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.
One in three worried about Britain's economic situation
More than one in three people say that they are worried about Britain's economic situation and as many as 15.3 million consumers feel financially worse off, according to a poll by uSwitch.With 38 per cent of people who applied for a new credit card being denied in the last three months, consumer confidence is crumbling as the credit crunch starts to take hold.According to the poll, as people worry...Read More
Bond and Da Vinci boost UK economy
British-produced films like Casino Royale and The Da Vinci Code helped to provide a £4.3 billion boost to the country's economy from the UK movie industry last year.New figures show that homegrown films' contribution to Britain's GDP in 2006 was up 39 per cent over the last two years.Casino Royale starring Daniel Craig and Tom Hanks' turn in The Da Vinci Code made almost £90 million at the UK bo...Read More
The UK German feud goes on
The UK ambassador to Germany has this evening submitted a formal complaint regarding the public and damning attack on Gordon Brown regarding his role in the EU economic revival plan. Members of the German Ministry were quoted as ridiculing his VAT reduction plan and the substantial increase in UK debt. Even though the German government openly attacked the plan they have since signed up to a simila...Read More
White collar fraud on the increase
In a sign of the times it has been revealed that a record £1.3 billion of white-collar fraud was the subject to court action in 2009. This is the highest figure for over 20 years and brings the total involved in white-collar fraud over the last decade to over £7 billion. When you consider that "just" £5 billion of similar fraudulent activity reached the courts in the 1990s this is a perfect exa...Read More
European finance minister gunning for London
Michael Barnier, the new European Union finance minister, has set about his new role within the EU with a warning to the city of London that the infamous square mile faces further regulation in the short term. For some reason London appears to be set to bear the brunt of stricter EU regulations regarding the banking sector amid claims that EU member states are looking to grab the power from London...Read More