Central banks are making trillions in unusually cheap money available to banks in a bid to restore liquidity to the financial system. But institutions are not passing on the cash to their customers, choosing instead to invest it and make a fat profit.

These days, bankers are used to bad press and being scolded by politicians. There's been no shortage of either in the past week.

 Frankfurt skyline: German banks are hoarding money at the expense of their customers. "Banks Hoard Money," was the headline on the cover of the Financial Times Deutschland, while the tabloid Bild sharply condemned the "Outrageous Overdraft Interest Rates." Consumer Protection Minister Ilse Aigner railed: "It is unacceptable that the financial industry takes months to pass on reductions in the key interest rate, when it only takes a few days to pass on key interest rate increases."

The new attacks on banks have been prompted by the fact that base rates are at a historic low and that central banks are injecting money into the market like never before. In the last week alone, the European Central Bank (ECB) allocated the record sum of €442 billion ($619 billion) to 1,100 financial institutions -- at a paltry 1 percent interest rate.

French restaurants are expected to cut prices on meals and soft drinks after the government slashed value added tax from 19.6% to a lowly 5.5%. The move, approved by the European Union, follows years of French lobbying in Brussels.

The French government has slashed value added tax (VAT) for the restaurant business from 19.6% to a significantly lower 5.5%, moving to satisfy a long-term demand from the industry. The tax applies to food but not to alcohol consumption.

This drop signals lower overall prices for consumers, since dining prices in France include VAT. Establishments are not legally bound to lower their prices as a result of the VAT drop; if they choose not to, they have the right to keep the same prices as before and pocket the difference.

Nonetheless, economic minister Christine Lagarde is confident that restaurants are likely to be motivated to implement a price drop in order to stay competitive. She said "The market will prove wrong" those who do not.

Britain's most profitable rail service will be nationalised after National Express announced it would default on its operating franchise.

The East Coast Main Line, the country's busiest inter-city route, will be taken into public hands for "about a year" while a new company is found to run it.

Announcing the move today Lord Adonis, the Transport Secretary, said nationalisation was "highly regrettable" and stated that there would be no limit placed on the amount of taxpayer money that would be allocated to the nationalised service to ensure it continued to run as normal.

Talks between the Government and National Express over the franchise, which runs the London to Edinburgh route, broke down last week. The company wanted to renegotiate the contract and this morning announced it would hand back the service to the Department of Transport when its funding runs out later this year.

Millions of travellers will pay much less to use their mobile phones while abroad within the European Union after new regulations came into force today.

Under the new limits there is a single tariff covering all 27 EU member states - bringing the maximum charge for making a call while abroad down to 37p per minute. Receiving calls now costs a maximum of 17p per minute.

Sending a text message from another country inside the EU costs no more than 10p. Data transfers have also fallen, with one megabyte of data now costing 85p. The limits exclude tax.

Mobile operators now also have to bill customers by the second from the 30th second of a call in order prevent them from rounding up to the highest minute, a practice which has cost consumers dearly up until now.

Updating my post from early June, the U.S. online job market^† still hasn't shown signs of recovering from steady declines that began in September of last year. Compared to the same period last year, there were 50% fewer job postings in June 2009.

A crime of bankslaughter would give reckless City workers pause in their renewed bonus chase

Guardian UK  Deregulation of the banks was built on two intellectual pillars. One was that regulation was not necessary because banks would self-regulate in order to protect their reputation. Please stop laughing. The other was that regulation would not work because regulators would always be one step behind the bankers. And unfortunately we cannot laugh this one off. Indeed, the technical problems facing regulation are now compounded by political impediments. Green shoots, lobbying by the banks, and turf wars among the regulators have eroded the momentum for action. So if banks cannot effectively be regulated by the authorities, what can be done?

-Skip-

So how can we avoid another Northern Rock? While shareholders cannot impose genuine penalties, governments can. Fear of jail would discourage excessive risk. Before bankers huff about blunting incentives, yes, I realise that without carrots, bankers will just sit and gaze at the office ceiling. Bankers, set your minds at rest: the introduction of penalties would permit BABEL: that is, the carrots for genuinely smart behaviour could be Even Larger.

The key problem with using the law against bankers has been the difficulty of getting a conviction: surely, the managers of Northern Rock did not intend to profit at our expense. We do not need to set the burden of proof that high. Intention misses the point. Faced with a corpse and a killer, police do not need to prove ill intent: manslaughter sets the hurdle lower than murder. It is enough to show the killer was irresponsible. That is the standard we need; we need a crime of managing a bank irresponsibly: in other words, bankslaughter.

On Turner's proposal a manager can still benefit from recklessness - as long as the bank does not blow up within three years. After that, if the bank crashes he can be off playing golf. With bankslaughter, when the bank blows up - even if it is a decade later - a criminal investigation traces back to determine whether crucial decisions were reckless. If a reasonable banker faced with the information available at the time would not have taken those risks, the person responsible is dragged off the golf course and jailed.

Seems like a sensible proposal, which probably dooms it from the start.  It is a bit hard to argue that destroying a bank, even if only negligence is provable, wreaks much more destruction than a single instance of manslaughter.

H/T Yves Smith again.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

Credit card cheques are set to be banned as part of plans for consumer protection due to be unveiled later.

Measures to assist people facing difficulties with debt and at risk from rogue traders during the recession are also expected to be announced.

Figures from the Bank of England show that UK residents owe £233bn on credit cards, overdrafts and other loans.

The disease is Anglo...

A second lesson, he added, was that there would have to be much stricter system-wide limits on leverage, particularly among big banks whose stability is crucial to the whole financial system.

"For a number of diseases, 20% of the population account for around 80% of the disease spread. The present financial epidemic has broadly mirrored those dynamics," he said, adding that the failure of a core set of large, interconnected institutions such as Fannie Mae, Freddie Mac, Bear Stearns, Lehman Brothers and AIG contributed disproportionately to the spread of financial panic.

"Epidemiology provides a second key lesson for financial policymakers - the importance of targeted vaccination of these 'super-spreaders' of financial contagion. Historically, financial regulation has tended not to heed that message."