Has the FSA gone too far regarding bank stress tests?
As we covered in one of our earlier articles, the Financial Services Authority (FSA) has issued a new set of guidelines regarding bank stress tests which will effectively force each and every financial institution in the UK to identify its own potential weaknesses. This is a rather bizarre way in which to protect the UK economy because all the regulators are doing is highlighting weak companies and making them susceptible to potential takeovers, mergers or limited financial backing.
If a company is forced identify a potential weakness in its own business model, then what is there to stop a predator approaching the company's shareholders and claiming that they could run the company better than its current board of directors. There are no industries in the world which force companies to do the homework of their potential predators and competitors and weaken their own reputation and financial strength in the eyes of investors. So why has the FSA decided to act now?
Even though the idea of "reverse stress tests" does appear to have some merit in the current economic climate it is absolutely crazy to ask a company to research its own weaknesses and then publish these for public consumption.
Bank keeps rates at 5.25 per cent
The Bank of England has once again voted to hold interest rates at their present level of 5.25 per cent.Rates have now gone unchanged for three consecutive months after the shock quarter of a percentage point rise recorded in January.Today's decision had been widely predicted by economists, but many had maintained up until midday that rates could have gone up by 0.25 per cent.Kevin Hawkins, direct...Read More
Confusion and disagreement on UK bank split
Despite the fact that the UK government and the Bank of England appear in favour of spitting UK banks into smaller more competitive components, Lord Adair Turner, the chairman of the Financial Services Authority (FSA), has today issued his opinion on the subject. He believes that by detaching the more stable elements of the UK banking sector from the "Casino institutions" we could well be injectin...Read More
Food Prices to rise as Weather Worsens
Research from Oxfam has revealed that extreme weather conditions caused by climate change are likely to raise food prices, as crop yields across the world are damaged. It is claimed by the charity that the implications climate change is having on the future of food prices is being widely underestimated, and has warned that worldwide communities are likely to become more vulnerable to events suc...Read More
Surprise, surprise, UK car scrappage scheme extended
As expected Lord Mandelson has today taken the opportunity to announce an extension of the UK government's car scrappage team at the Labour Party conference in Brighton. The scheme is now being extended to cover an additional 100,000 cars and vans which when you consider each and every scrapped vehicle could be in line for a £2000 discount, is a significant amount of money.
UK government pledges help for Corus workers
The UK government has come out in support of the 2,500 Corus employees who lost their jobs earlier this week with a commitment to a support package to try and get as many of them back into work as possible. The government announcement has been backed up by Euro MP Glenys Kinnock who is strongly in favour of a support and benefits scheme designed to offset the obvious serious impact of these job lo...Read More