Out of touch?

[andrewb]

Originally Posted by Taggy

Heads need to roll, and more regulation needs to be put in place to stop this from ever happening again.

Correct. Gordon Brown's head should roll for stripping out regulation in the Bank of England Act 1998 and disastrous mismanagement of the UK economy.

[entwisi]

Originally Posted by Taggy

Well lets see how long Barclays remains free of "Government Medling" Think you'll find the Arab deal has strings attached too! The dramatic fall in RBS shares has just as much to do with Hedge Fund Speculators resuming their "Short Selling" practises again as the performance of the business. Barclays arnt immune from that...time will tell. None of the banks...including Barclays are willing to accept that they, along with fund managers are the cause of the current finnancial crisis. Its their Greed and incompetance which is behind the recession we now find ourselves in. Heads need to roll, and more regulation needs to be put in place to stop this from ever happening again. Bonus payments should be for long term performance, not short term, unsustainable gains. First and formost Banks should have preferential rates and lending criteria for British Businesses and individuals. We keep hearing how we as individuals have borrowed more than we can afford...yet the bulk of the so called "Toxic Debt" is what banks have lent to foreign customers....they need to stick primarily to markets and areas that they understand and are easier to regulate.

Best Regards - Taggy

Why should a global company give preferential rates to british borrowers and savers? There are few 'UK' Banks now. In order to protect themselves from hostile takeovers it was necessary a number of years ago to become Global organisations. Barclays has a large prescence worldwide and is driving the increase in Banking in places in Africa and India bringing bank accounts to millions of people who have never had access to such services.

The vast majority of the Toxic debt you refer to is not UK loans to to foreign investors. The majority is American Sub primes watered down with other debts in packages sold on and on and on till its lost its identity.

Individuals has been foolish buying on cheap credit with no idea of what would happen during a down turn. It was a fact that in one year BMW sold more 3 series cars than Ford did Mondeos, now that is a crazy situation. we were all being sold a 'lifestyle' and no one bothered to think if they needed it or not. I'm fortunate that I was brought up with little money to hand so even though I'm fortunate to have a very well paid job I don't see the point in 'wasting' money for no reason. I could/can afford a brand new car if I wanted but I know that due to teh mileage I do it would be worthless in 4 years. I can't see the point in throwing 15-20K down the drain when I can do the same journeys for less than 5K. So I drive what some would term an old banger, who cares? I'd rather put my money into appreciating assets than depreciating ones! As such I'm looking to be in a position to be able to choose to retire when I hit 55.

People have been enjoying holidays, cars, flash goods etc on 'equity' on a house that was only really a false number driven up by the availability of cheap credit. Now its a reality that negative equity if likely to cause a fair amount of pain.

There isn't a Bank on the planet that has 'forced' anyone to borrow money. Its your own responsibility to work out if you a) need it b) can afford it and c) should do it!

I also fail to see why Banks are seen as something different to every other business in the land. They are busineses, there to make a profit( for shareholders or whoever). If they were too expensive they wouldn't have customers just like you don't pay over teh odds for anything else you buy. IN fact I would even venture that for Mr Average he gets a VERY good deal out of his Bank. They look after your money, pay you interest for savings, provide you at great cost with Cash Machines, branches, debit cards and the infrastructure so that you can spend your money in any number of places. how much does all this cost you? NOWT if you stay in credit. That to me has to be the bargain of the century.

[g jones]

Originally Posted by andrewb

Correct. Gordon Brown's head should roll for stripping out regulation in the Bank of England Act 1998 and disastrous mismanagement of the UK economy.

I think your failing to understand the problems other than in a simple crass way.

2 reasons for the UK recession. House price boom and UK reliance on banking which makes up 11% of GDP and is suffering worldwide, so we will suffer the most as one of the worlds leading bankers.

Ireland, Iceland, Italy, Greece, Portugal and Spain are in a bad way too as are many others.

No bank can allowed to fail in the UK hence the intervention. Howver it is a mixed picture. Barclays avoided Triple A whilst RBS problems resulted from usurping Barclays £9billion bid for ABSAnro Dutch bank with a £11bn bid and ABSAnnro had massive toxic debts.

Like Morgan Stanley who ditched 'Junk' Bonds whilst Lehman brothers didn't. Global markets led to vast sums of money slushing in the US primarily, Chinese money. That led to sub-prime bubble with any NINJA (no income, no job or assets) roadside hobo offered loans whilst mortgage sellers wrapped up the loans as TripleA rated bonds and got away with it 'because everyone was making millions'. A failure of laissez faire or regulation.

Credit laws were relaxed in the UK in the 80's and subsequently by all Governments. David Cameron did not oppose these measures but said there was too much bureaucracy in the city. Some Labourites like me objected but we were a small silent minority marginalised.

As Enti says, every bank is different. This is not a Gordon Brown (I am not his biggest fan) problem and to say so causes further problems for the UK because pointing the finger in the wrong direction will lead to further ongoing problems.

Prior to 1999 here was no Financial Police and Labour introduced the FSA. However this had reasonable results at a low level it has failed utterly at a strategic level to spot the toxic debts.

Recapitalisation of Northern Rock has led to their debts to the Government almost being paid off I believe. The doom mongers said it would last for decades and the tax payer never get paid off.

I think your point of view is consistant Andrew, always attacking the Government always (when it matters) and promoting The Conservatives irrespective of the facts.

[andrewb]

Originally Posted by g jones

I think your failing to understand the problems other than in a simple crass way.

2 reasons for the UK recession. House price boom and UK reliance on banking which makes up 11% of GDP and is suffering worldwide, so we will suffer the most as one of the worlds leading bankers.

Ireland, Iceland, Italy, Greece, Portugal and Spain are in a bad way too as are many others.

No bank can allowed to fail in the UK hence the intervention. Howver it is a mixed picture. Barclays avoided Triple A whilst RBS problems resulted from usurping Barclays £9billion bid for ABSAnro Dutch bank with a £11bn bid and ABSAnnro had massive toxic debts.

Like Morgan Stanley who ditched 'Junk' Bonds whilst Lehman brothers didn't. Global markets led to vast sums of money slushing in the US primarily, Chinese money. That led to sub-prime bubble with any NINJA (no income, no job or assets) roadside hobo offered loans whilst mortgage sellers wrapped up the loans as TripleA rated bonds and got away with it 'because everyone was making millions'. A failure of laissez faire or regulation.

Credit laws were relaxed in the UK in the 80's and subsequently by all Governments. David Cameron did not oppose these measures but said there was too much bureaucracy in the city. Some Labourites like me objected but we were a small silent minority marginalised.

As Enti says, every bank is different. This is not a Gordon Brown (I am not his biggest fan) problem and to say so causes further problems for the UK because pointing the finger in the wrong direction will lead to further ongoing problems.

Prior to 1999 here was no Financial Police and Labour introduced the FSA. However this had reasonable results at a low level it has failed utterly at a strategic level to spot the toxic debts.

Recapitalisation of Northern Rock has led to their debts to the Government almost being paid off I believe. The doom mongers said it would last for decades and the tax payer never get paid off.

I think your point of view is consistant Andrew, always attacking the Government always (when it matters) and promoting The Conservatives irrespective of the facts.

A long post about how the recession happened. Lets not read off the standard play script though, that everything is to be blamed on America, and Flash Gordon has saved the world. The UK is suffering worse than other countries, we are the worst prepared to weather the recession. Regulation was there, in the 80's and 90's. Credit probably was too free in the 80's, which is an element of our situation. The real problem though, the complete deregulation of the banking sector in 1998. Brown split up the bodies dealing with regulation, and effectively left it without any means to regulate. When you have a lot of free credit in the market, and banks are not regulated and told no, you cannot lend irresponsibly, this leads to our problems of massive private debt.

Combine this deregulation, with large public debts, which are only getting larger when the government finds logic in 'The problem is over borrowing in the private sector; lets counter it by over borrowing in the public sector'.

Banks need to be responsible, and they need to be told to be responsible by regulators if they decide not to be. People need to be responsible and only borrow what they can afford to pay back.

If you're unhappy about the Labour deregulation of the banking system in 1998, then perhaps you should join the Conservative Party. Failing that I'm sure the Socialist Party will take you in.

[garinda]

Originally Posted by entwisi

Barclays has a large prescence worldwide and is driving the increase in Banking in places in Africa and India bringing bank accounts to millions of people who have never had access to such services.

Very noble I'm sure, and nothing at all to do with an interest in securing profits.

Barclays was the only major bank active in South Africa under apartheid, even though most international finacial insititutions decided not to operate there, and followed internationally imposed sanctions.

It's nice Barclays is helping those poor Africans open a bank account.

Here's an example of them helping a nice Mr. Mugabe of Zimbabwe.

Barclays' millions help to prop up Mugabe regime | Money | The Observer

Banks and other finacial insitutions are primarily concerned with profits, first and foremost.

Morals come way down the bottom of their checklist.

[jaysay]

To quote Graham Jones " Some Labourites like me objected, but were a small silent minority marginalised" that seems something of an oxymoron to me, how can you object when your silent

[entwisi]

Originally Posted by garinda

Very noble I'm sure, and nothing at all to do with an interest in securing profits.

Barclays was the only major bank active in South Africa under apartheid, even though most international finacial insititutions decided not to operate there, and followed internationally imposed sanctions.

It's nice Barclays is helping those poor Africans open a bank account.

Here's an example of them helping a nice Mr. Mugabe of Zimbabwe.

Barclays' millions help to prop up Mugabe regime | Money | The Observer

Banks and other finacial insitutions are primarily concerned with profits, first and foremost.

Morals come way down the bottom of their checklist.

always nice to only look at one side of an argument.

Barclays offered services to many ex Pats etc in countries like Zimbabwe for many many years before any troubles began and having the infrastructure also supported locals building a solid financial stable platform for them. So Mugabe goes pear shaped, morals dictate that you have to consider both sides of a situation. would you have liked Barclays to immediately withdraw all services from its clients in these countries? That in itself would cause utter chaos if it was even possible. How do you 'suddenly' distribute all teh funds you hold? This is itself would completely destabilse the countries financial stasis. It would be catastrophic in itself.

Secondly, here we are today with everyone winging about Gordon interferringing in the Banking industry. HOw do you even begin to suggest that in that country teh Banks should interfere in the Politics of that country. Barclays didn't 'endorse' Mugabe anymore so than teh UK itself did. What it did was make a moral judgement on what it thought was best for its clients irrespective of the political situation.

[garinda]

Originally Posted by entwisi

What it did was make a moral judgement on what it thought was best for its clients irrespective of the political situation.

Just as they did when they decided to operate in South Africa under apartheid.

Barclays are no different from any other bank or financial institution, their main raison d'etre is to make a profit.

Don't kid yourself that their expansion into third world countries is for altruistic reasons.

[entwisi]

Is profit a dirty word now?

I didn't say it didn't provide a healthy profit as well(although the vast majoity of Barclays profits come from its investment arms). however they were there for the long term not some short term profit grab. As I said before would you have preferred they pulled out with no thought for the mess it would leave?

You haven't mentioned any of the community work that Barclays does in many nations across the world ( UK included ) including things like allowing employees to do 2 hours a month in voluntary work fully paid, running community projects funded by the Bank( a school in Ossy was subject to one of these project s only a couple of years ago)? running £ 4 £ matching for charitys for all employees up to £1K per event. paying for schools and eductaion of the poorest and most vunerable people in places like Philipines, Pakistan, India and Africa.

Its fun to always throw mud, sometimes the roses aren't as powerful a smell.

http://www.barclays.com/community/

[garinda]

Of course profit isn't a dirty word.

It's the word that keeps the capitalist system afloat.

Though some companies are more ethical than others, i.e. the ones that didn't operate in South Africa whilst under the apartheid regime.

[Taggy]

Originally Posted by entwisi

Why should a global company give preferential rates to british borrowers and savers? There are few 'UK' Banks now. In order to protect themselves from hostile takeovers it was necessary a number of years ago to become Global organisations. Barclays has a large prescence worldwide and is driving the increase in Banking in places in Africa and India bringing bank accounts to millions of people who have never had access to such services.

The vast majority of the Toxic debt you refer to is not UK loans to to foreign investors. The majority is American Sub primes watered down with other debts in packages sold on and on and on till its lost its identity.

Individuals has been foolish buying on cheap credit with no idea of what would happen during a down turn. It was a fact that in one year BMW sold more 3 series cars than Ford did Mondeos, now that is a crazy situation. we were all being sold a 'lifestyle' and no one bothered to think if they needed it or not. I'm fortunate that I was brought up with little money to hand so even though I'm fortunate to have a very well paid job I don't see the point in 'wasting' money for no reason. I could/can afford a brand new car if I wanted but I know that due to teh mileage I do it would be worthless in 4 years. I can't see the point in throwing 15-20K down the drain when I can do the same journeys for less than 5K. So I drive what some would term an old banger, who cares? I'd rather put my money into appreciating assets than depreciating ones! As such I'm looking to be in a position to be able to choose to retire when I hit 55.

People have been enjoying holidays, cars, flash goods etc on 'equity' on a house that was only really a false number driven up by the availability of cheap credit. Now its a reality that negative equity if likely to cause a fair amount of pain.

There isn't a Bank on the planet that has 'forced' anyone to borrow money. Its your own responsibility to work out if you a) need it b) can afford it and c) should do it!

I also fail to see why Banks are seen as something different to every other business in the land. They are busineses, there to make a profit( for shareholders or whoever). If they were too expensive they wouldn't have customers just like you don't pay over teh odds for anything else you buy. IN fact I would even venture that for Mr Average he gets a VERY good deal out of his Bank. They look after your money, pay you interest for savings, provide you at great cost with Cash Machines, branches, debit cards and the infrastructure so that you can spend your money in any number of places. how much does all this cost you? NOWT if you stay in credit. That to me has to be the bargain of the century.

If they are prepared to take British Taxpayers cash to keep them afloat then they sure as hell should be prepared to put the British Ecconomy above all others. I dont think it will be too far down the line before Barclays are availing themselves of this support either. Protecting themselves against hostile takeovers all seems a touch irrelevent now! The Toxic Debt that banks have bought are loans and loan guarantees that have been bought against Foreign investments. It does'nt matter how diluted some of these debts have become, in fact their dilution just emphasises the extent that some banks have gone too in order to disguise their greed and incompetance. As you mention with individuals...nobody forced anybody to take on debt. Well nobody forced the banks into these unsustainable deals either. For the most part, they did'nt understand the level of risk they were exposing themselves and us to. They need to learn from this and stick to things that they do understand. Whats the old saying " If something looks to good...then it probably is" But Greed took over i'm afraid.
The Cheap Credit that has been too readily available....now remind me who it was that supplied that?? Yes, you are right to say that people should never borrow more than they can afford to repay, but we all know human nature, and how gullible we can be when confronted by a Silver Tounged salesperson. If the Banks themselves thought the Good times were going to continue, then surely the man in the street is going to be influenced by this....and if the banks did'nt then why saddle themselves with unnessesary risk? When i got my Mortgage (Thankfully Paid Off now) a 10% deposit was the norm, and you really had to convince the lender why they should lend to you. Recently we've seen 125% mortgages literally thrown at people, now it was'nt customers twisting the Banks Arm, or overvaluing their own properties that brought that about, it was the nice commision fees involved. Of course some individuals have been foolish...but the Banks and Fund managers much more so. They are supposed to be the experts who understand the finnancial systems, we look to them for expert guidence..we've seen precious little of that. I would'nt know the figures, but i would assume that individual debts on Credit Cards only make up a small proportion of the total debt we are looking at, yet the banks would like us to think its mainly our fault. A lot of the Foreign debt is being written off by the Banks, will the same happen with a lot of small British borrowers...no they will be hounded by the banks....sometimes to the Grave...and beyond! As far as the great cost of Cash Machines goes, one of the reasons they were installed in the first place, was to save banks money by hopefully employing less counter staff...in fact i can actually recall some banks saying at the time, that they might decide to implement a small charge for people who wanted to withdraw funds over the counter instead of using them. The Banks have done very well over the years making money off OUR money, most people have at some point had a mortgage as well as savings with them, along with buying other products and insurances (Often with highly inflated premiums), so the concept of totally free banking is a bit misplaced. Yes everyone expects, accepts and understands that Banks need to be profitable. But how about accepting their part in the troubles we now face, and realising that great change needs to be made to how they operate.

Best Regards - Taggy

[andrewb]

It appears that the nationalised bank Northern Rock, has just paid bonuses to it's staff. The bonus is because the bank has paid back half of its debt to the Bank of England. Average bonus of £2,000, with people on the higher wages being paid a lot more.

Ridiculous. In a time when people are struggling, and the government are shouting at banks for giving bonuses, the bank they have complete control over, goes ahead and starts handing out bonuses while the bank still owes the taxpayer billions of pounds.

[SPUGGIE J]

Originally Posted by andrewb

It appears that the nationalised bank Northern Rock, has just paid bonuses to it's staff. The bonus is because the bank has paid back half of its debt to the Bank of England. Average bonus of £2,000, with people on the higher wages being paid a lot more.

Ridiculous. In a time when people are struggling, and the government are shouting at banks for giving bonuses, the bank they have complete control over, goes ahead and starts handing out bonuses while the bank still owes the taxpayer billions of pounds.

It may seem ridiculous to some but to the bank the only way to keep staff loyal and motivated is through bonuses. We have lost ours at work and been informed there is to be no payrise add to that no O/T and hey presto productivity has dropped. Sometimes you have to spend money to make money and they chose their way. Without incentives who will give 100% effort 100% of the time?

[andrewb]

I think people on £700,000 wages do quite well enough out of taxpayers without bonuses.

[SPUGGIE J]

Originally Posted by andrewb

I think people on £700,000 wages do quite well enough out of taxpayers without bonuses.

Cant argue with that Andrew but further down the food chain they might be deemed as worthy of it. Dosnt matter what they did they would be criticised for it especcially in parliment, which would be the kettle calling the pot sooty butt.