Tag: ‘financial utilities” “the great unwinding”

Economy, Innovation

Bank deposits – the hidden risk associated with government guaranteed deposits

Colin Henderson

The focus on bank financial strength is generally on the lending side of the business and the potential for bad debts.  Here is another view, and something that drives some banks to make ever riskier loans to produce enough revenue to pay for their deposits. For Banks, Wads of Cash and Loads of Trouble | NY Times The 79 banks that have failed in the United States over the last two years had an average load of brokered deposits four times the national norm … But the hot money also came with a high cost. To lure the money from … Continue reading Bank deposits – the hidden risk associated with government guaranteed deposits

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Bank nationalisation by a thousand cuts is distracting us from the root problem

Colin Henderson

In the series “The Great Unwinding” last week two types of banks, Financial Utilities and Risk Takers were highlighted to appear.  This direction received strong support this weekend with Alistair Darlings order to perform a complete review of bank practices. The review is the not so thin edge of a large wedge when the ramifications are considered. The chancellor said on Sunday that the review would look at risk management by boards including how pay affects risk taking; it would also look at the way boards operate and the role of institutional investors. … Mr Osborne (Shadow Chancellor)  added: “The … Continue reading Bank nationalisation by a thousand cuts is distracting us from the root problem