Fascinating Peterson Institute lecture by Niall Ferguson on the implications of government debt and on what he believes will occur after Greece which he predicts will default. http://www.piie.com/events/event_detail.cfm?EventID=152&Media And here is the slide show that accompanies the lecture.  The video is about an hour.  You can skip the first 13 minutes which are introductions. fiscal crises and imperial collapses Technorati Tags: niall ferguson,GDP,economics Continue reading Niall Ferguson | The metrics of doom

I believe George Osborne has got it right with a refusal to accept the Euro bank fund levy (tax).  If we consider the notion of a ‘failing bank fund’ the idea arose because of the 2007 banking crisis.  One result of that crisis was that bank liquidity dried up following banks’ refusal to lend to each other.  The only solution adopted by all the western nations was to provide the necessary liquidity by purchase of bank assets for cash.  The cash was ‘printed money’ created by the central banks’. Osborne rules out fund for failing banks | ft.com The chancellor … Continue reading Euro proposal to create a ‘failed bank’ fund is a bad idea

A new paper from Deloitte explores the potential of banks shifting pricing methodology to bundled pricing using relationship pricing models.  It recognises the distinctions between telco’s who have long used this model and banks but feels its worth exploring.  The next revolution in retail financial services marketing? | Deloitte Relationship-based pricing is a system of pricing whereby the prices or products and services depend on an individual or household’s overall product and service purchases rather than being determined on a product-by-product basis (i.e., overall purchase levels do not impact individual product level pricing). The goals of relationship pricing include: Attracting … Continue reading Considering bundled pricing for bank services | Deloitte

An interesting two pager from the Bank of England in response to a freedom of information enquiry.  It includes this succinct explanation of Quantitative Easing (QE). Where Does Money come from | BofE | FT Alphaville Nowadays, it is central banks that have the ultimate role in creating money. They generally do so in response to the demand for money – through both the issue of banknotes and the creation of so-called ‘central bank reserves’ on the accounts of commercial banks (which use this money to make payments to one another). The demand for money is usually affected by the … Continue reading Where does money come from | BofE

This is interesting.  Everyone assumes Blackberry is the gold standard for government and corporate communications.  It is hard to imagine why an iphone using 128 or 256 bit encryption would be any less secure.  I would think the main thing would be to restrict access from other apps to your emails, although that risk is identical in the blackberry when 3rd party apps are added so that risk is not permissible as an excuse  😉 Oh, and banks are now using iphone for online banking. This is simply another paradigm shift that people are finally getting over. Apple’s iPhone replaces … Continue reading Apple’s iPhone finally replaces BlackBerry for some bankers | Reuters

Carol at Glenbrook earlier made the classic point that  Memo to Bankers: A Customer is Someone Who Pays You in the context of the Durbin Amendment that is designed amongst other things to make interchange fees visible to consumers.  Interchange fees are those little understood fees which banks and card companies charge each other and merchants every time you use a credit/debit card.  Interchange is very convoluted but the bottom line is that it is a relative gravy train for banks.  The update is that Visa claim that making interchange fees visible to consumers are somehow a bid by merchants … Continue reading Visa is not happy about the prospect of its fees becoming visible

One outcome of the new Lib/Con coalition is that the FSA will survive.  The suggestion is that systemic banking risk will be a specific responsibility of the Bank of England but that individual bank monitoring will remain with the FSA.  This will be welcome news to UK banks who remain concerned about relative competition with foreign jurisdiction banks. Osborne aide says FSA might survive | ft.com George Osborne, the new Tory chancellor, has been forced to water down plans to hand over banking supervision to the Bank of England under a five-year coalition deal struck with the Liberal Democrats. Tory … Continue reading Financial Services Authority will survive under new coalition government