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.
David Blanchflower attacks Mervyn King
David Blanchflower, the former Bank of England policy maker, has today launched a stinging attack on Mervyn King suggesting that vital information was withheld from other MPC members at the height of the financial crisis. This is by far and away the most damning accusation aimed at Mervyn King and while unsubstantiated at the moment there have been rumours of an overbearing and over controlling cu...Read More
Fraudulent activity rises threefold in the UK
A KPMG survey has revealed that fraudulent activity in UK has risen threefold over the last 12 months. The number of court cases involving fraud increased dramatically in 2008 with more than £1.1 billion worth of fraudulent activity the result of criminal charges. This is the second highest level of fraudulent activity since the survey was introduced over 20 years ago.
While you fr...
HSBC looking to help first-time buyers
HSBC has today announced additional funding of £500 million which will be targeted at the first-time buyer market, an area of the UK mortgage market which has remained an outcast for some time. This follows an earlier move by the bank to inject a further £1 billion in loans to customers who were unable to raise deposits of more than 10%.
While the move has been well received by po...
Royal Bank of Scotland confirms no funding issues
At the open of the markets today it was Royal Bank of Scotland which seemed to be the centre of attention with the shares falling by nearly 30% in early trade. This was despite the fact the group had already confirmed a meeting with the Treasury last night, which was also attended by Barclays and Lloyds, to discuss a possible bailout for the sector. However, wires seem to have got crossed and ru...Read More
The IMF warns the UK to pay down debt
Over the last few months we have seen a significant parting of the ways between the International Monetary Fund (IMF) and the UK government. Even though an IMF statement just a few days ago suggested that the UK government was getting to grips with the economy and the UK was better placed than many to recover, a report produced after a staff mission to Britain in May has cast further doubt on the...Read More