ΒιΆΉΤΌΕΔ

The head-along rush to profit from the sub-prime mortgages have mesmerised the whole financial industry for about three years. In the process wiser and saner voices were cast out to cry in the wilderness.

Perhaps John Varley is one of the few wiser ones not cast out and will now enjoy the glow of vindication !!

I believe the Singaporeans have also avoided diving, head first, into the cesspit like all the other lemmings and are now sitting of mountains of gold (sovereign wealth, at least) !!

There is a biblical parable of the virgins and the conservation of resources and the US has proved themselves to be very foolish virgins indeed !!

If he gets it right he'll get a huge bonus and if he gets it wrong he'll get a huge payoff.
I wish I could take a risk like that

I wonder how much extra Barclays and the other banks may have to put aside having lost the charges court case this AM?

Couldn't happen to a nicer bunch of people.

We are only at the half way stage in the sub prime fiasco. The next mess to come are the law suits filed by very disgruntled investors.
Given the deemed damage is so great we ned regulators to insist all banks, insurance companioes and pension funds volunteer their off balance sheet liabilities.
It doesn't appear Mr Varley is prepared to do this which begs the question who is he kidding?

The issue of losing the first round in the overdraft case is a good starter for ten.
But the notion that banks wil look to make up their losses is an outrage.
The facts appear to be they have taken in way over what they should. That equates to greed, nothing more nothing less.
To then say their greed should be compensated for has totally lost the plot!
The banks have raked in billions through excessive charging and teh party is now over, they will have to get to grips with less income.
If the cutomer base were to take the internet route en masse then it would be down to who is the most efficient supplier. The main clearing banks would lose even more cutomers.
Just as with this government the notion of squeezing the taxpayer has reached its peak, so now with the greedy banks who feel they can charge with impunity.
We are at a watershed where the British population and British business will now be able to fight back and keep their hard earned money and stop it being abused by the banks.
The days of big unwarranted salaries and fat bonuses are over,
Banks from today can eat humble pie like their customers have been forced to through their banks actions.

My question is this: Where were the regulators and what were they doing while this fiasco was building momentum?

Do not the banks report their risk position on a regular basis? Where was the SEC, BoE or SFBC as the exposure to these positions became obvious in the months leading up to the collapse?

What of those who collected large bonuses based on paper profits in mortgage backed securities, or who lent private equity at multiples of the underlying asset cashflows? Will they pay them back, or will the tax payer pick up the bill?

Our society has lost all sense of responsibility or accountability, and this crisis is merely a reflection of our hubris and carelessness.

If you are concerned about your economic future, my suggestion is this: learn Chinese.

Unlike in the days of the book Liars Poker, the masters of the universe today can be found across the top ranks of all types of banking financial service institutions. In the process of deleveraging through which we are now going, the emperors will gradually reveal all, and we will see how many truly deserve the title of big swinging dick by the end of it.

It seems as if hubris plays itself out in such a consistent way in many different fields where power and money hold sway, that it has all the characteristics of a virus. This means that if we cannot predict its course precisely we can recognise some of its milestones when they happen.

One such milestone is that moment when the main protagonist takes a specific silly decision, after which their professional demise is certain. It triggers consequences which only superficially disguise this underlying certainty. It is as if the decision is the last one in which the main protagonist may exercise free will in their professional life.

For example, a Labour minister has referred to the 10p issue as Gordon Brown’s poll tax moment. Why did Mrs Thatcher let it happen? Were the sycophants too slow in coming forward, or holding back because this was their chance to observe her come-uppance in close-up? Or was it that her judgement was impaired because she knew herself to be already half-down the slippery slope? Or is it simply the tide of history, where the apparently defining decision is incidental to the broader storyline?

One such moment was undoubtedly when Sir Shred Goodwin made that final decision to buy ABN. It was as patently silly at the time to anyone with the slightest knowledge of finance, as the poll tax and 10p decisions have been to the populace at large.

His enemies must have guffawed. One wonders who may have been the role model of the manager in those hilarious NatWest TV ads. But yet, perhaps it was simply par for the course. Perhaps that decision was typical in RBS, and not momentous in itself.

In fact we know the broader storyline that is the driving force here. Ben Bernanke and Mervyn King are trying to prevent the inevitable deflation from unwinding into a depression perhaps as deep as 1929. From within this context, we should hope that Sir Fred stays brash long enough for the institutional investors to meekly take up their rights issue.

It was reported that the voice of the chairman quavered slightly when making the announcement, but that Sir Fred held firm. Sir Fred must continue to show a relaxed and confident exterior. He must play the role of a lifetime, and his chairman must be more empathetic.

So it would be premature for Mr Varley to start talking rights issue this soon, and he obviously realises it. It is too easy to startle the deer who, if they run away from the RBS rights issue, will cause us all to be in a lot of trouble.

In due course, when the RBS rights issue is in the bag, Mr Varley can announce one for Barclays. He will obviously say that it is necessary to increase the capital ratio because these are difficult times. If he is recalcitrant at that time, Mr King could just crack the whip.

Barclays without ABN Amro is well off than rival RBS

I wonder how much extra Barclays and the other banks may have to put aside having lost the charges court case this AM?
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The banks won't have to put anything aside, everyone will eventually loose the luxury of free current account banking, all of us will foot the bill for the inability of a few to manage their money.

What do the auditors say about all of this? Surely they signed-off accounts which would have included notes about contingent liabilities, going concern, true and fair view, etc. What value can one place on accounts which declare huge profits one year, and massive losses the next? Were the most recent dividends, paid out of profits, or out of capital? Does one assume the most recent performance bonuses were paid erroneously? Will they be repaid? What do the enormous losses [and they appear to be endemic throughout the banking universe] suggest regarding the real rate of inflation and government fiscal policy? If for instance, just the UK banks alone have lost something in the region of what..Β£100b so far(?) and it was 'unknown' to the profession or the regulatory authorities, then what does this imply about the present conceptual framework for measuring corporate solvency and shareholder wealth? I think there's potential for a good PhD paper here. Certainly the IASC ought to be scrambling resources at this point.

As above noted by iwanttoscream, Barclay's CEO is obscenely rich anyway and will get a gigantic bonus win or lose his socalled 'bet'. What exactly is the risk he takes?
Bankers performed the heist of the millenium and should be locked in a cell for the next 1000 years. An entire generation is about to suffer, they should not get away with it.
Seriously, they should be hunted down like dogs and go to jail for this.
Oh, and dont expect our corrupt political class to deliver justice or even just avoid moral hazard. They are too busy spinning themselves out of economic armagedon...

Gods bodkin I agree the banks will try to reclaim the money back from the average UK mug punter (sorry valued customer) in the long run.

However the point I was trying to make is that we are looking at billions of pounds a year in lost income, if some of the reports are to be believed, and also it will be an administrative nightmare for the banks for years to come.

If free banking does go at the High Street bank expect more people to go online to bank and to use other means of banking. A traditional bank account with a branch and a cheque book is becoming increasingly irrelevant in todays world or at least it is for many people.

With many shops stopping taking cheques and pretty much everything being paid by credit cards, direct debits or debit card why do I or many millions of others need Barclays; RBS or HSBC.

I expect that some high street banks will seek to bring in charges for operating a current account. I equally expect millions of people to move to accounts that don't charge.

Some people will be left at the lower ends of the income and earnings spectrum and they will be forced to pay charges. The rest of us will simply move elsewhere.

I guess, without any information, that Barclay's figures it can touch its Chinese contacts for a few bob and so not rights issue is needed (today). Anyway the best thing it did last year was to let RBS get ABN Amro. I also see that Barclay's former FD (not an accountant I' understand, but a trader - in synthetic financial instruments(perhaps?)) is now working for the FSA so I guess Barclay's will benefit from 'light-touch' regulation now, or perhaps he will know where the skeletons are buried! I wonder if they will be bothering "the demon barber of Threadneedle Street" (not to be too obscure - in [Unsuitable/Broken URL removed by Moderator] there is a reference to haircuts!)

Its worth remembering that if you had invested a pound at 2% interest around 0 BC it would be worth now far more than the total amount of money in circulation in the world.

In other words no economy can ever continue growing indefintiely. Every so often you have to have an event that wipes the nominal value off everything again.

Money originated because people could not be bothered to carry about their tangible assets with them. Very quickly this allowed banks to conjure up money out of thin air. Now there is probably 1000 times more money just existing as digital numbers than even exists as paper currency.

In the past 'Usury' (the charging of interest)was very much frowned upon and was even made illegal by Edward I.

The value of money only exists because people believe it has value. Without that belief no bank could ever function.

The point I am making is that just maybe we are reaching a threshold where that belief might be lost.

So the bankers may be worth millions after all their bonuses and share options. But if they bring the whole system down the only thing that matters is how much real stuff you own, and how well you can defend it.

I suspect that Messr's Varley and Goodwin might not fare too well when people come knocking at their mansions asking for some of their stuff back.

The points made by No 14, wykhamist, seem to be on the button. I just hope that we do not throw out the baby in the process.

I think the following is more or less how the cycle comes about.

The politicians want an economy to boom on their watch. Once they have sold the family silver, they try to create a consumer-led spending boom. Because of the multiplier effect, every pound spent adds many more to the economy.

So they speak to the bankers. Remember, if Robert Peston lends you a quid he has to have it on his person in the first place. But if the bank lends you a quid they only need about sixpence in their vaults. The rest is like a book entry. So the banks have a licence to create money.

Banks will lend the consumer as much as possible. A couple of things happened a few years ago. First, very low interest rates meant banks could lend huge sums to the consumer without an increase in the monthly repayment. Second, by securitising mortgages, they could pass them out of their own balance sheets and down the line as quickly as Jonny on a good day. This effectively removed the ceiling on how much they could lend and it created an essential disconnect between the originator of a loan and accountability for its repayment.

Banks pay the rating agencies, so the bonds get an AAA rating irrespective.

The ultimate sting was how to convince the consumer that they could afford to take out massive loans even though they could not afford to pay them back out of their income. The consumer may be ignorant but they are definitely rational. You cannot fool them once they know the score.

The only way, of course, to convince the consumer was to persuade them that some asset that they owned could, for some magical reason, result in a windfall gain. Money for nothing, in other words.

This asset was their home. The banks had to con the gullible into believing that somehow, some way, property could appreciate in the longer term at a much faster rate than GDP. Now how to convince them of something so patently ludicrous?

Well, there are armies out there of estate agents and financial advisors willing and able to say and do anything to earn commission. Respected academics willing to believe that things are suddenly different.

And the politicians themselves will do their bidding and spin whatever story is necessary. Remember, they just want the consumer boom. Being unscrupulous and ignorant, even if they knew that there is actually a real financial crisis, the most they would go out of their way to avoid it would be to kick for touch so that it would not happen in their watch.

But, most important, people wanted to believe. Who would not want to believe in the legitimacy of unearned income? Many used the proceeds to go shopping. Everyone was happy for a while.

I would not be too hard on the snake-oil salesmen. They never pretend to be otherwise. What is the difference between a true snake-oil salesman and a speaker on Hyde Park corner? No-one pays good money to the speaker on Hyde Park corner. I am sorry to say it, but most of the rogues deserve their hundreds of millions.

The success of a snake-oil salesman depends entirely on the gullibility of their audience. Remove that gullibility and their platform becomes another harmless soap-box. You cannot get rid of the financial shaman by removing them. Another will pop up in their place. You must eliminate the superstitious belief of the shaman worshippers.

Once everyone realises that property is merely a roof over their heads and the share market is a casino, they may redirect their efforts into creating real wealth through productive activities.

Then the banking and financial services sectors will shrink to appropriately small serving hatches and a few million people will be able to retrain themselves to do some useful work for a change.

I am confident that Mr King, now that he is working with his American counterpart, is working pragmatically in dealing with the real issues. Yes it is still true that while they try and manage the consequences we have to live with them.

In the meantime, banks are on the run, make no mistake. There hegemony is over for a generation or two if we only learn two things. Firstly, the greedy depend for their existence on the gullible but, because the greedy will always be with us, we must educate ourselves and others not to be gullible. Secondly, financial shamanism relies on the erroneous belief that some people or group of people are capable of foretelling the future.

Re post 14. This may seen pedantic but did we ever have a year 0 BC?

Surely it goes from 1BC to 1AD? Unless of course you happened to invest on the date of the birth of Christ otherwise either it is before the birth of Christ of after it?

However the Gospel according to St Matthew makes reference to Jesus being born at the time of the Roman census, this being why Joseph was going to Bethlehem in the first place.

As such it was most likely to be a bank holiday and no banks would be open to take the money.

I really should get out more!

There needs to be alot of clarification on what the government/regulators want from the banks. There have been these suggestions that they want the banks to own up to the loses they are incurring, however accounting standards mean the banks cannot just write off a load of investments just like that. These investments are marked to market. While for loans to customers won't get impaired if there are low arrears. If the market says that a particular MBS has a market price of Β£90, the bank can't just write it down to a value of Β£80 just because the government say so, unless there is a clear indication that the loans encased in the MBS are going bad. And if this is the case then generally these loans are either replaced or the is an immediate writedown in the relevant accounts. The only way to do an impairment test on these MBSs is to do a full housing valuation survey to determine which loans are in negative equity. Then they can do a general provision for any potential losses.

There are also tax implications. If the government are successful in forcing these writedowns then the tax payer is in effect financing 28% of these writedowns.

Next is this government bond idea. It will not work due to one very simple fact. The government are not (and quite rightly) going to take the risk for these bonds that are being given in exchange for T-Bills. This means that the market value risk stays with the bank, and as a result any fall in value of those investments means an impairment charge for the bank, which means the security of the value of the T-Bill drops. It is a never ending vicious circle. The only way this plan would work is if the government took on the risks and benefits associated with the securities, thus leaving the banks free of market value risk. If this were the case then the banks would be confident of getting their money back.

One aspect of the Credit Suisse write-downs mentioned by Robert Peston but not really touched in the subsequent comments has been the damage wrought by their exposure to leveraged private equity deals and commercial mortgages. It seems to me that the lending frenzy that led to the sub-prime crisis was at least matched by a similar, ahem, β€˜enthusiasm’ to lend to any and all buy-outs.

The serviceability of many of these huge debts depends on phenomenally low interest rates, preferential loan conditions from the lender and very healthy, if not maniacally exuberant, consumer confidence. All of which seem currently lacking.

Commercial property speculation took leave of all rational perspective. It’s so reminiscent of the internet bubble of just a few years ago that that I can only assume it’s the same bunch of lunatics who, for example, valued the worth of a US online airline ticket agency as greater than the value of all the US airlines put together. When both HSBC and Citigroup sold their Canary Wharf buildings for truly eye-popping sums of money – and for a rate of annual return that my Building Society could better – it signalled the end of that party.

Clearly a good number of individuals within the private equity industry knew the game was up: (perspicacity – it’s exactly why they argue they’re worth so much.) When Blackstone went for a public floatation it was like some ghastly episode of β€œScooby Doo Where Are You?” As the gang prepare to tackle the gigantic Debt Monster emerging from the corporate mire, Fred turns to Daphne and asks: β€œSay, where are Shaggy and Schwarzman?” It will be interesting to see how it plays out for those private equity owned companies who, given the current economic climate, cannot unload their asset-lite, debt-heavy companies, as Debenhams was. How many household names will go belly-up?

There are, it seems, two ways to avoid a hangover. One: don’t get drunk. Or two: just keep drinking – though I’m not sure how much of a runner that is in the long-term.

Gods_Bodkin (9) - I'm 100% with you on that.

If you can't keep your spending under control, and work within the agreed limits between you (the account holder) and your bank, then they should have every right to penalise you.

Why should we, the ones who can manage money, py for those who don't have the self discipline to do so?

Our banks seem to most people to have a "Del Boy" reputation now, rather than a "Captain Mainwaring" one.
There is a huge amount of public anger about the behaviour of banks in the last 5 years.
Although we must bail out our major banks, we dont have to bail out the bankers.
We are now seeing the fruits of the banks reckless and greedy behaviour, and now perhaps it is time to turn our thoughts as to how it can stopped from happening again.
Can we do anything to stop our bank directors from buying huge bundles of dodgy American mortgages...yes, perhaps a condition in their contracts to give them a financial penalty for large losses.
And dangerous property and debt bubbles in the UK...same answer, a financial penalty.
Barclays directors, like all the others, would then become Captain Mainwarings, rather than Del Boys.

People seem to miss the point a bit.

Yes, Bankers have been careless.

Yes, they have overcharged.

However,

75% of Bank Shares are owned by Pension Funds, that provide pensions to ordinary folks.

A good proportion of the rest is owned by investment trusts and insurance companies, providing services to, guess who ? Ordinary folks.

So damage to Bank Shares will actually hurt far more Ordinary people than Millionaires who are more likely to have most of their money safely away, in for example Farms, Vineyards, Buy to let properties, Gold, Gitl edged securities, Private businesses etc.

So the damage to the Banks, is going to be damage to us ordinary people.

The Fat Cats, will sit back and smoke their Cigars drink their Champagne and chuckle at the fickleness of life.

And just possibly to a Private Equity deal to buy a cheap Bank, further robbing Pension Funds etc etc.

Enjoy !

No 17, Tim MooreUK. I would not take too seriously the suggestion by Mr Darling that banks should own up to their losses.

It may be that he wanted to do some grandstanding to show he is in control, of himself, even if not of the situation. If so, he was being ingenuous. The problem with being ingenuous is it does not engender trust, and that is the only currency people are interested in at the moment.

The other alternative is that he is ignorant of the situation. This is quite possible, chilling as it may be given his job title.

No-one knows the value of a securitised bond.

Last week in Fortune magazine Mr Warren Buffet, speaking about residential-mortgage backed securities, said quote if you take one of the lower tranches of the CDO and take 50 of these and create a CDO squared, you are now up to 750000 pages to read to understand one security. I mean it cannot be done unquote.

Now Mr Buffet does not fool around betting on different counters with money belonging to other people like most of the 10000 hedge fund managers you read about. He is a real live active investor, one of the very few, and I tend to believe what he says.

That is, you cannot value a residential-mortgage backed security based on its individual mortgages.

Take an example of one described by NYT, yesterday I think, where the rating agency was Moody. It comprises a few thousand individual mortgages, with a face value of about 430 million dollars. After three months x percent of the mortgages have defaulted, after six months y percent.

Now how do they predict how many will have defaulted in two years? They do some analysis, comparisons, and extrapolations.

These guys are crawling with statisticians but, remember, they are all in unknown territory here. Moody says that they do not actually investigate individual mortgages, that that is not their job. (But it seems like some of the houses concerned were never even occupied. That is jingle mail for you).

I would suspect that they develop histories of these securities, obtaining a range of default patterns over time, and then match a given security against those with a similar pattern to extrapolate the default rate of their given security further down the track.

So what are the banks to do? In arriving at their recent 5.9 billion write-down RBS wrote down their sub-primes to about 38 percent and their Alt-A bonds to about 50 percent but these may not be exact so do not quote me. (I only have public information to go on, and I am a mere layperson).

Certainly this is apparently a more conservative (lower) valuation than many of the American write-downs, so good on RBS. They have to be convincing to encourage their shareholders into the rights issue!

In a few months there will be some more numbers. There may be more write downs. Maybe not. Maybe RBS has been too conservative, and they can increase these valuations.

Most of these situations will unwind or, as they say, proceed down the revelation path, in the next few years, so that must be one reason Mr King built in the three-year guarantee. It means the shareholders can support the banks and take up the rights issues, while the banks have three years to gradually cope with all these issues as they bubble to the surface.

Mr King has one very strong weapon which it appears he is beginning to use. (Or instruct the Treasury or FSA or the politicians what they must do). Capital ratios. The number of pennies in equity a bank must hold for each pound it lends.

RBS suddenly said in announcing its proposed rights issue it must go up to sixpence from somewhere above four-pence with its first tier capital ratio. Barclays is next in line being somewhere above five-pence at present. One of these days Mr Varley may suddenly believe Barclays must also go up to sixpence.

Between you and I it is quite possible that Mr Darling may have believed in agreeing that the Bank of England issue these bonds (guarantees) that the quid pro quo was for the banks to be more accommodating in their residential mortgage rates.

It may be that actually Mr King decided to give greater priority to saving the financial system, that is, creating an environment in which all the banks can recapitalise through rights issues and other equity sales, but felt that there was no harm in letting Mr Darling believe what he believes.

Who knows?

Bye the way.

The people who will Buy most of the Shares issued by the Banks in a Rights issue, will be, guess who ?


Our Pension Funds !

It would be interesting to know how much Subprime debt has been sold to Pension Funds in the UK.

They constantly remark on people buying these apparently dodgy Bonds.

But who are these Buyers ?

Mr Peston might like to look into the exposure of Pension Funds and Insurance Companies to this problem.

Or is he only prepared to look at one part of the CDO market ?

Where there are Sellers there are always Buyers....presumably they have losses too.

One more thing are the Banks going to take Legal action against the originators of the sub prime CDO's ?

And will they take legal action against the Ratings agencies who gave the subprime packages the all clear ?

So many questions.

Not strictly connected with this blog I know. But can anyone explain why if the financial sky is about to fall in, both the US and UK stock markets are hovering close to their record highs. The Dow is up 130 odd points today pushing the 13000 mark whilst the FTSE is still hovering around 6000. Mr Peston and his fellow horsemen of apocolypse never comment on this. Usually of course its all the financial commentators want to talk about. Probably doesnt fit the ΒιΆΉΤΌΕΔ's negative spin agenda to discuss anything remotely positive.

No 21 23 24 supercalmdown. Trust you with a name like that to single out without warning one of the large elephants from amongst the herd in the room.

Many shareholders in RBS are also shareholders in other banks and, as you rightly say, the majority are institutions including pension funds. So it is like a big happy family of bank shareholders.

But shareholders who do not take up a rights issue will find the value of their existing shareholding falls considerably, immediately, because of the low price at which the rights issue will be pitched. Will that not perhaps put the job of that money manager at risk?

So most would exercise their rights, I guess.

No matter how the share market performs it will probably perform better if the banking sector is stable. These BoE guarantees are real.

So the least risky option is to stay with the pack.

Not the best of all possible worlds, I agree. But the cards have basically all been dealt already. Now it is just a case of playing the hand they have got.

You say these millionaire fat cats are invested in farms, vineyards, BTL, and gold? You think those are safe? Hmm.

And private businesses? Bankers hardly know how to spell the words. They have no training in running private businesses. In practice, I would think a teacher or social worker would have the edge in actually running one.

Legal action? I am sure solicitor firms are shuffling through the most likely marks.

Are the ΒιΆΉΤΌΕΔ staff thinking of going on Strike?
Or are they happy with their Pay rise ?

Of course they can campaign for more money in other ways !!!!

I agree with post 15 almost entirely except for the last paragraph.
I think that there are a vast number of people out there who are that gullible or desperate that they will fall for the next scam.
You only have to look at the posts over the last week or so to see that there are many people who believe that they can see the future.
I haven't really got a clue about the future, I just feel that the vast majority of us are not going to enjoy it.

What we have to bear in mind is that going overdrawn beyond an authorised overdraft limit is basically theft.

If anyone was Β£100 short one month and took the money out of someone elses wallet to compensate then they would be criminally charged with theft. Why should taking it out of the bank's pocket be any different? The banks should have the right to charge for such bad management and decision making.

I agree the charges are too high and something similar to the credit card changes would suit whereby the charges come down to say Β£12 rather than Β£30 but there should be a charge.

If a current account stayed in credit there would not be a charge and people forget that an overdraft works the same as a credit card and accounts should fluctuate monthly between a debit and credit position.

I like charges on the credit cars as banks do not charge me for my account. You take out a card you agree a limit and then break the agreement. Any charge seems fair to me.

#25, the stock market has rebounded to reflect the short term fact that businesses are making healthy profits, but if the city sees job losses that go on to cause futher job losses in the wider economy then profit projections will be cut by businesses that will affect the stock market.
As for Barclays it is interesting to know the true position of its 'risky' investments, only if banks fully accept what losses they can expect now and disclose them in full can the banking system return to normaility.

Perhaps shareholders should link bonuses and salaries of those at the top to a banks long term performance immediately so they can't hold off losses banks are holding while continuing to pick up large financial bonus packages.

Please remember:

Pension Funds own the Majority of UK Bank Shares:

Your company pension is invested in these Banks.

Any Rights issue will probably be paid for by your Pension contributions.

Something to think about.

To #32, #27 etc. and others.

True, pension funds are invested in everything.

This means that we all hurt when anyone of us is ( financially ) injured.

Prepare for a massive reassessment of the degree of underfunding of our company pension funds!

We (and our agents - the pension funds) bet the market up now they, and we, will suffer the consequences. For many years pension funds have not taken an active part in supervising the companies in which they are invested and they, the pension fund managers, are as culpable as the managers of the banks for the result.

The lack of active participation by the pension funds has been a source of concern for decades.

By the way, returning to the topic, Barclay's also manages pension funds that invest in ...

In essence financial conglomerate cross ownership was always going to cause problems - eventually. This ownership situation is also a direct consequence of the prevailing regulatory regime - so the Government is not off the hook!

OUR TOP BANKERS SHOULD ALL HAVE THEIR PENSIONS AND SHARE OPTIONS FORFEITED.....YES/NO?

never fear Mr Banker... the tax payer will continue to pay for your bonuses.

In this country, all companies are created equal. But some companies are more equal than others.

stevewo....

Although I agree with most of your posts, I however have to answer NO to your question in post #34

Your proposal doesn't even nearly go far enough. The strength of feeling expressed about this developing disaster over the last few months has been unprecedented.
The consequences of the banker's wreckless greedy behaviour will result in misery for tens of millions for decades to come.

THE TOP BANKERS SHOULD BE PROSECUTED, THEN JAILED AND HAVE ALL THEIR ASSETS SEIZED!.....OR BETTER STILL... STRUNG UP BY THEIR CLOSEST ASSETS!!!

Only THIS ACTION will really address the root cause of this growing economic catastrophe (that, btw, Crash Gordon presided over during his watch).

PS - When I refer to the top bankers, I am especially referring to the chairmen (past and present) of said banks for allowing such crazy remuneration and bonus systems to be devised in the first place.

PPS - Keep up the good work Pesto!....just ignore the petty snipers who criticise your TV voice and presentation style.

Re Bankrslicker post 36.

I agree with eveything you say.
No doubt the banks would say " but if we penalise our top people they will leave?"
Well, the sooner the better, and without severance.
The government has a rule..."To get the best people, we must pay the best salaries, share options and pensions".
By "the best people" they must mean the people who can LOSE them the most money.
In future, their contracts MUST penalise failure, as well as reward success.
How is it that the layman could see this mess coming years ago, but the "experts" were blind to it.
Perhaps they werent blind at all, but just too busy lining their own pockets.
See you all down the dole office.

Ah, now the top Bankers specialise in Management......

They have Ratings agencies to tell them what the quality of Bonds and Debt are.

Just like if you build a house you could not do all the work yourself.

You would hire Brick layers, Plumbers Electricians etc.

Likewise with a Bank.

They pay specialists who undertake work on their behalf.

So they are not entirely at fault for the collateralised debt problems.

The Experts they trusted (who hoodwinked them) are most culpable.

Of course, recognising and making losses will mean the Banks will be unable to pay corporation tax (to the same level as last year).

And if Dividends are affected then Pension payments for future Pensioners will be lower.

Fortunately, we do not live in a Communist or Fascist State, so arbitrary torture of Bank Directors is quite out of the question!

Of course, in a recession fewer houses will be built, so fewer houses will be available to buy, with of course only the Wealthy being able to afford to buy in the first place.

And of course, in a situation of falling House prices, the Building trade will be laying off workers and reducing Salaries for those that remain.

If inflation does pick up (40% rise in the price of wheat, not a good sign) then holding cash in a deposit account is a waste of time.

Lets all hope the Markets settle down to a stable state.

Business cannot expand in a turbulent market, so employment in general will suffer.

Here's hoping that Common Sense will prevail!

Am I the only person not alarmed about bank charges.I have banked with Barclays for more than 50 yrs and have yet to be charged for my banking.I have a permanent overdraft I have never used,Just Lucky I guess, or is it the fact that I have never been overdrawn,or posted a cheque without adequate funds .
If I didn't have the money to pay for something or other,it had to wait until I had.Many of the complainants about banking charges give one the impression that they think they are entitled to write cheques or draw on the bank funds to manage their lifestyle.Such people should realise they are in some way using my money to manage their lifestyle and I want paying for them using "my money" Hence the charges which finish up in my account as interest.I will start being alarmed when Barclays start charging me because of the delinquency of others.

I just hope that Lord Peston (when he inherits his title and ancestral lands) will throw some Alms to us poor folk whose Pension Funds, invested in Banks and Building Companies and Tobacco firms and everything else listed on the Stockmarket (pensions invest in everything) when we queue to collect our Pension Credit because our Pension Funds are unable to pay us what we hoped for !!!!


Pension Funds rely on Dividends and Capital growth from the Stockmarket in order to provide for our Old Age.

If the Stockmarket does not grow, then our Pensions do not grow.

So, why don't folks do whats in their own best interest and back Britain PLC, instead of undermine it.

Anyone would think some of the posters would like to see us all in Poverty like a third world country ?

Believe me, if Britains economy falters everyone will suffer, imagine for example having to have a Ration book, and having to queue for basics ?

No fancy stuff at all on the shelves, no new clothes or shoes, just mended ones.

Most people not able to afford a car.

Maybe that is their hope.

Seems a bit of a twisted outlook on life to me.

1. Saving the Economy:
1. Sub Prime Crisis
Investors institutional/individual (inclduing bank to bank) and depositors are suffering from same thing - UNCERTAINITY about more sub prime exposure appearing in the future.
To remove the uncertainity we Create a Certification program an in which the SEC, and major accounting firms join (an authoritative impartial organization/body) that audit the banks (voluntary audits) financial exposure (extent and risk levels explained in earlier blogs)to sub prime. Then there is no future sub prime mess to make apperances in the future for the CERTIFIED banks. WIth no threat of future sub prime banks, these certified banks can drive the markets into healthy growth by getting back to business and making profits for themselves and furthermore lending/financing to businesses that will make profits themselves and escalate economic growth.
No more sub prime write downs that rock confidence of investors/depositors leading to panic runs on deposits and potential (insolvency GP). The investors need to know that the biggest threat for financial institutions right now is the sub prime crisis and can rest easy (safely) that certified financial institutions are exempt of this threat showing its face in the future.
This certification program can be used for any and (all bubbles GP)…(explained in my previous blogs). Including corporate bonds.

Dear People,

Tell me if you want my full story on our economy,

but don't wait too long...

I have been advised to keep blogs brief, thus missing a lot on key information.

Ian_the_chopper wrote:
If free banking does go at the High Street bank expect more people to go online to bank and to use other means of banking. A traditional bank account with a branch and a cheque book is becoming increasingly irrelevant in todays world or at least it is for many people.

With many shops stopping taking cheques and pretty much everything being paid by credit cards, direct debits or debit card why do I or many millions of others need Barclays; RBS or HSBC.

I expect that some high street banks will seek to bring in charges for operating a current account. I equally expect millions of people to move to accounts that don't charge.

........I'm afraid you have a misguided argument here, which online banks are you referring to? I cannot think of any??

I presume you are talking about all the ones that are owned by the banks you are so called suggesting people will leave in their millions, to these phantom online companies who will continue to offer free banking.......????