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Secret bank loans kept RBS and HBOS alive...

Mervy King has revealed, for the first time, that last autumn the Bank of England provided up to £62 billion in short term loans to RBS and HBOS in almost complete secrecy. This just goes to show how dire the situation was, and certainly reinforces the argument for a radical shake-up of banking regulations. If things reach a point where banks require staggeringly huge loans from the taxpayer, but without the taxpayer’s knowledge, no sane person could claim that business should be allowed to continue as usual. As Edmund Conway points out in the Telegraph, it’s also astonishing that these loans managed to go completely unnoticed by the news media, which at the time was scrutinising the financial...

posted on: Nov 24, 2009 | author: Lance

Bailed-out banks to be broken up, retail banking competitors encouraged...

This BBC article does a good job of explaining what the government is planning to do with all the banks that it bought huge shares in with taxpayer money over the past year or so. The long and short of it seems to be that the existing big-name high street banks are to be broken up and a number new players in the retail banking space will be created. This will, hopefully, increase competition in the market for mainstream financial products such as current accounts, mortgages, savings and investments, which can only be good for British consumers. There is some talk of the banks part-owned by taxpayers being made to sell off their investment-banking arms in order to...

posted on: Nov 1, 2009 | author: Lance

FSA threatens to tax the bejeezus out of banks...

The head of the Financial Services Authority, Lord Turner, seems to be taking a harder line with the banking industry, and we’re loving his newfound bad-assery. Turner’s bank-slapping comments were published as part of a rountable discussion on stabilising the global finance industry, which you can read at Prospect Magazine’s website (subscription required). In the article, Turner says that the global financial regulatory system needs a ‘very major reconstruction’ to prevent a reoccurrence of the recent turmoil – to dust off an old chestnut: well duh! But he goes on to say that the banking sector has become too big, describing some parts of the industry as ‘socially useless’. We imagine he’s referring to the parts which manage...

posted on: Aug 27, 2009 | author: Lance

Anger on the streets (and in the annual shareholder’s meeting)...

Things are starting to get pretty ugly in Iceland, protesters have taken to the streets to complain about the government’s handling of the banking crisis which has seen this once prosperous western democracy collapse into the kind of economic disaster you’d expect to see in the third-world. It’s not surprising that they’re angry – just like the rest of us, they were told  that their economic boom was sustainable and based on solid foundations, which as we all know now is complete BS. The tide has gone out, and now it’s clear that the people running Iceland’s economy have been swimming naked. And the Swiss are angry too – thousands of individual UBS shareholders want to know how...

posted on: Nov 23, 2008 | author: Lance

Paulson now more powerful than the President...

Henry Paulson is now arguably the most powerful man in the world – or will be if Congress passes his and Federal Reserve Chairman Ben Bernanke’s new bill. If you read through the text of the planned $700bn bailout of the US financial system (which will take all the banks’ bad debts off their hands in exchange for nice, clean, taxpayers’ money), one item stands out: “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency” Since it also states earlier in the bill that “The Secretary is authorized to take such actions as the Secretary deems necessary to...

posted on: Sep 21, 2008 | author: Alex