Bank fine, German bonds and cyber security alarm

The daily briefing “FirstFT” from the Financial Times.

Morgan Stanley will pay $2.6bn to settle claims that it mis-sold mortgage-backed securities in the run-up to the financial crisis. The US Department of Justice had charged half a dozen banks with mis-selling – this settlement brings the total of mortgage-related penalties to about $40bn. Goldman Sachs is likely to be the last of the banks to settle its case. (FT)

In the news

Chinese cyber security alarm European and US companies have asked their governments to help stop the implementation of new Chinese regulations, which will force local and foreign banks to use only IT equipment deemed “secure and controllable” by Beijing. The groups warned that the rules would “hurt the development and integration of the Chinese banking sector in the global market”. (FT)

Lenovo hacked after adware blunder Less than a week after being criticised for pre-installing advertising software on consumer laptops that exposed users to hacking, Lenovo’s website was hacked. Customers reported seeing videos of young people looking into web cameras and employee emails were leaked. (Bloomberg)

Budget reprieve for France and Italy The European Commission decided not to fine Francefor failing to bring its budget deficit under the EU limit of 3 per cent of GDP in time. Italy also got a pass for not cutting its debt level because more leeway is given to countries facing recession. (FT)

Google grouping The tech company is consolidating its European business and uniting its two European groups after a year in which setbacks in individual states have morphed into company-wide issues. Google has been the focus of a backlash against Silicon Valley groups in Europe, sparked by concerns over internet surveillance, tax avoidance and commercial dominance. (FT)

Paying for the privilege of lending Germany sold five-year debt at a negative yield for the first time . Negative-yielding bonds mean investors pay more than the face value of a bond plus interest payments and accept a guaranteed loss if they hold it to maturity. These securities are becoming more common and reflect a demand for haven investments. In Germany’s case, the ECB’s quantitative easing programme was seen as the main catalyst. (FT)

Isis conspiracy in New York Three Brooklyn residents were arrested on charges of conspiring to support Islamist militants. Meanwhile, British authorities have been trying to locate three teenage girls who are believed to have travelled to Turkey, en route to Syria. Roula Khalaf looks at what attracts girls to become jihadi brides, even when they come from better-off families than their male counterparts and are doing well at school. (FT)

It’s a big day for 

Royal Bank of Scotland Chief executive Ross McEwan presents annual results that are expected to show a return to pre-tax profits after six consecutive years of losses. RBS has been selling assets to shrink global operations and return the bank to private ownership. It is reported to be considering offloading its North American loan assets to Japan’s Mizuho Financial Group for several billion dollars. (FT, Bloomberg)

Net neutrality The US telecoms regulator will decide today whether to back Barack Obama’s plan to ensure all internet traffic is treated equally. Google upped its lobbying in an effort to prevent the regulator from setting the terms for the relationships between broadband providers and content providers. (NYT$, FT)

Food for thought

Restructuring for survival Michael Pettis argues that the biggest constraint to the EU’s survival is debt . “In many countries in Europe there is tremendous uncertainty about how debt is going to be resolved. This uncertainty has an economic cost . . . But because most policy makers stubbornly refuse to consider what seems to have become obvious to most Europeans, there is a very good chance that Europe is going to repeat the history of most debt crises.” (China Financial Markets)

Making money on North Sea oil was already difficult before crude prices halved. Now the UK industry fears that investment cuts and company withdrawals could deliver a fatal blow. (FT)

My saga Karl Ove Knausgaard, author of the epic autobiographical novel My Struggle , documents his travels across North America. He writes of his ambitions to see where Icelandic sagas were set in Newfoundland, the girth of Canadians and his struggle with American small-talk. (NYT$)

Sex, lies and Chinese spies Dajin Peng left behind a childhood fractured by Mao’s informers for an academic life in Florida only to become embroiled with the FBI. His dealings with the bureau show how worried the US government is about growing Chinese involvement inAmerican higher education. (Bloomberg)

Of all financial institutions, HSBC seemed the least likely to let its empire run amok. John Gapper examines whether it simply expanded too fast and lost its grip, or whether it was never as good as its reputation. (FT)

Video of the day

Worries for Trichet Former ECB president Jean-Claude Trichet explains his concerns about the technological surge, a correction in China and indebted countries. (FT)

This article is published in collaboration with The Financial Times. Publication does not imply endorsement of views by the World Economic Forum.

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Author: FirstFT is the Financial Times’ editors curated free daily email of the top global stories from the FT and the best of the rest of the web.

Image: A man walks past buildings at the central business district of Singapore. REUTERS/Nicky Loh.