Should the regulators have forecast the ongoing recession?
As the FSA releases details of the criteria used in various stress tests amongst UK financial companies, there is a growing debate as to whether the UK regulator should have been able to forecast the current demise of the UK economy as a whole. Even though we are currently in a situation which has never been repeated in the modern era there are various aspects which have appeared in the past, most notably the 1930s depression. So should regulators have been able to forecast the dramatic decline?
Unfortunately for those looking to make the FSA and other regulators a scapegoat for the current situation this argument does not hold true. In basic terms, we are now paying the price for a decade in which financial markets around the world were pushed to unsustainable levels by investors and corporate greed. While the demise of the US property market was the catalyst for a collapse in the worldwide economy there is no doubt that each and every banking operation and corporate business in the world has to take its fair share of responsibility.
Fear and greed are two elements which pushed worldwide stock markets to unsustainable highs and also saw banking operations chasing mortgage income on thinner and thinner profit margins.
Share this..
Related stories
Commodities start to feel the pinch of the worldwide slowdown
News that Europe's second-largest steelmaker Corus is set to extend steel production cuts beyond the original date of December has caused some consternation in the commodities market. The company has confirmed plans to reduce production by around 30% during the next two quarters and then reassess the situation in the early part of 2009.
Companies such as Corus have been hit hard by...
Is it cheaper to buy a home than to rent?
Experts now believe that first-time buyers should be looking towards a property purchase rather than renting their home due to the fact that house prices have fallen so far over the last two years. While there are obvious implications with regards to a purchase and rental of a home these need to be taken into account and balanced against the long-term future and long-term investment potential. Is...
Read MoreHurricane Ike pushes oil price higher
After a period during which many expected the oil price to slip below the vital $100 a barrel level it seems that a raft of hurricanes in the Gulf have ensured this does not happen in the short term. While hurricane Gustav did not cause as much damage as had been feared it did cause a number of offshore rigs to be closed down as a precaution. There are now growing concerns that hurricane Ike wil...
Read More66pc of People looking to buy property in the next 12 Months
Two in three people are looking to buy new property over the course of the next twelve months; of which 25pc are would be first time buyers. This is great news for the UK property market, after years of price and demand decline. There has been no secret about the fact that the economic downturn which started in 2008 has affected almost everything we do. People socialise less often, are saving...
Read MoreWhy has the UK stock market disconnected from the economy?
Despite the fact that UK GDP (Gross Domestic Product) was a disappointing -0.4% during the last quarter, against an expectation of 0.2% growth, the UK stock market ended on a high today adding 60 points to 5268. But why is the UK stock market racing ahead when the UK economy appears to be going into reverse?
As we have mentioned on numerous occasions, the UK stock market tends to lo...