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kevinan108

HSBC chief to subject UK banking operation to performance tests | Business | The Guardian - 0 views

www.guardian.co.uk/...ng-operation-performance-tests

bank HSBC Guardian UK retail banking stresstest

shared by kevinan108 on 18 May 12 - No Cached
  • As he gave an update of the bank's strategy – which has led to 14,000 job cuts as he cuts costs to make the bank more efficient – Gulliver said the UK business would be subjected to his performance tests once it was known how the final details of the Independent Commission on Banking (ICB) were implemented.
  • Gulliver described the UK as essential for retail banking and he said on Thursday that the business was one of the best performing, describing it as a "home" market.
  • He is intending to achieve $3.5bn (£2bn) of savings within three years to bolster the bank's return on equity to 12-15%. It was 11% last year.
Kevin Mao

Definitions - 12 views

Interest - "1. The charge for the privilege of borrowing money, typically expressed as an annual percentage rate. 2. The amount of ownership a stockholder has in a company, usually expressed as a...

started by Kevin Mao on 18 Apr 12 12 follow-ups, last by Kevin Mao on 18 May 12
Kostya Golovan

Banking regulations cost more than they deliver | Mail Online - 2 views

www.dailymail.co.uk/...-regulations-cost-deliver.html

shared by Kostya Golovan on 17 May 12 - No Cached
  • One should never underestimate the depths to which politicians will go to seek popularity
  • It must be the evil capitalists, they suggested, and not Labour's appalling spending record that was to blame for Britain's struggling response to the recession.
  • worrying tendency to meet recession with excessive regulatory response to banks, in order to justify taxpayer-funded bailouts.
  • ...12 more annotations...
  • Where banks are concerned, regulatory responses are often commercially restricting, difficult to comply with, and ineffective in lowering commercial risk.
  • Not unjustified, of course - if you believe in bank bailouts.
  • This is often done by shifting business towards high-risk products in the battle for survival.
  • Apart from restricting credit through profit loss on regulatory compliance, it may also result in the shift of risk to general credit transactions, as banks seek to recoup profits lost from overregulated areas such as hedging products.
  • On the back of the J.P. Morgan's billion dollar losses, there is now a temptation in the EU to pass a measure similar to the Volcker rule in the U.S Dodds-Franck Act.
  • The Volcker rule, in the U.S., prevents banks from using additional profits on deposits for a high-risk bet strategy
  • Banks have made it clear that this sort of regulation is difficult to comply with, as bet-style transactions and a pure hedge are very difficult to distinguish
  • These seek to distinguish between retail and other banking operations, and to increase reserves in banks to protect the taxpayer.
  • One might observe that the inflationary costs of low interest rates to encourage lending, and over-regulation that effectively reduces it (and also comes with public-sector administrative costs) are not exactly compatible on principle.
  • Long-term growth will also suffer, and with it, jobs - especially as we are in a recession.
  • It would be better for banks to crash and burn where they deserve to, and for governments not to get involved in second-guessing market risk, through unworkable regulation, for political gain.
  • Further, politicians ought to realise that the best way to protect the taxpayer is not to get involved in bailouts at all.
  • Kostya Golovan on 18 May 12
     
    The banks are apparently being over-blamed in the causation of the worldwide economic crisis by politicians. They are using the hype of the economic crisis in their favor and assigning all the blame to the banks which is in turn now leading to increases in regulations over the banking industry. Over-regulation will hurt the banking industry by reducing the number of option and easy with which they can utilize their money.
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