I wouldn't bank on it

[ahinton]

http://www.bbc.co.uk/news/business-18612279

Tip of an iceberg? Almost certainly. UK's financial services "regulator" FSA is already being roundly criticised - nay, vilified - for doing the right thing but not going anything like far enough by US and others. FSA, in its attempt at some kind of defence, is now stating that it has several (it won't yet say how many or into whom) similar investigations of interest rate fixing on its books right now and, of course, they're not alone in carrying out such investigative action. They also say that they're to make an announcement by the end of this week about additional investigations into the intgerest rate swap industry. It seems to me to be only one step beyond this to get to a series of fully-fledged international investigations of currency value fixing and currency value relationship fixing - and I doubt that it will stop there, or indeed anywhere.

Only a short whoile ago, the cry about certain banks was that of "too big to fail"; surely that's now morphing into "too big to regulate" - anywhere? I'm not about to defend FSA here or anywhere else, but I don't quite see how it could possiblyh hope to deal with all of this as it applies in UK alone without it having tens if not hundreds of times the number of staff members than it now has - and who would pay for that? FSA is industry funded, not taxpayer funded.

It seems that banks may yet have the last laugh at least until they establish, permanently, that there are no more laughs for anyone (including themselves) to have, anywhere...

[Serial_Apologist]

http://www.bbc.co.uk/news/business-18612279

Tip of an iceberg? Almost certainly. UK's financial services "regulator" FSA is already being roundly criticised - nay, vilified - for doing the right thing but not going anything like far enough by US and others. FSA, in its attempt at some kind of defence, is now stating that it has several (it won't yet say how many or into whom) similar investigations of interest rate fixing on its books right now and, of course, they're not alone in carrying out such investigative action. They also say that they're to make an announcement by the end of this week about additional investigations into the intgerest rate swap industry. It seems to me to be only one step beyond this to get to a series of fully-fledged international investigations of currency value fixing and currency value relationship fixing - and I doubt that it will stop there, or indeed anywhere.

Only a short whoile ago, the cry about certain banks was that of "too big to fail"; surely that's now morphing into "too big to regulate" - anywhere? I'm not about to defend FSA here or anywhere else, but I don't quite see how it could possiblyh hope to deal with all of this as it applies in UK alone without it having tens if not hundreds of times the number of staff members than it now has - and who would pay for that? FSA is industry funded, not taxpayer funded.

It seems that banks may yet have the last laugh at least until they establish, permanently, that there are no more laughs for anyone (including themselves) to have, anywhere...

If I heard the lady from the FSA correctly, she stated that it was not its responsibility to prosecute in such instances. Then surely the Fraud Squad would be prevailed upon? I for one would be interested to know who all these "credit rating agencies" are, not to mention why the euphemistically defined "markets" place so much credibility in their pronouncements.

[ahinton]

If I heard the lady from the FSA correctly, she stated that it was not its responsibility to prosecute in such instances. Then surely the Fraud Squad would be prevailed upon? I for one would be interested to know who all these "credit rating agencies" are, not to mention why the euphemistically defined "markets" place so much credibility in their pronouncements.

No organisation - SEC and CTFC in US, SFO in UK and their counterparts elsewhere in the world will be able to guarantee being able to deal with this any more than FSA can, beyond scratching the respective surfaces; there are, quite simply, not enough qualified staff to do it.

Credit rating agencies are privately funded companies which, likewise, make sufficient noise to be taken seriously enough that their pronouncements affect ratings and, as a consequence, all manner of other things that are the outcome of ratings changes; I believe that they are largely unregulated wherever they operate but it's not obvious how anyone could regulate their activities because all that they really do is express opinions in public, so unless vitcim organisations, nations or whatever can sue any one of them successfully, they can do what they do and what they like and, even were any such legal action to set an example by putting one of them out of business, there'll be another one along in a minute or less.

[Resurrection Man]

Yes, good old Gordon Brown's 'Light Touch' is certainly coming home to roost.

As was his wholehearted and enthusiastic adoption of PFI ...which kind of got us in the hole that we are in now.

[ahinton]

Yes, good old Gordon Brown's 'Light Touch' is certainly coming home to roost.

Well, yet, but this is by no means simply a UK based issue, as what's coming out now shows; FSA, for example, has fined Barclays (an international organisation) less than £60m yet its total fines over intgerest fixing are not far short of £300m.

As was his wholehearted and enthusiastic adoption of PFI ...which kind of got us in the hole that we are in now.

Indeed - you should read Dr Jesse Norman (who happens to be my MP) on that one; here's http://www.telegraph.co.uk/finance/e...th-of-PFI.html and http://www.jessenorman.com/2012/05/t...yers-cash.html for starters. I have to confess that it seemed like a good idea at the time but Brown's régime blew it up out of all sensible proportion and its legacy of devastation is now all too evident to most of us (although we ain't seen all of that yet, to be sure).

To return to your "light touch" regulation accusation, I would, however, add that much toughter regulation might have required so very many more staff to do it that it might not have been possible to make it work anyway; a regulator has in some senses to be "bigger" than the organisations that it regulates and, in the present case, able to work in partnership with its counterparts anywhere in the world where it has them which, again, is not so easy a task.

[amateur51]

Yes, good old Gordon Brown's 'Light Touch' is certainly coming home to roost.

As was his wholehearted and enthusiastic adoption of PFI ...which kind of got us in the hole that we are in now.

To be fair to Mr Broon, 'light tough regulation' was not his original idea - he was heavily pushed in that direction by the industry. But he should have been advised by the Governor of the Bank of England about the inherent problems therein and he should have had the political courage to listen to that advice.

[amateur51]

I have to confess that it seemed like a good idea at the time but Brown's régime blew it up out of all sensible proportion and its legacy of devastation is now all too evident to most of us (although we ain't seen all of that yet, to be sure).

Well at least one British politician didn't think so at the time and said so very loudly

[JohnSkelton]

Yes, good old Gordon Brown's 'Light Touch' is certainly coming home to roost.

Up to a point - but surely the problem is that the touch wasn't light enough? I know it's fashionable now for politicians and journalists to bash the banks, but seriously - if the banks make more money, if they make more money for their shareholders, if other financial institutions make more money ... where's the problem? That's what they are meant to do <doh>. The disaster would be if we returned to the bad old days before capitalism was however inadequately set free from the red tape choking off enterprise, strangling initiative.

Sure some 'citizens' will feel sore about it. Give them counseling or something. Touch luck. It's in the greater good, getting people off their dependency on the State and Big Regulator. As for PFI: the problem there, of course, was the public bit. Not the contracts signed (which at least transferred money from the State to the private sector). What should have been done was the wholesale selling off of the public sector to the highest bidder. The lot: transport infrastructure, healthcare. There are good profits to be made and unquestionable benefits in terms of making the 'citizen' wake up and smell the coffee. Imagine if the unemployed, the disabled, the low paid, had no access to healthcare? At last we'd ALL have to grow up. And the money raised could go to establishing a flat rate of tax, set at a nominal 1p in the £.

(Admittedly some sort of public contagion / epidemic provision might be necessary. So 1p in the £ might not be possible. But that, the police - mostly privatised, but with some subsidy for riot control, protecting private property - and the military and that should be that. If only the politicians had the courage. The vision).

[amateur51]

Up to a point - but surely the problem is that the touch wasn't light enough? I know it's fashionable now for politicians and journalists to bash the banks, but seriously - if the banks make more money, if they make more money for their shareholders, if other financial institutions make more money ... where's the problem? That's what they are meant to do <doh>. The disaster would be if we returned to the bad old days before capitalism was however inadequately set free from the red tape choking off enterprise, strangling initiative.

Sure some 'citizens' will feel sore about it. Give them counseling or something. Touch luck. It's in the greater good, getting people off their dependency on the State and Big Regulator. As for PFI: the problem there, of course, was the public bit. Not the contracts signed (which at least transferred money from the State to the private sector). What should have been done was the wholesale selling off of the public sector to the highest bidder. The lot: transport infrastructure, healthcare. There are good profits to be made and unquestionable benefits in terms of making the 'citizen' wake up and smell the coffee. Imagine if the unemployed, the disabled, the low paid, had no access to healthcare? At last we'd ALL have to grow up. And the money raised could go to establishing a flat rate of tax, set at a nominal 1p in the £.

(Admittedly some sort of public contagion / epidemic provision might be necessary. So 1p in the £ might not be possible. But that, the police - mostly privatised, but with some subsidy for riot control, protecting private property - and the military and that should be that. If only the politicians had the courage. The vision).

Not before I've taken me meds, please JS

[french frank]

I'm ... cautiously ... happy to see that the Coop appears to have won the battle to take over many of the LloydsTSB high street branches. Their chief competitor, NBNK, is (was, now?) a former executive at - Barclays and Northern Rock . Or perhaps Barclays and Northern Rock. To be associated with one might be regarded as misfortune, to be associated with both looks like very bad news indeed.

[Lateralthinking1]

I don't understand this thread but part of me wants to understand it. Random thoughts -

- When exactly were the bad old days John Skelton? What prices were people paying for services, were those services less reliable, what were people buying in the high street?

- What do these sentences mean? 'Imagine if the unemployed, the disabled, the low paid, had no access to healthcare? At last we'd ALL have to grow up.' I genuinely don't understand them.

- I and everyone I knew boycotted Barclays in the early 1980s because we thought it had the worst record on South Africa. I've always seen it as the bank to avoid.

- Boris supported Bob D publicly last night as he doesn't want the banks to go elsewhere. Someone pointed out - yes it's the Daily Mail again - that they wouldn't have anywhere to go. The US certainly aren't tolerating what is going on.

http://www.dailymail.co.uk/news/article-2165468/Bob-Diamond-shamed-giving-bonus-Barclays-fined-290m-attempting-rig-money-markets.html

- I was always against PFI. I was against all privatisation of the utilities and still am.

[eighthobstruction]

No Longer Shine you crazy crazy Diamond....

[amateur51]

No Longer Shine you crazy crazy Diamond....

[jean]

I don't understand this thread but part of me wants to understand it. Random thoughts -

- When exactly were the bad old days John Skelton? What prices were people paying for services, were those services less reliable, what were people buying in the high street?

- What do these sentences mean? 'Imagine if the unemployed, the disabled, the low paid, had no access to healthcare? At last we'd ALL have to grow up.' I genuinely don't understand them.

The whole post is (isn't it?) the heaviest of irony - the reductio ad absurdum of where we might be heading.

[ahinton]

I'm ... cautiously ... happy to see that the Coop appears to have won the battle to take over many of the LloydsTSB high street branches. Their chief competitor, NBNK, is (was, now?) a former executive at - Barclays and Northern Rock . Or perhaps Barclays and Northern Rock. To be associated with one might be regarded as misfortune, to be associated with both looks like very bad news indeed.

I urge you to prioritise your caution over your optimism here; the Co-op bank is, after all, a bank, so there is no obviouis reason to assume that it would never get up to the kinds of activity of which Barclays have been and others are waiting to be accused

Whilst it's not entirely germane to the interest fixing scam, I can tell you that, some time ago, I encoutered a situation where someone wanted an ethical TESSA. Now we know that the market includes a sector that is at least "called" ethical investments. OK, so what criteria determine whether any particular investment is or is not classified as "ethical"? Broadly speaking, it's usually down to whether it - or any part of it - is placed in certain industries such as tobacco, "recreational" drugs and a host of other factors including the support of corrupt régimes although, of course, not every ethical investment provider has identical criteria for its ethical investments. The Co-op was mentioned but it was discovered that it placed investments in Nigeria. When it sought to convince that its investments there were all squeaky clean (which, in themselves, they were - beyond reproach, indeed), it was pointed out that no bank would be daft enough to invest in failing organisations; when this was agreed with, it was pointed out to the Co-op that, if the firms in which it investged in Nigeria were sufficiently successful to warrant their investment in them, they must be paying taxes to the corrupt régime in the country concerned, thereby supporting it. Case closed.

On such a basis, it might be argued that there is no such thing as an ethical investment. I use this merely as an illustration of the fact that there may be no way out for the banks here; whilst big ones can indeed be accused of interest fixing, had they backed off from all such activity and instead let everything take its course, might not those same banks then be accused of exerting too little control over such matters? I'm not defending the banks' activities in this field, but I suspect that one outcome of the forthcoming investigations may be that the banks were and still are in something of a "damned if they do, damned if they don't" situation.