have calculated the cost to the public purse of higher borrowing costs should markets lose confidence in British economic policy. The figures are being touted as evidence of the disaster awaiting if the deficit is not tackled. 'The consequences of losing market confidence can be sudden and severe,' said the Treasury, publishing figures showing a worst-case scenario that would rack up interest payments of more than £100?bn in five years, according to The Financial Mail on Sunday. Greece is set to purchase back about half of its debt owned by private investors, broadly succeeding in a bond buyback that is key to the country's international bailout, a Greek government official said on Saturday. Greek and foreign bondholders offered the targeted €30bn in the deal, which is central to efforts by Greece's euro zone and International Monetary Fund lenders to cut its debt to manageable levels. "The buyback went well in broad terms. The amount offered by investors was within the range expected, about €30bn," the official told Reuters on condition of anonymity, The Sunday telegraph writes. He did not provide more details. No formal announcement is expected before Monday, another official told Reuters.Drinks giant Diageo has held talks with the Japanese brewer Suntory about acquiring bourbon whisky producer Beam for more than $10bn (£6.2bn). City sources said Diageo, whose brands include Guinness, Smirnoff and Baileys, held the discussions with Suntory in the spring and summer about working together on buying US-based Beam. Diageo, the world's largest whisky distiller, is interested only in a limited range of Beam's brands, which include the bourbon whisky Jim Beam. Working with a partner on a joint bid would also help the London-listed drinks group get past competition hurdles. Beam's other brands vary from bourbon whiskies, such as Maker's Mark, to Scotch whiskies, including Laphroaig, and also some rums, tequilas and vodkas, The Sunday Telegraph reports. China released a series of figures on Sunday showing continued economic strength as it prepares for new leaders tasked with sustaining the country's dramatic growth. There was a double-digit increase in production at factories, workshops and mines for the first time since March, the National Bureau of Statistics said, a strong sign the country is shaking off the effects of the global economic slowdown. The 10.1% November increase follows rises of 9.6% the previous month, 9.2% in September and a three-year low of 8.9% in August. Overall growth has slowed for seven straight quarters in China. It hit 7.4% in the three months through September, the weakest performance in more than three years, The Sunday Telegraph reports. Tesco is to focus its Indian expansion on the major cities of Mumbai and Bangalore as part of chief executive Philip Clarke's fight back on growth. The Sunday Telegraph understands that Mr Clarke met members of the Tata family - thought to include Chairman Ratan Tata himself - this weekend to begin to flesh out the plans for the retailer's push into the world's second most populous country. It comes just days after Indian politicians ended a ban preventing foreign retailers from owning a majority of a domestic retailer. The news follows Mr Clarke admitting that it was reviewing the future of Fresh & Easy, Tesco's troubled US venture. The admission was made as Tesco revealed flat UK performance, with like-for-like sales, excluding petrol and VAT, down 0.6% in the 13 weeks to November 24th.The Bank of England has put production of all its bank notes out to tender in a £1bn contract. The new contract could end De La Rue's dominance over the printing of the bank notes and could lead to an overseas company producing Britain's money for the first time. The Sunday Telegraph also revealed that an official Government tender document effectively kick-starts the race for the lucrative 14-year contract, which in extreme circumstances could even see sterling notes printed abroad.Sir Richard Branson could give up control of Virgin Atlantic in just a few days after three-way talks over its future this weekend. Branson is in takeover negotiations with America's Delta Air Lines and Air France-KLM. The Sunday Times revealed last week that Delta, America's largest carrier, had approached Singapore Airlines to buy its 49% stake in Virgin Atlantic, with a view to Air France-KLM eventually buying part of Branson's 51% holding. Virgin Atlantic has 40 aircraft and flies about 6m passengers a year to long-haul destinations. In the 12 months to the end of February it posted a pre-tax loss of £80m, and it faces tough competition at Heathrow from a revitalised British Airways, which bought BMI British Midland this year, that same newspaper adds. ENRC has agreed to pay $550m cash to take control of copper mines in the Democratic Republic of Congo and end its controversial partnership with Dan Gertler, the Israeli billionaire. The FTSE 100 miner's landmark deal, first reported by The Sunday Times in July, is part of a clean-up campaign by the chairman, Mehmet Dalman. The £3.6bn company is controlled by three central Asian tycoons and trades at a heavy discount to rivals because of concerns about its corporate governance. One of the main reasons for investor alarm has been its dealings with Gertler. The tycoon, a close friend of the Congolese president, Joseph Kabila, has been accused of buying mines at knockdown prices and flipping them at huge profit ? to the cost of a desperately poor nation, the above newspaper adds.AB
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