divimg alt="" src="http://hits.guardian.co.uk/b/ss/guardiangu-feeds/1/H.15.1/96014?ns=guardianpageName=Business%3A+Government+puts+RBS+lending+policy+under+scrutinych=Businessc3=The+Guardianc4=Royal+Bank+of+Scotland+%28Business%29%2CBanking+sector+%28Business%29%2CRegulators%2CBusiness%2CMortgages+%28Money%29%2CBanks+and+building+societies%2CMoney%2CEconomic+policy%2CPoliticsc5=Personal+Finance%2CInvestments%2CCredit+Crunch%2CNot+commercially+useful%2CBusiness+Markets%2CProperty+Mortgages+and+Interest+Ratesc6=Jill+Treanor%2CRupert+Jonesc7=2008_12_02c8=1127185c9=articlec10=GUc11=Businessc12=Royal+Bank+of+Scotlandc13=c14=h2=GU%2FBusiness%2FRoyal+Bank+of+Scotland" width="1" height="1" //divpRoyal Bank of Scotland was put on notice yesterday that its lending policy, boardroom appointments and business strategy were being reviewed by the government as it took control of 58% of the Edinburgh-based bank./ppThe body set up to oversee the government's stake said it was in "active discussions" about the bank's strategy. UK Financial Investments said that John Crompton, hired from Merrill Lynch, would manage the stake that came under government control yesterday after shareholders shunned a pound;15bn cash call. It has presented the taxpayer with a paper loss of about pound;2.5bn. The UKFI said it was "putting in place arrangements to secure a robust assurance" that commitments to maintain lending to homeowners and small businesses at 2007 levels for the next three years were fulfilled./ppMeanwhile RBS's new chief executive, Stephen Hester, yesterday promised to grant a six-month moratorium to home owners struggling to keep up with mortgage payments. RBS pre-empted any government crackdown on repossessions by asserting that it would give customers falling into arrears six months rather than three months before beginning any repossession proceedings./ppThe move was welcomed by the Treasury and is expected to become a benchmark for the industry. Liberal Democrat Treasury spokesman Vince Cable said it was "welcome news" for RBS customers. But, he added: "It will be a mere drop in the ocean unless it is followed by the whole industry. The government must now insist that all the nationalised and part-nationalised banks follow suit."/ppNorthern Rock, the nationalised bank responsible for a tenth of all repossessions, insisted it actually took 15 months for homes to be repossessed./ppHBOS, which owns the country's largest mortgage lender Halifax, which is accepting a pound;12bn government rescue package, said it would look at the RBS announcement but felt it already had a package in place to deal with customers in difficulty./ppLloyds TSB, which will take over HBOS next year and is likely to be 40% owned by the taxpayer, said borrowers were usually at least six months in arrears before it began repossession steps./ppThe Council of Mortgage Lenders will use its annual conference today to urge "an honest assessment of the challenges facing the lending industry". It appealed against the imposition of strict criteria on repossessions for each lender./pp"In a large number of cases, borrowers are already able to remain in their home for six months or longer while they work with the lender on implementing a plan to pay off their arrears," it said. "But in cases where there is little or no equity in the property - and no chance of the borrower getting back on his feet in a short period - it may be in the best interests of the home-owner to move towards selling the property rather than allowing arrears to continue to build up over a long period."/pdiv style="float: left; margin-right: 10px; margin-bottom: 10px;"ullia href="http://www.guardian.co.uk/business/royalbankofscotlandgroup"Royal Bank of Scotland/a/lilia href="http://www.guardian.co.uk/business/banking"UK banking sector/a/lilia href="http://www.guardian.co.uk/business/regulators"Regulators/a/lilia href="http://www.guardian.co.uk/money/mortgages"Mortgages/a/lilia href="http://www.guardian.co.uk/money/banks"Banks and building societies/a/lilia href="http://www.guardian.co.uk/politics/economy"Economic policy/a/li/ul/diva href="http://www.guardian.co.uk"guardian.co.uk/a copy; Guardian News Media Limited 2008 | Use of this content is subject to our a href="http://users.guardian.co.uk/help/article/0,,933909,00.html"Terms Conditions/a | a href="http://www.guardian.co.uk/webfeeds/1,,1309488,00.html"More Feeds/a pa href="http://feedads.googleadservices.com/~at/vb3TVPgl9pQWbnvPOkAIHCmTSCU/a"img src="http://feedads.googleadservices.com/~at/vb3TVPgl9pQWbnvPOkAIHCmTSCU/i" border="0" ismap="true"/img/a/p

divimg alt="" src="http://hits.guardian.co.uk/b/ss/guardiangu-feeds/1/H.15.1/26782?ns=guardianpageName=Business%3A+Markets+sink+as+recession+in+US+is+confirmedch=Businessc3=guardian.co.ukc4=US+economy+%28Business%29%2CBusiness%2CMarket+turmoil%2CGlobal+economy+%28Business%29%2CInterest+rates+%28Business%29c5=Credit+Crunch%2CBusiness+Markets%2CProperty+Mortgages+and+Interest+Rates%2CUS+Economyc6=Dan+Milmoc7=2008_12_01c8=1127207c9=articlec10=GUc11=Businessc12=US+economyc13=c14=h2=GU%2FBusiness%2FUS+economy" width="1" height="1" //divpConfirmation that the US is in recession shook Wall Street tonight and set the Dow Jones industrial average on course to end a five-day winning streak./ppThe Dow fell 445 points to 8384 by the afternoon, a drop of 5%. Shareholders balked at an announcement by the National Bureau of Economic Research that the US economy entered recession in December last year. /ppBen Bernanke, chairman of the Federal Reserve, said today that further interest rate cuts were "feasible" but the scope to bring the key Fed funds rate below its current 1% was "obviously limited". /ppAnswering audience questions after a speech to business leaders in Austin, Texas, Bernanke said more constraints on risk-taking by large financial institutions were needed to ease the problem of banks being "too big to fail". /ppLimiting the risk-taking of institutions to "feasible" levels would mean "we don't privatise the profits and socialise the losses," Bernanke said. "We need a better system for resolving failing institutions," he added. This may include similar mechanisms to deal with problems at companies outside the banking sector./ppThe NBER's business cycle-dating committee gave Bernanke and his colleagues more bad news to digest when rates are discussed on December 15 by announcing that the US was in recession. The committee, which defines recession as "a significant decline in activity spread across the economy" and is considered an official arbiter of the economic cycle, said the downturn began last December as firms started to shed jobs in large numbers./pp"The committee determined the decline in economic activity in 2008 met the standard for a recession," said the privately owned group. President Bush expressed contrition over the downturn yesterday. In an interview with the ABC television network, he said: "I'm sorry it's happening, of course. Obviously I don't like the idea of people losing jobs." He added authorities would intervene if the financial system suffered further difficulties, after the Fed and US treasury bailed out Citigroup and nationalised mortgage lenders Fannie Mae and Freddie Mac. /pp"The American people have got to know that we will safeguard the system," the president said./ppThe Dow fell yesterday morning before the NBER statement, following factory output data for November that showed the weakest activity since 1982. /ppInitial optimism about a strong start to the shopping season also appeared to evaporate as retail stocks were hammered on concerns that heavily discounted sales would hit profits. The SP 500 and Nasdaq indices were off by more than 6%./ppMarket-watchers said the Dow would have struggled to retain recent gains because hedge funds are still dumping assets to pay investors who are withdrawing funds, and to settle bank loans. /pp"I don't know of a single investment strategist who thinks that we are at the beginning of a bull market. It looks like it will be a long recession," said Brian Gendreau, of ING Investment Management in New York./pdiv style="float: left; margin-right: 10px; margin-bottom: 10px;"ullia href="http://www.guardian.co.uk/business/useconomy"US economy/a/lilia href="http://www.guardian.co.uk/business/marketturmoil"Market turmoil/a/lilia href="http://www.guardian.co.uk/business/globaleconomy"Global economy/a/lilia href="http://www.guardian.co.uk/business/interestrates"Interest rates/a/li/ul/diva href="http://www.guardian.co.uk"guardian.co.uk/a copy; Guardian News Media Limited 2008 | Use of this content is subject to our a href="http://users.guardian.co.uk/help/article/0,,933909,00.html"Terms Conditions/a | a href="http://www.guardian.co.uk/webfeeds/1,,1309488,00.html"More Feeds/a pa href="http://feedads.googleadservices.com/~at/r1_Gs_wICuhqUud18l1RR5NriT0/a"img src="http://feedads.googleadservices.com/~at/r1_Gs_wICuhqUud18l1RR5NriT0/i" border="0" ismap="true"/img/a/p

divimg alt="" src="http://hits.guardian.co.uk/b/ss/guardiangu-feeds/1/H.15.1/17804?ns=guardianpageName=Society%3A+Charities+lose+faith+and+hope+as+funding+crisis+leaves+them+with+%26pound%3B2.3bn+black+holech=Societyc3=The+Guardianc4=Voluntary+sector+%28Society%29%2CRecession+%28UK%29%2CCredit+crunch+%28Business%29%2CBusiness%2CMoney%2CSociety%2CUK+newsc5=Society+Weekly%2CPersonal+Finance%2CCredit+Crunch%2CNot+commercially+useful%2CBusiness+Markets%2CSocial+Care+Societyc6=Robert+Booth%2CPatrick+Butlerc7=2008_12_01c8=1126633c9=articlec10=GUc11=Societyc12=Voluntary+sectorc13=c14=h2=GU%2FSociety%2FVoluntary+sector" width="1" height="1" //divpCharities are facing a multi-billion pound black hole in their finances as companies withdraw sponsorship and individuals cancel standing orders as the economic downturn bites, according to an authoritative study published today. /ppA survey of 362 charities by PriceWaterhouseCoopers, the Institute of Fundraising and the Charity Finance Directors' Group reveals that charity incomes are expected to fall in real terms and costs to rise. PwC estimates that the shortfall could reach pound;2.3bn next year as the UK heads towards recession./ppThe forecast is the clearest sign yet of the crisis facing the charitable sector as a result of the credit crunch and has been met with warnings that charity services - often aimed at helping victims of financial hardship - will be curtailed, and some may even collapse./ppThe squeeze has already seen the value of corporate donations tumble. The British Red Cross was forced to cancel its winter gala ball beside the Thames this month as it could not find a corporate sponsor for an event which usually raises pound;500,000. Shelter, the housing charity, lost pound;400,000 in the space of six weeks this autumn when corporate sponsors, including the nationalised mortgage lender Bradford Bingley, cancelled donations./ppCharity chief executives will now press ministers further to release a pound;500m emergency fund to help see them through the slump. "There is no doubt that over the coming year we will see charities fail," said Stephen Bubb, director of the Association of Chief Executives of Voluntary Organisations. "We need help to help the victims of this recession."/ppDemand for services which deal with homelessness and mental illness has grown at the same time as a fifth of charities report increased cancellations of direct debits by individual donors - often a bedrock of income. Of the charities surveyed, 71% said they expected corporate donations to fall or stay static over the next year, and a fifth of those feared they could lose at least 15% of corporate income. Some reported declines of up to 50% already./ppAfter a decade of strong growth in revenues, the value of legacies and wills - which account for a third of the income of UK charities - has also plunged, and the charities' investment income has collapsed in line with the equity markets. According to the survey, the only growth looks set to come from charity shops, as bargain hunters turn to second hand goods. Even that is threatened by a lack of goods to sell, as some would-be donors try to raise extra cash by selling their bric-a-brac online./ppThis afternoon a group of 27 charities which have lost pound;46m in investments in Icelandic banks will lobby a creditors meeting for the release of their frozen assets. Among them are Cats Protection and the children's hospice Naomi House, which together invested pound;16.9m with Kaupthing Singer Friedlander./pp"In all but a technicality the recession is upon us and the economic climate is looking bleak," said Keith Hickey, chief executive of the Charity Finance Directors Group. "The one certainty is that our beneficiaries will need us more than ever. We must respond to this demand by ensuring that our charities are strongly led and able to ensure that we make the maximum possible use of resources."/ppThe crunch has come at a difficult time for Shelter, which offers advice on mortgage problems, homelessness, keeping warm and coping with rent arrears. Banking donors, who account for a third of corporate donations across the sector, pulled the plug on sponsorship deals as a rise in repossessions precipitated a 20% increase in demand for services. It had already laid off 30 staff./pp"If the situation worsens there will be an impact on our services," said Adam Sampson, Shelter's chief executive. "It is the speed with which it has happened which has made it very difficult to adjust. We have to plan for a significant proportion of our loyal donors not being able to afford their five pounds a month standing order payments."/ppDonations from the rich and legacies have slumped, according to the survey. Of charities polled, 86% expected legacies to either decline further or remain static over the coming year./pp"Giving from rich individuals, which had been flagged up as the next big thing, has gone down the pan," Mark Astarita, director of fundraising at British Red Cross, said. "The bulk of the value of legacies is in property and shares, and their value has plummeted. We have predicted a 20% decline next year." That would wipe more than pound;3m off the charity's pound;100m annual income./ppOverall, however, the British Red Cross, believes its income will grow modestly next year, largely from monthly direct debit donations gathered through face-to-face fundraising./pp"It is going to be tough, but it is not all doom and gloom," he said. "We are watching our individual donations closely and there is no detectable change."/ph2Short of funds/h2pWith more than two-thirds of charity bosses believing corporate donations will fall or stay static in the next year, charities which rely on this stream of income will be under pressure./ppThe strongMoney Advice Trust/strong, which provides free advice for individuals struggling with debts, relied on corporate donations for 65% of its pound;7.3m annual income in 2006-07. Five high street banks each gave it more than pound;500,000 in that year, including Royal Bank of Scotland, now nationalised./ppThe strongPrince's Trust/strong depends on the commercial largesse for around a fifth of its pound;22.5m fundraising income./ppstrongBreast Cancer Care/strong depended on corporate donations for 52.6% of its income, strongBreakthrough Breast Cancer/strong, for 16.6% and the strongRoyal Opera House/strong for 16.1%./ppThe crisis-hit UK financial sector accounts for around one third of UK charities' income from corporate donors. Figures from financial information group strongCaritas Data/strong show RBS gave pound;57m in cash and kind last year, Barclays pound;52.4m and HSBC pound;50.7m./pdiv style="float: left; margin-right: 10px; margin-bottom: 10px;"ullia href="http://www.guardian.co.uk/society/voluntarysector"Voluntary sector/a/lilia href="http://www.guardian.co.uk/business/recession"Recession/a/lilia href="http://www.guardian.co.uk/business/creditcrunch"Credit crunch/a/li/ul/diva href="http://www.guardian.co.uk"guardian.co.uk/a copy; Guardian News Media Limited 2008 | Use of this content is subject to our a href="http://users.guardian.co.uk/help/article/0,,933909,00.html"Terms Conditions/a | a href="http://www.guardian.co.uk/webfeeds/1,,1309488,00.html"More Feeds/a pa href="http://feedads.googleadservices.com/~at/926Ypjk1CSQjwUdlv-98U_M_fs4/a"img src="http://feedads.googleadservices.com/~at/926Ypjk1CSQjwUdlv-98U_M_fs4/i" border="0" ismap="true"/img/a/p