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British Banks Highly Vulnerable To Future Shocks, Bank Of England Warns

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http://www.telegraph.co.uk/finance/finance...land-warns.html

Britain's banks remain over-indebted, highly vulnerable and harbour growing funding gaps which leave them susceptible to future shocks, the Bank of England has said.

In a warning to bankers and consumers after months that have seen large jumps in share prices and hopes that the banking system is recovering, the Bank used its Financial Stability Report to emphasise that the UK remains highly vulnerable to potential shocks.

With the Government poised to deliver its White Paper on financial regulation next week, the Bank also cautioned that life for financial institutions was about to change forever, with big banks facing a whole spectrum of new restraints on their size, structure, business plans and lending.

The report, published today, said: "While pressures on the major global banks have stabilised over the past few months, their balance sheets remain impaired. Banks' leverage remains high, with the possibility of further impairment of assets placing continued pressure on profitability and capital ratios. Future revenue generation will need to balance the desire to deleverage with the need to generate new business at profitable spreads.

"At the same time, the major UK banks maintain a high and rising customer funding gap. The withdrawal of overseas funding and competition for domestic deposits has added to these funding pressures."

The report revealed that the funding gap – the shortfall between what banks have in deposits and what they lend out to customers – has further widened in the past year to more than £800bn. The increase underlines the scale of adjustment that they will have to undergo before life returns to relative normality. The report also pointed out that the amount banks have in liquid assets remains low, while the leverage ratios remain high, saying: "As long as these balance sheet vulnerabilities persist, there is a risk to the banking system from further adverse economic or financial sector developments, which could in turn affect lending and economic recovery."

In a sign of the strain facing nations' public finances – including the UK's – the report also revealed that the threat of a sovereign debt default has become one of the biggest concerns for investors. A survey put together for the report identified sovereign risk as a financial stability concern for the first time.

The report also laid out a number of key criteria banks will have to fulfil in the future – reforms which could transform the structure of the financial system. Among its recommendations were that in future banks should "face a credible threat of closure or wind down", should have a "risk-based, pre-funded deposit insurance system", should increase their levels of capital and liquidity, depending on their size, and should provide a "will" which explains how to dismantle them in the event of insolvency.

Banks must also provide the authorities with more information about their interlinkages, to ensure that the collapse of one will not bring down a whole series of institutions, the Bank said.

In other shock news Pope found to be Catholic, more on this breaking story later.

So if your central banks warns of sovereign debt default is that serious? :unsure:

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http://www.telegraph.co.uk/finance/finance...land-warns.html

In other shock news Pope found to be Catholic, more on this breaking story later.

So if your central banks warns of sovereign debt default is that serious? :unsure:

I'm going to keep banging this drum until it happens. Also from the report:

And it says the difficulty in raising money cheaply on capital markets could be made worse if the UK and other governments still have huge budget deficits, which could make the cost of borrowing more expensive for everyone.

Oh dear. Lifetime tracker anyone?

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I reckon the chance of total collapse is becoming more and more likely... :blink::ph34r:

Well, obviously no more money for bailouts:

Quote

Among its recommendations were that in future banks should "face a credible threat of closure or wind down" and should provide a "will" which explains how to dismantle them in the event of insolvency.

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Well, obviously no more money for bailouts:

Quote

Among its recommendations were that in future banks should "face a credible threat of closure or wind down" and should provide a "will" which explains how to dismantle them in the event of insolvency.

What they should also add is that any directors of a failed bank, should also have their assets, including their pensions, seized.

Put in that as a mandatory act in case a registered bank needs to go to the bank of England, then I think you will find that banks will be a lot more careful.

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Lord no.

Everything is fine, we can't move for green shoots and tractor production loans are up 400%.

Even a corpse shows signs of life if you leave it somewhere warm for a couple of weeks.

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Quote

Among its recommendations were that in future banks should "face a credible threat of closure or wind down" and should provide a "will" which explains how to dismantle them in the event of insolvency.

The only way to establish that credible threat in the current climate is to let a couple go under IMHO.

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Even a corpse shows signs of life if you leave it somewhere warm for a couple of weeks.

Yes, I also saw a peppered and otherwise well seasoned piece of cod jump in my frying pan last night.

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Rearrange these words in to a well known phrase or saying

the has bolted horse door stable the shutting after.

Sent in a by a Mr. King who claims to work in a bank somewhere.

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Rearrange these words in to a well known phrase or saying

the has bolted horse door stable the shutting after.

Sent in a by a Mr. King who claims to work in a bank somewhere.

Poor old Mr King. He is the Chief Engineer of the ship..... The Captain and all the other senior crew members are all out to lunch, the ship is heading at full steam towards the rocks -- and poor old Mr King knows that disaster is about to strike... And there is NOTHING -- NOTHING he can do about it.... He has been left high and dry --- he has been totally betrayed and stabbed in the back....

Edited by eric pebble

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Poor old Mr King. He is the Chief Engineer of the ship.....

Gordon: 'Printer speed 10'

Merv: 'She cannae take any more, cap'n'

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Trying to pm mop injin but no go! it's here!

dude, you either have pm disabled or are still not allowed to use the feature as a new member. Either way you can't be sent pm's either.

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Guest spp

Subscribe to the Bobchapmanchannel...It's personal with him. He wants to bring them down!

Edited by spp

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More to follow...just listening to todays

<_<

Can you post a transcript or synopsis of their lunacy for us to debunk please...... Would watch but that'll be a few wasted minutes of my life I'll never get back.

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Trying to pm mop injin but no go! it's here!

Your pm is disabled as richyc said.

This message can not be sent because the recipient has their personal messenger disabled or they are in a member group not allowed to use the personal messenger.

This personal message has not been sent

You need to speak to the mods.

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Guest spp

You on the Sachs/Morgan payroll Hamish??

you are up very late!?? I wonder.

Lets start getting some facts to back up your rubbi$h, yeah?

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You on the Sachs/Morgan payroll Hamish??

you are up very late!?? I wonder.

Lets start getting some facts to back up your rubbi$h, yeah?

:lol:

OH NOESSSY111!!!!11!

The Eleventy millionth end of the world is here, and the devil owns Goldman Sachs....... :lol::lol::lol::lol:

These doom mongering idiots shorted everything in sight and got burned by the market recovery. Now they want to create hysterical conspiracy theories to cover their ar5e.

They have no credibility, none, zip, nada, zilch, ZERO..... they are tin-foil-hat wearing nutcases who called it wrong, lost themselves and/or their listeners a packet, and are now squirming and desperately trying to blame anyone but themselves.

But PLEASE keep posting as much of this tripe as you can, it just shows the average person how foam-at-the-mouth looney tunes most of the doom-mongering posters on here really are. ;)

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Guest spp

Big reaction there Hamish!

Whats up...Touched a nerve?

Shorted what??? nothing here.

Like we didn't know the suckers are being sucked dry.

Sit down shut up...you have been found out!

;)

Edited by spp

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