Shares climbed in Europe and Asia, led by banks, after the U.S. Congress adopted a landmark financial regulation package on Friday, removing uncertainty, and the G20 dropped a 2012 deadline for more stringent risk-provisioning rules.

“We welcome the fact that the G20 has stepped away from imposing an arbitrary timeline for the implementation of new measures and has instead agreed to phase-in requirements agreements as and when national economic conditions allow,” the International Banking Federation said in a statement.

Leaders of the main developed and emerging economies papered over differences on the right balance between reviving economic growth and cutting budget deficits at weekend talks in Toronto, in what was seen as a setback for U.S. President Barack Obama.

Unable to muster the unity of the past three crisis-era G20 summits, the leaders fell back on the “Sinatra doctrine,” leaving each country to do it “my way,” move at its own pace and adopt “differentiated and tailored” policies.

European leaders got what they saw as a green light to pursue austerity measures they consider essential to restore market confidence in the euro dented by the Greek fiscal crisis and wider concerns about high European sovereign debt.

“To be honest, it was more than I expected,” German Chancellor Angela Merkel said of the G20’s non-binding pledge to halve budget deficits by 2013 and balance budgets from 2016.

The United States had pressed the Europeans before the meeting to avoid withdrawing economic stimulus measures prematurely and urged countries with current account surpluses such as Germany to boost domestic demand.

“The positive outcome is that the European consolidation programs, which are moderate and appropriate given the confidence crisis in Europe, have been endorsed and accepted by others at the G20 level,” Michael Heise, chief economist of Europe’s biggest insurer Allianz, told Reuters.

The world’s central bankers called on Monday for early and resolute steps to cut deficits, warning that global recovery could be derailed by surging interest rates unless industrial economies take determined action to reduce debt.

“High and rising levels of public debt imply significant risks for the global economy,” the Basel-based Bank for International Settlements said in a report.

FRANCE NEXT

France is likely to be the next European state to announce deficit-cutting steps this week, with the cabinet due to approve measures on Wednesday to curb public spending, and further cuts to be spelled out in September in a tough 2011 budget.

“We have an untouchable goal to reduce the deficit level by two points from 8 percent to 6 percent next year. That’s never been done before,” Budget Minister Francois Baroin told France 2 television, adding the 2011 budget would be “the most difficult in more than 30 years.”

Meanwhile, several banking sources in Frankfurt said the European Union is preparing to stress-test more than 100 of the biggest EU banks in July, representing some 50 percent of each member state’s banking balance sheet.

EU finance ministers are due to decide next week how many banks will be tested for their risk resilience, and on what criteria. EU leaders have agreed the results will be made public in an effort to restore market confidence.

In a sign markets are still nervous about euro zone debt, the premium investors charge to hold French, Belgian, Spanish and Italian bonds rather than benchmark German bunds rose to the highest levels since early June. The interest rates at which banks lend to each other in euros also rose.

The European Central Bank said it bought another 4 billion euros in euro zone government bonds last week, the lowest weekly sum to date, taking the total to 55 billion since it intervened on May 10 to halt contagion from Greece’s debt crisis.

The Toronto summit exposed issues that are harder to resolve when countries loosely united in the G20 are emerging from the downturn at different speeds and with divergent priorities.

China avoided a scolding over the weak yuan, which has fueled its export boom, by announcing a more flexible foreign exchange regime a week before the summit and letting its currency rise by 0.5 percent against the dollar. But Beijing also refused to let the G20 praise it for the shift, insisting the issue had no place in international forums.

On trade liberalization, the G20 arguably moved backwards, dropping 2010 as the target date for concluding the long-stalled Doha round of World Trade Organization negotiations.

Opposition from Canada, Japan, Brazil and Australia, whose banks did not need state bailouts during the crisis, thwarted European calls for a common tax on banks to shield taxpayers from the costs of rescuing the financial sector.

On financial regulation, leaders endorsed a long phase-in for new Basel III bank capital and liquidity rules, allowing different speeds for different countries at the risk of encouraging regulatory arbitrage.

“The outcome makes it more difficult to guarantee stability on financial markets if all the countries go their own direction, because you get the possibility of regulatory arbitrage in markets,” Heise of Allianz said.

(Additional reporting by Arno Schuetze and Jonathan Gould in Frankfurt, Huw Jones, Steven Slater and Emilie Sithole-Matarise in London and Elizabeth Pineau in Paris; writing by Paul Taylor, editing by Sonya Hepinstall)

Do-little G20 summit cheers spared bankers

Obama wants to slap a 0.15 percent tax on the liabilities of the biggest U.S. financial institutions to recoup the costs to taxpayers of the financial bailout.

“We need to impose a fee on the banks that were the biggest beneficiaries of taxpayer assistance at the height of our financial crisis — so we can recover every dime of taxpayer money,” Obama said in his weekly radio and Internet address.

Obama, who is in Canada to attend gatherings with leaders of the world’s biggest economies, also used the address to welcome a deal by congressional negotiators on a historic rewriting of U.S. financial regulations.

Obama hopes to tout the changes as a model for other countries at the Group of 20 summit on Saturday and Sunday.

“I hope we can build on the progress we made at last year’s G20 summits by coordinating our global financial reform efforts to make sure a crisis like the one from which we are still recovering never happens again,” he said.

The financial regulation package would set up a new financial consumer watchdog, create a protocol for dismantling troubled financial firms and mandate higher bank capital standards, with the aim of avoiding a repeat of the 2007-2009 financial meltdown.

The bill, marking the biggest changes to the financial regulatory structure since the 1930s, still needs final approval from both chambers of Congress.

Obama, who hopes to sign the legislation by July 4, urged Congress to push the bill “over the finish line.”

With congressional elections looming in November, Obama hopes the financial reform and the bank tax idea will resonate with U.S. voters furious over Wall Street risk-taking that led to the financial meltdown and the worst recession in decades.

Some lawmakers have indicated they are receptive to the bank tax proposal but others have questioned whether it is fair to impose the tax on banks that have already repaid money from the Troubled Asset Relief Fund to make up for losses by American International Group Inc and General Motors.

Financial companies with more than $50 billion in assets and hedge funds with more than $10 billion in assets will be hit with the new levy upon enactment and lasting until 2020.

(Writing by Caren Bohan, Editing by Mario Di Simine)

Obama calls for bank tax as next step in reform

The decision is fraught with risk for Obama, who faces the difficult choice of shaking up command of an unpopular and costly war just six months after ordering 30,000 more troops into the fight against the Taliban.

McChrystal, the U.S. and NATO commander in Afghanistan and architect of Obama’s war strategy, was summoned back to Washington to explain his “enormous mistake” to the president, the White House said.

Obama’s spokesman said “all options were on the table” but the president stressed he wanted to speak to McChrystal first.

“I think it is clear that the article in which he and his team appear showed poor judgment … but I also want to make sure I talk to him directly before I make any final decision,” said Obama, speaking to reporters after a cabinet meeting.

U.S. officials said they expected McChrystal to offer his resignation and allow Obama to decide whether to accept it.

The 55-year-old commander has apologized for the article in Rolling Stone magazine, which quotes his aides calling one top Obama official a “clown” and another a “wounded animal.”

In the article “The Runaway General” — here — McChrystal himself makes belittling remarks about Vice President Joe Biden and the U.S. special envoy to Afghanistan and Pakistan, Richard Holbrooke.

McChrystal’s departure would add to already growing uncertainty about the course of the nine-year-war just one year after his predecessor, General David McKiernan, was pushed out of the same job.

The controversy could also weaken Obama, either making him look soft on insubordination if he lets McChrystal stay or potentially irresponsible if he fires the top general leading an already difficult war effort.

“The White House has to make it pretty tough on (McChrystal) because he was clearly insubordinate. Then they have to decide what to do with him,” said a senior Obama administration official. “It’s a real dilemma.”

White House spokesman Robert Gibbs said Obama became “angry” when he saw the article, due to be published in Rolling Stone on Friday.

Defense Secretary Robert Gates said McChrystal had “made a significant mistake and exercised poor judgment.” Admiral Mike Mullen, who as chairman of the Joint Chiefs of Staff is the top U.S. military officer, expressed his “deep disappointment.”

McChrystal, in an apparent attempt to save his job, reached out to Gates and other officials to say he was sorry.

“It was a mistake reflecting poor judgment and should never have happened,” McChrystal said in a statement.

Lawmakers were split over whether he might have to go, with most leaving the decision to Obama.

“Everyone needs to take a deep breath and give the president and his national security team the space to decide what is in the best interest of our mission,” said Senator John Kerry, a leading Democrat who is close to Obama.

REPLACEMENTS?

Defense officials say they have confidence that a suitable replacement could be found for McChrystal if he is fired.

Possible successors include Lieutenant-General David Rodriguez, who is now McChrystal’s No. 2; Lieutenant-General William Caldwell, who runs the NATO training mission for Afghan forces; and General James Mattis, the commander of U.S. Joint Forces Command.

Afghan President Hamid Karzai fully backed McChrystal and “believes he is the best commander the United States has sent to Afghanistan over the last nine years,” a spokesman said.

The Rolling Stone article, which quoted several McChrystal aides anonymously, portrays a split between the U.S. military and Obama’s advisers at an extremely sensitive moment for the Pentagon, which is fending off criticism of its strategy to turn around the Afghan war.

“It certainly isn’t going to help relations between the White House and this building,” one defense official said.

The article quotes a member of McChrystal’s team making jokes about Biden, who was seen as critical of the general’s efforts to escalate the conflict and who had favored a more limited counter-terrorism approach.

“Biden?” the aide was quoted as saying. “Did you say: Bite me?”

McChrystal himself quipped: “Are you asking about Vice President Biden?”

“Who’s that?” he asked.

He also belittled Holbrooke. One aide said McChrystal had compared the special envoy to a “wounded animal.”

“Oh, not another e-mail from Holbrooke,” McChrystal groaned while checking his BlackBerry during a trip to Paris, according to the magazine. “I don’t even want to open it.”

“CLOWN” STUCK IN 1985

One of McChrystal’s aides called White House National Security Adviser Jim Jones, a retired four-star general, a “clown” who was “stuck in 1985.”

The article also quoted an adviser to McChrystal dismissing an early meeting with Obama as a “10-minute photo op.”

“Obama clearly didn’t know anything about him, who he was. Here’s the guy who’s going to run his (expletive) war, but he didn’t seem very engaged,” the adviser told the magazine. “The boss was pretty disappointed.”

The White House, asked about whether Obama was in fact disengaged, said McChrystal would have Obama’s undivided attention on Wednesday.

“I think anybody that reads that article understands … what an enormous mistake this was, given the fact that mothers and fathers all over this country are sending their children halfway across the world to participate in this,” Gibbs said.

He added that parents of troops needed to know their military was “capable and mature enough.”

“I think that is one of the things that the president will look to discuss tomorrow,” he said.

(Additional reporting by Alister Bull, Will Dunham, Matt Spetalnick, Jeff Mason, Susan Cornwell and Deborah Charles in Washington, David Fox and Jonathon Burch in Kabul; Editing by Patricia Wilson and John O’Callaghan)

Fate of McChrystal in doubt

Big Chinese state-owned banks kept the yuan in check, a day after its biggest rise since the currency was revalued in 2005, indicating Beijing will allow its currency to appreciate at a far slower pace than demanded by its critics in the West.

The two-way movement in the yuan is not great by the standard of freely floated currencies but is unprecedented in China where until this week the central bank had squashed intraday volatility via intervention.

China is relaxing its control on the yuan ahead of this weekend’s G20 summit of world leaders in Canada, breaking a two-year dollar peg that had been a lightning rod for critics who say the currency is undervalued and gives Chinese exporters an unfair trade advantage.

“China has backed up all the talk with action, and President Hu (Jintao) will arrive in Toronto later this week with tangible evidence that China is serious about increasing the flexibility of its exchange rate,” said Brian Jackson, strategist with Royal Bank of Canada in Hong Kong.

“We still may see moves in either direction from day to day, but we think the trend in the weeks and months ahead will be for the yuan to make limited but meaningful gains against the dollar.”

The yuan rose more than 0.4 percent on Monday, its biggest rise since the landmark revaluation in 2005, pushing up close to its trading limit of 0.5 percent either side of a reference point set each day by the central bank.

On Tuesday, the central bank set the reference rate at about the same level as Monday’s close, leaving room in theory for the currency to rise another 0.5 percent.

The yuan immediately rose to a new five-year high before turning lower. State-owned banks also stepped in to the market and aggressively bought dollars, suggesting authorities want to control the pace of the yuan’s appreciation.

The People’s Bank of China, the central bank, made no secret that it would not allow the yuan to appreciate too fast in statements over the weekend announcing the currency reform.

By allowing for greater ups and downs, the central bank will move a step closer to its long-stated aim of developing a more mature market in which companies learn to hedge against foreign exchange risks, part of its overall efforts to develop Shanghai into a global financial center by 2020.

Still, markets and critics in the United States and other countries are unlikely to be easily convinced of the depth of the reforms unless they see significant appreciation of the yuan.

Markets surged on Monday after Beijing’s weekend vow, on optimism a stronger currency would boost the fast-growing economy’s purchasing power.

But doubts about the speed of yuan appreciation had already begun to surface in the United States on Monday. Asian stocks then reversed their gains on Tuesday as investors took profits from the rally on Monday.

Commodities also pared their gains, as did commodity-linked currencies like the Australian and Canadian dollars.

HOW FLEXIBLE?

Many economists see China’s currency strengthening further in coming days but at a very modest pace, further diluting hopes for big market gains.

A Reuters poll of 33 economists showed they expected the yuan to end the year at 6.67 per dollar, a rise of 2.4 percent from late last week before China’s policy announcement and similar to the appreciation implied by offshore non-deliverable forwards.

The challenge for China going into this weekend’s G20 summit will be to convince other countries, many of which are expected to seek further clarification from Beijing, that it has made a genuine move to a more flexible currency.

“We’re obviously encouraged, but we’ll be monitoring the progress,” White House spokesman Bill Burton said in Washington. “Implementation here is going to be key, and so we’re just going to be keeping an eye on that.”

A senior U.S. official, briefing reporters on condition of anonymity, said China’s gradual approach to yuan flexibility was a prudent step that could both manage expectations and deter massive speculative buying of Chinese assets.

The official said it was promising that China seemed ready to allow the exchange rate to respond to market forces, and that the test now was how far and how fast Beijing would permit the yuan to move.

“The proof will be in the pudding over time,” Canadian Prime Minister Stephen Harper said in an interview with Reuters.

“But I think it’s fair to say this is a very positive announcement by China. More broadly it does show China not simply doing some positive things, but China assuming a more global view,” he said.

(Additional reporting by Koh Gui Qing and Karen Yeung; additional writing by Wayne Cole)

China makes good on flexibility vow as yuan falls

However, it all but ruled out a one-off revaluation or major appreciation, saying there was “no basis for big fluctuations or changes” in the exchange rate.

The dollar peg has come under intense fire from abroad as China’s export juggernaut roared back to life, while much of the rest of the global economy remained sluggish and beset by unemployment in the wake of the financial crisis.

Just ahead of a G20 summit in Canada, the announcement seemed to be intended to placate critics of China’s currency regime. It was welcomed by U.S. Treasury Secretary Timothy Geithner who called for “vigorous implementation” of the change.

But China had long said that it would not bow to international pressure over its currency and the central bank went out of its way to dampen expectations for any big yuan rise.

“We believe this is a positive gesture, suggesting the yuan will soon resume its appreciation against the dollar,” Goldman Sachs economists Yu Song and Helen Qiao said.

The news could soothe investor fears of a trade row between the United States and China at a delicate time for the world economy and propel world stocks markets higher on Monday.

It was clear that China intended its announcement — published in English at around the same time as Chinese, a departure from usual practice — to mark the end of the yuan’s de facto peg to the dollar, which it had defended as a “special policy” to protect its economy from the global financial crisis.

“The global economy is gradually recovering. The recovery and upturn of the Chinese economy has become more solid with enhanced economic stability,” the Chinese central bank said in a statement on its website.

“It is desirable to proceed further with reform of RMB exchange rate regime and increase the RMB exchange rate flexibility,” it said.

The yuan is also known as the renminbi, or RMB.

Dominique Strauss-Kahn, head of the International Monetary Fund, also saluted the announcement, saying it would boost Chinese household incomes and domestic investment, key ingredients for rebalancing the global economy.

RISE — AND FALL

In practice, it is likely to mean that the central bank will use its system of setting daily reference rates for the yuan to guide the currency back to a path of gradual appreciation against the dollar, which it followed for three years until mid-2008.

Initial movements in the yuan’s exchange rate will probably be small, but cumulatively, it could amount to several percentage points of accumulation over the next few months, several analysts.

The “crisis-mode” of locking the yuan to the dollar was over, but any appreciation would likely be slow and modest, said Li Daokui, an academic adviser to the monetary policy committee of the People’s Bank of China, the central bank.

In fact, the yuan could begin to move in two directions, he told Reuters.

“If the euro falls sharply against the dollar, the yuan may depreciate against the dollar as it refers to a basket of currencies. But if the euro stabilizes, the yuan could rise against the dollar,” he said.

“The message to the outside world is: don’t pressure us,” he said.

Whether the outside world, especially U.S. lawmakers who say an undervalued currency gives China an unfair trade advantage, will agree with that remains to be seen.

PRESSURE FLARING UP

International complaints about China’s exchange rate policy had died down in recent months as the European sovereign debt crisis became the dominant concern, but pressure had just begun to flare up again.

A group of U.S. lawmakers, led by Senator Charles Schumer, were pushing for a bill that would allow the United States to use countervailing duties against countries with “fundamentally misaligned” exchange rates.

And the yuan was threatening to be the elephant in the room at a G20 summit in Canada on June 26 and 27.

U.S. President Barack Obama said that it was essential to global economic vitality that countries adopt market-oriented exchange rates, but a series of Chinese officials said the yuan was China’s sovereign concern and should not be discussed in international circles.

China has held the yuan at roughly 6.83 to the dollar since July 2008 in an attempt to insulate the fastest-growing major economy from the global financial turmoil sparked by the U.S. credit crunch.

“The government has made the reform of the exchange rate a priority and has been waiting for the right time to move forward,” said Gao Shanwen, chief economist of Essence Securities.

“Now is the best time to carry out the reform,” he said, pointing to weak market expectations for appreciation, which could help curb the hot money inflows chasing a stronger yuan that have long been dreaded by the Chinese government.

At the end of trading on Friday, investors were betting on the yuan rising 2.2 percent against the dollar over the next 12 months, according to pricing in offshore forwards.

(Additional reporting by Phil Smith, Lu Jianxin and Zhou Xin; Writing by Simon Rabinovitch; Editing by Neil Fullick)

Peg is dead as China vows yuan flexibility

With final negotiations on the reform bill bogged down amid partisan bickering, Democrats who control the process neared consensus on an element that has drawn furious opposition from the Wall Street banks that could lose billions in profits.

The deal would require banks to isolate their swaps desks in separate affiliates, which would require the banks to raise new capital and deprive them of profits they get from dealing. But it would allow their parent holding companies to retain the value of the operations.

But negotiators remained at odds over another sticking point: how to cover the costs of dismantling troubled financial firms before they threaten the broader economy, as happened during the 2007-2009 financial crisis.

The broadest overhaul of Wall Street rules since the 1930s would establish new consumer protections, crimp big banks’ profits and saddle the industry with tighter regulations in a bid to avoid a repeat of the crisis, which led to the deepest recession in generations.

With congressional elections looming in November, Democrats aim to harness widespread anger at Wall Street and iron out by June 24 the remaining differences between bills already passed by the House of Representatives and the Senate.

That would give President Barack Obama an example for other world leaders to follow at a summit of leaders of the Group of 20 industrialized and developing economies in Toronto, which starts on June 26. Europe is aiming to tackle similar reforms, but the United States is far ahead.

On Thursday, the U.S. Federal Reserve won another battle to maintain its independence as lawmakers on the House-Senate panel dropped a plan to have the head of its New York division appointed by the U.S. president, rather than its board of directors.

However, they decided to prevent bankers on regional Fed bank boards from participating in the selection of their Fed bank chief.

The U.S. central bank, whose authority some lawmakers had wanted to rein in amid wide criticism for lax oversight before the crisis, will actually see its powers increase under the sweeping overhaul of financial regulation.

HIGHER CAPITAL REQUIREMENTS

Separately, lawmakers also agreed to give banks more time to comply with higher capital requirements to help them ride out crises, though they remained at odds over which firms could be grandfathered under the proposal.

They also agreed to exempt small companies, those with market capitalization under $75 million, from a requirement in the Sarbanes-Oxley law that requires them to show they have internal controls in place to ensure the accuracy of their books.

The White House intervened to weaken a provision that aims to give shareholders more say on how companies are governed, though the panel had yet to formally act.

Lawmakers had hoped to resolve a central element of the bill that would give regulators clear authority to seize unstable financial firms before they threaten the economy in an effort to avoid a repeat of the recent crisis, but postponed action after they failed to reach an agreement.

House lawmakers insisted on setting up a $150 billion fund to cover costs for liquidating troubled financial firms, paid for by firms with more than $50 billion in assets.

Senate negotiators rejected that proposal, insisting that costs should be covered by selling off the troubled firm’s assets. Other firms would have to chip in if the asset sales did not cover the bill.

The banking industry does not want to pay any fees up front.

Democrats in both chambers agree that banks, not taxpayers, should foot the bill next time. They brushed aside Republican charges that the new process would encourage reckless behavior.

‘FUNERAL SERVICE’

“Knowing that the funeral service, casket and plot are paid for does not make death any more compelling, at least not for a normal person,” said Democratic Representative Luis Gutierrez.

The new plan would give regulators clear authority to step in and dismantle troubled firms if they deemed them a risk to the system, tools that they lacked in the recent crisis.

At the height of the meltdown, regulators persuaded Congress to authorize $700 billion in funding to bail out Wall Street firms, spurring widespread voter anger.

Regulators did not take a consistent approach to troubled firms during the crisis. They provided $182 billion to bail out insurer American International Group while they let Lehman Brothers declare bankruptcy and steered investment banks Bear Stearns and Merrill Lynch into mergers with other firms.

When it next meets on Tuesday, the committee plans to tackle consumer-protection plans and whether to limit fees on debit-card transactions. The committee plans to address the controversial trading limits later in the week.

Once a final bill is agreed, it must be approved by the full House and Senate before Obama can sign it into law.

(Additional reporting by Rachelle Younglai, Charles Abbott and Kim Dixon; editing by Leslie Adler and Mohammad Zargham)

Swaps plan seen staying in Wall Street reform bill

By Daily Mail Reporter

Police want to speak to this man who was filmed on CCTV in Finsbury Park 30 minutes before the attack

A heavily pregnant woman was raped at gunpoint in her bedroom by a gang of armed burglars who broke into her home.

The 33-year-old victim, who was seven months’ pregnant, was watching TV with her boyfriend when the balaclava-clad men forced their way into their North London home.

Her 39-year-old boyfriend was threatened and hit around the head with the butt of a sawn-off shotgun as they demanded the keys to their Audi TT which was parked outside.

The woman was then grabbed and forced upstairs by one of the attackers and forced to perform a sex act on him which police have described as ‘oral rape’.

He threatened to shoot the couple unless she did what he said.

Speaking for the first time about the rape, the victim said: ‘I just wanted to protect my baby. I was absolutely terrified and being so late in the pregnancy I didn’t want to get into a fight where they might hurt me or my baby.

‘He (the rapist) said it was my lucky day.’

Her boyfriend added: ‘I pleaded, I was shouting, “She’s pregnant, she’s pregnant, leave off her, tell me what you want”.’

The men took the couple’s grey Audi TT and other items including an iPod, cash, debit cards and a laptop from their Finsbury Park home on May 14 last year.

The car was found abandoned two days later in Portland Road, near Seven Sisters Underground station.

Police believe these two men, captured on camera outside a mini-market at the corner of Seven Sisters Road and Durham Road, ten minutes before the attack could be part of the gang

Police said details were being revealed only after other efforts to trace the men had failed, adding that a £20,000 reward is being offered for help in catching the gang.

Officers said the woman went on to have her baby without any problems.

Detective Inspector Robert Pack, the investigating officer, said he hoped ‘allegiances had changed’ over the past 14 months as he appealed for information.

He said: ‘Every rape is a very serious crime but what makes this all the more shocking was that the victim was so clearly heavily pregnant.

‘It was all the more traumatic because it took place in the couple’s home.

‘Concerns for the unborn baby can only have exacerbated what was already an emotionally and physically traumatic experience.’

He added: ‘Allegiances may have changed over the last 14 months and we would urge anyone with information to contact us.

‘There is a reward on offer of up to £20,000 and I hope there are people out there who are prepared to do the right thing and tell us what they know.

‘Do you know the men who did this? Do you remember hearing anyone boasting about stealing an Audi TT around this time? We would like to hear from you.’

The couple are still haunted by the attack.

The female victim said: ‘Everything that you believe to be safe is no longer safe. You can’t walk into the bedroom and feel relaxed because you remember that someone was in there who wasn’t supposed to be there.’

The couple had been watching TV when they heard a noise outside at around 10.30pm. The boyfriend opened the front door to see what was going on.

He saw the three men, all wearing balaclavas and scarves, at the end of the path and tried to shut the front door but the men forced their way inside and shoved him to the ground.

The suspect who carried out the sexual assault is described as black, 6ft, aged 18 to 25 and stocky.

He wore a black balaclava, black jacket, black tracksuit bottoms and black shoes.

A second man was black or Asian, 5ft 6in and about 18.

Enlarge

The area of North London where the attack took place

He wore light grey tracksuit bottoms, black trainers and a zip-up jacket with red sleeves.

The third suspect, who had the gun was black, 5ft 10in, and aged between 18 and 22. He was wearing burgundy tracksuit bottoms.

Police said they were keen to trace the men if only to eliminate them from their inquiries.

DI Pack said he believes the men who carried out the attack either live locally or have links to the area.

He added: ‘They clearly felt comfortable committing a crime at the top end of the scale which suggests they know the area.

‘We need people to give us names to open up other avenues of  investigation for this enquiry.

‘It is unlikely that these men will not have spoken to someone about the robbery or about the fact that they stole the car.’

A reconstruction of the incident will be shown on BBC1’s Crimewatch at 9pm tonight.
Read more: http://www.dailymail.co.uk/news/article-1216840/Heavily-pregnant-woman-raped-home-armed-gang.html#ixzz0SWIBt8NU