ΒιΆΉΤΌΕΔ

What does he mean 'deter banks from lending'. Are they lending at all?

> Here's the paradox: investors positive reaction and the rise in banks'
> share prices will tend to reinforce economic growth and should thus
> strengthen banks; but if there turns out to be another banking crisis
> before 2018, banks may not be in optimal shape to cope with it.

If banks were in optimal shape to cope with another banking crisis, there would not be one.

A crisis could only would happen because banks are not in good shape. That is the nature of a banking crisis.

The only people too thick to know this are greedy bankers. Why did give any authority to such slow-witted folks?

These businesses (banks) are in a unique position, oiling the wheels of commerce etc. and as such require special handling.

Others on this forum have referenced the key question "Who creates the money?".

Maybe in the interests of financial stability, the ability to create money should be gradually withdrawn from these banks and revert solely to the BoE.

how strange, it almost seems that the personal profits of a few major investors affect the whole economy...

Robert Peston wrote: Basel Committee on Banking Supervision - the supreme decision making body for global banking regulation
-----------------------

What's that conspiracy, Robert? Are you trying to say that there's one world government?

Why do we have a global banking regulatory body? Whatever happened to national sovereignty? And is Basel bigger than Brussels?

Business as usual then. Credit Crunch 2, anyone?

On a macro scale financial services dealing with standard current and savings accounts must be separated from investment banks, and if people have to pay a service charge for this safety then so be it.

My beef with banks is more about their arrogance and their complete lack of respect for their customers. I have a list of issues that if corrected would put a smile on 90% of adults in this country. Here are a few;

1 - Cheques and money transfers do not take days. I have worked with BACS and in the financial services. There should be a simple rule that if you ask for a transfer it takes a maximum of one hour. There should be none of this oh it could be tonight but it could be tomorrow rubbish.

2 - I want my account to tell me when money is coming out, especially charges from the bank. With internet banking it would be simplicity to offer a facility whereby a customer can see when money is going to come out of their account, allowing them to better plan.

3 - Overdrafts - if a customer is going to go over their limit with a direct debit, cheque or whatever, refuse it. Don't process it, put them over their limit and then charge them both for being over their limit and sending them a limit telling them they are being charged for going over their limit. If they can't do this then at least make the charge comensurate with the unauthorised amount. I went over my limit by nine pounds and was charged something ridiculous like twenty pounds a day for five days until my next pay deposit. People in this situation usually need help, not making the situation worse.

Politicians have only themselves to blame for this mess, as they should not have promised both to improve banking stability and to speed an economic recovery, as the two goals are mutually exclusive.

It is however great fun to watch those like Vince Cable et al flounder helplessly from one view to the other and then back again!

When Preston does his β€˜longer analysis’ I hope he will publish the gradually falling capital adequacy ratio as a lesson to all of the dangers of reducing what was effectively the system’s insurance cover.

The problem is that banks much prefer lending against property rather than to small and medium sized businesses.

This results in property price inflation, and reduced growth in businesses.

There needs to be a way to make lending against property less attractive.

Every reform seems to risk `snuffing out our fragile economic recovery'. No doubt we should all be careful what we eat for fear that indigestion will snuff out our fragile economic recovery.

Might I suggest that if our economic recovery is so fragile it may not even be an economic recovery. It might just be a load of cheap cash sloshing around encouraging bubbles.

We need root and branch reform not just of the banks and of government but of the entire economy. The country took a wrong turn about ten years ago, having taken a further wrong turn some twenty yeats previously. We have been taking wrong turns since 1945.

To do nothing now for reasons of fear is yet another wrong turn. We need to get fit to earn our living in the modern world. There is no point in tiptoeing around for fear of frightening the horses as they have all bolted.

I wish politicians would understand that you cannot have increased lending and increased capital at the same time (ceteris paribus).

They can call for one or the other - doing both just makes them look ignorant.

It is interesting that the governments still like to pretend that they regulate banking when it is banking that regulates governments. They put forward these silly justifcations that should embarrass the governments but it is very diffcult to embrrass governments anymore. I would guess the bankers are promising the governments a new bubble to get out of the current economic crisis they created and polticians are always willing to promote such a process even if the result is a repeat of what we have today. History will repeat itself and the governments will be surprised when it happens, as they always pretend to be. Until the power relationships are changed nothing else will change.

Rebuilding bank balance sheets is the opposite of lending more.

Basel 3 is not strong enough, but heaven help us if the banks are forced even to mark to market as even that will blow a massive hole in their balance sheets!

The fact is that there is too much debt in both the public and private sectors - period. The banks have created all of this 'fake' money themselves completely beyond the oversight of regulators. We really haven't got a regulator at all.

You show a picture of Mervyn King but all he will accept responsibility for is managing to the cpi - he does, and did not, have the gumption to be a regulator of anything else - indeed he stated that he wasn't going to do it! His education is against him too as he is a light/non regulator by training (from Harvard). His completely defective economic education gave us the bubble - because house price inflation did not matter! - a crasser more stupid thing to say is hard to imagine - but that is the basis for both his and his predecessors regulatory actions - they deliberately drove up debt!

The fact is that debt has to be reduced (on houses) at the same time as providing loans to keep business afloat. There is no other way to achieve this other than stopping banks/building societies lending high multiples of income - the 'affordability lie' must be killed stone dead.

Rates must then rise to economically sane levels - as it is impossible to run any from of rational economics at 0.5%, 5% yes, even 4 % at a pinch, but not 0.5%. Mervyn King has destroyed the Bank of England - this is a fair description of his actions - taking rates to one fifth of the previous low in the last 300 odd years and its entire history. Mervyn King has destroyed money, by making it essentially worthless. The man has a lot to answer for. He has also destroyed every pension fund in the country as annuity rates have halved so pension pots have to double to pay the same pension. It is hard to imagine any single person being more destructive of the Nation's wealth - all because he didn't choose to listen to the sound economic advice warning him of the certainty of collapse of the housing bubble. He just said it wasn't his problem (as did his predecessor)!!!!

We need proper regulators not defective ones - however a warning, if proper regulation is introduced it will lead to a near certainty of depression! (See the first line^^^)

New to this, and may well become a "post once don't appear again" sort. If so, I apologise. However, I've been following the ongoing debates on these pages for some time, and could no longer keep council, particularly on the ongoing exchanges between WotW and AndyC555.

WotW - Your agrguments seem well informed, and well presented - often with a tinge of black humour, but nonetheless, over time I'm gradually beginning to see the nature of your position, and have to say it's one I'm all to much these days in agreement with. I hope you are wrong - I really do. Sadly hope often remains unrealised, and reality is what it is. Time will tell, but for the sake of my children - and theirs - I find myself in the unfortunate position of agreeing with what you are putting forward, whilst all the time desperately wishing you to be wrong.

AndyC555 - I do not wish to get personal, but can't help wondering if you have children, or plan to. Forgive my impertinence, it's none of my business I know. Even if you don't - what are your aspirations for the future of western civilisation, or is that irrelevant as long as a section - albeit a small section - of that society can continue to eat at a nice London restaurant?

It does sound reasonable after such a big transient shock to the system that trying to react in the opposite direction too hard too soon could make matters worse.

So one can understand the thinking behind this.

The issue is clearly essentially one of trying to wean a system off excessive debt when it is practically the whole system that is in debt.

However the problem is that we still don't trust the bankers.

Basle is still populated by, and represents the overweening interests of, the global banking class way over those of 'ordinary people', who constitute 99% of the rest of society.

And Basle as a concept (... a kind of secret pact between bank executives who produce some guidelines that have never been anywhere near a democratically elected parliament, which keep getting revised under the pretence that one day it will achieve its objective) is completely discredited.

We need a group of ordinary people, not bankers, to draw up the rules for our new banking system, which should be based on the principles that work in any market:

- openness and transparency - banks need to put their books into the public domain!
- encouraging new entrants - about time the UK handed out a lot more banking licenses
- market share limits - don't allow anyone to takeover anyone else if that gives them more than 10% share
- enabling players to exit easily - ensure depositors are protected when a bank goes bust
- no public subsidy - not only no bail outs, but remove the public tax subsidy of debt which only encourages everyone to become in hock to their bankers

I think this is purely to try and stop the drift into gold, since more and more people are distrusting paper. Nevertheless the ECB & BofE will just keep printing money every time they get anxious. What a disaster.

Who(if anyone) -who is politically accountable to an electorate- was party to this decision to stall until most of them retire? Meantime the taxpayer will foot the bill for all financial crises in the next 8 years? Not likely, mate.

Absolutely disgraceful.

Regards,

#14 Jasp27

Big mistake Jasp27. I think you might have killed any value on this thread. Andy doesn't contribute to the debate. I'm off. Bye.

I was pleasantly surprised to read that the Bank of England Governor, Mervyn King, raised concerns that the reforms of Basel III may not be strong enough. Mr. King was giving evidence before UK lawmakers during which he several times supported the Basel III decisions while urging a longer transition into the new regulatory standards, so that banks would not be forced to choose between
a) rebuilding capital and
b) lending to businesses.
The Basel III package is, of course, aimed at preventing another financial meltdown. But implementation in 2018 – eight years from now – seems a bit long to me especially in that portion that pertains to derivatives.
Mr. King: "I have no concerns about [Basel III] as a minimum standard, indeed my only concern about the way the debate is going is that it's not tough enough." Unfortunately he failed to qualify which sections he thought should be stronger.
Mr. King also voiced concern re any attempt by the EU to attain complete harmony. Why?
Mr. King felt that doing so would leave little (or no) discretion for the Prudential Regulatory Authority. The Prudential Regulatory Authority is a future agency of the UK Government formed as one of the successors to the Financial Services Authority. The PRA will be part of the Bank of England and will carry out the prudential regulation of financial firms - regular banks, investment banks, building societies & insurance companies.
While The Coaltion Government may be abolishing quangos, at the Treasury they are sewing together pieces which appear to me rather Frankensteinish. i.e. The plan is to create three new ones at an estimated cost of Β£50m.
1. A Financial Policy Committee to oversee
2. the Prudential Regulation Authority which will work alongside the
3. Consumer Protection and Markets Authority.
I’m not kidding, would I make this up?
The FSA may have failed in its supervision of the banking sector, but does this Coalition Government β€œimprovement” not seem like a little much?
Mr. King seems to realize that Britain needs better regulation, but allowing the number of "quasi"-civil servants to double (again) at a Prudential Regulation Authority is not going to guarantee oversight; in fact, it may do just the opposite.
Dig this: The proposed shake-up is supposed to realize the Coalition Government’s commitment to replace the so-called tripartite system of regulation, (set up by the Labour Government), which divided financial oversight among the BOE, the UK Treasury and the FSA. In my book three equals three equals three. Is it little wonder that The parliamentary Treasury Select Committee plans to hold an enquiry into the reforms? King tried hard to set aside worries that the actions taken by the FPC (Financial Policy Committee) could and very well might conflict with the MPC (Markets Authority Committee).
Meanwhile the US has passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. This act aims to prevent future crises by strengthening regulatory powers and oversight, limiting proprietary trading by banks, promoting transparency, and requiring most derivatives to be cleared through exchanges. US banks lobbied aggressively against the bill, though I don’t know why because the bill (when you digest it) proves rather toothless.
Mr. King rejected a suggestion that London should aim to profit from the US bill by having less restrictive standards and attracting a bigger financial sector. Thank the good Lord that Mr. King did not accept that idea! In fact, he once again surprised me with a profound statement: "Their (the US') legislative outcome is a morass of different provisions which is massively long and to be perfectly honest represents a very large amount of lobbying which has been successful." Right on Mervyn King!
The key part of Basel III, which will be dangerous to delay is this:
Counterparty Credit Risk - Derivatives, Repos and Securities
Strengthens the risk coverage of the capital framework.
The Committee is proposing to strengthen the capital requirements for counterparty credit risk exposures arising from derivatives, repos and securities financing activities. The strengthened counterparty capital requirements will also increase incentives to move Over-The-Counter (OTC) derivative exposures to clearing exchanges.
I could go for a slow but steady implementation of all the other measures, even to 2018 - but not for the capital reforms and statuary regulations applied to derivative trading, including default swaps, and of course negative betting.

What a surprise! Reforms intended to prevent more problems will be delayed for political expediency (ie trying to keep European economies going rather than sort out our financal mess.

No-one is surprised.

Oh dear, completely the wrong conclusion.That means the only way to effectively influence the banks is to ask for the taxpayers money back pronto and to leave them to face market reality as far as sovereign debt is concerned. Should not effect the real world too much. Scrap the cutbacks and life for the majority should go on fairly comfortably.Central banks will be much busier filling the gap as the commercial banks fail but it's about time real change happened.

Some paper is patently worth more than other paper.

For example, who would lose any sleep if they held substantial amounts of Norwegian Krone, as it is backed by a sovereign fund of some Β£260Bn or so, built up over the decades from North Sea oil revenue.

Banks here in the accursed Blighty are borrowing at BBR (0.5%) and if they are lending, it is at indecent margins, presumably to repair balance sheets/bolster Tier 1 capital.

Clues as to what banks think about loaning for residential property can be found in the LTV's, as the best deals require a 40% deposit then we can assume that the banks think at worst case, house prices might slump 40%.

I find it hard to believe that companies, with a good business case, cannot get the funds they require, if not necessarily from banks.

18. At 8:27pm on 28 Jul 2010, BluesBerry wrote: ....In my book three equals three equals three. Is it little wonder that The parliamentary Treasury Select Committee plans to hold an enquiry into the reforms?
=====================================

a clear and informative post - I cannot understand their thinking either, if you were a politician asking why like that could of just saved us Β£50 million. But then if you were, you probably wouldn't...

@ 3. At 5:46pm on 28 Jul 2010, JohnConstable wrote:

> Maybe in the interests of financial stability, the ability to
> create money should be gradually withdrawn from these banks
> and revert solely to the BoE.

What's with the "gradually"?

Look, the wealth of humanity is in what we have. It is not in paper
or computer records in banks. It is everywhere else in the world, but none
of it is in paper or computer records in banks.

If you are looking for our wealth, look at what people have and what
people can do for each other. Do not look in paper or computer records in
banks. All they have there are tally sticks.

You know it makes sense.

@ 17. At 8:18pm on 28 Jul 2010, PacketRat wrote:

> Andy doesn't contribute to the debate.

That's right. Andy just likes to chow down and pretend that things are the same!

#12 ghostofsichuan

What we have in this country is free-market Anarchism. Ironically, it's how the free-market operates in practice (the most recent architects being Thatcher's and Blair's backers). Hayek's 'The Road To Serfdom' was anti-government so we should try to see Thatcher & Blair as anarchists and Human Rights/feminism as self-destructive demographic forces.

By the end of the 1970s Tony Benn had migrated to the left-wing of the Labour Party. Benn attributed this political shift to his experience as a minister in the 1964-1970 Labour government. Benn wrote:

"As a minister, I experienced the power of industrialists and bankers to get their way by use of the crudest form of economic pressure, even blackmail, against a Labour Government. Compared to this, the pressure brought to bear in industrial disputes is minuscule. This power was revealed even more clearly in 1976 when the IMF secured cuts in our public expenditure. These lessons led me to the conclusion that the UK is only superficially governed by MPs and the voters who elect them. Parliamentary democracy is, in truth, little more than a means of securing a periodical change in the management team, which is then allowed to preside over a system that remains in essence intact. If the British people were ever to ask themselves what power they truly enjoyed under our political system they would be amazed to discover how little it is, and some new Chartist agitation might be born and might quickly gather momentum.[30]"

2018?! Banking odyssey?
I couldn't help bursting into laughter! They must be joking!

Many who are more knowledgeable about banking than I am have emphasised the need for a 'separation of powers' and/or 'separation of functions'. Such separation sounds right and good and necessary. But it doesn't sound sufficient to me. I think as well as the establishment of these separations, we also need the establishment of a certain specific connection.

When I consider the costs of banking compared with the commensurate service I receive from banks, and when I queue at the bank sometimes for ages, and when I consider the penalising 'fines' for unauthorised borrowing, I am reminded of 'my place' in the banking scenario. I am a buyer in a seller's market.

Likewise, when the banking crisis happened and the banks went to The Great and The Good to be rescued, and when it turned out that we the tax payers were to meet the costs of bailing out the banks, I was reminded of 'their place' in the banking scenario. They are sellers in their own market.

It is time we consumers of banking took ownership of this banking market. This is not to reject capitalism; it is to call for an acknowledgement of and respect for the 'client' or 'customer' as not only the original source of capital but also as capital's core beneficiary. Considering the mopping up process which we now all face with banking, it appears that we the tax payers have basically been treated as only capital's source; meanwhile we feel as if we are scraping the barrel of capital for any benefits. I don't think that in their transactions bankers have made any strong and committed connection between the profits of their trading on the one hand and we as suppliers of capital for those trades on the other hand. In contrast I think that bankers should accept, as a matter of professional commitment, that suppliers of capital - all of us who invest in one way or another - should benefit from banking deals as well as bankers. In this way bankers get connected with the rest of us in what can be a proper and decent deal for us all.

How do we achieve such a connection? We establish a banker's professional oath or first rule of banking that is the pre-condition of all other banking rules, conditions, separations and protocols for all and any professionals in the banking business. Just as the first rule for doctors is 'do no harm', for journalists it is 'don't make it up' and for the armed forces it is 'he who plans must also execute', we must likewise devise a professional oath or first rule for bankers - one that connects the banking fraternity's business role and profit margin more substantially, concretely and directly to their client/customer base. The banking crisis sent out the message that bankers' held an interpretation of their connection of what they did as bankers to the thriving of the client/customer as being extremely tenuous and conditional - and in some cases, arguably, not existing at all.

And if this proposal is thought to be a good one and workable, then bearing in mind Robert's conclusive paragraph in his blog on bank reforms, the bankers' new professional oath should be sorted out as a matter of urgency. It should be introduced to current bankers as well, in the form of Banker's Oath document, which is held on their Compliance/HR records, just as from time to time bankers have to sign documents in connection with new compliance regulations or corporate contractual protocols.

The client/customer is not always right. But the client/customer is always the client/customer. In my view bankers have demonstrated that they have lost sight of that. In this most fundamental respect they must get their sight back, and 'see' the rest of us each day in their trades. Then we will all have a better chance of seeing what they are doing with our capital, and thereby be better able to judge our ongoing position as beneficiaries of our investments – our rightful entitlement in the deal that is capitalism.

We need a money system run for the benefit of society, not bankers and their political puppets. Jacques Cartier and JohnConstable are right in saying that the Bank of England should create all our money. The proposed Bank of England Act proposes transaction accounts amongst other things, which is a good start. These cannot be used as a basis for lending, so the money is not at risk if the bank goes bust. Investment accounts are available for those who want a greater return, but this is at risk. In the meantime all we can do to reduce the malign influence of the banks is to pay back debt, and owe as little to them as possible. The problem is that when interest rates are below inflation, it pays to be a debtor rather than a saver, which is the case now, as it was for much of the 1970s. We are trying to educate a younger generation of people in monetary reform so eventually our debt based money system will die off along with it's proponents. This could take a long time, but it was a long time from the Tolpuddle martyrs to the height of trade union power in the 1970s. It is in their interests because they are the ones who have to pay off students loans or take on mega mortgages to buy a modest home. We will all pay when the coming inflation arrives to write off public and private debt. It is incredible that medicine and engineering have made great advances in the last 50 years, but economics and banking practices remain rooted in the past. Ghostofsichuan is right - there is no real change because the powers that be don't want to lose their wealth, power and influence for the greater good and this has been the situation for a very long time.

Robert, it is not the "so-called" Basel Committee on Banking Supervision - that is the Committee's correct name (I even checked their website to be on the safe side!). Adding 'so-called' before an innocent committee name kind of comes across like you want us to suspect that those dastardly banking supervisors are even lying about the name of their committee, the cads! For me this greatly detracted from the rest of your article.

Mr Peston you write in your PS :

'There are reasons to be concerned about the foundations and philosophy of this attempt to learn the lessons of 2008's banking meltdown.'

I read this sentence half a dozen times. Its precise meaning eludes me.

Are there reasons to be concerned about the clarity of ΒιΆΉΤΌΕΔ prose ? I ask this as an ordinary member of the public who follows your blog in an attempt to become better informed.

25. At 10:19pm on 28 Jul 2010, DebtJuggler

Exactly. I've asked quite a few time if we do or do not live in a democracy.

Well, we do, as long as we vote in the government the rich want! I'm in the process of learning about the events in Haiti around 2004 - makes you realise democracy is about as real as Santa Claus...

So it all gets kicked 8 years down the road, will it ever happen I wonder? Why should it when we taxpayers are there to foot the bill every time. There will never be a 'right' time for the banks to do this, in 8 years time we may well be on the downside of the next economic cycle so it'll just get pushed back even further. There are any number of taxpayer loan guarantee and insurance schemes running at the moment that won't be needed once the banks are standing on their own two feet again, tens of billions of 'you take the risks and we'll take the profit' money that the banks won't have access to once they are secure again...No wonder they threaten to stop lending if the tap is turned off!! So it will never happen, not in 2018, not ever.

It is interesting how such negative thoughts about Bankers are focussed as a result of the current banking crisis. The history of our wrath however, can be traced back much, much further in history.
We would do well to remember that Bankers have been playing the providers of their capital as mugs for around 4,000 years! Ever since their beginnings as goldsmiths, they have sought to make returns that were, shall we say, above the normal confines of acceptable profits.
We are all familiar with the story of a certain gentleman who, 2,000 years ago, was seen to lose his temper with the Bankers who were trading within the Temple walls and upturned their trading tables, scattering their monies all over the Temple floor. Well done Jesus!
The truth of course, is that we the public, allow ourselves to be played in this fashion. We provide the Bankers with their capital, (either in the form of deposits or in tax bailouts),who then play with those monies casino-like, rewarding themselves with huge bonuses, while returning to us a meager pittance for the use of that dosh. HOW ABSURD!
Are we complete fools or what?
The reason that we do it of course is that at certain times we need to make borrowings from those Banker folks. They have us over the proverbial barrel. Don't forget too, that when we borrow our own money back from the bankers for that nice new car or whatever, we pay them a fee which is about 3 times higher than the fee thay pay us for borrowing OUR money. It demonstrates that we are not very good at maths to say the least. Bankers of course, are maths specialists. Hooray!
We are straight hoodwinked folks, let's not forget it. And because we haven't done anything about it for the last 4,000 years, I have a funny feeling that the position isn't about to change anytime soon.

Robert

How can investors’ positive reaction and rising bank shares reinforce growth and strengthen banks?

Will that last until 2018, eight balance sheets away?

And will it at the same time ban all the exuberant international risks our/most banks are exposed to?

The banksters won again no matter how much one tries to fudge the story about the β€œfragile economy” and the β€œdeter from lending” argument.

caw

So on one hand we MUST have austerity measures to repair the government debt, but on the other we MUST keep interest rates at 0.5% and let banks charge 10/20 times more to increase thier reserves?

On one hand we MUST cut all government spending by 25-40% but it WILL NOT have a detremental effect on the fragile recovery, but on the other hand we MUST NOT enforce rules on the banks that will ensure they are robust enough to cope with another crisis because this will prevent lending which will "risk snuffing out our fragile economy"

What a complete nonense AND the banks are not lending now anyway

Mr Peston I hope your broader insight exposes the REAL reasons (if you are allowed to expose anymore?)

Confused.

According to Mr Cable and his Voodoo Economics, THE BANKS are not lending enough.
BUT according to Mr Cable when he was a minor party opposition spokesmen, THE BANKS got into their problems mostly because they were lending too much to the wrong people/business's.

Now call me simple by all means, but it must surely follow that if The Banks cut out their previous bad lending practices and revert to PRUDENT lending policies, then lending will reduce.
But profits will not, thus enabling The Banks to build up Capital, which seems to be what all Economists want.

Can you hear that?

That is the sound of a mighty punt into the long grass.

Should be force banks to lend more?
Should we force them to hold more capital?
Should we smash them up and have lots of little banks?

Decisions...Decisions....

Answer: We'll let our banking masters decide.

35. At 08:40am on 29 Jul 2010, PetersKitchen

financial coup d'etat on a global scale
financial terrorism on a global scale
Inside robbery on a global scale

Call it what you will, but we are heading for huge trouble, yet how many bankers have been treated as they should be - tossed in jail while their assets are seized?

If our country's pensioners are considered too poor to heat their homes (about Β£120 state pension) then how on earth can any right minded person argue that less than half that is suitable for an unemployed adult. People aren't out rioting because in my view, they are too frightened, too excluded, and blamed for an economic mess they are the victims, not the creators of. How long will that last, how long before people really do have nothing to loose and will not respect a society that deliberate excludes them?


Take a look at what is going on in places like Arizona and Utah, and tell me the massive poverty, frustration, anger and propoganda isn't leading to a lot of very angry people, and a lot of very frightened people. It isn't reds under the bed this time, it's Latinos.

"An anonymous group has distributed a list that is spreading terror and outrage among the Latino community in Utah. The list includes names, addresses, workplaces, phone numbers, birth dates and, in some cases, Social Security numbers of some 1,300 people that the group alleges are undocumented. The list was sent to law enforcement officials, state lawmakers and the media, and urges that those on the list be immediately deported. All the names are Latino, and they include over 200 children and the due dates for six pregnant women. We speak to Tony Yapias of Proyecto Latino de Utah."

We could put a lid on this, we could sort out our problems properly, but instead we watch TV and will be surprised when the youths get angry enough to start burning cars, just like we were were surprised when the banks keeled over.

From where I am sitting this morning, I can't for the life of me think what we've got to be proud of - certainly not ourselves.




We are now doing what they have been doing. Slashing and burning while our government swallow the line that high taxes increase unemployment. Has anyone got a good source for a UK-data graph of just like this US one?

Current unemployment benefits are about $65 a week. Soon that will be cut and then extra will be taken to pay for rent. Already there are deductions for community charge, and then add in things like a TV license. Imagine trying to buy a decent newspaper on that every day? Think about it. There is no way anyone can eat, keep clothed smart enough to find a job, and keep warm on that never mind surviving on the lower level. The unemployed living in affordable housing (council, housing association, bedsits, shared-flats will have to choose between a roof over their head or food in their stomach. I can't get my head around what the government thinks the unemployed are supposed to do. There are more job seekers than jobs, and most of the jobs apparently are part time. It's not as if people could grow food because there is no free land - the rich have that along with all the money!

That's disgusting. It's pathetic. And it is immoral of any government official to fail to ensure the basic means of living for each and every person in this country, while making excuses for why the casino game should cotinue so long we've all keeled over from hunger and hyperinflation that we forget who brought about this mess in the first place.


If we reject the economic victims from our society, then can we really be surprised when they reject us and our social rules?

For the first time in my life, we are embarking on a policy that will mean we have people who are hungry, seriously hungry in this country.

Where will that take us? Fascism or UN food camps?

At 09:35am on 29 Jul 2010, copperDolomite, I agree

When Governments begin to take drastic action against what is normally a legal and "free" entitlement in a capitalist environment you know they and we are on the brink

/news/world-europe-10798260

Yes Inflation IS a scandal, but sadly there is no story in inflation anymore, not when this has been THE world order since 1933/34.

It has been permitted as, at the time, it was felt by politicians that it would make their lives easier (or less difficult.) Inflation puts off your problems until tomorrow. But, as we have seen in recession after recession, it does and will catch up with you.

If you FAIL to control the money supply properly, (and then allow the problem to accelerate with a "money supply turbo boost" courtesy of reckless banker behaviour,) you're going to get economic meltdown! (In fact with the scale of our current problems, being Trillions of dollars of unwound derivatives positions, that situation suggests they'd developed money supply acceleration "technology" way beyond the humble turbo!)

What gets me is, as ordinary people, we should continue to allow the proverbial ostriches with their heads in the sand, to remain in charge of this - to allow them to carry on as before, to 2018!? How on earth are you rationalising that? By going out and buying shares? Funny that because it's one way that keeps bankers and their whole investment edifice alive. But they do have to pull the wool over your eyes to achieve this. It may work for a few, some will sell for more than they bought. Only this time there was taxpayer bailout - so in the round there was ultimately monumental failure. (And a bit of success on the one hand and monumental failure on the other - means the bit of success for the tiny minority is just that, a tiny bit of success for a very few. And humungus failure for everyone else.)

Of course Banking shares will rise now! If we're getting back to inflation in a big way, and this is one of several BIG indicators over the last 12 months that we are, then we're getting back to socially useless behaviour and asset bubbles. And in the world of investing that means bankers piling in now buying shares, (hopefully on the cheap,) before all the small nobodies - you and me - are persuaded by rising (bubble) share prices - to pile in as well!

Just Back Vince if you want to get out alive!

The base rate is 0.5%, the cheapest Credit Card deal out there is 16.6% APR

The base rate is 0.5%, the cheapest mortgage out there is 4.69% with a 10% deposit

Overdraft rates, arrangement fees, business fees appearance fees it goes on and on and on

I relish the day we start to see bankers ..........from bridges (self moderated!)

If pensioners could physically fight we would of had a revolution long ago, now the bankers greed has begun to effect people that can fight we will now see a change from the people committing suicide because of their plight to people willing to take up arms to change their plight.

This comment was removed because the moderators found it broke the house rules. Explain.

7. At 6:37pm on 28 Jul 2010, fleecy moss wrote:

"1 - Cheques and money transfers do not take days. I have worked with BACS and in the financial services. There should be a simple rule that if you ask for a transfer it takes a maximum of one hour. There should be none of this oh it could be tonight but it could be tomorrow rubbish."

Agreed ... but that is unlikely to come from the banks themselves as that would affect profitability wouldn't it?

As an example, a certain high street bank that the taxpayer now holds an interest in used to process all online payments between any two accounts held with that bank (where a transfer had previously been made between the two accounts) immediately EXCEPT where the destination account would incur some sort of penalty charge should the money have been transferred immediately, in which case the transfer would be made the next day so the penalty charge could still be applied.

...so let me get this straight...

Banks lobbhy for light regulation under Thatcher and Ray-gun claiming that "we can manage ourselves". It then follows years of Hubris and boot filling by banksters to applause as they claim to have 'fixed Capitalism by deregulating it)

Then in subsequent years we have several small instances of 'regulation lite' failing (LTCM, Savings and Loan etc. which are brushed off as 'one offs') , culminating in the biggest banking crisis in Britain, possibly ever.

As a result we (the taxpayer) now have to pay for some 'new policemen' to protect and manage this threat - a threat we created through our own actions

Now consider the same story but with Terrorists, Wars and the promise of safety if you agree to forgoe services in order to pay for your protection from terrorist - a problem which it seems to be widely accepted we created through our own actions.

These nasty people aren't even very imaginative. They create a problem and then demand 'protection money' to fix it (or appear to fix it).

If these were the actions of a plumber - he would lose his Corgi registation
If these were the actions of a Doctor - he would be struck off
If these were the actions of a gangster - he would be arrested and charged with extortion

....so can someone explain why the Government or the world of finance can act in such a manner and it's not considered the same?

It's almost like there are 2 sets of rules - Basel or not - we cannot live with such a contradiction and it seems the only solution we have is to create further contradictions and anger the people.

I am one of those who are very concerned by the weakening of the rules on bank capital adequacy,after all 2018 is a long way away and as you say Robert may mean that they are never actually applied.This has implications for our economic recovery according to the analysis of the notayesmanseconomics web blog.

"For anyone wondering what will happen going forward I think that the phrase highlighted in bold is quite clear that the banks and their recovery are the main priority and such issues as trying to prevent another crisis and raising banking standards in terms of capital can take a back seat to this. Those who believe that regulation is a way out of our current problems must find such a view very disappointing. Regular readers will know that I always feared that when it came to a choice which weakened the banks then the regulators would cave in and favour the banks. As the memory of the credit crunch is still quite recent it concerns me how much further our authorities will weaken as time goes by."

When will regulators show some backbone in dealing with the banks? The full article on Mervyn Kings speech is on

25. At 10:19pm on 28 Jul 2010, DebtJuggler

Oh the cracks in society are already appearing, hidden from the mainstream media there are people who are acting in sheer defiance of laws created by a corrupt Parliament - despite a recent court ruling against them.
It's an amusing read (at the bottom) and it shows the absurdity of trying to prevent legitimate protest, and how it undermines the authorities who are forced to take action.

All this money wasted during a time of supposed austerity to crack down on people doing very little harm.



Banking regulation? - this country can't even enforce the basic laws it has already, what chance will new regulation have?
It's all well and good talking about new laws in banking, but without the manpower to enforce it (don't forget the FSA is closing - and don't be fooled into thinking the new BoE section will have the same number of people - the coalition are not going to miss an opportunity for a cut if they're handed one on a plate through 're-organisation')

It's just one giant smokescreen to cover the 'getaway'

There comes a point, I think it is called "the breaking point" where the human brain creates it's own stress test - a stress test that is not manufactured to pass without incident.

A lone shooter
A suicide
A group of suicides for the same reason, maybe debt?
A gang
A demonstration
A riot
A revolution

/news/world-europe-10802239

The breaking point here is the level of austerity the many will have to endure at the expense of the few and people WILL NOT ACCEPT it

44. At 10:51am on 29 Jul 2010, writingsonthewall wrote:

If these were the actions of a plumber - he would lose his Corgi registation
The law applies here because he's not Eton.
If these were the actions of a Doctor - he would be struck off
See above.
If these were the actions of a gangster - he would be arrested and charged with extortion
See above.

47. At 11:46am on 29 Jul 2010, PetersKitchen


Most of those things if reported, can be subject to simple spin. So no one will take much notice.

If we as a nation ever decide to get organised and demonstrate ie Poll Tax demonstrations in London, then that not be as effective. The police have better equipment, better tactics like Kettling, and of course thre are the Anti-Terrorims Laws.....

46. At 11:08am on 29 Jul 2010, writingsonthewall wrote:

It's an amusing read (at the bottom) and it shows the absurdity of trying to prevent legitimate protest, and how it undermines the authorities who are forced to take action.



_______________________________________________________________________


A, sitting down, cross-legged protester, charged with a "breach of the peace" for sitting down, cross-legged, whilst holding up a rainbow flag with the word "PEACE" written across the middle, in large white letters!?

So, he's being charged with a breach of something that he's protesting in FAVOUR of!? Absurd, funny and sinister all at the same time. Think I might pop down there on Saturday if nothing else other than to watch a (free) show!

If some of the protestors could turn up in security guard type uniforms, just to add to the confusion, that would be fun as well. Make a citizens arrest of a police officer perhaps?

50. At 2:50pm on 29 Jul 2010, spareusthelies wrote:


A, sitting down, cross-legged protester, charged with a "breach of the peace" for sitting down, cross-legged, whilst holding up a rainbow flag with the word "PEACE" written across the middle, in large white letters!?

So, he's being charged with a breach of something that he's protesting in FAVOUR of!? Absurd, funny and sinister all at the same time. Think I might pop down there on Saturday if nothing else other than to watch a (free) show!

And our millionaire politicians just can't see what is wrong with that.

I like the idea of the security guard uniforms. Some nun outfits, from a silent order obviously, would tip the balance, surely?

25. At 10:19pm on 28 Jul 2010, DebtJuggler wrote:
"Hayek's 'The Road To Serfdom' was anti-government"


Coincidentally, I'm reading this book now. I have to take issue with what you've written. Hayek takes pains, repeatedly, to stress that free market does not equal laissez. Allow me to quote:
"The liberal argument is in favor of making the best possible use of the forces of competition as a means of coordinating human efforts, not an argument for leaving things just as they are. It is based on the conviction that, where effective competition can be created, it is a better way of guiding individual efforts than any other. It does not deny, but even emphasizes, that, in order that competition should work beneficially, a carefully thought-out legal framework is required and that neither the existing nor the past legal rules are free from grave defects. Nor does it deny that, where it is impossible to create the conditions necessary to make competition effective, we must resort to other methods of guiding economic activity. Economic liberalism is opposed, however, to competition's being supplanted by inferior methods of coordinating individual efforts. And it regards competition as superior not only because it is in most circumstances the most efficient method known but even more because it is the only method by which our activities can be adjusted to each other without coercive or arbitrary intervention of authority."

The banks may have the politicians in there pockets and the postponing of the introduction of tighter rules & regulations just proves that.
What the banks don`t have control of is consumers that do not want to spend, the silent consumer strike thats going on now. People are choosing to clear debt down rather than take on any more, which means banks are losing there strangle hold over the consumers.

#52

But there again agree or disagree with him at least Hayek thought about these things. Too often when the term "free market" is used it is referring to a situation where a small number of large suppliers dominate.

A free market agenda in the sense of your Hayek quotation would be too much for the banking sector to contemplate, because it is not a market which they would have a large element of control over.

The logic is to seek a large measure of control of market in which a company operates in. So a free market agenda would have to deal with this tendency: how to do that?

This story helps to fuel the future commercial success of USA banks. A story in the Financial Times of 30th July 2010 states that US banks are rushing to raise debt at historical low interest rates. US bank debt is being re-financed at lower rates of interest. These rates are not available to European banks because of the Eurozone crisis. So, with increased capital requirements waiting another 8 years, US banks have a international competitive advantage.

The whole regulatory environment is weak just look at Equitable Life! No wonder people are abandoning pensions and buying houses and stocks and shares.

What this country needs is a big dose of honesty:

+ Mortgages that are one fixed rate for 20+yrs for example

+ Pensions and investments where the provider is not loading charges or over paying their staff - both endemic

+ Government and the regulator paying what is due when they fail - not an Equitable Life

Only when the City fat cats and their political master who know so little of what they manage are understanding these issue will ther ebe improvement.

We'll all be dead by then as none of us are capable of holding our breath for that long!!

Do we have a choice?