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EmmaRoid

Carney Speech

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Bank assets are now 4 times GDP. By 2050 he said they were likely to be 9 times GDP.

And wants a flood of liquidity

And wants to accept raw loans as assets...

Doomed

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It wasn't organised properly before...

Partly as a consequence, the size of the UK’s financial sector relative to its economy has increased

dramatically. When the FT was in its infancy, the assets of UK banks amounted to around 40% of GDP. By

the end of last year, that ratio had risen tenfold.

As we have recently been painfully reminded, a specialisation in financial services carries risks as well as

rewards. And those risks will grow, unless we put global banks and markets on a sounder footing. Suppose,

for example, that UK-owned banks’ share of global banking activity remains the same and that financial

deepening in foreign economies increases in line with historical norms. By 2050, UK banks’ assets could

exceed nine times GDP, and that is to say nothing of the potentially rapid growth of foreign banking and

shadow banking based in London.

Some would react to this prospect with horror. They would prefer that the UK financial services industry be

slimmed down if not shut down. In the aftermath of the crisis, such sentiments have gone largely

unchallenged.

But, if organised properly, a vibrant financial sector brings substantial benefits. Today financial services

account for a tenth of UK GDP and are the source of over 1 million jobs.

Two thirds of those are outside London, including jobs in asset management in Edinburgh, transaction processing in Bournemouth and insurance in Norwich. Being at the heart of the global financial system also broadens the investment

opportunities for the institutions that look after British savings, and reinforces the ability of UK manufacturing

and creative industries to compete globally. Not to mention that financial services represent one of the UK’s

largest exports.

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Though the overhaul itself is unlikely to be noticed by bank customers, policymakers hope that it will help encourage lenders to provide more cash for those who want to borrow.

http://news.sky.com/story/1159278/mark-carney-announces-liquidity-boost

Carney said he expected demand for the BoE facilities - which are currently relatively little used - to increase over the years when the BoE ended its Funding for Lending Scheme and reversed its quantitative easing asset purchases.

http://uk.reuters.com/article/2013/10/24/uk-britain-boe-carney-idUKBRE99N0Y620131024

You can't print capital. Meanwhile in the USA...

U.S. sets bank liquidity plan, says tougher than Basel

WASHINGTON | Thu Oct 24, 2013 2:00pm EDT

(Reuters) - U.S. regulators unveiled a plan on Thursday for banks to hold enough assets they can easily sell to survive a credit crunch, calling on U.S. banks to meet new liquidity standards two years before most foreign banks must comply.

http://www.reuters.com/article/2013/10/24/us-banks-liquidity-idUSBRE99N0NX20131024

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And wants a flood of liquidity

And wants to accept raw loans as assets...

Doomed

Does that meant that the H2B loans guaranteed by government can be used by lenders as collateral to create more money to lend to other potential home buyers? Is that a real help to buy multiplier?

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But, if organised properly, a vibrant financial sector brings substantial benefits.

Bob Diamond would agree.

He extracted £120,000,000 of them.

Gravy for fradusters in the City of London, rest of UK picks up the tab, including Carney's fat pay check.

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But, if organised properly, a vibrant financial sector brings substantial benefits.

This appears to have been edited they've missed of the "to the limited few".

For everyone else the parasites will bleed you dry.

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This appears to have been edited they've missed of the "to the limited few".

For everyone else the parasites will bleed you dry.

Pretty obvious what they've decided to do.

Empire 2.0 - The Rise of the City of London

This time they're going to inculde Russia, China, emerging economies etc etc.

All run by the usual suspects out of the City backed to the hilt by Threadneedle St. and the Bullingdon Boys.

They're even going to relaunch the securitisation markets and clearly want to be able to print other global currencies including RMB, not just limited by the existing swap agreements (imo).

Like last time, but much bigger.

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Pretty obvious what they've decided to do.

Empire 2.0 - The Rise of the City of London

This time they're going to inculde Russia, China, emerging economies etc etc.

All run by the usual suspects out of the City backed to the hilt by Threadneedle St. and the Bullingdon Boys.

They're even going to relaunch the securitisation markets and clearly want to be able to print other global currencies including RMB, not just limited by the existing swap agreements (imo).

Like last time, but much bigger.

It's just a scheme to dump assets into, with a new crunch ahead, imo, to keep the UK financial system afloat.

A roundabout way of what's happening in the US, to survive a crunch, but dressed up pretty.

Demand for loans is well down, many well capitalised companies/corporates sat on their funds, not trusting current market conditions to make heavy investment. Other entrants waiting for zombie competitors to go under, so as to compete from lower base borrowing.

Not your boom 2.0.

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Bank assets are now 4 times GDP. By 2050 he said they were likely to be 9 times GDP.

Sounds nicer than "debt is 4 times GDP, we need it to be 9 times GDP"

Given yields tend to fall when values rise, and yields are pretty near zero, one wonders how. The private sector is in debt saturation, the govt too. My guess is more HtB type schemes where the govt basically bribes private entities to take on more debt so the govt can ease off stimulus and deliver Osbourne's silly surplus. That's the only way it seems possible to me. Oh, and privatizations, lots of privatizations.

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Sounds nicer than "debt is 4 times GDP, we need it to be 9 times GDP"

Given yields tend to fall when values rise, and yields are pretty near zero, one wonders how. The private sector is in debt saturation, the govt too. My guess is more HtB type schemes where the govt basically bribes private entities to take on more debt so the govt can ease off stimulus and deliver Osbourne's silly surplus. That's the only way it seems possible to me. Oh, and privatizations, lots of privatizations.

You've missed the entire thrust of his speech outlined in my earlier post.

They're going to grow overseas assets and assimilate BRICS banks as part of the new globalisation.

Empire 2.0

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Should be able to to re-use Gordon's Mansion House speech .... I paraphrase 'our financial sector is the envy of the world' a short time before it all collapsed. Still Carney will have created his property bubble with the cheap money and left for pastures new before the inevitable.

Exactly.

Good here innit.

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It's not entirely Carney's handiwork. The very last thing Mervo did before dashing off with his silver ring and portrait (below) was to sign up the UK to bail out China's shadow banks. There's a lot of competition.

“The establishment of a sterling/renminbi swap line will support U.K. domestic financial stability,” King said in the news release. “In the unlikely event that a generalized shortage of offshore renminbi liquidity emerges, the bank will have the capability to facilitate renminbi liquidity to eligible institutions in the U.K.”

The agreement puts the Bank of England first in a race among European central banks to establish swap facilities with China, allowing London to expand its ties with the world’s second-biggest economy. The U.K. capital is the center of the world’s $4 trillion-a-day market for foreign-exchange trading.

China already has currency-swap agreements with countries including Australia, South Korea and Malaysia. The Bank of England’s chief cashier, Chris Salmon, said in January that the idea of London as a major yuan center “carries much force.”

The accord is one of the final legacies of King, who will leave the central bank at the end of this month. It is also the culmination of a flurry of economic diplomacy with China at a time when rival European centers are also jostling for a role in trading yuan. King had met Zhou in February and agreed to “facilitate” discussions.

Dorian+Gray+2_OTIS.jpg

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This is all going to blow up far, far sooner than people think.

The insanity going on at the moment has reached all new levels.

Word.

Been saying for a while that, as far as the election goes, George has come to soon.

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You've missed the entire thrust of his speech outlined in my earlier post.

They're going to grow overseas assets and assimilate BRICS banks as part of the new globalisation.

Empire 2.0

I thought the BRICS wanted no part of this...even setting up their own, distinct International bank to rape the third world rather than participate in the UN's one.

http://www.bloomberg.com/news/2013-03-25/brics-nations-plan-new-bank-to-bypass-world-bank-imf.html

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Pretty obvious what they've decided to do.

Empire 2.0 - The Rise of the City of London

This time they're going to inculde Russia, China, emerging economies etc etc.

All run by the usual suspects out of the City backed to the hilt by Threadneedle St. and the Bullingdon Boys.

They're even going to relaunch the securitisation markets and clearly want to be able to print other global currencies including RMB, not just limited by the existing swap agreements (imo).

Like last time, but much bigger.

I thought you were joking at first, but you reference the same post later in the thread as your answer, so maybe not...

Honest question - who will borrow and who will lend? Will it be asset backed or not?

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as far as the election goes, George has come to soon.

Oh god, another image I'm going to have to scrub from my brain. That aside, hope you're right...

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I thought you were joking at first, but you reference the same post later in the thread as your answer, so maybe not...

Honest question - who will borrow and who will lend? Will it be asset backed or not?

His speech seems to be a major repositioning of the BoE and London as a global financial hub.

He's completely moved away from Merv's grudging provision of liquidity, removal of Bob Diamond etc etc and seems to be setting London up for a global banking 'land grab' especially in China and emerging markets.

I'd read it through a couple of times and consider what he's saying in that context. UK domestic banking doesn't seem to interest him very much - he's thinking BIG. You need to think of it more like the Victorian global trade era but with banking at the core instead of physical goods trade.

That's my take anyway. Probably the most significant BoE speech for a generation imo.

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