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.
Is the UK really headed for a double dip recession?
Towards the end of 2009 it seemed as though the UK economy was on the verge of a sustainable recovery which could potentially save the Labour government from defeat at the next election. However, over the last few weeks the situation has deteriorated somewhat and there are grave fears of a double dip recession in the UK which would effectively undo all of the good work done by Gordon Brown over th...Read More
Is this one gamble too many for Alistair Darling?
No matter how you wrap up today's pre-budget speech, a £21 billion gamble on the UK economy has been taken and if this fails we are all in deep deep trouble. A number of tax cuts, tax increases and additional borrowing for the government budget have taken the UK deficit this year to nearly £80 billion. While this figure is bad enough it is set to rise to a record £120 billion next year!
Nights out cut back by crunch-hit homebodies
Many Britons are swapping revels for Revels - passing up a night on the tiles for staying in with snacks and a DVD.According to a new survey from Halifax, 60 per cent are cutting back on expensive socialising due to the economic downturn.More generally, 84 per cent are reducing their general spending, in a bid to cancel out the effects of the credit crunch and food and fuel price rises.Moreover, H...Read More
Why does it take an election to cut public-sector investment?
As we approach the next general election there are all kinds of scare stories and rumour mongering emerging from the main political parties. The Conservative party has for some time been on the offensive and highlighted the amount of money that the Labour Party has wasted on public sector investment at a time when money is tight all around the UK. The Labour Party have since accused the Conservati...Read More
Why is the SFO suddenly in the headlines?
Even though the Serious Fraud Office (SFO) has been a very influential agency in the UK for some time, we have seen more references to the SFO and ongoing cases over the last six months than we have possibly seen over the last six years. Suddenly it seems that the SFO has "got its act together" and is now pursuing a number of industries and individual companies with regards to alleged irregulariti...Read More