Tuesday, November 4, 2008

Mandys’ warning to Bankers

Mandelson warns banks to pass on rate cuts

Lord Mandelson upped the stakes in a row with UK banks this morning by warning that they face a customer backlash if they do not pass on interest rate cuts to customers. Britain's Business Secretary fired the latest salvo after an awkward 24 hours in the Gulf, which saw a senior HSBC banker travelling with the Prime Minister being attacked by No. 10 for saying that customers would not benefit fully from rate cuts.

Posted by sold out @ 03:53 PM (1460 views)
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14 thoughts on “Mandys’ warning to Bankers

  • “by warning that they face a customer backlash” – the apathy of the vast majority of banking customers makes this a completely empty threat, and the banks know and rely on it.

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  • Could work, due to its tarnished reputation
    UBS today reported net outflows of 83.6 billion francs in the third quarter
    and are reacting (slowly ) with higher interest accounts …

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  • A consumer backlash of course means that people might not want to borrow money from them.

    Which is exactly what they want to happen.

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  • The Lord of Darkness knows the situation, he’s discussed it with senior bankers. This is just political posturing – “look, it’s not our fault”.

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  • Can someone, please “shoot this representative sh1t” They have, either no concept of reality, or they are frantically trying to “stash as much cash” as possible, before even the “sheeple” realise that there is something very suspect, under foot!! [you know what it is like to step in it!]
    P.S.The “Nazi dash-for-art” springs to mind. Heaven help……………please!

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  • what can customers do ? banks are cartels and the anticompetitive rules do not apply anymore.We ve all been conned.

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  • planning4acrash says:

    He is treating the public like morons. Conditioning us to think politicians have no power, by pretending to demonstrate powerlessness. They exercised the power to bail out banks and knew that they would not lend, PERIOD!

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  • I have a question which I hope someone can answer: When will the banks pay back the trillion plus Dollar/ Euro/ Sterling liquidity injections from the central banks?? (if they have to constantly ignore rate cuts to build capital balance, therefore have little capital themselves, even after the huge ‘liquidity’ injections we have all heard about??) Do central banks not understand the term bottomless pit of the Vested Interest?.

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  • ah! vested interest and ‘invested interest’

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  • May well be these “bulbous tulips” yet again….shame, they did look so pretty!!

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  • I’ve said it before and I’ll say it again, Why does anyone expect banks to “pass on” rate cuts? There is not much passing on to be done in the current climate. A cut in rates does not necessarily get passed on to them, so then there is nothing to pass on. look at the LIBOR market – if that comes down (it is edging down) then increased competition will dictate lower market prices, it’s as simple as that.

    If I were in the business of lending now is not the time I’d be increasing my book and I would not be looking to a change to the base rate for the decision as to when to start; I would be looking at the risk vs reward and the current competition. Normally there would be competition and a rate change would be reflected almost instantaneously (OK, so I’d be greedy and lag it as much as I could on the sell side whilst staying competitive – which would imply a product by product function, but….)

    Any rate cut will eventually be passed on, but at the moment other forces are driving the market.

    Why can people not even put themselves in the shoes of bankers? All they need to do is picture themselves this morning when they were rushing head-long for that seat on the commuter train (probably pushing a heavily pregnant woman out of the way in the process).

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  • Modern economics is not rocket science. Modern economics is a fraud. Metrics such as “monetary aggregates” and the “velocity of money” are merely devices meant to divert attention away from the fraud in progress.

    Focusing on such metrics has been a critical component in the success of the bankers’ extraordinary shell game of modern economics. But the current crisis has not only interrupted the bankers’ confidence game, it has shed unexpected light on the precarious positions of those fleeced

    The producers, savers, entrepreneurs who had previously accepted the banker’s credit based money as legitimate are now discovering they were but suckers in an opaque and cleverly constructed street game, sic Wall Street’s, designed to defraud the unsuspecting and vulnerable onlookers and players.

    Schoon

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  • more Schoon

    The greatest casualty of today’s unfolding crisis is the belief that bankers are performing a needed function in today’s world. It is true that in credit driven capital economies founded on debt-based money issued by central banks, bankers are essential. In confidence games, con-men always play a critical role; the banker’s shell game of modern economics is no exception.

    Modern economics is a system whereby bankers inserted compounding credit with debt-based paper money into every aspect of commerce; and are thus able to live like parasites partying off the productivity of others (gotta love those billion dollar bonuses!). Only now is this becoming obvious; for only when a confidence game breaks down, does the truth become clear.

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  • planning4acrash says:

    bystander, suggestion that the banks will pay back was always a lie. It was based on the assumption that the bailout would sustain house prices at their current levels. They will not, and cannot, without huge inflation. The reality is, with banks not being able to pay back, that they become nationalised. This is game over, because government couldn’t run a 100m dash, let alone run a company. They will never turn them over to making big money. Since when was National Savings ever a decent company? Didn’t the Freddie, Fannie debacle show that government can’t run big investment companies? The moral hazard is rampant, because, with these companies failing, the state bails itself out, and this contract is clear from the outset. So, we will continue to pay interest on the debt via income tax, whilst government grind spending to a halt. But, maybe that will bring us sound money in the end? If enough people wake up to the situation?

    The banks should have been declared bankrupt, sent into recievership and asset stripped in the open market, private investors deciding the value of each part and making entrepreneurial decisions about how to turn them to profit. This would destroy the investors, but they bought a dud, and should not be supported for poor decisions at the expense of those who made good decisions, i.e. to stay out of a failing market!! This bailout only benefits those who made poor decisions and had insider knowledge about the comin bailout planning4acrash

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