Â鶹Éç

The retail arms of banks must be protected against risks taken by their investment arms...and then and then. Nothing.
It recommends ringfencing. Where there is "ringfencing" and not LAW (as in a LEGAL SPLIT), smart accountants will find their way around any fence or firewall. Can we not tell this already by the way huge investment banks generated such nefarious products as derivitive bundles and default swaps?
Glass-Steagall, as originally desired by Vince Cable, is still on the table. Good.
Question: Why is The Coalition Government giving the huge investment banks all of these options; is this a football game or high-level financial security? Is the Coalition Government afraid of the investment banks too big to fail?

Why doesn't Lloyds just dump HBOS which they got from Labour's shotgun wedding of the two? Merging a semi-decent bank with a Scottish one that racked up huge debts was always going to end in tears.

We know the only reason Labour did the shotgun wedding of the two banks is to save Scottish votes before the general election.

Not sure what the Chancellor and Ed balls have to usufully say on the matter within the bizare rules of political debate.

One of them helped get us into the mess in the first place and the other one has vested interest in keeping us in the mess (to a degree) by cause of being part of the etonian elite. All we will get will be an inane intellectual sword fight set in fantasyland (aka the westminster intellectual bubble).

What are they going to ''thrash out'' exactly?

More like thrash around.


If NN wants to 'thrash out' a proper debate at least one other person should be part of the debate, not sure who that would be, as anyone who speaks the truth is marginalised by the media,, Krugman via satelite maybe.

Otherwise PLEASE, PLEASE just dont bother NN or you will be wasting your time and ours.

I am sure Krugman (or similar) would be up for it.. you have no excuse unless of course NN is hopelessly leveraged as well.

CHRISTOPHER WHO?

I take it, from the closely reasoned exposition above, that America has not yet been discovered, and may safely implode without any monetary tsunami crossing the Atlantic?

Is there an element of Emperor's new Clothes in all this, or am I just showing my ignorance? After all – I am a ‘9/11 denier’.

"BUT IT STOPS SHORT"

Westminster governance ALWAYS stops short of applying proper control to sources of party funding. Viz; THE FILTHY RICH, BANKS, ALCOHOL, TOBACCO, ARMS, GAMBLING and their like.

While the Westminster Citadel stands, insidious corruption will endure.

SPOILPARTYGAMES

Reading the executive summary gave rise to the thought : how much did this exercise cost the UK taxpayer ? The G20 working groups and Basel 111 have done all the policy-setting - bail-in credit instruments and resolution regimes for banks are already in train. Several references to the proposition that action on internationally related banking should only be policed by global regulation, not national ones and that big business which use these services can look after themselves. The debate about additional capital buffers is an old one and the commission doesnt seem to touch on liquidity and wholesale funding weaknesses and regulation dealt with by others. Where's the value-for-money in this talking shop?

@BluesBerry

"... smart accountants will find their way around any fence or firewall. Can we not tell this already by the way huge investment banks generated such nefarious products as derivative bundles and default swaps?"

This is entirely the point. Gaming the banks is notoriously difficult, as they are better gamers. The only real restraint is legal and regulatory restraint.

@3 I would solicit the opinions of James Galbraith, William K Black and Brad Delong as well as Paul Krugman. They are all a bit more radical, and each have slightly different perspectives. If nothing else, they would act as Devil's Advocates for the strongest possible action.

#3 footnote

Vince Cable used to be a regular at such 'debates' and oft represented the voice of reason in them. Nowadays he is merely conspicous by his continual absence.

Let's remember that finance has been used to hide the fall in the true underlying rate of profit.
This dates back to the 1970's.
I accept that the incorporation of the Soviet Bloc & China into the capitalist economy went a long way to improving profitability.
But the fact remains that increases in asset prices based upon printed fiat money is hiding reality that will hit home sooner than later.
Indeed, rising energy & commodity prices is making reality even worse.

The crisis has not been resolved.

#10 DV

I'd say that the limits to growth were starting to show through in terms of slow down in productivity increases in physical work:



(See pg 19/20 for summary if pushed for time).

The financialisation of the economy since the 1970s served two purposes. It disguised the underlying problems with economic fundamentals (i.e. limts to absolute growth), and it facilitated underhand wealth extraction:



The crisis is far from resolved, indeed the stakes are increasing day by day.

May be by September the grass would have grown longer untrampled by airborne Gloucestershire Old Spots. The focus is on structure but at least as important is supervision, governance, audit and transparency. Why not leave a place for some continuing public ownership perhaps based on HBOS-Northern Rock link up. The underwriting of deposits by the government is a powerful tool that can be used as leverage against a devious management.

From your morning blog:

'At the same time they appear likely to maintain the efficient flow of credit to the economy'

Er????
Not for SME's being deliberately sent to the wall to clear the way for transnationals.

I don't see anything in any of this to address that problem, the one on which the government is waiting till its all too late.


Jericoa #9 - have you been asleep? Cable has shown his dirty evil side since those days when he played Mr Niceguy before the election.


Watriler #12 Yes I think in a 'mixed economy' we should have a nationalised option, but one that is not deliberately disadvantaged in the market, as Nationwide was having to offer only v high interest rates to loan renewals, so the bank did NOT look like a good option.

I think many people would go with a nationalised option if it had a fair crack. If they did it would demonstrate what people want to see.

My impression of this blog is that the self censorship button is being pressed greatly - but there is a 'between the lines' feeling that you have a lot more to say - but daren't.
I suppose this is the nearest to non-conformity we can expect

"We hope the Chancellor and Ed Balls will come on Newsnight tonight to thrash it all out to a conclusion. Yes, and there is a flight of Gloucestershire Old Spots on the approach path to London City Airport right above my head! "

#11 Hawkeye_Pierce

Thanks for this link.

First impressions is its interesting & I'll have to read it again to understand whether or not its muddling up value terms.

It Marxist terms an increase in energy prices means more labour time is going towards producing energy - the easy stuff has been got first.

This means an increase in the organic composition of capital - energy is constant capital for Marxists.
An increase in the organic composition of capital puts downward pressure on the rate of profit.
The higher energy prices also raises the cost (labour time) needed to produce the means of subsistence.
This reduces the rate of exploitation & again puts downward pressure on the rate of profit.
Hence the attack on workers wages, pensions, conditions, etc to resist the downward pressure of profits.

I suspect that things are much worse that they seem because the printing of money, financialisation & consequent rising asset prices mitigate underlying reality.

Marxist value terms keep the qualitative argument (relatively) simple.
But of course we want quantative evidence.

If the report is saying technological change (including ICT) is the key growth ingredient, then in Marxist terms this is the constant revolutionising of the means of production.

This is expressed in an increase in relative surplus value (all things being equal).
The means of subsistence reduce in price & the rate of exploitation increases.

Is the report saying that the technogical changes are more important than the energy inputs?
If so, surely this neglects the relationship between the two.
New technology has only become possible due to cheaper energy - human power to animal power, wood burning to coal burning to oil burning to gas burning.

I suspect the green argument that growth can continue even with more expensive energy (sun & wind) so long as new technologies can be invented, is unlikely to happen.

Limits are being hit & capitalism is dying.
Now politics is catching up with economics.

When it comes to lines, the Mason-Peston ones of course may be viewed as defining different boundaries, and hence perhaps differently depending...



Of course, not being present, one cannot know whose view reflects accuracy, which is why one reads around.

Some one pays. Others one doesn't. The odd one requires you to.

#14

I suspect you are right wrt some self censorship, I dont know what the Orwell Prize judges will make of that, irony seems inadequate somehow if he wins... which he should.

To be fair you are much better off trying to get a very important message out there from within a mainstream organisation like the Â鶹Éç than trying to influence from outside, which is extremely difficult the way modern media works.

As for being royaly suckered and robbed, that is agiven I am afraid, heck, even the governor of the Bank of England is 'surprised' people are not more angry.

The real bad news is that there is no point in voting for any of the main political parties if you want to change things.

Both Labour and now the lib dems sold their souls to the devil for power. The Tories never had one in the first place and all the rest get either non-existent or negative media coverage despite (quite often) having fairly sensible policies.

It sounds daft but if UKIP and the Greens teamed up they may thrash out something workable by way of support and a policy platform ...go figure !!!

The fact that the above sounds daft is a reflection of how utterly successful the media has been in manipulating peoples views and marginalising alternatives, hence securing a type of kleptocracy seemingly within the boundaries of democracy.

A fundamental requirement to make finance safer must be the mandating, by the Bank of England, of minimum Service Level Agreements for all financial institutions in the UK which offer current account and deposit account services to the public. I believe that the collapse of Northern Rock came about not because of Robert Peston's Â鶹Éç News report but because customers sought to undertake transactions using the internet services of Northern Rock after watching the news. Some of these wished to close their account but others merely wished to undertake some basic transactions. The volume of customers attempting transactions overloaded the bank's servers because insufficient capacity and resilience had been built into the bank's network. It did not have the capacity to scale and pull in servers and other computing resources in other countries to enable it to service its' customers requirements. Unable to access their bank and suspecting the worst. the customers queued at branches - and the rest is history.

We are now in an age when the same situation, triggered by a rumour (a Tweet from a well followed Twitter celebrity?) could lead to a run on a high street bank. Internet resilience must not be optional.

#16 Just Fawkes ranting on abut the Â鶹Éç in the he does when he has little of use t say - i.e. quite frequently.

'19. At 21:03pm 11th Apr 2011, SeanBroseley
#16 Just Fawkes ranting on abut the Â鶹Éç in the he does when he has little of use t say - i.e. quite frequently.'

If u say so. Like I say, I wasn't there.

Just... is it possible that one person's rant is another's 'sources say'? Otherwise, how to explain such as Mr. Crick's body of work being deemed appropriate on these pages? Or any other 'reporter' whose opinions can direct audiences either happy to be lead or... wondering where to.

Even a free ride has risks, which is why one does hop aboard with caution. Paying on top to get an earful of the driver's views whilst being conducted where he wants to go just seems odd. Especially when history suggests, speaking of lines, they never go Sarf of the river.

Which may be fine if where they inhabit and travel around is one's home turf too, I guess.

As a wise person recently wrote:

' Reading the contributions to this blog has encouraged me to look further into the various subjects. I think one of the problems is that there is a lot of complexity around the issues and people shy away from the complexity. And yet it is vital that we don't do that, otherwise decisions are made in our names over our heads. '

/blogs/thereporters/robertpeston/2011/02/hsbc_biffs_government_and_regu.html?postId=106856251

Hence reading around does pay dividends. For instance:



'Here, even more hilariously, is the Â鶹Éç’s Robert Peston as recently as two weeks ago: "Only in the event that the Portuguese financial crisis exhausted the available money in the eurozone’s bail out fund – which it won’t – would the UK become liable."'

Meanwhile the search for what is considered news, and what is not, continues.

I see errant ex-councillors are 'in' if suitably critical, along with ratings-pleasing 'rows' about apologies.

Meanwhile, coverage of others are more muted. Looking at the Politics home page there's what's hot (PM 'wrong' on Oxford black intake)... and not so much (Brown admits 'mistake' on banks).. As opined elsewhere...



Maybe it 'depends' on who controls the presses for when they get stopped, and for what?

#21 I guess you must be making a point there, but it's a little too elliptical for me: just spit it out would you?

I just want to state that no one I have talked to today believes the latest figures about food inflation dropping. All I have chatted to have expressed disbelief.

I assume that the CPI food basket comprises caviar, champagne and Fortnum & Mason cheese and crackers.

Obviously the recent riots made it impossible for the nation to buy these items and hence food inflation fell as a result.

Am I the only one who thinks the figures are being fiddled to give the BOE an excuse not to raise interest rates?

There are millions of decent people suffering in the UK as a result of the weak Pound. It is all very for King to argue that this is helping exports but it just stinks of supporting the banks and the bankers yet again.

On a slightly different note.

I have not ate cheese and crackers in a year due to a gluten intolerance. My asthma improved in leaps and bounds as a result.

In recent days, however, I have given in to temptation and am now wheezing again. I hold this blog, the Â鶹Éç and Mr. Mason entirely responsible for reporting rioting in that provider of fine foodstuffs.

Mr. Mason will soon be hearing from my solicitors - the honourable Messrs Wallace & Gromit.

YOU ARE NOT ALONE (#23)

Everything is fiddled. We are living within the lie, maintained by Westminster: the place where honour costs nothing and truth is economical.

Dave is currently Liar-in-Chief. What is his record? On the Boaster Poster, he put a false image of himself (more like Liar Tony?) and told us the NHS was safe with him. Then, in the election Liar Flyer, he SIGNED (like Nick) statements to the effect that we had NO OPTION BUT TO VOTE TORY, or Bugblatter Brown would stamp all over us.

And, in case we should think the media are watchdogs of truth, try contacting them with damning evidence. Certain things they don't want to know. They stay within the lie. Vaclav Havel wrote that SOMEONE will, ultimately, 'step outside'. NOT IN BRITAIN, IT SEEMS.

I know...Asda told me this morning that they are clean out of caviar, the plebs just do no know their place anymore.....

#25

Ahhh but it is worse than you think, it would be the lump fish caviar dyed black..all part of the lie.

They keep the good stuff for themselves while giving the illusion of distributing it.

Breaking news:

Someone in the mainstream media (almost) gets it:



"Reykjavik now serves as a very different kind of parable, of how to minimise the misery of financial collapse by ignoring economic orthodoxy.......newspaper columnists were using Iceland's case as an example that Portugal, Greece and Ireland should follow – make an allegiance and say to the EU that they won't pay the debt"

At last someone reporting that there is an alternative to bailouts and austerity.

Unfortunately towards the end, the author gets a bit confused about what free-market dogma actually means:

"Iceland was a country wrecked by implementing free-market dogma crudely and quickly; it may yet became another such lesson of how an economy can ignore free-market dogma – and come out far better than its critics predicted."

The free market should NOT be about privatised profits and socialised losses. By defaulting on its debt, Iceland actually did the free-market thing, and enacted privatised losses to counter privatised profits (profiteering?).

Lazy language = lazy logic (but a sizeable step in the right direction)

I thought we were only allowed Soylent Green caviar?

If Robert is right today in his assertion that the subsidy is greater than the profits made by banks, then we have reached a profound point in the economic epoch - the rate of profitability has now got so low that the state has to take money off its people to prop the finance sector up, so it is no longer the case that the banks are free enterprise companies, but are simply an extension of the state - and a VERY expensive one in direct subsidy AND in the damage they are doing to our economy overall through excessive charges and low lending rates to small businesses and home owners.

If banking is therefore no longer viable as a private sector activity without state aid, it needs to be treated exactly the same as every other so-called "lame duck" industry - coal mining, ship building, steel making, motorbike manufacture - the list goes on.

And as all we need from our banks is a core deposit taking and responsible lending service, the current arrangement is HUGELY expensive and as we are endlessly told, UK PLC is living beyond its means.

The other critical point Robert highlights is the market distortion this subsidy creates removing competitive pricing to consumers - so we have a bloated unsustainable banking system that is dysfunctional, hugely risky and vastly expensive - THIS MUST END!

The answer must be to switch to a mutual model of smaller regional providers and to encourage diversification like more building societies, credit unions and the dismemberment of the big banks as soon as possible - the axe must come down just as hard in Canary Wharf as it did in the Yorkshire pit villages, or we will know that the Conservative Party isn't about economic reality, it's simply a smokescreen to hide the fleecing of the British people by their friends in the banks.

The current position is immoral, unsustainable and unless we take firm action now to begin to reverse the process started by "Big Bang", like a vampire in the night the banking industry is simply going to suck the lifeblood out of the British economy until we join the PIIGS economies with the begging bowl out to the IMF.

The way to start the process is to force the banks to recognise the true trading position in their accounts - and use that analysis in determining bonuses - which will cease to exist in terms of profit-related, because there are only loses once you factor in the subsidy.

Secondly we need to start forcing the banks to pay the real cost of the subsidy through imposing a much tougher insurance regime on them that builds up a central pool of cash that is there to reinvest in the banks if they need to recapitalise in the future, whilst we start the process of breaking them up and mutualising as much as we can.

Getting the likes of Tesco and Sainburys etc. to bolt on financial services to their core business is OK because the banking part then has the "floatation" device of the main company to cross-subsidise it if it makes loses, rather than the taxpayer doing it, but the key IMHO is to prevent ANY bank getting larger than 10% of the market, so they can be allowed to go bust without threatening the entire system.

Let's be clear about this - the banks don't MAKE anything - they only exist as a service industry to provide a conduit between those with savings to invest and those wanting loans to invest for homes, businesses and to aid their cashflow. Their judgement has been dreadful - their willingness to make outrageous gambles resulted in most losing their shirts - they distort the market and are a major dead weight on business by failing to provide finance at a fair price on reasonable terms, particularly to small businesses and first time home buyers.

In many ways simply formalising the state's holding in them into full blown nationalisation and taking out all the duplication and layers of management to provide a no-frills British Community Bank with a basic product range of retail and B-2-B services at very competitive margins would provide a massive shot in the arm to the UK economy right now by ending the excessive profits being made - BoE base rate @ 0.5% and commercial bank loan rates @ 9% - and free up the logjam in levels of lending.

If the Coalition doesn't square up to this challenge and be every bit as hard on the banks as they are on the public sector and the Tories were on so much of British manufacturing industry in the 1980s (industry we now desperately need to restore), then we'll know what their real motivation is and that the Conservative Party is totally in the pockets of the bankers, but we should not be surprised at that because they are joined at the hip to the City which now provides most of their funding, jobs for ex MPs and their families.

The British people are being asked to pay a heavy price for the banking collapse in cuts in their living standard and public services whilst the subsidy to the banks dwarfs the amount being taken from them.

This cannot continue.

Richard

Agree with you 100%. It seems the only major "think tank" that shares this comprehensive assessment of our situation and has similar appropriate proposals is NEF:



Good to see Tony Greenham on NN on Monday, but NEF needs more prominence in the mainstream media.

We mustn't rest until the man in the street has heard of NEF and gets their message.

#30

An excellent post...thanks..spot on. I am going to save that text if you dont mind, I may wish to refer to it in future.


#31

At the risk of looking like a habitual 'head nodder' I agree as well, NEF have a bit of an identity crisis though I sense (I met with them a little while back).

They still seem to see themself as a traditional itellectual think tank / lobby type organisation to facilitate change via traditional political routes. Yet in the dynamic expressed in #30 above all they will get is polite head nods from politicians and not much else.

The influence needs to come from the bottom up not the top down in this case and if NEF really do want to make a difference they will have to embrace this, but that is quite a cultural shift for NEF whom are staffed largely by folkes for whom that does not come naturally.

The NN interview is a case in point really. The city Lawyer was interviewed in a pinstripe at the top of askyscraper overlooking the city ...it had gravitas. The NEF guy was sat on a park bench in a jumper with the birds singing in the background and although his message had much more intellectual substance it did not come across anywhere nearly as powerfully as the leech city lawyer.

They have to address that if they are to get anywhere...sad but true I am afraid and it is way out of their comfort zone.

Looks like the end of the World may indeed be in 2012... or short there-after.

Interesting read.

----------

The perils of excessive economic optimism

There is an interesting thread over on the housepricecrash forum from several posters who, having either applied for a mortgage themselves or know a close friend who has applied for a mortgage in the past week, have been told by certain banks and building societies that they are now only lending 2 times salary.

2 x salary. That is below even the pre-house bubble 3.5 x salary norm.

If this is true, and the mortgage lenders have adopted this policy in recent weeks, then what does this say about the state of both the lenders and the UK economy?

Are they anticipating another economic disaster in the coming months? Is this because they expect unemployment to rise later in the year as public sector cuts click in.

If they are only lending 2 x salary then what would that do to the UK housing market? Stagnation at best, crash at worse.

#30 richard bunning

"the rate of profitability has now got so low that the state has to take money off its people to prop the finance sector up"

Yes, profitability, or rather lack of it, is key.

Remember the financial sector is unproductive labour - they do not produce means of subsistence or production.
They are a cost in the circulation of capital, just as marketing & retail are.
They justify their existence in the capitalist system by claiming to be able to direct capital to the most profitable economic activity.

So the rate of interest must always be below the true underlying productive rate of profit of enterprise.
If its greater, then there's no sense in enterprises reinvesting their profits for less return than they can get compared to say lending to a government.

But we have had historically low interest rates (even before the financial crash) for some time.
It would appear though that much of the recorded profits of banks over the last decade or more has been based upon rising asset prices, particularly in property, rather than true productive capital.

This is the argument that it is fictitious capital that has been hiding the true decline in profitability for western capitalism & probably capitalism on a worldwide scale.

To keep the Ponzi scheme going more fictitious capital had to be thrown in after the 2008 financial crash.

The adjustment is still to come & next time interest rates can't go any lower.
All they can do is to continue the debasement of the major currencies.

Both inflation & a decline in output beckon.

#34

Stagnation I think, the powers that be have learned to avoid any sharp corrections or run the risk of the people realising what they are actually doing.

2 times salary plus 20% deposit minimum no doubt and a rate 10 times the official base interest rate.

The banks have done their analysis, looked at the corrections in the market accross the globe and yet to happen here (not been allowed to as we would go down and uK plc is too big to fail).

So... lets apply a bit of basic math and work this backwards and figure out what the banks think is the correction to come (the basis for thier current lending policy)

So 20% deposit...10% is traditional so lets knock off 10% of current house prices.

2x salary instead of 3.5 times. A reduction of 40% (ish).

Therefore if the above (or similar) is the typical offer from banks now to new buyers then they must be secretely expecting a 40 to 50% drop in Uk house prices and are adopting lending policy to suit to protect future liabilities.

Funily enough that corresponds with corrections experienced around the world for similarly afflicted nations.

Against the simple mathematical background above (which must come from the banks own assessments of risk) our own ** government is actively encouraging 'first time buyers' into the market full in the knowledge ? that the banks themselves are expecting a massive house price adjustment downwards.

Am I missing something here? Why is the above simple assessment anyone with basic math could do not all over the business pages and the Â鶹Éç in big red letters and banks interviewed to understand this gross disparity in their lending policy and government policy.

Of course we all know the answers on here.


I wonder even if this post will pass the mods.

#36 addendum.

Forgive my very rudimentary mathematical back analysis of the true value of housing stock in the UK according to the banks currently lending into that market.

I am sure the principal applied must be sound and if someone out there (shireblogger?) can put some economically defendable numbers behind it, it could go some way to finaly, tangibly, numerically, in a way people can easily understand blow apart this grotesque aparatus we are currently all unecesarily living under.

The banks are pricing mortgages on the basis of big falls in value...so why is government intervening to encourage first time buyers into a market the banks think will collapse....


If that is not a scandal I dont know what is.

Interesting thoughts Jericoa.

I had not thought it through in the way you write, but there does appear to be a huge gulf between the Government using money to encourage first time buyers and the banks who, seemingly on the quiet, are preparing for a significant correction in UK house prices.

If they are increasingly, but recently, decided to reduce lending to 2 x salary plus a big deposit then surely that would mean the average house price in the UK is unaffordable?

I think the average house price, outside of London, is about 165K which would mean a single person would effectively have to be earning circa 80K or have a hefty deposit.

With all respect to those average 165K houses but I doubt that people on 80K a year would be wanting to live in one - if you see what I mean? Or is my reasoning and my maths wrong?

I think you are right Jericoa, according to the thread on HPC at least one major bank and one major building society has told people only this week that they are now lending 2 x salary - it can only mean they are expecting a big drop in UK house prices and intending to minimise their risk?

They must be looking at anticipated unemployment rises in the next few years and working through the affect on house prices?

# 15 "Limits are being hit & capitalism is dying.
Now politics is catching up with economics."

Of course globalisation and extending improved means of production to other regions extends the growth, at least for those in a position to profit from it.
In many ways an eroded work ethic could be seen as reducing our available labour inputs; or at least making it prohibitively expensive.
Many of the old theories fail to take proper account of the global nature of today's economy and thus the limited control that can be exerted by traditional levers.

As to the banks, our entire economic model is now based on the banking system increasing money supply through "growth" and this being channelled into asset bubbles showing notional "wealth" rather than rampant inflation. In some ways this could be down to the offsetting factor of cheaper global production, but such notions can only last for a relatively limited time frame.
In the end it comes back to the question, what are we able to do / produce that others will pay enough for for us to be able to afford what we want from elsewhere?

The services provided by the banks do produce an income, but then who owns the banks?
We need to get back to investing in R&D, technology and skills and away from speculation in shares, property, etc. Looking to generate real production, rather than speculative bubbles.

Since the main determinant of house prices is available credit, a limit of 2 x salary would be great since it would drive down prices to that level. Oh, hang on, I don't see the banks wanting that to happen .....

#37 Jericoa
Interesting angle. Take a look at the European Banking Authority bank stress tests calibration. The adverse scenario ( sovereign shock events and other global downsides) anticipates slides in residential house prices from baseline for 2011 c. minus 7.7%, 2012 minus 18.1%. Lenders must have to tailor their lending policies to take on board regulator adverse stress test scenarios. The estimates are supposed to allow for existing overvaluation of assets...I suppose governments would say these are worst case scenarios but I remember them saying similar things last year!

Hawkeye

Re your...
/blogs/newsnight/paulmason/2011/04/vickers_splits_the_difference.html?postId=107979026

Robert Peston used the phrase 'the goose that lays the golden egg' early on Radio 4 this morning...

Coincidence?

museV

Possibly just a co-incidence. Unless Peston squats on this blog to get the real deal on the global financial crisis ;-)

I presume the comment by Peston wasn't in the same context, i.e. the Golden Goose is the credit creation capability?

You're a good egg!

This egg has been banned several times now!

Good luck!