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Dave Beans

Banks' Dicey £1Trillion Bets

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From NOTW of all places..


BANKS like bailed out giant RBS have gambled more than £1TRILLION of money they don't have on high-risk bets.

Ten international banks have put staggering sums on the iffy flutters which could leave them empty-handed. And hundreds of billions of pounds worth of their assets are still linked to risky products that helped caused the catastrophic banking crash.

The shock findings come as a major report calls for big banks to be BROKEN UP and rogue traders STRUCK OFF. In total the ten banks chanced £1.1trillion on derivatives - hugely complicated financial "products" which are linked to underlying assets such as the American housing market or a stock. They can reap huge rewards, but if they don't come off they can leave the banks with NOTHING.

Derivatives are controversial because they helped cause the banking crash. But Barclays' accounts reveal 30 per cent of its assets (£416billion) are still linked to such bets. RBS, which is 84 per cent owned by taxpayers, has chanced 20 per cent of its assets (£421billion) and HSBC is gambling with 10 per cent (£174billion).

For Lloyds - 41 per cent owned by the taxpayer - the figure is just 5 per cent of its assets. But that still adds up to a £49billion gamble.

The scandal shows the banks have not learned the lessons of the catastrophic crash. And there is evidence that they've returned to business as usual and are still paying out bumper rewards. In the year before the crash British banks handed out £10billion in bonuses. A probe by Channel 4's Dispatches programme reveals they still forked out £6billion in 2009.

And many bankers were handed a 300 PER CENT increase in their base salaries. Experts say this enables banks to claim they've changed their ways and are paying lower bonuses - while actually still dishing out just as much cash. The findings come as a commission on banking's future calls for sweeping changes. Its members include Business Secretary Vince Cable and Tory big-hitter David Davis.

It calls for banks to be completely restructured so their investment advice is separated from their trading. And it demands "living wills" detailing how the collapse of a bank would be managed to ensure its core deposit, lending and payment functions are ring-fenced.

The commission also wants a code of conduct for bankers, insisting those who breach it should be struck off like doctors. And it says bank boards, rather than regulators, should take primary responsibility for their group's stability.

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From NOTW of all places..

Whoops, somebody forgot to send the memo to the rag tops!

If you have access to the News of the World editorial team, please let them know that bankers are now at liberty to make any runtcrazy bet they want. If it comes off, then  they get an utterly huge, dynasty founding bonus.

If it fails, then the taxpayer bails them out and they have to make do with just a really really large, buying a farm in Shropshire bonus.

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  • 399 Brexit, House prices and Summer 2020

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