Banks threaten to leave London over measures to prevent another bailout

From The Guardian UK:

Commission’s plans unlikely to include breaking up institutions, but banks ‘may still quit UK’

Jill Treanor
Sunday 10 April

A government commission is to unveil measures aimed at ensuring taxpayers will never again need to bail out Britain’s banks, with recommendations that risk splitting the coalition and infuriating the banking sector.

Amid warnings from large banks such as Barclays, HSBC and Standard Chartered that they will leave London if the proposals by Sir John Vickers are too radical, the commission will seek to ringfence savers from riskier banking operations.

The commission has considered the potential impact of its proposals on the City and is expected to counter suggestions that they would encourage banks to move to New York or Hong Kong.

The report, thought to run to 200 pages, was handed to ministers late on Friday to be presented to the banks at 6am on Monday – an hour before its official release. It is expected to back away from proposals such as “narrow banks”, which only take savings, and splitting high street banks from their investment banking divisions, which Vince Cable, the business secretary, previously alluded to as “casinos”.

But it sets out a handful of ideas to avoid another taxpayer bailout and bolster competition on the high street in the wake of the rescue of HBOS by Lloyds, which was only permitted because Labour overrode competition concerns.

Crucially, Vickers and his four commissioners have looked at ways banks can bolster their capital through new types of loss-absorbing financial instruments. They are concerned that the capital held by banks before the crisis – largely equity – was too brittle and lacked the flexibility of other types of instruments that might be more effective incushioning the blow of multibillion-pound losses.

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One Response to “Banks threaten to leave London over measures to prevent another bailout”

  1. Andrea B. Says:

    The banks have been slowly leaving London over the last 8 years anyway. They are moving to Asia and Middle East. They will get a shock when they find out that the Middle Eastern countries and China will not raise a finger to help them, if they fail.

    In the Middle East debtors jails are brutal. It is not uncommon for lawyers, derivatives brokers, bankers and other financiers to end up in those jails until they pay of there debts. They are not relased until the debts are repaid in full, which in the case of billions would mean permanet incarceration in a hell hole run by Sharia Law lunatics.

    For once there might actually be a good use for sharia law.

    In China, if a person runs up debts of billions of Euro, a friendly regulator will arrange to meet you and the police will black bag you in the meeting. That person or company will either pay that money very quickly or all involved will goto jail and do serious hard labour. A description of how the police interogation of how you salted the money away will make guantanamo and Abu Ghraib seem like a trip to Disney Land.

    Seems the Chinese might have some ideas we can copy there.

    I have noticed that the Chinese also take food safety seriously. They execute people who sell tainted baby food. Compare that with the west where they would get a bonus instead.

    Ten years from now, I can see those same banks begging to be let back into the UK and Europe.

    Banks used to do about 80% of their business in London, but that had dropped to about 40% before the crash. I hope to soon see the day when they are not there at all.

    In Iceland, the Icelandic people told the bankers they were getting no bail outs and to go fuck themselves for there reckless behaviour, in two referendums.

    Unfortunately the Icelandic people have not issued arrest warrants for every banker involved who all seem to be living in London, New York, Washington DC and Dubai.

    In Nigeria, they jailed the bastards.

    Jail term for ex-bank boss

    A judge threatening to jail a banks chairman.

    Seems that the days of Africans copying our ideas 50 years late, are over. It now looks like Nigeria has a few ideas we need to look at as the way forward for our society.

    All banks need to be split from there investment arms.

    Having a bond or derivative broker working with the assets of a bank that is dealing with millions of mortgage’s is insanity.

    Until the end of the 70’s, most bond dealers had to take a second job as a cleaner, stacking shelves in a supermarket or similar just to have enough money to survive. Now they think because they are paid millions that they are really smart and are paid fairly. They do not seem to realise that they are all mostly a bunch of coke snorting idiots who today would not be able to get a second job stacking shelves, due to having degenerated so far.

    Then some morons came along with an idea born out of a mixture of extreme psychopathic illness and greed known as neo-liberalism, then legalised banks being allowed to speculate as they saw fit. That started under Reagan in the US and was concluded by complete removal of any form of indepth oversight by Clinton. Those same deregulations occurred in the United Kingdom under Thatcher. Those laws had been put in place by Roosevelt in the 30’s, so as to prevent another speculative economic bust as happened in the Great Depression. Reagon-Clinton removed those laws and set everyone up for another great depression.

    In the process there sucessors George Bush and Bush 2 (Obama) oversaw the greatest wealth transfer in the history of the human race. That wealth transfer has been not from middle class or poor. That wealth transfer was purely from the bottom 99% of the population, to the richest 1%. That wealth transfer took actual wealth from the modestly well of, upper middle class, middle class, well of workers, workers, poor workers, the unemployed, pensioners, incapacitated and those not normally counted in society in any way. Basically anyone with less than about 5 to 8 million in assets and investments down to the very poorest in society, had wealth removed and given to the richest of all.

    After what happened in the Barings Bank scandal in London some years ago, anyone with at least two functional neurons would have realised that having a brokerage inside a bank was insanity.

    The German government has wanted to make it EU law to seperate investment banking from high street banking. The countries that opposed that idea are United Kingdom, Ireland, Spain, Sweden, Denmark, Portugal, Italy and Greece. There is eventually going to be a clash between countries that prefer economic stability such as Germany, Poland and Estonia and those that prefer recklessness such as United Kingdom, Sweden and Ireland in the EU.

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