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Wednesday newspaper round-up: Iran, Fed, Co-op

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Obama in plea to postpone new Iran sanctions; Federal Reserve pledges to maintain its asset purchase scheme; Flowers scandal puts £1.5bn Co-op Bank rescue 'at risk'.

Barack Obama made a personal appeal to leading senators on Tuesday to postpone new sanctions on Iran. The move came on the eve of crucial nuclear talks. However, the US president still faces fierce opposition from many Republicans in Congress. The US administration had initially appeared to win some political breathing space over its nuclear negotiations after a leading Republican senator left a meeting with Obama and said that no new sanctions were likely until at least next month, the Financial Times says.

A £480m contract to supply 12 British-built helicopters to India was on the brink of collapse last night after a bribery scandal prompted Delhi to abandon the deal. Executives from AgustaWestland, Britain’s only helicopter manufacturer, were scheduled to meet India’s Defence Ministry in Delhi today in a last-ditch effort to rescue the deal which, since February, has been overshadowed by corruption allegations, according to The Times.

The US would impose a one-time 20% tax on an estimated $2trn of cash held overseas by American multinationals under a proposal from Democrats on the Senate finance committee that would reshape international tax policy. The proposal by Max Baucus, the veteran Montana lawmaker who chairs the panel, was unveiled on Tuesday as a way to stoke momentum for a sweeping rewrite of the US tax code, which is facing uncertain political prospects, the Financial Times writes.

The Chairman of the US Federal Reserve Bank last night pledged that it would maintain its $85bn-a-month asset purchase scheme. Ben Bernanke, in one of his final speeches before handing over to Chairman-elect Janet Yellen, said that the Fed’s Open Market Committee “remains committed to maintaining highly accommodative policies for as long as they are needed”, The Times reports.

Investment banking giant JP Morgan Chase & Co last night signed a $13bn (£8bn) agreement with the US government to settle claims that it had overstated the quality of mortgages sold to investors in the run-up to the financial crash. The civil settlement – the largest ever reached between a government and a company – marks the end of weeks of tense negotiations between representatives of JP Morgan, the largest US bank, and government agencies under pressure to hold banks accountable for wrongdoing that led to America’s housing crisis, The Scotsman explains.

The Co-op Bank’s £1.5bn recapitalisation could be “at risk”, the troubled lender was warned as it continued to face the fall-out from damaging revelations about the private life of its disgraced former chairman. Lord Myners, the former City minister, warned the growing scandal over the sex life and alleged drug use by Paul Flowers, the Co-op Bank’s chairman until his resignation in June, risked scuppering a rescue deal for the bank and could lead the lender’s backers to rethink the terms of recent recapitalisation plan, The Daily Telegraph says.

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