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.
Icelandic credit rating under negative review
Stand and Poors, the renowned credit rating agency, has today placed the Icelandic national credit rating on negative alert after the banking collapse compensation bill was blocked by the Icelandic president. This is yet another massive blow to the Icelandic government who are still reeling from the after-effects of the current blocking of compensation payments to the UK government and the Netherl...Read More
How has the UK government lost control of European financial regulation?
As Michael Barnier, the Frenchman installed as the EU finance minister, comes to terms with his very influential position in the European Union, many people are wondering exactly how the UK government appears to have lost control of the City of London. The signs that the EU was looking to reduce the influence of London have been there for some time but for some reason the UK government had decided...Read More
More blood on the high street as UK retailers struggle to survive
There is more doom and gloom for the UK retail market today with news that a number of companies are struggling to survive in the aftermath of a difficult Christmas and a potentially worse 2009. Despite the headlines of consumers coming out en masse during the days prior to Christmas this would appear to have come too late for many who are drowning under a mountain of debt. As the list continues t...Read More
Do hedge funds operators hold the key to Cadbury future?
Richard Lambert, the director-general of the CBI, has today opened a potential "can of worms" with a suggestion that hedge funds operators and other short-term investors should have their voting rights curtailed in relation to the ongoing potential takeover of Cadbury. It would appear that there are things happening behind the scenes with regards to Cadbury as the share price has risen substantial...Read More
Phoenix Four and the UK government witch hunt
The UK government is under attack from the infamous Phoenix Four who have been hung out to dry in the press with regards to the collapse of MG Rover some four years ago. A government report which took four years to produce and £16 million of taxpayer's money would appear to lay the blame fairly and squarely at the door of the Phoenix Four who are accused of unreasonable remuneration packages. How...Read More