The banking pendulum swings back to positive
After revelations that US banks may not require additional funding from the US authorities, today saw a significant rise in the share price of many UK banks. This is the latest movement in the banking pendulum which appears to swing between negative news and positive news on a regular basis. While the growing opinion that US banks are fully funded for the future is most definitely a positive sign, is it really right to translate this euphoria to the UK banking sector?
While there was no doubt that the UK recession and the US recession have run along similar lines, a number of UK banking operations also have exposure to the US. A general pickup in the US banking sector will therefore influence a number of UK banks directly and indirectly, increasing liquidity in worldwide money markets. It is hoped that this renewed confidence will then allow those weaker banks to raise significant funding at a more affordable price in the future.
Stress testing of banks is being carried out all over the world and while the news from the US is good today this does not mean the news from other parts of the world will also be positive in the short to medium term.
Share this..
Related stories
Lloyds TSB Move For Dresdner Bank
In a move which has surprised many in the market it seems as though Lloyds TSB is in talks with Dresdner about acquiring the company’s retail banking unit. While there is little detail about the deal, or even the talks, a number of UK newspapers have picked up on the potential for a £6 billion bid. However, there is also talk that the company may look to swap its Scottish Widows division...
Read MoreFemales failed by UK banks
Women are not being targeted effectually by the banking sector, according to a study by Accenture, which believes that females could be the most profitable market for retail banks.According to the research, 55 per cent of women have financial products with at least two banking institutions. Moreover, 52 per cent revealed that they would probably switch providers if a bank was offering tailored pro...
Read MoreWest Bromwich building society back in action
Despite nearly failing earlier this year the West Bromwich building society is back in action and competing in the bond market. The Society has issued a number of fixed rate savings bonds and is top of the tables for one, two and five-year bonds with rates of 3.9%, 4.45% and 5.45% respectively. After a very difficult few months which saw the society convert just under £200 million of debt into ca...
Read MoreBitter Hips row goes to parliament
The government's controversial home improvement packs (Hips) are to be voted on in the House of Commons today, a day after legal action was launched against their introduction.Conservative party leader David Cameron has tabled a motion for Hips to be discussed by MPs, with the debate set to take place after prime minister question's.Yesterday the Royal Institute of Chartered Surveyors (Rics) took...
Read MoreEquitable Life sufferers receive backing from MPs
The demise of the Equitable Life business is something of a slow and painful death for many customers who are waiting for compensation relating to their mortgage guarantee claims. The Equitable Life group collapsed in 2000 when a House of Lords ruling forced the company to honour mortgage guarantee policies which would cost the business in the region of £4 billion. However, before any policyholde...
Read More