Foreign Banks Could Be Banned From The Uk

[Monkey]

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10661329/Foreign-banks-could-be-banned-from-City.html

Foreign banks with branches in Britain have been warned by the Bank of England that they could be barred from operating in the City amid concerns over their poor regulation.

The Prudential Regulation Authority (PRA), Britain’s banking supervisor, has for the first time set out a series of requirements for non-EU banks wishing to do business in the UK.

In a consultation paper published on Wednesday, the PRA says it will require foreign regulators to meet British standards of oversight as a condition of continuing to allow their overseas bank branches to operate in Britain. Failing to meet those British standards could lead to financial groups from some countries being banned entirely from the UK and the City of London.

the PRA wont have the bottle to ban anyone, but the smallest of banks, who have 1 branch in the whole of the UK.

[tomandlu]

the PRA says it will require foreign regulators to meet British standards

How hard can that be? Throw out any affordability criteria, sell fraudulent products, manipulate the international money exchanges, and you're good to go.

[interestrateripoff]

And what about banks that operate via the internet?

[Errol]

So we can say goodbye to Goldman Sachs, JP Morgan et al?

[Monkey]

So we can say goodbye to Goldman Sachs, JP Morgan et al?

A list of "banks"

http://www.bankofengland.co.uk/pra/Pages/authorisations/banksbuildingsocietieslist.aspx

there are a lot of names.....

[Ash4781]

How hard can that be? Throw out any affordability criteria, sell fraudulent products, manipulate the international money exchanges, and you're good to go.

Lol

[katchytitle]

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10661329/Foreign-banks-could-be-banned-from-City.html

the PRA wont have the bottle to ban anyone, but the smallest of banks, who have 1 branch in the whole of the UK.

The "branch" definition is actually a legal one not a high street branch. Banks operate as branches when they open up in new countries. Branches are given different privileges to limited companies for instance they can move their capital to other parts of their branch around the world without paying tax etc. This is because the nature of their business is to allocate capital. Is it the fundamental requirement of capitalism to move money to where there is demand for it e.g move money from older retiree savers in california to new family home starts in the UK. Foreign banks have long used their branch structure to mitigate their losses/risks by keeping their risks in one country but all their capital in their host country .eg Lehman brothers.

The PRA has finally realised this and asked that they convert from branches into real limited companies in the UK ensuring that they keep their capital in one place and do not move it back to their host country if/when they fail.

What does this mean for us? Well, when you remove the free flow of capital it means that funding costs for banks go up because they cannot get the economies of scale they used to. So, the PRA has just increased the price of loans for all of us. isn't regulation brilliant? Remember, no one is in business to provide you with a service, they just want to make more money than you to have a higher standard of living for their 75+ years on the planet.

[R K]

Foreign banks with branches in Britain have been warned by the Bank of England that they could be barred from operating in the City amid concerns over their poor regulation.

Beyond satire.

But they could start with the Bank of Scotland and the Royal Bank of Scotland.

[Ah-so]

Beyond satire.

But they could start with the Bank of Scotland and the Royal Bank of Scotland.

While a somewhat predictable response from you, the rulrs are clearly there to target any equivalents of the icelandic banks who offer great rates of interest and are largely unsupervised and whose deposits are not fscs protected.

[R K]

While a somewhat predictable response from you, the rulrs are clearly there to target any equivalents of the icelandic banks who offer great rates of interest and are largely unsupervised and whose deposits are not fscs protected.

Indeedy. My somewhat predictable response was mostly predicated on the not insignificant detail of the UK not being in the mess it's in 'cause of rogue Icelandic (or similar) banks, but the entirely FSA regulated and UK domiciled RBS and BOS (and all the rest). Now if only they'd been banned from the UK.

[macbeth79]

Indeedy. My somewhat predictable response was mostly predicated on the not insignificant detail of the UK not being in the mess it's in 'cause of rogue Icelandic (or similar) banks, but the entirely FSA regulated and UK domiciled RBS and BOS (and all the rest). Now if only they'd been banned from the UK.

LOL,

[Ah-so]

Indeedy. My somewhat predictable response was mostly predicated on the not insignificant detail of the UK not being in the mess it's in 'cause of rogue Icelandic (or similar) banks, but the entirely FSA regulated and UK domiciled RBS and BOS (and all the rest). Now if only they'd been banned from the UK.

No one will disagree. Hence the Banking Reform Bill going through parliament.

This does not mean that this set of rule changes are undermined or invalid.

[(Blizzard)]

So, the PRA has just increased the price of loans for all of us. isn't regulation brilliant?

Good. In this case, yes, regulation that increases the cost of capital would be brilliant.

[billybong]

How hard can that be? Throw out any affordability criteria, sell fraudulent products, manipulate the international money exchanges, and you're good to go.

+1

it will require foreign regulators to meet British standards of oversight

It sounds like the reality is that the British banking sector is frightened of the competition and of foreign banks higher banking standards.

Edited February 27, 2014 by billybong

[R K]

No one will disagree. Hence the Banking Reform Bill going through parliament.

This does not mean that this set of rule changes are undermined or invalid.

Of course it does. The last lot of rules were undermined and invalid, why wouldn't these be? Carries a very high degree of probability.

[Traktion]

I'm sure the remaining banks would revel in the lack of competition.