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Bank Of England Planning New Ways Of Covering Up!

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In the Bank of England's Stability and Depositor Protection: Further Consultation.

http://www.bankofengland.co.uk/publication...ction080701.pdf

3.23 The January consultation indicated that the Government intended to legislate to

remove the requirement for the Bank of England to release weekly returns detailing its

summary balance sheet. For the most part respondents to the January consultation

were supportive of the proposal. The Bank of England has been consulting further on

whether or not to continue publication of the weekly return.

3.24 In the January consultation, the Government also set out that it would consider

other statutory reporting requirements related to the Bank of England that have the

effect of disclosing its operations. The Bank of England’s Annual Report and Accounts

clarify that, in order to prevent a loss of confidence in the financial system, the financial

effects of its liquidity assistance operations may not be identified

What that means is that currently we can see large interventions by the BoE because they show up on their balance sheet. Now they want to avoid reporting so we won't know if they are intervening...

This was discussed before:

http://www.housepricecrash.co.uk/forum/ind...st&p=870854

Perhaps suggest that the BoE take notice of what is said here? Certainly this eradicates the information route I highlighted in that thread.

Personally I find it outrageous. A lack of transparency across the banking sector (through securitisation) got us into this mess. Full transparency would help enormously. If the BoE had to publish minutes of all their official transactions with banks we'd know who to avoid for depositing money, and the whole system would work well. Hopefully Parliament will find the idea of the BoE dropping their reporting unacceptable.

Optobear

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Personally I find it outrageous. A lack of transparency across the banking sector (through securitisation) got us into this mess. Full transparency would help enormously. If the BoE had to publish minutes of all their official transactions with banks we'd know who to avoid for depositing money, and the whole system would work well. Hopefully Parliament will find the idea of the BoE dropping their reporting unacceptable.

It just means you need to draw the 'avoid' line further back. Most depositors wouldn't look at these figures in any case; if it was transparent it might cause a panic and we wouldn't want that :ph34r:

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Looks a bit like what america did when it stopped publishing it M4 money supply figures

As can be seen this did nothing to arrest the crash or prop up the value of the $USD.

Stock dealers will know this is a clear signal to get out if only they can dump their holdings on to stupid joe public. It's a race for the life boats and joe does not know the boat is sinking.

We need a revolution to kick our corupt MP's out and whilst we are about it we may as well ensure measusre are in place to stop the BoE stuffing over the public every cycle.

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It just means you need to draw the 'avoid' line further back. Most depositors wouldn't look at these figures in any case; if it was transparent it might cause a panic and we wouldn't want that :ph34r:

The city, and that includes all the regulation, the treasury, everyone, have proved themselves incapable of running the UK financial system. Total transparency - ie publish all minutes of all discussions between banks and regulators would make it much clearer what is going on. People would then understand the risk inherent in investing at returns higher than gilts, and would scrutinise lending much more efficiently. Currently we have a system where the BoE will cheerily let you invest in a bank right up to the moment it goes pop. That is just wrong. If they (who are officials in a publically owned central bank) have suspicions then they ought to be published. If that leads to banks treating our money on deposit in a less cavalier way, then all the better.

Why not have a section on the BoE website detailing all meetings? It would have some cost (in terms of time to write up the minutes), but would be massively stabilising.

The current BoE proposal to drop the Bank return would have allowed them to take over NR debt without the public knowing. Would that have been in the public interest? I would say not, because it was a big part of the edifice propping up unrealistic house prices, and deserved to fail.

There is still a strong sense that the UK is damaged if house price wealth is reduced, personally I don't see that. We have a disproportionately high fraction of our national wealth tied up in housing. It would be much healthier if UK banks had to seek places to put capital to work in industry instead. It would be very interesting to see how German personal wealth assets are distributed between property, commodities, service industry and manufacturing industry. You'd need to drill down to understand pension fund shareholding, and use of bank deposits, but I think it would be very instructive about our current financial malaise.

[rant]

For the BoE to propose that they could stabilise things better by allowing less information out is frankly astonishing. Why aren't there riots? I'm afraid I even despair of many posters on here who ignore the serious things like this and spend time wittering about gay couples winning £5000, or the front page of the express...

[/rant]

Optobear

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I would suggest also that the UK drop the requirement for banks to publish profits and losses and any detailled accounts, in case it suggests that the bank might be in trouble.

Indeed, full face masks for tellers would help keep them from shame in the street.

Masks depicting the various famous gangsters from the US, Al Capone, Carlo Gambini would be very appropriate

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They seem, as usual, to be contradicting themselves. On the one hand we have in effect been told that if a bank fails the only losers will be the shareholders, but on the other hand they're not going to give the shareholders information they should have in order to determine wether to invest or not. You can't have it both ways.

On the bank return reports, has anyone worked out how to read them for the special liquidity scheme and other interventions? which part of assets does it show under, and is there a spreadsheet of weekly totals anywhere?

http://www.bankofengland.co.uk/publication...08/080716cs.pdf

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Looks a bit like what america did when it stopped publishing it M4 money supply figures

As can be seen this did nothing to arrest the crash or prop up the value of the $USD.

Stock dealers will know this is a clear signal to get out if only they can dump their holdings on to stupid joe public. It's a race for the life boats and joe does not know the boat is sinking.

We need a revolution to kick our corupt MP's out and whilst we are about it we may as well ensure measusre are in place to stop the BoE stuffing over the public every cycle.

You're absolutely right about the M4 figures. Dropping the bank return would indicate a switch to whole-scale nationalisation of banking.

I really feel that we are at a juncture where we need leadership that tells it like it is, and says

"People bought houses hoping to make profits, but they bought them at much too high a price. Prices are now returning to reality and many will lose money, but they were greedy and hoping for profits without working for them, and so it is tough. We need to get all the nonsense out of the system quickly, or we'll have a decade of misery"

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I would suggest also that the UK drop the requirement for banks to publish profits and losses and any detailled accounts, in case it suggests that the bank might be in trouble.

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I was watching that issue. There seemed to be no change in the figures at the start of the special liquidity scheme. I think at the time they announced that it wouldn't feature because they didn't want people to know how much of the £50bn was used up. When NR came about the bank's balance sheet immediately jumped, and in fact, it has been possible to watch it fall as they've offloaded the mortgages... This suggestion of removing the return is eminently sensible from the perspective of the government and the BoE, but very bad from the perspective of investors and depositors. Just who is supposed to serve who here?

Not sure if it would show up. they were EXCHANGING unsaleable securities for good securities. One would balance the other out.

What they are failing to show, or show up elsewher in the balance sheet are TRUE valuations, then again, not many banks are comfortable with mark to market valuations, so dont bother.

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The city, and that includes all the regulation, the treasury, everyone, have proved themselves incapable of running the UK financial system. Total transparency - ie publish all minutes of all discussions between banks and regulators would make it much clearer what is going on. People would then understand the risk inherent in investing at returns higher than gilts, and would scrutinise lending much more efficiently. Currently we have a system where the BoE will cheerily let you invest in a bank right up to the moment it goes pop. That is just wrong. If they (who are officials in a publically owned central bank) have suspicions then they ought to be published. If that leads to banks treating our money on deposit in a less cavalier way, then all the better.

Why not have a section on the BoE website detailing all meetings? It would have some cost (in terms of time to write up the minutes), but would be massively stabilising.

The current BoE proposal to drop the Bank return would have allowed them to take over NR debt without the public knowing. Would that have been in the public interest? I would say not, because it was a big part of the edifice propping up unrealistic house prices, and deserved to fail.

There is still a strong sense that the UK is damaged if house price wealth is reduced, personally I don't see that. We have a disproportionately high fraction of our national wealth tied up in housing. It would be much healthier if UK banks had to seek places to put capital to work in industry instead. It would be very interesting to see how German personal wealth assets are distributed between property, commodities, service industry and manufacturing industry. You'd need to drill down to understand pension fund shareholding, and use of bank deposits, but I think it would be very instructive about our current financial malaise.

While my gut reaction is to say, no bail-outs and publish everything, I also think there's an argument for trying to maintain a functioning banking system ;) The problem I have with secrecy is if it's used to protect shareholders and bank executives. Having said that, if a central bank says, 'Bank X is looking dodgy' then it becomes a self-fulfilling prophecy and the shareholders might have a claim for compensation. Frankly I have no idea how to go about fixing the current mess, apart from saying, 'I wouldn't start from here' :P

The problem arises out of the nature of banking, and the nature of people, IMO. At the heart of the system is the ability of people (not banks, not central banks, people) to conjure funds for speculation out of thin air by writing promises on pieces of paper. Take that power away and you kill house price bubbles dead, permanently -- but you also exclude many from any possibility of home ownership.

Which would not be a bad thing, with more equitable rental laws.

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One day people will wake up and realise how much the wool has been pulled over their eyes. Not just in the UK but in most countries. By then the only public servants there will be government money left to pay will be the police.

If governments and central institutions keep trying to make the next generation pay for their mistakes there will be a tipping point. Thatcher overlooked this and brought her downfall upon her.

I am far from a conspirator (I'm not even sure I can spell the word) but there is only so much the governments can get away with before the people are no longer fooled.

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Not sure if it would show up. they were EXCHANGING unsaleable securities for good securities. One would balance the other out.

What they are failing to show, or show up elsewher in the balance sheet are TRUE valuations, then again, not many banks are comfortable with mark to market valuations, so dont bother.

But surely their balance sheet would increase, as they would hold an extra asset and an extra liability?

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What is more frightening is the fact that social economic experts in the meeja have failed to pick up on this. We as taxpayers deserve to know the truth, if a bank has something to hide it should not have shareholders in order to avoid telling them. OK I think this demands an enquiry to Ben Bradshaw my MP.

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They seem, as usual, to be contradicting themselves. On the one hand we have in effect been told that if a bank fails the only losers will be the shareholders, but on the other hand they're not going to give the shareholders information they should have in order to determine wether to invest or not. You can't have it both ways.

On the bank return reports, has anyone worked out how to read them for the special liquidity scheme and other interventions? which part of assets does it show under, and is there a spreadsheet of weekly totals anywhere?

http://www.bankofengland.co.uk/publication...08/080716cs.pdf

I was watching that issue. There seemed to be no change in the figures at the start of the special liquidity scheme. I think at the time they announced that it wouldn't feature because they didn't want people to know how much of the £50bn was used up. When NR came about the bank's balance sheet immediately jumped, and in fact, it has been possible to watch it fall as they've offloaded the mortgages... This suggestion of removing the return is eminently sensible from the perspective of the government and the BoE, but very bad from the perspective of investors and depositors. Just who is supposed to serve who here?

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While my gut reaction is to say, no bail-outs and publish everything, I also think there's an argument for trying to maintain a functioning banking system ;) The problem I have with secrecy is if it's used to protect shareholders and bank executives. Having said that, if a central bank says, 'Bank X is looking dodgy' then it becomes a self-fulfilling prophecy and the shareholders might have a claim for compensation. Frankly I have no idea how to go about fixing the current mess, apart from saying, 'I wouldn't start from here' :P

The problem arises out of the nature of banking, and the nature of people, IMO. At the heart of the system is the ability of people (not banks, not central banks, people) to conjure funds for speculation out of thin air by writing promises on pieces of paper. Take that power away and you kill house price bubbles dead, permanently -- but you also exclude many from any possibility of home ownership.

Which would not be a bad thing, with more equitable rental laws.

I think it important to distinguish things that look like good ideas from where we are now (like keeping the current banking system going), from things that are good ideas for the future. Perpetuating failed systems for short term political reasons is not likely to end happily.

If it were a real concern to banks that the central bank might say they are dodgy, then they would have to take measures to ensure that didn't happen. It is easy to refute, just show the journalists the vaults full of gold, diamonds, the share certificates for all the shares in blue-chips, the loan list to blue-chips, the amount on deposit with the BoE... if all that looks good, then customers will be happy with the bank's stability. If that stuff isn't in place, then depositors will go elsewhere or demand a proper risk premium.

We've all got used to best buy tables in the newspapers showing deposit rates, while most people have forgotten to ask why the rates differ, and the fact that risks are associated with higher rates on paid deposits.

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  • 396 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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