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Boe Demands Probe As Rumours Hit Uk Banks

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"The Bank of England has demanded the Financial Services Authority investigate inaccurate rumours sweeping the market that a British lender is in crisis after being forced to issue a vehement denial that it has been called into emergency meetings.

Sources said the Bank was livid with what it believes are short sellers attempting to turn a profit by spreading false stories about distressed lenders that could undermine the stability of Britain's financial system in these fragile markets.

A Bank spokesman said: "No meeting has taken place or been scheduled with any financial institution in the UK."

It added that it made no loans through its standing facility yesterday.

HBOS appeared to be the main target of this morning's speculation. Its shares tumbled up to 11pc on rumours that it had applied for emergency central bank funding despite a clear denial.

An HBOS spokesman said: "There is not a shred of substance whatsoever in these unfounded and malicious rumours. This is a classic case of a lie being half way round the world before truth has its boots on. It is deeply concerning these rumours are circulating the markets.

"HBOS is one of the strongest financial institutions in the world with a balance sheet of £660bn the group has also had the largest deposit base in the UK. We are one of the most respected names in the wholesale and capital markets. HBOS is a very strong financial institution."

The rumours have been fuelled by the dramatic actions of the US Federal Reserve's dramatic actions over the past few days, both orchestrating the cut-price sale and rescue of Bear Stearns and cutting interest rates by three quarters of a percentage point. Britain's central Bank also took the unusual step of quashing a number of other rumours.

A spokesman said: "It's a fantasy that all leave for Bank staff has been cancelled over Easter. There is also talk going round that the Governor has had to cancel a trip to the Far East. There was no trip, that's complete fantasy."

Mervyn King, the Bank's governor, did cancel a trip to the west Midlands scheduled for Monday and Tuesday and his deputies Sir John Gieve and Rachel Lomax have also cancelled follow-up trips due today and tomorrow.

"These trips were cancelled so that they could be in London to monitor conditions in the wake of Bear Stearns," the spokesman said. Britain's banks all suffered large fshare price falls in morning trading on the rumours.

The FSA last year said it would be paying close attention to all hedge fund or short-selling practices in the current extreme conditions to keep an eye out for market abuse. Well-placed insiders said the Bank has requested the FSA step up its attempts to crack down on the sources of the latest rumuors. The Bank declined to comment."

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HaHa is too many people listening to us on here!!

Probably. If New Labour have taught me one thing, it's to gain an advantage by spinning the truth and manipulating others.

By the way, has anyone else heard that anybody in arrears with their mortgage is to be executed at noon tomorrow? :lol:

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Perhaps the saying "thou dost protest too much, methinks" is actually true in this case we will wait and see however ive heard a rumour that Derby will win the Premier league this year!!

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Apparently materminded by some dodgy far Eastern speculators who have presided over a thirty percentage decimation of HBOS's monthly share price!

Abit relieved actually as my three month bond with Halifax matures in early April - not the 1st I might add.

Merv meeting the heads of the big banks tomorrow to discuss how much they all need to get them through the month :lol:

I suspect A&L, B&B and HBOS will be there early doing abit tidying up and pot washing.

Edited by Rover

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Probably. If New Labour have taught me one thing, it's to gain an advantage by spinning the truth and manipulating others.

By the way, has anyone else heard that anybody in arrears with their mortgage is to be executed at noon tomorrow? :lol:

They have to choose... transparency or rumours.

They chose to change the law so they can keep it under wraps; therefore we get runs sparked by rumours.

NO SYMPATHY.

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"The Bank of England has demanded the Financial Services Authority investigate inaccurate rumours sweeping the market that a British lender is in crisis after being forced to issue a vehement denial that it has been called into emergency meetings.

So they investigate, then what? Rumours are banned? How does the BoE envisage the FSA clamping down on rumours that emanate in Asia?

The biggest boost for rumour-mongers was the Govt/BoE being able to provide bail-outs in secret.

p-o-p

EDIT: chris c-t got there first

Edited by piece of paper

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Guest DissipatedYouthIsValuable
So they investigate, then what? Rumours are banned? How does the BoE envisage the FSA clamping down on rumours that emanate in Asia?

Do a spell check and censor any articles where 'l' and 'r' are used the wrong way round in words?

That could make Lloyds bank the safest.

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Do a spell check and censor any articles where 'l' and 'r' are used the wrong way round in words?

That could make Lloyds bank the safest.

Doesn't work anymore, they all attended Imperial College!

p-o-p

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They have to choose... transparency or rumours.

They chose to change the law so they can keep it under wraps; therefore we get runs sparked by rumours.

NO SYMPATHY.

I'll second that.

Now the only thing us peasants have to act on are smoke signals, unless we just sit on the tarmac waiting to be processed into roadkill.

The rumours were untrue. But the point is, they were credible. Not 'arf!

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"HBOS is one of the strongest financial institutions in the world with a balance sheet of £660bn the group has also had the largest deposit base in the UK. We are one of the most respected names in the wholesale and capital markets. HBOS is a very strong financial institution."

What, then, are the right questions?

How are your defaults coming along?

For how long into the future is your financing arranged?

What proportion of your mortgages are sub-prime or 2/3 year fixes due to revert to SVR this year?

How large is your capital base? How big a loss can you sustain before you need to either do a rights issue or similar?

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What happens when they fail to deny a rumour in future.

Or, if they lie to the market, could they be sued?

I think that is a good point.

Simply though, if the Uk Banks were in robust health, then you don't need to make statements. If they are ailing, and on the point of collapse then you need to make statements in support, and that fact tells the lie.

Optobear

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Guest mSparks

but as far as I can see the futures market for HBOS is currently closed, and last traded between 470 and 490 for 05 2008 to 02 2009 at 17.54 yesterday on Eurex (excluding the stupidly low 450 for 03 2009 which seems to be very low for all banks in that month.

I stand to be corrected, but this was all on the normal exchange and a collapse in demand for HBOS shares.

EDIT:

I think it more likely that someone from the BoE whos been buying all our financial junk took a tea break with no cover.

Edited by mSparks

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I think that is a good point.

Simply though, if the Uk Banks were in robust health, then you don't need to make statements. If they are ailing, and on the point of collapse then you need to make statements in support, and that fact tells the lie.

Optobear

British Banks are exposed to bad debtors, its a simple fact born out of several years of lending to anyone who had two arms and two legs.

In addition, British Banks relied on cheap wholesale markets for money fixed at low rates for three or six months, then lent that money for 25years, only to find after six months that the wholesale rate has gone up at an alarming rate.

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British Banks are exposed to bad debtors, its a simple fact born out of several years of lending to anyone who had two arms and two legs.

Sorry Laurejon, but their lending criteria were nowhere near that strict........

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They have to choose... transparency or rumours.

Exactly. You'd think they'd understand this.

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Most conspiracy theories are nonsense but the idea that some big players conspired to manipulate the stock markets this week is one that has legs. But isn't that the way that the finacial world works? Ironically, although insider trading is illegal, fabricating non-committal rumours about their financial status probably isn't.

But the perception that big players can still manipulate the markets so much, in itself, contributes to the general sense of impending meltdown. If another major British bank is in trouble, they're not going to tell anyone until they absolutely have to and the government would be expected to dismiss the rumour as false, even if it wasn't.

Edited by Sofa Spud

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but as far as I can see the futures market for HBOS is currently closed, and last traded between 470 and 490 for 05 2008 to 02 2009 at 17.54 yesterday on Eurex (excluding the stupidly low 450 for 03 2009 which seems to be very low for all banks in that month.

I stand to be corrected, but this was all on the normal exchange and a collapse in demand for HBOS shares.

EDIT:

I think it more likely that someone from the BoE whos been buying all our financial junk took a tea break with no cover.

I so want that to be true. It seems so likely.

Looking at the Times when Ms Dewar was appointed http://business.timesonline.co.uk/tol/busi...icle3168360.ece

I think she may have had her speech prepared just in case.

"Mrs Dewar has already been outspoken on a crackdown on insider trading and sharing of price-sensitive information, targeting market abuse as one of the FSA’s top priorities."

p-o-p

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  • 294 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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