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.
George Osborne urges the Bank of England to cut interest rates next week
All political parties, business associations and consumer interest groups have joined in urging the Bank of England to cut UK base rates next week in a move to try and relieve some of the pressure on business and consumers. Some are calling for a half point cut, and more, in order to have any meaningful impact on the UK economy. If the Bank decided to retain rates at current levels we are highly l...Read More
CBI raises doubts about UK economic recovery
The latest quarterly survey from the CBI has highlighted the fact that many UK banks and building societies believe that the recent increase in lending will collapse in the first quarter of 2010. While many people are becoming more and more confident about the UK economy, due to the fact there has been an increase in lending over the last six months, many banks and building societies believe that...Read More
Banks 'will be part-nationalised'
The government is to part-nationalise large UK banks, in a bid to loosen up the money markets and avert a severe economic downturn.Alistair Darling announced the move this morning - saying that preferential stakes would be bought in eight firms.These are Abbey, Barclays, HBOS, HSBC, Lloyds TSB, Nationwide, Royal Bank of Scotland and Standard Chartered.It is hoped that this plan will lead to greate...Read More
Recession Watch : Political Polls
One of the first signs indicating the end of a recession is a return of support for the government of the day, i.e. the Labour Party. However, the situation in the UK is slightly different because of ongoing scandals regarding MPs expenses and the recent e-mail sage emanating from number 10 Downing Street. However, many political analysts believe that as and when the UK recession ends we should se...Read More
High street sales drop 0.4%
Retail sales fell in the UK last month, Office for National Statistics (ONS) data revealed today.The official figures showed a 0.4 per cent decline on the month, better than analysts' predictions of a 0.9-one per cent fall.August's sales total was also revised, to a 1.1 per cent rise.This means that the annual sales growth now stands at 1.8 per cent, down from 3.3 per cent in August.Gavin George a...Read More