Vickers provides the best of both worlds for George and Vince

trevors den

2019? whats all the fuss?

2trueblue

Balls and Milllipede, the Beeb, will of counrse have another view. But frankly it was their watch where it all went wrong and this must be referred to at all times.
As for the LibDems getting all the credit, why should they? t is the way the media presents it and that is where our problems are.

alexsandr

We need to get new players in the banking field. Banking in the UK has become too concentrated into a few big players.
How we entice new players into UK banking I dont know. Maybe peer to peer lending on the Zopa model, or new mutuals, or large companies moving into the field like supermarkets or the insurance industry.

Percy

When do we get the comedy turns from Big Bob Diamond and Humpty-Dumpty Hestor?

Anna

Back in the mists of time I chose to open a current account with Lloyds specifically because it didn't host an investment arm, it was strictly high-street banking and that seemed a safe choice. I later opened a Halifax account for similar reasons (distributing my eggs among baskets!). Since then, Gordon Brown forced Lloyds to take over HBOS and I find myself with two accounts I wouldn't originally have chosen.

I'm no economist, I try to sort out the arguments with no great success. To separate high-street banking from investment banking seems to me plain good sense, but on the other hand people far more knowlegeable than I argue that would hobble the economy.

How is any ordinary person supposed to understand what is best?

Gawain

I can recommend Allister Heath's Editor's Letter in today's City AM for an alternative view on this http://www.cityam.com/news-and-analysis/allister-heath . He makes a strong argument for the reintroduction of capitalist profit and loss disciplines into banking by letting creditors take the pain rather than taxpayers andallowing for the orderly winding up of failed banks.

Tom Pride

I don’t know whether these proposed reforms are sufficient to protect the taxpayer from reckless behaviour or whether they will damage the financial sector – I’ll defer to others with the technical expertise but at the same time I will be wary of howls of protests from bankers.

But, in the reports on Vickers, there tends to be references to “the banks” as a single entity whereas I see two separate groups with not wholly congruent interests – the banking companies with their owners and then the senior highly paid directors, of whom the latter seem to beyond the control of the owners or anyone else.

It is all very well imposing new restrictions and controls on the banking institutions but it is not going to work unless some control is imposed on the directors and senior employees or measures are introduced to encourage responsibility.

The best idea I have seen is to make the directors of banks (and those retired within say five years) personally liable in the event that a bank becomes insolvent – their pensions included. You could have a cap – say 120% of their bank remuneration over the last seven years – but this single reform would seriously concentrate minds.

TGF UKIP

I wonder how Fraser and the other house mag hacks are going to try to spin the breaking Sleazy George story for him. Guido a MUST over at order-order.com

normanc

I often joke that prostitutes and cocaine are the best investment opportunity for any conservative - an unregulated market, free from taxation and government interference and a perfect model of supply and demand, with both existing and balancing despite the best efforts of government to distort the market by constraining both.

George (I now finally get why Fat Bloke calls him Sniffy!) should be applauded for leading the way.

TGF UKIP

Like it normanc and, who knows, perhaps that might be the line Fraser tries to spin for his client. Be amusing even if somewhat surprising.

As the story has been kicking round for a few years, Dave 'n George will presumably have a pre-rehearsed line to spin, but going to be v interesting to see how lame it might be.

Tom Pride

normanc

Yes, these nicknames and acronyms - I was as clueless about his dog boiling until a Coffeehouser explained it. I figured out H2B myself and ABC (the bearded religious one) but only recently found out why Nick Robinson is called “toenails”!

Frank P

TGF UKIP

It does indeed look as though there is another 'slow train a coming'.

I wondered what the real story of Coulson's grip on this administration was; now we know. Vivian White is one of the last of the old investigative team that once gave Panorama its reputation as a kosher crew. Extremely damaging stuff. If the government survive it, I shall be surprised. It's always the cover up - not the indiscretion that get 'em in the end. What a feckin' mess!

Gawain

So pleased to see UKIP raising the level of discussion as usual. Interesting that this story should appear today. I wonder who Osborne has upset ? I wonder how much ABC are paying fir their interview ? I suspect it is a story going nowhere.

Baron

Madness

and another thing:

The Continentals, but mostly the French, have always hated the pre-eminence of London, Vickers sticks the knife in for them, the other rivals of our banks must be having a laugh, too.

The thing is retail banking will not be safer any more than before, the ring-fenced operations will have to gear up, grow assets, too, if they didn’t nobody would be interested in doing it, it ain’t the domain where any bank has made much money in the past anyway, it will be even less attractive if the 10% capital adequacy ratio is enforced. The cost of capital for the investment side will go up as well making it much harder for banks within out jurisdiction to compete with anyone else, mostly the US banking giants, Baron confidently predicts that if the suggested measures are implemented in full at least three banks won’t be domiciled here within the next three years or sooner.

The banks should have been told they have few years to adopt any business model they want from a full separation of retail from investment to their full coupling, depositors should be told the consequences of both, advise to split their savings amongst not only different banks, but different classes of assets, i.e. diversify across all assets from savings, ISA's to funds invested in forestry, the green nonsense. If any one of the banks were to go belly up because its business model didn’t succeed, so be it, that’s the price capitalism pays for delivering more than any other system.

Baron

alexandr complains: “Banking in the UK has become too concentrated into a few big players.
How we entice new players into UK banking I dont know”.

You haven’t heard of the Bank of Essex? You can bank with them, why don’t you.

Anna, makes a sensible point: “How is any ordinary person supposed to understand what is best?”

But Anna, it’s like that with everything, what’s the best car, the best marmalade, the best holiday, ha? It’s you, Baron, the market of the great unwashed who decide on the ‘best’. In banking it should be the same, but it isn’t. Vickers came up with a model, every bank will have to follow. That’s lunacy, the banks should be free to decide what business model they follow, tell us, we should then decide to go for either greater safety buying NS&I certificates (£30,000 max) or go for higher return buying into a hedge fund. If the latter folds up, it’s up to us to live with the consequences.

What you may like to remember is this, the banks take in deposits short i.e. you or any other depositor can ask for the cash back, they lend it long, i.e. those who’re advanced the loans promise to repay the money in 10-20 year time. If, for whatever reasons, the short term depositors get nervous, panic, demand their cash back, the bank has to call in the loans, those who bought whatever it was with the loan have to sell, sell into a distressed market, depositors in other banks get anxious, too, queue to withdraw their savings,,,, the whole system eventually collapses.

The point of it all is banking is inherently unstable, always, it has bugger all to do with bankers.

Is the guarantee implicit in Vickers report doable? Of course it is, we could switch to bartering, it’s doable, too, is it desirable though? Nope, no other country has gone that way, it won’t change the inherent instability of retail banking in any way, it will only make the loans to you, everyone else more expensive. It will burden the taxpayer who ultimately is the guarantor of he stability of the retail operation.

and another thing:

do scan the suggested link to Allister Heath suggested by Gawain, it’s worth reading, offers a better way of dealing with the banks than the ring-fencing.

saddleworth

So G Brown's narrative wins.
He vilified banks in order to try to push the blame on someone else and at all costs avoid questions about his conduct. This economic genius never regarded the Treasury has having any responsibility for the running of the UK economy - he was solely concerned with tax and spend (or perhaps slash and burn).
Not very bright bankers then took absurd risks in order to finance the asset/debt bubble.
Sure we need to review the manner in which banks conduct their operations. But with a sight more concern for the future of our economy than this report shows
The Leader of the Opposition suggests we should ban bankers from practice if they get it wrong. How about banning those who failed to exercise adequate supervision of the UK economy from the practice of Government?

Baron

saddleworth, sir, spot on, absolutely spot on, the great unwashed are rightly cheesed of, angry with the bankers, the politicians have craftily joined in conflating the bankers with banking.

Baron has said it before, the rot set in when the American do-gooders decided to spread home ownership to people the banks wouldn’t have touched themselves with or without a bargepole, the sub-prime lending was charged interest that was higher than that paid by credit worthy customers (for an obvious reason), at times of low cost of money these contracts were attractive to institutions that needed yield, hence the securitising, hence the acquired toxicity when the cost of money went up, the sub-primers began defaulting en masse. Not one politician had said no to securitisation, they just sat there pocketing huge salaries, building their pension pots, basking in the glory of massive tax receipts they could bribe the voters with.

It was the politicians who fugged up big, now, to assuage the indignation of the hoi polloi over the bankers remuneration they are about to install a system that will as unsafe as before, will deliver what we had before, but at a much higher cost, the cost will be paid by us. Madness.

Dimoto

Methinks Baron doth protest too much (on every thread !)

He must be relieved at the reality.
Lots of dead wrong guesses in the media.

David Lindsay

Is there any remaining purpose to the Labour Party? If so, then it will propose the following amendments to the forthcoming banking legislation:

- That investment banking and retail banking be split completely;

- That the independent directors to predominate on the boards of retail banks be elected by and from among the account-holders; and

- That the profits from the public stakes in HBOS and RBS (permanent, non-negotiable safeguards of the Union, as public ownership always is) be divided equally among all the households in the United Kingdom.

That Keynesian, pro-Commonwealth, anti-neoconservative Eurosceptic, Sir Peter Tapsell, may be old, but he is increasingly typical. Like the most welcome resurgence of the atavistic Labour dislike of the EU, we are witnessing the most welcome resurgence the atavistic Tory dislike of international capital, corporate megalomania, American hegemony, Israeli interference, and wars.

Is the Labour Party capable of taking advantage of these trends, both in Parliament and beyond? I say again, is there any remaining purpose to the Labour Party?

Baron

Dimito, my blogging friend, the poorly educated Slav has but two hobby ponies, the world of finance and criminal justice, dabbles in everything though for he’s stupid enough not to figure the ranting of his has as much resonance in the world at large as the fart of an undernourished, NHS cared for dwarf of an ant, and that’s overdoing it in favour of the eastern barbarian. You agree, Barons trusts.

still, explain the last two sentences of your three sentence view of the blue veined monster, please.