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.
More strike action in Scotland
As we approach the next general election, it would appear that UK unions are looking to turn the screw on the Labour Party and squeeze every last drop of investment from the government before the next election. Today we saw a number of wildcat strikes in Scotland which has affected the postal system in an ongoing dispute about drivers who cross pick lines.
While the postal strike wi...
Peter Mandelson joins the argument regarding City bonuses
The UK government has again stepped in to attack the Financial Services Authority (FSA) and the ongoing attempt to curb bonuses and remuneration packages in the City. While Lord Mandelson himself, and his fellow MPs, are no strangers to the more lucrative end of the bonus and remuneration package market they have threatened legal action against the banking industry as a means of curbing future pay...Read More
ECB cuts European base rates to 1.5%
As the European Central Bank (ECB) announced a reduction in European base rates from 2% to 1.5% it appears as though the ECB is also contemplating a policy of quantitative easing such as that ongoing in the US, UK and Japan.
This is a drastic measure for the EU authorities as just a few weeks ago there had apparently been hopes that the fall in European economies would not be as ba...
UK government discussing spending cuts
Despite only last week come out into the open and admitting that investment cuts would be required in the short to medium term, Gordon Brown and Alistair Darling have spent most of the last few days around the table with a number of UK ministers. It seems as though the government is deep in discussion with regards to future spending cuts which may be more than many people are expecting.
Marks & Spencer Christmas sales disappoint
In this new period of renewed hope for the UK retail sector a major setback occurred today with news that Marks & Spencer festive sales were up by just 0.8% in the three months to Boxing Day. This is a far less impressive performance compared to the likes of John Lewis and Next and today we saw the share price of Marks & Spencer fall on investors disappointment. So what does this mean for the UK r...Read More