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.
House prices rise again in October
A survey by Hometrack has confirmed that house prices in England and Wales rose by 0.2% in October to an average of £156,400. This is the third such rise in a row and while many people are now starting to call the bottom of the property market it is worth noting that the number of people signing up with estate agents has begun to slow. While this may just be a reflection of the time of the year,...Read More
Alistair Darling turns up the pressure on UK banks
It has been revealed, by "secret sources", that Alistair Darling has this week requested the attendance of the chairman of the remuneration committees of the U.K.'s four largest banks at a meeting. The meeting will be held in number 11 Downing Street sometime this week at which point Alistair Darling, and potentially Gordon Brown, is expected to place more pressure on the UK banking sector and rem...Read More
UK stock market posts worst year on record
The UK stock market has today posted the worst year on record with a fall of just over 30% in UK stocks over 2008. And while there were hopes that 2009 would see a substantial improvement in the UK economy these hopes appear to be fading very fast with the outlook for the UK stock market still very cloudy. While the UK banking sector has grabbed the headlines over much of 2008 it is the housebuild...Read More
UK employment hits record high
The total number of people in full employment in Britain has reached its highest level since records began.Government figures show that in the three months ending May there were 29.1 million people of employable age in work, an increase of 180,000 on the year.According to the Office for National Statistics (ONS) the total jobless in the UK fell 35,000 during the same period to 1.66 million.Peter H...Read More
Begbies Traynor forecast surge in UK business failures
Insolvency experts Begbies Traynor have today issued a statement suggesting that the UK business arena will suffer an enormous number of failures in 2010. The company believes that around 130,000 businesses in the UK are currently showing "material signs of distress" and we will see a surge in business failures even though many people believe the recession is at an end. So what is happening?