Newspaper round-up

LONDON (Reuters) - Here are the business headlines from Tuesday's newspapers.

The Financial Times

BUILDING SOCIETIES ANGRY AT BEING MADE LIABLE FOR ANY B&B LOSSES

Britain's major banks will be liable for any unforeseen losses incurred following the nationalisation of Bradford & Bingley BB.L after they ignored the pleas of authorities and decided not to rescue the building society. The banks will have to contribute to the Financial Services Compensation Scheme to cover any unexpected losses from the deal. The development sparked anger among Britain's building societies, which will also have to contribute to the scheme. John Goodfellow, chairman of the Building Societies Association, expressed concern at the use of the FSCS to "help rebuild a nationalised bank's balance sheet", adding: "As deposit taking institutions our members will be badly hit by this."

DATA HINT HOUSE PRICE FALL HAS FURTHER TO GO

Data from the Bank of England shows that mortgage lending slowed to almost a standstill in August as approvals for new loans hit a record low. Net lending fell from three billion pounds in July to 143 million pounds on a seasonally adjusted basis. The bank's figures also showed that the number of mortgages for new house purchases fell to a low of 32,000, down 70 percent from the same time last year. The latest data comes amid market turmoil over the government's rescue of Bradford & Bingley, which specialised in buy-to-let and self-certified mortgages that require no proof of income. Some economists surmised from the data that house prices are set to fall further.

HEDGE FUNDS BRACED FOR FLIGHT OF CASH FROM WEALTHY INVESTORS

Investors and fund managers claim that hedge funds are preparing to face massive withdrawals as wealthy clients resort to the safety of cash as the sector experiences its worst year. Several managers claim that even hedge funds that survived the turmoil were facing redemptions, with the sector's major investors seeking to raise cash to meet withdrawals made by their clients. Several funds, including Drake Management, Ospraie Management and MKM Longboat, have been forced to shut down because of redemptions. According to one large London hedge fund, restrictions on short selling are adding to the movement of money due to investor fears that temporary bans could become permanent.

BT BEGINS TRIALS TARGETING BUYERS' WEB BROWSING HABITS