Indeed today did have special meaning. While the origins may have been from American politics, the reality is Canada does have a unique personality that is based on the British parliamentary system, whereas American is more akin to the … Continue reading This was the moment Charles became King of Canada, and Canada his kingdom
#geopolitics #risk President Donald Trump issued a direct threat to Iran, saying he’d hold the regime responsible for future attacks on shipping in the Suez Canal and southern Red Sea by Houthi rebels. His threat of retaliation against Tehran ratchets up the stakes even more after he authorized military strikes over the weekend on the group. The Houthi health ministry said 53 people were killed. Successive US administrations have accused Iran of supplying training, expertise and weapons to the Houthis, but taking on Iran directly would carry a fresh set of risks. Trump’s director of national intelligence, Tulsi Gabbard, said that other countries should … Continue reading Europe update – Bloomberg
Executive Summary pdf 8 pages 0.4MB Full Report pdf 214 pages 2.2 MB The report begins by summarising the impacts of the financial crisis on the UK banks. Table of Contents here The overall impact is summarised here: Despite recent de-leveraging, the total balance sheet of UK banks is more than four times annual GDP. More than 80% of RBS and more than 40% of Lloyds are in state ownership. Competition in UK banking has been seriously weakened as rivals to the largest retail banks have left the market or been absorbed into others. The general approach has three … Continue reading First Look – UK Independent Commission on Banking report has a focus on new competition, but implementation will have practical difficulties
Lord Myners was financial services secretary from 2008 to 2010. He indicates in this op/ed in the Financial Times that he has had a change of heart and recognises the British banks are simply to large and expose the UK economy to too much risk. Break up Britain’s uncompetitive big banks | ft.com To ensure a further contribution, Sir John should note that Britain’s banks are too concentrated and that each individually represents too great a portion of gross domestic product. Indeed its high operating margins and return on equity suggest the UK has one of the world’s most concentrated … Continue reading Some momentum in UK towards breaking up Lloyds and RBS
There has been much talk of systemic risk since the financial crisis hit. I see it more as a crisis of banking and banking confidence, and the debate on systemic risk is critical because it exists because of Government intervention and protections, implicit and explicit. The latest from Lord Turner of the FSA is a discussion paper, that reviews systemic risk and provides as good a discussion on that topic as I have seen. What it particularly interesting is how the insights raise the prospect of penalising globally integrated banks over nationally independent organizations with higher capital requirements. Things just … Continue reading On Bank Systemic Risk, International Integration and Capital Requirement | Turner Discussion Paper
The management of UK banking/ financial system has become highly politicised reflecting the general Browns government style. This from the meeting yesterday between Mervyn King, Governor of the Bank of England and the Commons committee. Governor in dark on banking regulation | FT His comments to MPs on the Commons Treasury committee flabbergasted its members. John McFall, the committee chairman, said the lack of communication at the top level between the Bank, Treasury and Financial Services Authority was unbelievable. “The tripartite authorities are a communications black holes, which is worrying.” Continue reading BofE Governor in the dark on banking regulation
This is nice to see. Lloyds is was the most risk averse bank before the crisis. Yet after the Government intervention and Lloyds ‘takeover’ of HBOS with all their self inflicted mortgage problems, the situation altered dramatically. I hope Lloyds will be a survivor, and can remove government ownership. Lloyds repays £2.3bn to UK Treasury Lloyds Banking Group has repaid £2.3bn to the UK Treasury after strong support for its open offer and placing aimed at repaying the government’s £4bn of preference shares. Lloyds is believed to be the first major western bank to repay state equity in the round … Continue reading Lloyds moves to regain independence
It appears the weakness in the UK banks that showed first when the crisis hit, were foretold 5 years ago in a BoE simulation. Northern Rock risk revealed in 2004 | FT Banking regulators identified Northern Rock as the weak link in Britain’s banking system during secret “war games” held as long ago as 2004, the Financial Times has learned. The risk simulation planning, conducted by the Financial Services Authority, the Bank of England and the Treasury, made clear the systemic risks posed by Northern Rock’s business model, and its domino effect on HBOS, then the UK’s largest mortgage lender. Continue reading “Northern Rock risk revealed in 2004” | FT
The degree of shift that has occurred and is occurring as we speak with respect to bank valuations is simply staggerring. What got me going on this was when I noticed that the combined market capitalisation (stock exchange value of a company) of Lloyds Bank, Barclays, and HBOS was less than several of the Canadian banks. So with the valuable assistance of Google Finance here are some statistics, with some notes following. the banks picked here have had their value cut in half the UK banks are in terrible shape with low market cap, and reflecting low P/E the Canadian … Continue reading Enormous shifts have occurred in banks’ market capitalisation
The press is all doom and gloom at the moment. Not without reason, but the causes and implications are getting blurred. So I did a simple analysis comparing three stock markets, their fall since mid 2007, and the relative importance of the banking sector in that fall. The results suggest that it does depend where you live. There is an all out banking crisis in the US and UK, based on market sentiment. Somehow Canadian banks are not regarded with such fear as the others. This no doubt partly due to the early work of Purdy Crawford and … Continue reading Canada banking sector is avoiding the troubles in US and UK
Bankwatch 