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While today’s decision by the Bank of England MPC was literally a no brainer it does not help the thousands of home owners who are struggling to make ends meet. As we read another report from the...
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Tuesday 22nd July 2008
As news that the Financial Services Authority (FSA) is set to agree to allow banks to tap the Bank of England for secret funding in times of trouble hits the market, the FSA now stands accused of hypocrisy of the highest order. The FSA was very quick to introduce the short selling plans into the market to try and protect the larger banks and flush out the short sellers, all in the name of transparency. However, this new move seems to go against that new found sense of duty to shareholders....
While the FSA and the government will argue that offering covert access to the Bank of England in times of trouble is their public duty, what about the poor shareholders who would be kept in the dark if ever another potential Northern Rock situation arose?
The banking sector as a whole may well survive in the face of additional funding or even an arranged takeover, but what about the shareholders, these people who actually own the public banks which would be allowed to use this funding procedure?
The bottom line is that the FSA has both a duty to the business sector but it also has a duty of protection to shareholders and customers alike. If a bank is in trouble this fact cannot be hidden forever! |
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