Hsbc Chairman Says Can't Deleverage Unless Interest Rate Up, Saving Up And Asset Price Down

[easy2012]

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8212895/HSBC-investors-question-Citys-viability-as-banks-HQ.html

He also called for a return to the "fundamentals" of banking and warned central bank support for lenders would have to continue unless interest rates rose. "Western banks, in Europe in particular, are over-geared. How they deleverage that gearing, which is being financed by the ECB and the Bank of England, how that can be unwound is hard to see unless the savings rate increases or asset values decrease, with the consequent provisions for losses.

[Tired of Waiting]

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8212895/HSBC-investors-question-Citys-viability-as-banks-HQ.html

Yep. They know it, and the Gov+BoE+FSA also know that. I am convinced that they are trying to land this "sucker", but as gently as possible, to avoid a stampede. And the coalition government has been signalling this direction since July: http://www.moneymarketing.co.uk/mortgages/coalition-ready-to-let-property-values-fall/1015197.article

[long time lurking]

Since the BOE report of low interest rates are not helping home owners ,it seems like they are preparing the ground for them to rise

But the question I ask myself is ,are they jumping before they are pushed or are they now being pushed? by the problems in Europe starting to warm up with out a sign of falling off the radar as they expected when the Irish bailout took place

[R K]

Bankster says govt. must allow us to carry on looting or we'll move to Hong Kong 'cause we're 'special'.

No you're not. You're criminal looters. F*ck off and see if Hong Kong taxpayers bail you out next time you fail.

[South Lorne]

Bankster says govt. must allow us to carry on looting or we'll move to Hong Kong 'cause we're 'special'.

No you're not. You're criminal looters. F*ck off and see if Hong Kong taxpayers bail you out next time you fail.

...don't think Hong Kong would entertain the Banks who failed and are still supported by the taxpayers ....that is a myth....for the others who pay us taxes ...well it will be their business choice ...it's a free world .....

Edited December 21, 2010 by South Lorne

[billybong]

"I've no problem with discipline for remuneration but we have to be cognisant that London will be at a disadvantage if others don't follow our approach and I haven't seen any other financial centre following London or the European Central Bank."

"no problem with discipline for remuneration" Discipline , that's almost on a par with Erik Danielsenova's "Boy, I would hate to have to run with a mediocre workforce."

And as for "I haven't seen any other financial centre following London or the European Central Bank." well no that's because no other centre wants to have to continually pay out the sectors bailout money..

The whole interview is full of Erikisms.

Edited December 21, 2010 by billybong

[Tired of Waiting]

"no problem with discipline for remuneration" Discipline , that's almost on a par with Erik Danielsenova's "Boy, I would hate to have to run with a mediocre workforce."

And as for "I haven't seen any other financial centre following London or the European Central Bank." well no that's because no other centre wants to have to continually pay out the sectors bailout money..

The whole interview is full of Erikisms.

Banks' directors and top traders would hate any "discipline for remuneration". But banks' shareholders would LOVE it!

[SarahBell]

Bankster says govt. must allow us to carry on looting or we'll move to Hong Kong 'cause we're 'special'.

No you're not. You're criminal looters. F*ck off and see if Hong Kong taxpayers bail you out next time you fail.

Have hsbc taken uk govt money?

[gf3]

Have hsbc taken uk govt money?

well if they have been able to borrow money from the bank of England at 0.5% I would say yes. Lets face it would you have any money problems if you could borrow a few billion at that rate? When I here them saying we will get all our money back from the bailout I wonder what interest rate we will get back as well. Bet it wont me 27% like some credit cards.

[thecrashingisles]

Banks' directors and top traders would hate any "discipline for remuneration". But banks' shareholders would LOVE it!

"Discipline for remuneration" - is that a service offered by Lindi St Clair?

[South Lorne]

Have hsbc taken uk govt money?

....no is the straight answer.....

HSBC snubs Government bank rescue scheme

HSBC has turned down the chance to tap the Government's offer of emergency funding as several high street banks begin to strike a more defiant note about the state of their finances.

The UK's largest banking group, which also shunned the Government's first bailout plan in October, said today that it had not asked for any money.

It said: "HSBC has not sought capital support from the UK Government and cannot envisage circumstances where such action would be necessary.

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5545532.ece

[Tired of Waiting]

"Discipline for remuneration" - is that a service offered by Lindi St Clair?

[Timm]

HSBC never seemed to be quite as ******ed up as some of the others.

Since they have benefited from the same wide spreads and don't have state support to pay back, perhaps they would now gain a competitive advantage if the market marked down and everyone had to eat their losses?

[gf3]

HSBC, although a signatory to the Government's bailout package of last October, has not taken any government capital and does not intend to. It is thought to have taken advantage of the Bank of England Special Liquidity Scheme and has not ruled out tapping the asset protection scheme — a plan to guarantee toxic bank assets.

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5827909.ece

not sure but I don,t think the Special Liquidity Scheme was considered a bailout

But it still looks like a bailout to me. I think you would need a degree in splitting hairs to tell

the difference.

How ever I really don't know what I'm talking about so I will will leave it to them that do.

Edited December 21, 2010 by gf3

[South Lorne]

EDIT: OFCOURSE SLS IS A BAILOUT! THERE IS A HUGE COST AND THE BENEFICIARY WAS THE BANKS.

...this was a special cheap line to encourage the inter bank lending market ....any organisation would take use of this cheap finance if offered and it kept additional liquidity going and costs down for customers...another example from the past was the Government's ECGD Guaranteed Finance Scheme accessed through Banks and Guaranteed by the Government ...HSBC were good to pay of the SLS.....were the bailed out Bank's in a good position ....HSBC would be welcomed overseas ....don't think your current bail outs would .....

Edited December 21, 2010 by South Lorne

[South Lorne]

The thought that any company should think and choose which country it would like to be domiciled in for tax and regulatory purposes is a complete and utter anathema to me.

If I were in charge I simply would not allow those thoughts to even enter the heads of the banks never mind the fact that they have the gall to publicly hold the country to ransom.

From a political perspective, where there is a will there is a way - as the Irish have shown under extreme duress. Clearly my threshold of stamping my boot on the faces of the bank executives is a lot lower than the government - but it may well come.

...they operate in about 90 countries ...were originally domiciled in Hong Kong ....and their business is world wide....why not....?.....

[South Lorne]

Hong Kong was part of the British Empire. It was not set up by the Chinese. It is a global player because of the British Empire. As part of the agreement for allowing them a foothold in the uk by being allowed to take over Midland Bank (itself the largest bank in the world just after the second world war before it made a series of catastrophic mistakes) they had to relocate to London (this suited them too at the time as they were looking for a way to get out from under the communists shortly to take over).

I don't just apply this rule to HSBC, or even banks. It goes for the likes of Shire Pharma who have just relocated to Ireland for tax reasons.

Basically it should not be allowed.

....ahh..."man of the Empire"....the Bank was British in Hong Kong ......but Britain no longer has an Empire....and basically 'it should not be allowed' is not the answer.....Governments in the UK are mostly staffed by people who go from University to Westminster and stay for life ....that is not the answer to doing business in the Global Economy.....we need real people to deal with global individuals , businesses and corporates ....if we don't survive globally...we don't survive at all.....

[South Lorne]

I'm just stating the historical facts which you seem to be unaware of. I am not mourning the loss of the Empire as you insinuate.

However, let companies do what they want and play countries off against one another, you lose control of the democratic process. That is my point.

And yes, if a country is deemed to be 'British' as I have explained HSBC is, then the democratic masters of the parent of the company should be those in Britain at the end of the day. If they have to have operating companies needing to be domiciled abroad then so be it and they hold by the laws of the country in which that subsidiary is domiciled.

....unaware ...?...I was aware .....long before they were seen on our High Streets ....history and entitlement in the future do not go hand in hand ....we have to compete ...and if your core business is elsewhere ...you may have to move to focus on it....

[South Lorne]

Shows that if you have enough money you don't need to pay much tax. True for companies and individuals; 'only little people pay taxes ... '

Even if HSBC did not receive money directly they benefited indirectly from the various schemes.

...the customers also benefited...as did the Government ....with the failures in NR RBS and HBOS shaking the very foundation of the system due to lack of supervision and regulatory control which Brown removed from the BofE in 1997 to hand over to the FSA newly created by him....he didn't survive ...and the FSA survived in name only ....so far.....

[South Lorne]

You're making a very good fist of it even if you aren't.

I'm not sure what your point is. Are you suggesting that companies should be beyond the control of the democratic process and the laws associated with that? Simply being able to stick two fingers up and shift around to perhaps corrupted states (like Ireland in fact some would say) seeks to evade the democratic process.

...when you have a Business Secretary far left of even Labour and a Coalition Government and Opposition feeding mob frenzy against the Banks ...if you are successful and don't need to be here as your core businesses are elsewhere ...then you consider moving elsewhere ....'not allowing it' as you suggest is against the 'baying' which howls 'who cares'.... but the decision makers within the company care....that's why they are there.....smaller companies than HSBC have or are in the process of moving ....

[LuckyOne]

I'm just stating the historical facts which you seem to be unaware of. I am not mourning the loss of the Empire as you insinuate.

However, let companies do what they want and play countries off against one another, you lose control of the democratic process. That is my point.

And yes, if a country is deemed to be 'British' as I have explained HSBC is, then the democratic masters of the parent of the company should be those in Britain at the end of the day. If they have to have operating companies needing to be domiciled abroad then so be it and they hold by the laws of the country in which that subsidiary is domiciled.

One of the challenges of running a democratic country is that people and companies have the democratic right to opt out of one jurisdiction in favour of another if they feel that the relative costs of one jurisdiction outweigh its benefits.

When the majority try to extract too much from the minority, the minority can leave.

[Blod]

The threat of the financial sector to move abroad seems a little like the way the old unions in nationalised industries used to threaten the government. If legislation was passed demanding that for a bank to operate a retail wing in the UK they had to be domiciled here we could encourage a natural division between their investment arms and retail. Then a proper set of regulations would alleviate any future bank runs that would have be taxpayer subsidised.

[South Lorne]

The threat of the financial sector to move abroad seems a little like the way the old unions in nationalised industries used to threaten the government. If legislation was passed demanding that for a bank to operate a retail wing in the UK they had to be domiciled here we could encourage a natural division between their investment arms and retail. Then a proper set of regulations would alleviate any future bank runs that would have be taxpayer subsidised.

...all the Banks who were bailed out in the UK were British High Street Banks ....and the Gordo 'proper' regulation brought in through a series of Banking Acts from '97 ....didn't work ...basically because they didn't understand what they were doing .....

[Lanky Bear]

Are you Bruce Banner in disguise? don't think I've seen that many patronising 'rolleyes' in a single hpc thread for quite a while.

[South Lorne]

Are you Bruce Banner in disguise? don't think I've seen that many patronising 'rolleyes' in a single hpc thread for quite a while.

...depends on your point of view whether it is patronising....