Category: Uncategorized

Uncategorized2 Comments

‘UK banks set to vote on abolition of cheques’ | Finextra

Colin Henderson

A headline like that is music to my ears. The fact that Banks in UK, Canada and European countries (less so US) are still spending enormous sums on a set of fixed cost infrastructure designed to manage volumes in cheques that are orders of magnitude larger. The ultimate irony here is that it is the government considering this move. As the largest shareholder in Banks, perhaps this is the responsible thing for them to do, to enhance their investment. Indeed it is hard to imagine any one bank having the gumption to eliminate cheques. UK banks set to vote on … Continue reading ‘UK banks set to vote on abolition of cheques’ | Finextra

Uncategorized

‘The Shape of Business – The Next 10 years’ | CBI

Colin Henderson

Confederation of British Industry (CBI) have issued this paper. It is a short but useful discussion on what business ought to consider in the UK, but my reading suggests most western economies. It touches on the main categories of concern of business, people issues, environmental, partnerships, supply chain and technology Here is an excerpt from the Table of Contents, followed by the conclusion. Download: The shape of business – the next ten years (PDF 2MB) | CBI The Changing Business Environment Changing finance and capital conditions The decline of trust in business and markets A less benign macroeconomic environment Social … Continue reading ‘The Shape of Business – The Next 10 years’ | CBI

Uncategorized

“Rally fuelled by cheap money brings a sense of foreboding” | ft.com

Colin Henderson

Gillian Tett voices her concerns here, based on background discussions with bankers. We are not out of the woods yet, despite the equity markets. Rally fuelled by cheap money brings a sense of foreboding | FT Yet, if you talk at length to traders – or senior bankers – it seems that few truly believe that fundamentals alone explain this pattern. Instead, the real trigger is the amount of money that central bankers have poured into the system that is frantically seeking a home, because most banks simply do not want to use that cash to make loans. Hence, the … Continue reading “Rally fuelled by cheap money brings a sense of foreboding” | ft.com

Uncategorized

Is the utility bank/ risky bank model workable?

Colin Henderson

Martin Wolf makes a persuasive argument that regulatory division between financial utilities and risk takers (casinos in his words) is impossible. Why curbing finance is hard to do | FT Martin Wolf First, the border between utility and casino banking is impossible to draw. For Mr Kay, the utility is the payment system and protection of deposits. This would leave all lending – including to households and businesses – inside the casino. For those in the US who hark back to the Glass-Steagall Act, the distinction is between commercial and riskier investment banking. … … Mr Kay’s distinction is clear, … Continue reading Is the utility bank/ risky bank model workable?

Uncategorized

A succint comparison of exiting 1980 recession, and 2009 recession

Colin Henderson

I thought this a particularly succinct view of the next 10 years view prospects for banks and their business planning. The view from New York | Buttonwood/ Economist The bearish view came from Josh Rosner of Graham-Fisher. Mr Rosner was one of the first analysts to spot the potential havoc caused by the interaction between subprime mortgages and structured products like CDOs. He thinks the economy will not rebound as it did in the 1980s. Demographic trends are not as favourable (the baby boomers were entering their prime earning period in the 1980s; now they are retiring); while credit card … Continue reading A succint comparison of exiting 1980 recession, and 2009 recession

Uncategorized

Mervyn King calls for banks’ break up per “The Great Unwinding” post in Feb

Colin Henderson

It is with some relish I see Mervyn King agreeing with me from last February. King calls for break-up of banks | FT – Oct 2009 Mervyn King, governor of the Bank of England, called on Tuesday night for banks to be split into separate utility companies and risky ventures, saying it was “a delusion” to think tougher regulation would prevent future financial crises. The Great Unwinding | part 1 of 3: 2009 – 2012 | The Bankwatch – Feb 2009 This will effectively split the financial community into two distinct sets: financial utilities – significant operating restrictions in light … Continue reading Mervyn King calls for banks’ break up per “The Great Unwinding” post in Feb

Uncategorized2 Comments

Bank retail operations have not recovered despite profits

Colin Henderson

In this piece at the NY Times, Krugman points out the obvious that despite profits, Banks’ retail operations have not recovered. The large profits we are hearing about are all centred in the Investment Banking units. I would add that it will take more than a turnaround in consumer confidence and reduction in unemployment. It will also take time to work through the de-leveraging impacts of consumer desire to reduce debts and save more for future crises while this one is firmly in peoples minds. For everyone who is still working they know of someone who is not, and that … Continue reading Bank retail operations have not recovered despite profits

Uncategorized

RBS pays out 10% of equity to investment bankers

Colin Henderson

In the banking business I think we all understand the point and motivational benefit of bonuses, however this story from a Bank that is almost a Government Department (70% government owned) takes insanity to a new level, if you are a taxpayer. The sheer size of the bonus pool of £4 billion is astounding. That represents just under 10% of the banks equity! I mention the government ownership because while we are used to investment bankers paying out such bonuses, one would have thought that their government overseers would have insisted on that £4 billion being used to boost capital, … Continue reading RBS pays out 10% of equity to investment bankers

Uncategorized

Canadian Electronic Commerce Protection Act and lobbyists efforts {Geist}

Colin Henderson

Michael Geist provides a gallant service following and analyzing the legal developments in the Canadian Parliament relative to internet, privacy, DRM. His current focus is the ECPA that is having its Commons review completed Monday. Electronic Commerce Protection Act (C-27) (Posts on Michael Geist site re this topic) The ECPA is basically intended to be an anti-spam bill. This should include opt-in only relative to advertising. It has become mired in the minutiae of cookies, tracking, email address collection and such things. The opposition Liberals appear to be taking the opportunity to side with the lobbyists from the advertising world … Continue reading Canadian Electronic Commerce Protection Act and lobbyists efforts {Geist}