Proposals to force banks to choose between taking deposits on the high street or continuing to operate their investment or ‘casino banking’ arms have an obvious popular appeal, but may be mistaken. Since the global credit crisis began three years ago, we have heard much more about the Glass Steagall Act which separated the two [...]
Sir John Vickers’ banking report: banks should count themselves lucky
We’ve heard a lot of bleating from the banks about how dangerous reforms may be for economic growth. This morning, the Independent Commission on Banking (ICB) sought to put what Vince Cable calls their “special pleading” into context. Its proposals, the ICB estimates, will cost banks £4bn-£7bn a year. Note that that is a cost [...]
What happens when banks are required to hold more capital?
Financial regulation imposes requirements on banks to hold certain amounts of capital. When the financial crisis began in 2007, the capital banks held fell significantly. Regulators could have taken the view that capital is there as a buffer against a rainy day, and the rainy day had come, so the buffer should be allowed to [...]
Banning short-selling is shooting the messenger. But can Europe’s banks handle the truth?
A number of countries have introduced short-selling restrictions today. This is a classic tactic in bear markets. Back in 2002, I wrote a paper analysing in some detail the economic role of short-selling and the impact of various proposed regulatory restrictions upon it. It’s worth observing the following points, in the light of today’s events: [...]
Euro crisis: the banks are back in the line of fire
The stock markets are now getting what the bond markets have known for a while. Growth in Europe will be weaker than previously forecast even if the eurozone can stave off another crisis. Europe’s central banker in chief Jean-Claude Trichet warned as much today. Britain’s blue-chip index is down 10pc from its February peak, but [...]
Traders eye central banks as growth fears rule
The Japanese currency has fallen after the latest move by a central bank to combat the impact of recent market turmoil View full post on Financial Times – UK Homepage
UK banks lead market rout of lenders
Stress tests, designed to reassure markets about the robustness of Europe’s best banks, appeared to compound jitters View full post on Financial Times – UK Homepage
If banks charged a fee for debit cards, would you still swipe?
If banks charged a fee for debit cards, would you still swipe? Americans prefer using their debit cards at the register. But a small fee could change that. A new Associated Press-GfK poll finds that about two-thirds of consumers use debit cards more frequently than credit cards. Read more on Everett Herald
Banks to meet to sweeten Greek terms
Eurozone lenders are to gather Paris on Wednesday to consider a sweetened rollover plan which will ease burden on Greece View full post on Financial Times – UK Homepage
Eurozone banks to meet on Greek debt
Eurozone banks to meet in Paris on Wednesday to try to end deadlock over terms of investors’ role in the Greek sovereign debt restructuring View full post on Financial Times – UK Homepage