Category: regulation

Business Models, Economy, regulation

banking 101 | All banks are vulnerable to runs

Colin Henderson

This is a fascinating and insightful paper by Willem Buiter and Anne Sibert on the failure of the Icelandic banking system, but with scary parallels to the UK system and others.  In particular though, and of interest to everyone possibly is section 2.1 copied below in full.  It defines the generic vulnerability that all banks’ have to “run a on the bank” even in good times. Thus the argument goes, accept reality, nationalise the banks, and treat basic banking as a utility, just like water and electricity, until a better model can be developed that would have a better chance … Continue reading banking 101 | All banks are vulnerable to runs

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The G20 ought to consider only regulation that assesses the outcome of good and bad decisions

Colin Henderson

President Bush makes an important point and distinction here [emphasis mine].  The couch economists and newly found supporters of a new President are tempted by talk of new regulation and government control.  Bush defends free-market system | BBC Returning to the cause of the credit crunch, Mr Bush admitted that failures had been made "by lenders and borrowers, by financial firms, by governments and independent regulators". But that the answer was "not to try to reinvent the system". Instead, he said the solution was to "fix the problems we face, make the reforms we need, and move forward with the … Continue reading The G20 ought to consider only regulation that assesses the outcome of good and bad decisions

regulation

Some fresh thinking – The New American Bank Initiative (NABI)

Colin Henderson

I worry about the bailout plans led by newly famous Gordon Brown (Prime Minister UK), and which every other world leader is falling over themselves to adopt.  Such an approach is natural for Brown and his political leanings, but to see it occurring around the world to the extent it is happening is worrisome.  That worry is exacerbated now that we see proposals to help out the auto manufacturers.  This is protectionism by another name, and will result in worse companies with worse products.  The same can be said of Banks.  How can a bank with a financial tap opened … Continue reading Some fresh thinking – The New American Bank Initiative (NABI)

Economy, regulation

Yamato Life goes bankrupt due to bad management

Colin Henderson

In a dramatic similarity to HBOS, Bradford & Bingley, to name just two, the Japanese Life Insurer Yamato was caught out investing in securities and losing out in the crash.  The similarity lies in the classic example of a financial services company getting caught out of its bread and butter business, trying to build profits in other ways, and taking shortcuts. Japanese insurer Yamato Life collapses Government officials tried to portray the bankruptcy as a special case. Yamato Life’s failure “is the result mainly of the company’s unique business model, whereby it covered its high operational costs with returns from … Continue reading Yamato Life goes bankrupt due to bad management

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Two years on | Which banks understand the web lifestyle?

Colin Henderson

When I started this particular blog, my impetus was the lack of creativity amongst Banks in getting beyond automation of traditional transactions, and sticking them online [online banking]. Introduction « The Bankwatch Introduction Saturday, 28 January 2006 Welcome to Bankwatch. The purpose of this blog is to monitor banks around the world for their online capabilities, and the strategies they are adopting with online. Consumers are web savvy now, and most banks aren’t, so I will point those out, and I will also recognise best practices too. It might be useful to just take a look and see what progress … Continue reading Two years on | Which banks understand the web lifestyle?