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.
Sterling falls to new lows as recession is confirmed
The UK currency has fallen to its lowest level since 1985 after the confirmation that the UK is technically in recession. It seems as though investors in the currency markets and investors in the stock market are running scared with nobody quite certain how low the economy can go and how quickly it can bounce back. The situation has been exacerbated by the Treasury's refusal to clarify the exact m...Read More
Bank lending rates continue to fall but investors are nervous
The rate at which UK banks will lend to each other has fallen for fourth day in a row and now stands at 2.19% on a three-month basis. This rate very much suggests that UK base rates will fall further in the short term and the indication from the Bank of England seems to confirm that situation. The concern is that even though finance costs have fallen sharply since the highs just a few months ago t...Read More
Barratt Developments concerned about rights issue take-up
Barratt Developments, the UK property company in the throes of a £720 million rights issue, has today expressed concern that the ongoing postal strike could impact upon the "success" of the fundraising. The final day for acceptance is 3 November and the company has issued an urgent statement suggesting that shareholders make alternative arrangements to return their documentation or post it as soo...Read More
Is the FSA giving in to the banks?
The Financial Services Authority (FSA) has today confirmed that the supposedly regulations to control banking bonuses and banking remuneration packages in the UK will be delayed for a further two months. The new rules have been expected to come in on 6 November 2009 but now they will come in on 1 January 2010. While the two-month delay may look pretty innocent on the surface, what really is going...Read More
Financialadvice.co.uk New Years Summary- What happened?
29/12/2014 So it’s finally arrived, the end of 2014. Again, it seems to have absolutely flown by! It feels like only yesterday we were saying goodbye to 2013, and now, in only a short time, we will be welcoming in 2015. We’ve decided to have a look back at some of the biggest financial events this year, and how they have had an effect on us all, and how they may impact on the future....Read More