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.
The British Bankers Association warns FSA
The British Bankers Association (BBA) has this evening delivered a warning to the Financial Services Authority (FSA) that proposed regulation changes for the future could well stifle competition and liquidity in the UK banking sector. While there is no doubt that the regulators and the UK government are looking to take more of a hands-on role with regards to the UK banking sector there are concern...Read More
Will Northern Rock be given away?
As it becomes more and more apparent that the UK government would like to dispose of Northern Rock before the general election there are serious concerns that the company will be "given away". Despite an attempt by a number of MPs to persuade the government to convert Northern Rock back into a mutual society, this particular avenue looks to be a non-starter. In all honesty the Northern Rock has be...Read More
Lloyds bank in talks to sell Scottish private client broker
Lloyds bank is rumoured to be in talks with Rathbone Brothers regarding a disposal of the company's Scottish private client fund management division. Originally the Bank of Scotland portfolio management service, this division is now a non-core asset of the business and with cash now king for Lloyds bank it seems that now is the time to dispose of the operation.
Those close to the ta...
Business leaders question UK government's broadband tax
UK business leaders have today questioned the UK government's suggestion that a six pound telephone line tax should be brought in by the end of 2010, with the aim of party funding the investment required for a new UK national broadband network. However, in a move which will surprise many people, business leaders do not believe six pound per telephone line would be enough to raise the funds require...Read More
UK authorities look to shore up banking system
On a day which was probably lost in the headlines of the US debate about the $700 billion bailout it has been confirmed that the UK authorities have introduced three new elements to the financial markets in an effort to steady the ship. The new elements include :-
Increase of savings protection - as was widely flagged over the last few days it has been confirmed that savers will se...