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.
UK set to leave recession in the third quarter of 2009
Today's revision of the GDP figures between April and June were well received, even though the adjustment was minimal, and many analysts now believe the UK will move out of recession in the third quarter of 2009. HSBC is forecasting a 0.5% rise in the UK economy in the third quarter and a 0.7% rise in the fourth quarter. So will 2009 be the end of the UK recession?
While there are h...
MG Rover report shrouded in controversy
The £16 million report into the collapse of car firm MG Rover is littered with controversial and potentially damaging statements for both the Phoenix Four and the UK government. The report seems to suggest that pay structures were "unreasonable" and even alleges that UK government ministers may have given misleading information at various press conferences.
Despite the fact that th...
How Did It Go So Wrong For The UK Economy?
The Alistair Darling interview with the Guardian newspaper has 'let the cat out of the bag' in the words of Shadow Chancellor George Osborne. After months of refuting suggestions that the economy was on its knees and sinking it seems that the government - or at least Alistair Darling - has come around to this way of thinking. The signs are there, the pressure is building and this sheds a whole n...Read More
Why are the banks still in control of the UK economy?
Over the last few days a number of financial experts have been asking the question as to why the banks are still holding the UK economy to ransom. While a controversial argument, a look back over the last few months will see that the situation we are in at the moment was predominantly down to greed in the financial system. However, despite the banking sector around the world falling to its knees a...Read More
New wave of job cuts on the way
It has been revealed that advertising giant WPP and software company Sage are set to announce thousands of additional job cuts over the next few days. Many experts now fear that the employment market is entering the next phase of the economic downturn which could see hundreds of thousands of job losses announced over the coming days and weeks.
After the initial reaction to the econo...