Tuesday newspaper round-up: Mervyn King, KPMG, BP...

Mervyn King last night called for radical reforms of the "hazardous" banking sector, warning that new global standards were only a "small step" towards a safer financial system, the Times reports.In a speech that will cause deep disquiet in the City of London, the Bank of England Governor denounced the "absurd" levels of debt that still prevail in the sector and said that firms will have to adopt "much, much" higher equity buffers.Mr King also dismissed industry claims that new Basel 3 capital standards agreed in September went too far, calling complaints "exaggerated".Blistering growth in Germany is aggravating the growing gap between the eurozone's North and South and may force the European Central Bank to tighten monetary policy long before the high-debt states are ready, Standard & Poor's has warned. S&P said Germany has been able to lever recovery off the emerging market boom, leaving Southern Europe behind. German exports - mostly machines and cars - account for 47% of all EU goods shipped to China. France is a distant second at 10%, the Telegraph reports.Warren Buffett, who heads the beloved American conglomerate Berkshire Hathaway, has named an obscure 39-year-old hedge fund manager to oversee much of the company's money, making him the favourite to succeed the billionaire investment guru. For the past five years, Todd Combs has run a Connecticut hedge fund called Castle Point Capital, which withstood the financial crisis, despite investing almost solely in financial companies, the Independent reports.KPMG, one of the world's largest accounting firms, is being investigated by British regulators over its audits for BAE Systems in connection with a long-running corruption probe into the European defence contractor. The UK's Accountancy and Actuarial Discipline Board said on Monday that it was investigating a decade's worth of KPMG's audits - from 1997 to 2007 - relating to commissions paid by BAE to third party agents and outside companies in big arms deals, the FT reports.The abnormal state of the credit markets came into focus as the US Treasury sold bonds with negative interest rates for the first time and Goldman Sachs prepared to issue its first 50-year debt deal. Both developments on Monday highlighted the difficult choices facing investors at a time when interest rates are at historical lows and the Federal Reserve is moving towards more asset purchases aimed at boosting the economy and staving off deflation, the FT reports.Citigroup hopes to wrest control of EMI, the troubled British music group, from its owner Terra Firma, according to documents revealed in a New York court yesterday. Opening the second week of Terra Firma's lawsuit against the bank, lawyers for the private equity firm revealed an e-mail from one senior Citigroup banker to another in which the bank's plans for EMI were laid bare in public for the first time, the Times reports.BP was last night preparing to close down a gas field off Scotland, co-owned with Iran, because of sanctions announced by Europe to force negotiations over nuclear weapons. The oil giant was studying a regulation banning joint investments with the Iranians that could lead to the loss of 5 per cent of its North Sea output. The Rhum field, a joint programme dating back to the Shah of Iran's era, is threatened by the tough line against the Iranian energy sector announced by European foreign ministers yesterday, the Times reports.The chief executive of BP has insisted the oil giant "will not be quitting America", despite selling Gulf of Mexico fields it bought just eight months ago.Bob Dudley told Monday's CBI conference that the media and industry rivals had hyped BP's Gulf of Mexico oil spill out of all proportion. He added that the US government and population had "not completely lost faith" in BP, the Telegraph reports.The secret Swiss bank account, the traditional hidey-hole for tens of thousands of UK tax evaders, may not be entirely safe from the British authorities in future. Ministers from both countries have begun talks about ways in which the British Exchequer could receive tax on interest paid on such accounts while protecting the anonymity of the customer. The Swiss may be prepared to levy a withholding tax on the accounts, which then would be passed to HM Revenue & Customs, according to Treasury sources, the Times reports.The German sportswear and footwear chain Puma is to write off up to €115m (£103m) after it unearthed what it believes to be "systematic" fraud at its joint venture in Greece. The company is considering pursuing criminal charges against its partners in the Pumas Hellas venture, and will exercise an option to gain full control of its Greek operation by acquiring their 30 per cent stake by the end of the year, the Independent reports.