Guest post: Banks are Burning

You may find this surprising, even upsetting, but there are still some people, in 2009, who don't have a blog of their own. Imagine. Terrible. CF is always happy to help this poor beleagured minority. JonesTheSteam has guested here before, with this fine post, and now he has something to say about our banks.

Take it away, JonesTheSteam:....

 


I agree with every golden word CF writes on the subject of bonuses. The debate frustrates me, not just because it is crude political showboating. The flip side of politicians saying that bonuses should be lower and deferred/in shares is, logically, that bank profits should be higher. Why should that be desirable? Who does it serve if banks pay higher dividends? Only, perhaps, the government which recklessly shored up the banks with our money and would like to flog the shares on as soon as possible.

The real problem is that bank profits are too high. Companies are desperate for debt capital, you know, the stuff they need to grow or maybe just survive a downturn. In the good times the banks offered then debt at 6 times (or more) their annual cashflow at rate just above the bank rate. Now the renewals are coming round they are lucky to be offered 2 times cashflow at a huge spread to the bank rate. Imagine trying to plan your personal finances if your mortgage provider tried the same thing - not when you moved house, but right now. UK banks can do this because they have very little to lend (their assets, the stuff they lend against, have been greatly diminished by the recession) and because foreign banks have had to withdraw their capital from the UK. So the banks can be very picky and lend only on low risk on high margin.

We need the banks to lend more, to lend as much as possible to help reduce the effects of the recession. The bail-out has made clear that the banks are not regular businesses. To make their profits they depend on a guarantee from the state, from us. When the guarantee gets called on, like last year, it results in a disaster for us. So it seems obvious to me that the lending business should be tightly regulated. To get the name "bank", to be able to take deposits from the public with a guarantee from the government, you would have to able to only hold certain kinds of assets (ideally ones the directors of the banks understand - which was clearly not the case) and only loan a certain multiple of those assets (which was). Since the capital of the banks has been shown to be public capital and it provides a service to the economy, why not treat it like the assets of the regulated utilities and the railways and fix a maximum return on that capital. The "problem" of banks being too profitable would be fixed by forcing them to lower lending rates to bring the profits down and giving proper businesses access to the capital they need. Don't want to operate under this regime? Fine - don't be a bank, don't take deposits. Be a trading business, take risks on complex financial instruments, make a fortune or go bust - I don't care because you wont take the new, tightly regulated banks with you.

So, yes, let's separate banks from trading risk taking businesses. The Government did think about this and, wisely consulted experts. To chair the committee they chose Sir Win Bischoff, former Chairman of Citigroup. That would be the Citigroup which lost 90% of its share value owing, in part, to poor risk control. I'm all in favour of the principle that if you want to know how to stop buildings being set on fire you should consult an arsonist, but ideally a reformed arsonist and you probably want to ask a fireman too. Sir Win's committee did not conclude that banks should be separated from other activities - but then it did start the Executive Summary with the phrase

"UK International Financial Services – a centre of excellence working in partnership with the world"

You probably don't believe me so have a look at this document.

To summarise the report - "lets chuck some more petrol on the embers to see if we can get that blaze going again". The representative of the fire service was not available for comment.


----

Please show your appreciation for this damn fine guest blogger. And let CF know if you're one of the poor blog-less, and would like to do the same.

243 comments:

Anonymous said...

uC7Z7q http://botasuggs.1minutesite.es qW1M7j [url=http://botasuggs.1minutesite.es]botas ugg[/url] eX3Z5t botas ugg baratas bH3B5b
dU6O4i http://goedkopeonline.jimdo.com fC8S8i [url=http://goedkopeonline.jimdo.com]uggs laarzen[/url] zI4T6o uggs online fH5T5s
tC7Y5m http://bootsshopit.blinkweb.com eZ8B9x [url=http://bootsshopit.blinkweb.com]ugg italia[/url] nF3G5e ugg italia oL8W1q
hA1A8q http://goedkopelaarzen0.webnode.nl sJ9R9o [url=http://goedkopelaarzen0.webnode.nl]uggs laarzen[/url] cW2X0c uggs laarzen aI5O7a
vO5K7t http://canadaoutletboots.webs.com sQ1G0o [url=http://canadaoutletboots.webs.com]ugg boots canada[/url] vK2C8t uggs canada wY1N0l
gC1B9f http://bootspascherfr0.webnode.fr nF8C9n [url=http://bootspascherfr0.webnode.fr]ugg pas cher[/url] pC1G8z chaussures ugg dJ9B6f

Anonymous said...

how to buy valium online buy valium goa - valium online pharmacy no prescription

Anonymous said...

ativan 2mg what are ativan withdrawal - ativan ep 905

Anonymous said...

order tramadol online without prescription tramadol dosage back pain - buy tramadol online usa

Anonymous said...

buy discount tramadol tramadol dose for high - tramadol hcl 319

Anonymous said...

order ativan online 1mg lorazepam too much - illegal buy ativan online

Anonymous said...

klonopin pill teva best generic klonopin - xanax klonopin social anxiety

Anonymous said...

buy tramadol online no prescription cheap buy cheap tramadol cod - tramadol online missouri

Anonymous said...

order tramadol no prescription buy cheap tramadol - buy tramadol 50mg online

Anonymous said...

ativan pills lorazepam 1 mg vademecum - what's normal dosage ativan

Anonymous said...

best buy tramadol tramadol pain killer dosage - buy generic tramadol.net

Anonymous said...

can you buy tramadol online best site purchase tramadol - discount tramadol

Anonymous said...

tramadol online tramadol 50mg bula - tramadol online no prescription cheap

Anonymous said...

klonopin online who makes generic klonopin - 2mg klonopin vs 2mg xanax

Anonymous said...

buy tramadol online reviews tramadol hcl breastfeeding - buy tramadol online cod

Anonymous said...

buy tramadol cheap tramadol hcl contraindications - order tramadol with money order

Anonymous said...

tramadol online overnight order tramadol florida - tramadol hcl 377

Anonymous said...

order ativan ativan uses and dosages - 4mg ativan high

Anonymous said...

generic ambien buy ambien generic online - ambien sleep medication side effects

Anonymous said...

soma price where to buy soma - soma drug contraindications

Anonymous said...

buy tramadol without rx tramadol is the generic of what - tramadol 50 mg is equal to

Anonymous said...

buy tramadol overnight delivery buy tramadol australia online - buy tramadol cheap

Anonymous said...

buy ambien online ambien klonopin overdose - ambien sleep walking driving

Anonymous said...

klonopin for sale generic klonopin not effective - klonopin dosage plmd

Anonymous said...

buy soma soma controlled medication - jeffree star soma san diego

Anonymous said...

online ambien ambien side effects withdrawal - buy cheap ambien no prescription

Anonymous said...

tramadol online tramadol hcl premature ejaculation - tramadol for dogs - crush

Anonymous said...

soma online soma san diego as i lay dying - buy cheap soma online no prescription

Anonymous said...

klonopin no prescription 2mg klonopin withdrawal - snorting generic klonopin

Anonymous said...

buy tramadol cheap online order tramadol online overnight - tramadol codeine high

Anonymous said...

cheapest ambien ambien cr generic equivalent - zolpidem (ambien) y zaleplon (sonata)

Anonymous said...

ambien drug cheapest ambien no rx - generic ambien cr 6.25

Anonymous said...

buy tramadol overnight delivery buy tramadol online us pharmacy - buy tramadol line uk

Anonymous said...

ambien pills stories of ambien addiction - ambien dosage extended release

Anonymous said...

buy soma online cheap parking soma - aura soma 99

Anonymous said...

buy tramadol overnight cod tramadol dosage mayo clinic - tramadol 50 mg para que sirve

Anonymous said...

buy klonopin online canada 2 mg klonopin - what is klonopin high like

Anonymous said...

tramadol online tramadol no prescription usa - generic tramadol no prescription overnight

Anonymous said...

tramadol 100 tramadol for sale online no prescription - tramadol hcl blood pressure

Anonymous said...

buy ativan online buy lorazepam india - overdose of ativan side effects

Anonymous said...

purchase ambien ambien cr and generic - ambien effect sleep quality

Anonymous said...

zolpidem without prescription ambien withdrawal headache - recovering ambien overdose

Anonymous said...

ambien 5 ambien sale online - generic sleeping pill ambien

Anonymous said...

buy tramadol online tramadol 50 mg snort - tramadol hcl tylenol

Anonymous said...

klonopin for anxiety klonopin withdrawal symptoms cold turkey - generic brand for klonopin

Anonymous said...

ambien on line cheap ambien no prescription - highest safe dosage ambien

Anonymous said...

carisoprodol soma buy muni pass soma - soma printable coupons 2012

Anonymous said...

buy tramadol online mastercard overnight cheap tramadol cod - tramadol euphoria

Anonymous said...

buy tramadol online order tramadol online mastercard - tramadol pain

Anonymous said...

buy ambien online overnight side effects of ambien sleeping pill - ambien side effects anger

Anonymous said...

viagra online dosage does viagra come - cheap female viagra online

Anonymous said...

generic ambien ambien cr withdrawal effects - ambien side effects high blood pressure

Anonymous said...

soma online much do soma cost street - order soma no prescription

Anonymous said...

order ambien ambien zolpidem order - ambien online no prescription cheap

Anonymous said...

generic ambien ambien side effects fda - order ambien mastercard

Anonymous said...

order ambien online no prescription average street price ambien - difference between ambien generic brand

Anonymous said...

buy viagra online buy viagra and cialis - viagra online 24 ore

Anonymous said...

klonopin buy taking 2mg klonopin - klonopin dosage for recreational use

Anonymous said...

buy ambien online buy ambien cheap no prescription - ambien online no prescription

Anonymous said...

ambien order ambien overdose many mg - ambien the drug

Anonymous said...

buy generic viagra buy cheap viagra pills online - cheap viagra from india

Anonymous said...

can you buy viagra online cheap viagra paypal - where to buy generic viagra

Anonymous said...

carisoprodol without prescription soma 50 - legal buy soma online

Anonymous said...

tramadol online buy generic ultram online - tramadol hcl para que serve

Anonymous said...

buy viagra viagra online lloyds - viagra erection

Anonymous said...

buy cialis prescription online buy cialis online fast shipping generic - buy cheap viagra cialis

Anonymous said...

order herbal viagra buy viagra online new york - cheap viagra men

Anonymous said...

buy viagra houston viagra me buy online - order viagra in canada

Anonymous said...

cialis cost cialis online purchase - cialis overnight shipping

Anonymous said...

generic soma soma pill dan 5513 - order soma overnight delivery

Anonymous said...

purchase tramadol klonopin and tramadol high - buy tramadol overnight delivery no prescription

Anonymous said...

buy viagra online pharmacy order viagra online - viagra online australia net

Anonymous said...

cheap tramadol taking tramadol high blood pressure - cheap tramadol online no prescription

Anonymous said...

order viagra reputable viagra online pharmacy - buy viagra with discover card

Anonymous said...

cheap sildenafil buy viagra online lloyds - viagra buy online canada

Anonymous said...

sildenafil online buy-generic viagra reviews - buy 5 viagra pills

Anonymous said...

buy viagra online buying generic viagra online reviews - buy viagra online pharmacy

Anonymous said...

cheap tramadol no prescription buy tramadol online utah - tramadol withdrawal emedicine

Anonymous said...

buy propecia online propecia vs generic - cheap propecia london

Anonymous said...

buy viagra buy viagra generic online - buy now viagra 8080

Anonymous said...

buy generic viagra buy viagra hujagra 2011 - viagra beer

Anonymous said...

buy tramadol online no prescription cod tramadol 50 mg reviews - illegal order tramadol online

Anonymous said...

buy sildenafil buy viagra nz - generic viagra 200mg

Anonymous said...

buy propecia cost of propecia in india - propecia users

Anonymous said...

propecia cost makes generic propecia - order generic propecia online

Anonymous said...

buy strattera generic strattera atomoxetine - strattera vs adderall weight loss

Anonymous said...

buy tramadol saturday delivery tramadol hcl 50mg tablet amnea - order tramadol online prescription

Anonymous said...

buy generic viagra online overnight buy viagra online new york - viagra dosage in dogs

Anonymous said...

tramadol online tramadol buy online no prescription - tramadol addiction success stories

Anonymous said...

buy retin retin a 1 or 5 - retin a gel or creme

Anonymous said...

buy generic viagra buy viagra online dublin - viagra jello shots

Anonymous said...

generic strattera strattera good study drug - erowid strattera vault

Anonymous said...

buy viagra los angeles buy viagra online from usa - buy viagra in canada no prescription

Anonymous said...

buy tramadol online tramadol hcl back pain - dosage for tramadol for dogs

Anonymous said...

generic propecia toco-8 propecia - is propecia generic yet

Anonymous said...

buy discount tramadol tramadol dosage 200 mg - tramadol 50mg dosage for adults

Anonymous said...

buy tramadol online buy tramadol online with cod - but tramadol online usa

Anonymous said...

buy tramadol online illegal buy tramadol online uk - order tramadol no prescription

Anonymous said...

buy tramadol for dogs tramadol kratom - tramadol 50 mg vs percocet

Anonymous said...

buy tramadol buy tramadol with paypal - tramadol hcl tab 200mg

Anonymous said...

buy tramadol online buy tramadol online overnight - buy tramadol no prescription cheap

Anonymous said...

cheap finasteride can you buy generic propecia - is generic propecia ok to use

Anonymous said...

cheap tramadol where can i buy tramadol online usa - tramadol dosage body weight

Anonymous said...

buy propecia online propecia generic effective - propecia side effects gynecomastia

Anonymous said...

buy tramadol can order ultram online - has bought tramadol online

Anonymous said...

propecia online propecia online pharmacy uk - generic to propecia

Anonymous said...

order tramadol online overnight buy tramadol 50mg online - ultram tramadol made

Anonymous said...

buy tramadol cod good site buy tramadol - tramadol for dogs kidney failure

Anonymous said...

best buy tramadol tramadol overdose medscape - no prescription tramadol overnight delivery

Anonymous said...

buy tramadol online tramadol online usa - order tramadol online with mastercard

Anonymous said...

propecia online is generic proscar as good as propecia - buy propecia cheap online

Anonymous said...

buy tramadol without a script can i buy tramadol in usa - buy tramadol online in australia

Anonymous said...

tramadol 50mg buy tramadol with visa - tramadol hcl xr 100mg

Anonymous said...

buy tramadol buy tramadol australia - tramadol 50mg good

Anonymous said...

buy propecia online generic propecia 2013 - propecia effectiveness over time

Anonymous said...

buy tramadol with paypal tramadol for sale online no prescription - tramadol online cheap no prescription

Anonymous said...

tramadol online tramadol with alcohol - tramadol for dogs high

Anonymous said...

tramadol 50mg buy tramadol c.o.d saturday delivery - high dose of tramadol

Anonymous said...

buy tramadol online online purchase of tramadol - tramadol for sale

Anonymous said...

purchase propecia how to buy propecia in uk - propecia side effects over exaggerated

Anonymous said...

buy tramadol tramadol hcl tv 58 - tramadol hcl zydol 50mg

Anonymous said...

tramadol online pharmacy best way buy tramadol online - can you buy tramadol over counter

Anonymous said...

tramadol 50mg tramadol versus vicodin - tramadol 50mg to get high

Anonymous said...

tramadol online non generic tramadol - order tramadol cheap

Anonymous said...

discount propecia propecia peak results - generic propecia the same

Anonymous said...

tramadol 50 mg buy tramadol online no prescription cheap - buy tramadol online florida

Anonymous said...

tramadol 50mg 50 mg tramadol lot - tramadol 100 mg ratiopharm

Anonymous said...

generic viagra viagra buy in usa - buy pfizer viagra no prescription

Anonymous said...

tramadol 50 mg tramadol 50 mg cheap - tramadol dosage strengths

Anonymous said...

order viagra viagra in us for sale - buy viagra us

Anonymous said...

buy tramadol buy tramadol online for dogs - buy tramadol in uk no prescription

Anonymous said...

viagra online without prescription viagra online mexican pharmacy - buy real viagra online cheap

Anonymous said...

buy cialis professional cialis online is it safe - cialis daily does it work

Anonymous said...

buy tramadol buy tramadol tablets online - tramadol metabolism

Anonymous said...

viagra online without prescription buy viagra online scams - cheap viagra england

Anonymous said...

buy tramadol tramadol online consultation - tramadol hcl for headache

Anonymous said...

tramadol 50 mg buy tramadol online saturday delivery - tramadol quick release

Anonymous said...

generic cialis generic cialis mastercard - cialis мнения

Anonymous said...

cheap viagra viagra online overnight - buy viagra online us

Anonymous said...

cialis pharmacy cialis online with prescription - cialis daily erfahrungen

Anonymous said...

cialis professional viagra cialis online canada - cialis daily from canada

Anonymous said...

generic viagra order viagra online from us - viagra online pharmacy us

Anonymous said...

generic cialis cialis 5mg price - cialis online new zealand

Anonymous said...

generic viagra where do buy viagra - viagra online store review

Anonymous said...

generic cialis cialis online discount - cialis 8cpr riv 20mg

Anonymous said...

buy cialis buy cialis 20mg - cialis reviews forum

Anonymous said...

cheap cialis online buy cialis from canada online - buy cialis from europe

Anonymous said...

generic cialis cialis online overnight - cheap generic cialis free shipping

Anonymous said...

buy soma online buy soma boardbag - buy soma watson online

Anonymous said...

viagra online generic viagra next day delivery us - viagra online us overnight

Anonymous said...

cialis 20mg generic cialis purchase - cialis daily price

Anonymous said...

tramadol 50mg tramadol dosage amounts - overdose on tramadol the effects

Anonymous said...

cheap viagra generic viagra us customs - buy viagra online next day

Anonymous said...

viagra online purchase genuine viagra online - generic viagra online overnight

Anonymous said...

cialis pills cheap cialis soft - has best price cialis

Anonymous said...

buy soma online getting high soma drug - soma drug label

Anonymous said...

viagra sildenafil purchase viagra prescription - generic viagra us customs

Anonymous said...

viagra online viagra online lowest price - buying viagra online guide

Anonymous said...

generic soma online soma kendrick - discount code soma intimates

Anonymous said...

viagra sildenafil buy viagra online http buyviagraonlinehere - buy 1 tablet viagra

Anonymous said...

buy soma online muscle relaxer medications soma - buy soma online us

Anonymous said...

purchase soma images of generic soma - buy 180 soma

Anonymous said...

buy soma 350mg buy soma online usa - buy soma saturday delivery

Anonymous said...

generic soma buy soma online from usa - buy soma online credit card

Anonymous said...

generic soma soma muscle relaxer street value - buy discount soma online

Anonymous said...

buy soma soma de horas online - online pharmacy soma no prescription

Anonymous said...

soma drug will soma show up on drug test - soma muscle relaxer fibromyalgia

Anonymous said...

buy retin-a online retin a 05 cream for sale - retin a cream wrinkle treatment

Anonymous said...

purchase soma soma 250 medication - soma 350 mg street value

Anonymous said...

buy cialis online cialis online discount - generic cialis liquid

Anonymous said...

retin a online retin a cream walgreens - retin a micro face burning

Anonymous said...

soma muscle relaxant buy soma online us - soma medication generic

Anonymous said...

order tramadol purchase tramadol online cheap - tramadol hcl xl

Anonymous said...

tramadol cheap tramadol with acetaminophen high - tramadol yeast infection

Anonymous said...

generic tramadol online tramadol for dogs same as humans - where can i order tramadol

Anonymous said...

buy retin a retin-a price - retin a micro 0.04 gel

Anonymous said...

buy tramadol online mastercard overnight tramadol back pain - buy tramadol cod next day delivery

Anonymous said...

tramadol online tramadol overnight shipping cod - tramadol hcl vicodin

Anonymous said...

cheap tramadol buy tramadol online safe - tramadol 50mg can you snort

Anonymous said...

buy retin a retin a 1 gel - retin-a micro gel for sale

Anonymous said...

order tramadol online overnight buy tramadol online from canada - buy tramadol texas

Anonymous said...

buy tramadol online tramadol overdose level - tramadol for dogs pet meds

Anonymous said...

retin a skin buy retin a micro gel 0.04 - retin a micro before and after pics

Anonymous said...

where to buy tramadol online tramadol qatar - buy generic tramadol

Anonymous said...

buy tramadol mastercard order tramadol phone - order tramadol cod next day delivery

Anonymous said...

buy tramadol buy tramadol online mastercard overnight - tramadol online mexico

Anonymous said...

tramadol no rx buy tramadol overnight shipping - buy tramadol forum

Anonymous said...

tramadol 50 mg tramadol overdose much does take - tramadol withdrawal pain

Anonymous said...

buy tramadol online tramadol dosage schedule - tramadol 50mg uses

Anonymous said...

buy tramadol saturday delivery tramadol high opiate tolerance - legal to buy ultram online

Anonymous said...

cheap tramadol tramadol hcl tab 200mg - tramadol 58 tv

Anonymous said...

cheap tramadol tramadol withdrawal high blood pressure - tramadol hcl liquid

Anonymous said...

generic xanax xanax side effects reviews - much does generic xanax cost

Anonymous said...

xanax alprazolam will a .25 xanax show up in a drug test - xanax .50 mg side effects

Anonymous said...

buy tramadol tramadol to buy online in usa - tramadol for high

Anonymous said...

where to buy tramadol online cheap tramadol online overnight delivery - buy tramadol cash delivery

Anonymous said...

buy carisoprodol carisoprodol can you get high - listaflex carisoprodol 350 mg para que sirve

Anonymous said...

tramadol online buy tramadol with cod - tramadol get high off it

Anonymous said...

xanax online xanax white pill dosage - get cheap xanax online

Anonymous said...

buy tramadol for dogs tramadol is generic for what drug - tramadol hcl 50 mg withdrawal