Wednesday, Jun 24, 2009
A step in the right direction
Telegraph: Banks told: restructure or face tougher rules
Ministers will announce a crackdown on Britain’s biggest banks next week, putting pressure on them to reorganise or face a blitz of more onerous capital and liquidity rules. In a move that could push up their cost of capital or force them to accept worse terms from their trading counterparties, large banks will be encouraged to restructure themselves so that taxpayers do not foot the bill if their higher-risk investment banking divisions fail.
Posted by quiet guy @ 01:43 AM (367 views) Add Comment
3 Comments
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1. stillthinking said...
I don't see how restructuring an overleveraged financial system can result in anything other than deflation. Higher capital requirements = lower lending = less credit.
Perhaps the strategy being following is to allow gradual deflation. Not good for housing or employment.
2. inbreda said...
stillthinking. Deflation? Aren't you assuming that the excess credit of yesteryear caused inflation? I'm not so sure it did. Can't have an unwinding fo something that hasn't been wound up to begin with.
"Banks told..." is about as vacuous a statement as "Gordon Brown vows to...". Complete and utter government useless BS. Gordon Brown vows to do everything, to save everything, to fix everything. He even promised to stop offshore tax avoidance. And yet even the banks that he nationalised still have massive offshore intesrests with no signs whatsoever of any change. I have never known anyone to promise so much and acheive so little over such a long period. He really is the most fat useless one eyed t0sser on the planet.
3. denzil said...
Talk is cheap. I'd like to see some real action from the govt, not just lip service. I would also like to see some clear thinking by both the remainder of this rotting corpse of a Labour govt and the future tory govt regarding measures to prevent boom and bust cycles in the housing market. All Labour have done is enslave this and the next generation to paying off the govt debt.
Call me an idealist but it's about time those in govt work for the welfare of the people of this country and not their own egos.