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.
S&P downbeat on UK banking system
Standard & Poor's, the credit rating agency, has today issued a downbeat assessment of the UK banking system. The agency has reiterated its belief that the UK banking system is no longer considered to be one of the world's elite and is in fact in the agency's third tier banking industry risk assessment category along with the likes of Portugal, Chile and Austria. While the assessment was flagged s...Read More
The twelve saves of Christmas
08/12/2014 According to a recent article, this year Britons intend to spend on average £868 over the festive period, with spending on food, drink and decorations increasing on previous years. However, at the same time, surprisingly people are planning to spend less on presents. The average spend on gifts is expected to be £345.65, although there are some who according to the article, have a...Read More
Gordon Brown demands wartime spirit from UK consumers
Gordon Brown has today issued a rallying call to the UK population to show some wartime spirit in these very testing times. However, despite a number of public appeals it would appear that the general UK consumer is lacking in both confidence and ready cash to make any significant impact on the economy at this moment in time. This is the latest attempt by Gordon Brown to instil a "must do" attitud...Read More
Mortgages hit by Eurozone crisis
Mortgages and other loans could become more expensive but less available if the Eurozone crisis persists, a lenders' group has said. The Council of Mortgage Lenders (CML) said that ‘short-term prospects for the housing market were linked to the upheaval’; leading to Brokers mentioning that borrowers should remain alert to the potential effect. Mortgage lending fell away in April after a...Read More
Largest climate emission falls in 40 years
While the recession has had an impact on businesses and individuals around the world, a forecast fall of 2.6% in global carbon emissions would appear to be as a direct consequence of the recession. A significant reduction in business levels around the world and less "spending money" for individuals would appear to have led to what many governments were seeking, a marked reduction in damage to the...Read More