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Why have we left bank reform to technocrats?

Robert Peston | 09:42 UK time, Monday, 13 September 2010

Credit (please) where it's due: on Thursday, yesterday and today, the BBC has covered the historic agreement on new capital and liquidity rules for banks in the main body of its bulletins.

It's a certainly not the easiest story to explain, but it's hard to think of one of more importance to our future prosperity.

So I regard it as something of an achievement that the BBC has provided its reports outside of the ghetto of specialist financial news. Which is not true of many mainstream news organisations (the FT and Wall Street Journal are of course splashing the story).

I don't suppose most British people, including our lawmakers, would therefore have much of a clue that agreement has been reached on the most important global initiative to learn the lessons of the 2008 banking crisis and correct them.

On the basis of a pact between central bank governors and senior regulators, every important developed and developing country has agreed to enact laws to raise the amount of capital that banks have to hold as protection against future losses to more than treble the current minimum.

If we want to avoid future financial crises that impoverish us all, we've got to pin our hopes on the effectiveness of these new rules - which also cover the amount of cash banks have to hold against the threat of runs, the longevity of their own debts and the risks that banks attach to different kinds of loans (among other things).

And, by the way, whether the rules work or not, they'll have an effect on the price and availability of credit - probably raising the price and shrinking the availability, for the period of implementation (at least) and possibly for longer.

So if you can find me many stories in the past few days or months that matter as much, then I'll acknowledge I'm living on a different planet from you.

For banks, what's been concluded is the equivalent of a climate-change deal: an attempt to reverse potentially lethal global warming in the financial sector.

But do you remember how much coverage there was of the Copenhagen climate change conference, both the hopes attached to it and the massive disappointment when it failed?

What was concluded in negotiations behind closed doors in the Swiss city of Basel last night wasn't much less important to all of us than the Copenhagen debacle. So where's the media circus? Where are the screaming headlines?

Unlike the politicians at Copenhagen, the central bank governors and heads of banking supervision who form the oversight body of the Basel Committee on Banking Supervision - which decides these vital rules for banks - well, they don't exactly court the media.

For television and radio, they are a nightmare, because they rarely give interviews for broadcast. Their press conferences are few and far between. And their press releases are hopeless at translating the arcana of bank regulation into concepts that most can understand.

But, you might say, that should surely double the resolve of the press to hold them to account.

Well, it's not really happened. I've banged on and on and on in posts here about the importance of what was being discussed by the Basel Committee. And many of you have responded with apt and passionate comments.

But you are the exception. There's been little populist debate about how much capital and liquidity banks ought to hold for our own welfare. We've been presented with a fait accompli.

And most would argue that the media hasn't exactly done a brilliant job in shining a light even on that fait accompli.

You might also ask where our MPs have been while unelected central bankers and regulators have trampled on territory that they would surely regard as their own, viz the fundamental laws that affect how British domiciled banks conduct their affairs.

So if you felt there had been something of a democratic failure here, you might have a point.

But I suppose we can always hope that in another 60 years, when a banking crisis next precipitates a great global recession, we'll do a slightly better job as citizens at holding the technocrats to account.

Comments

Page 1 of 3

  • Comment number 1.

    So if you can find me many stories in the past few days or months that matter as much, then I'll acknowledge I'm living on a different planet from you.
    =============================

    how about one of a hundred links to the big picture

    http://www.well.com/~davidu/extinction.html

    add in the size of our growing population, and the fact of our consumption of resources, the dying seas...

    60 years the same?
    we need a serious change, or the won't be 60 years

    so these people meeting behind closed doors to keep things the same, for them, in their best interests - well...
    it cannot work Robert.

  • Comment number 2.

    I saw your report on the news last night Robert. As you pointed out, tougher rules will restrict the availability of credit from banks.

    We need a mathematical analysis of this situation. How much money (state created and credit) was in existence before the crunch? How much is there now? How much do we need to be in existence for the economy to provide for the needs of its citizens (including a surplus for capital investment)? Supply a shortfall by QE, remove a surplus by taxation (tax it, and effectively burn it!)

    I realise that obtaining these figures will not be easy, and that accuracy will only be approximate. The question: is an accountable macro-managed economic system better for the public than speculation-driven laissez faire?

    The next question is how to stop the surplus being used to fund speculative - non wealth creating activity, and direct it into real investment. I believe that we need a National Investment Bank, and punitive short-term capital gains taxes. We need a change in investment culture, and realistic expectations of returns upon investment. To me, it beggars belief that state-owned NatWest stockbrokers are still promoting "spread-betting" services for example.

    The final point for Britain, is that we have, as always, a balance of payments problem. We need an industrial strategy to reduce imports and provide for more of our own needs in a sustainable way. As fuel prices rise and climate change becomes more of an issue, this is vital. I wish I could say it was inevitable, but given the inability and unwillingness of politicians (and bankers) to see the bigger picture, I am not optimistic.

  • Comment number 3.

    Robert,

    You want extra credit for doing what you are supposed to be doing anyway?

    You sound like a banker!

    As for your comment:

    "So if you felt there had been something of a democratic failure here, you might have a point."

    There are words which better describe what is going on Robert:

    Dogmatic Totalitarianism
    Plutocracy
    Fascism

    Take your pick...

  • Comment number 4.

    The new Basel rules don't prevent reckless lending to sub-prime borrowers.
    Those dodgy loans were the main cause of the second Wall Street crash. A financial crash that dragged down inter-bank lending - and then all the OECD economies.
    But these rules are the best we can get every country to agree with. And they remain insufficient to prevent a third Wall Street crash.

  • Comment number 5.

    So what happens to all the hybrid capital that won't count under Basel III? Some of it is still trading below par or suspended under a 2 year agreement with the EU (for those in receipt of state aid). I assume the sensible thing to do would be to make an offer to the bond holders at the distressed prices - except they can't because the EU has banned tenders. So they'll just have to wait until the suspension is lifted and pay the full whack to redeem them. So the EUs attempt to make (some) bondholders suffer some pain may mot work quite as expected.
    If you want a real story Robert perhaps you can ask how the banks managed to stitch up retail investors in the 2 year suspension whilst exempting/converting the issues mainly held by corporate investors?

  • Comment number 6.

    "But I suppose we can always hope that in another 60 years, when a banking crisis next precipitates a great global recession"

    Much Much sooner !

  • Comment number 7.

    If i have understood your previous posts on this subject Robert, then in theory it shouldnt affect us in this country at all...

    Our banks already have more supposed Tier 1 capital than is being recommended, so no further belt tightening is required here,but i am sure they will not spare the opportunity to squeeze more money from the tax payer.

    But i ask my self IF this is the remedy that they have come up with why were our Banks so affected in the first place as they allegedly had enough capital to weather the storm anyway ????

  • Comment number 8.

    Democratic failure? That's the understatement of the century. We didn't nationalise the banks, they privatised our governments.

    I've been reading this blog since 2007, lurking with intent you could say. My fury has been building slowly and I can tell you this. I for one will not be waiting 60 years to wrest my childrens futures from this crowd of leeches. I don't have that long.

    Bring on the next domino, I'm prepared. no more of this insiduous status quo. We need reform but we will never get it without threat of revolution. It is long overdue, expenses, bailouts, bonuses, cuts, taxes, prices and job losses. Next the cuts.

    At some point in time x-factor is just not going to cut the mustard anymore, hopefully then we as a nation will stop worrying how high Mr Cowell wears his trousers are and start looking at the CUT of our own cloth.

    Plutocracy or democracy, the fight over this one syllable is going to be epic.

    Get them up against the wall.

  • Comment number 9.

    Like many agreements between industry insiders the Basel 3 is really a putting off of the evil day. Most of the chief executives and Chairmen of the Banks and the Regulators will have retired on fat pensions long before these regulations come into force.

    The reality is however stark. We MUST not carry on doing and living the way we were with regard to money/credit. Brutally, this means that the love affair with ever increasing debt stops. What this means is that debt will become more and more expensive and servicing existing debt will be come more and more costly. Everything that is happening points to this inevitability. (As I have been saying for the last couple of years - and warning about for the last decade.)

    The problem is that we are still running the system with people who don't understand this and they will act in an inappropriate manner as that is all they understand. Everyone who remembers my concerns about the fault-lines in British institutions knows of my views on this subject. The old order has to go as they did not see the crash coming even though they were warned about it time and time again. By delaying getting rid of them we are delaying the recovery as all this load of chumps know is how to inflate an unsustainable debt bubble - the opposite of what everything is moving towards. To get started we need a break with the past and we need it now!

    We need to work towards debt deflation is a controlled manner, by slowly and progressively raising interest rates with to 5% at least - if we do not do this NOW we will be like the Japanese with 16% below the poverty line and an economy that is still dead in the water and still sinking. As I wrote over a year ago we are all Japanese now - but it does not have to be this way as this way lies progressive destruction. We could start by publishing house prices as multiples of the average local income and then using capital gains tax to 'fine' overpriced house owners with a wealth tax (or some such strategy.) We have to engineer a reduction in asset prices to rational levels before we can recover any dynamism in the economy (or suffer the terrible consequences - see Japan)

  • Comment number 10.

    Robert,

    'But I suppose we can always hope that in another 60 years, when a banking crisis next precipitates a great global recession...'

    So you finally acknowledge recessions are inevitable?

    Soon you will realise they are not only deliberate but under capitalism, completely necessary.

  • Comment number 11.

    Must agree with #1 & #6 - 60 years till next crisis?!!! Robert, you are more optimistic than I thought!

  • Comment number 12.

    7 AqualungCumbria (Capernwray by the way?)- none of this makes much sense. As someone pointed out a few days ago, if UK banks are already holding enough capital adequacy, or whatever nonsense terms they use, why are they still refusing to pass on rate benefits to mortgage customers using the premise that 'reparation of the balance' sheet is still required. Something fishy. Same reason that lending is resitricted, to reduce the exposure to debt/risk-weighted assets to help repair the balance sheet. It is pure nonsense - corruption & theft.
    As someone else pointed out the other day (apologies for not remembering names) - banks a movng he goal posts on customers and giving no notice/limited notice to comply before fees are levied - again in the interests of repairing balance sheets, which are already compliant (8 years) ahead of Basel III requirements.
    Credit Unions all round I feel. Let's not wait for them to relocate on the interests of tax advantage.Instead let's make their retail businesses non-viable

  • Comment number 13.

    ... and if you'd like some credit Robert, then credit where it's due. Well done indeed for continuing to do your bit - though whether the narrow focus of the overall agenda on which you tend to report is helpful or not is another matter.
    Also, 5 demerits for not pushing the "Basel Faulty" headline!

  • Comment number 14.

    "We've been presented with a fait accompli."
    or should that be a 'fiat accompli'?

  • Comment number 15.

    #8 szjon;

    We didn't nationalise the banks, they privatised our governments.
    -----------
    A very strong point.also
    #12 jSwede;

    Credit Unions all round I feel. Let's not wait for them to relocate on the interests of tax advantage.Instead let's make their retail businesses non-viable
    ------------------------
    This again is a very sensible point, and lets have legislation to support and free up the larger Credit Unions, an orderly movment of funds from "Banks" to Credit Unions could make a significant difference and not just to the finance industry but the country as a whole.

    Lets just do it.

  • Comment number 16.

    Forthose that are passionate about Fractional Reserve Banking (inckuding me) the following might be of interest:

    "This Wednesday, Douglas Carswell MP (Conservative, Clacton) will introduce legislation into the UK parliament that takes the first step towards ending fractional reserve banking. As Steve Baker MP describes:

    'Douglas's Bill would assert property rights over demand deposits. Real savings - term deposits - would be loaned to entrepreneurs, delivering an economy built on save and invest.'"


    Now might be a good time to contact your MP of whatever flavour and suggest to them that they support this bill and, if you're au fait with the detail, why it is important.

    Taking back control of our currency coupled with the Basel rules will be a huge step to bringing the banks back in line.

    I know this is politocs and not business Robert - but your take on this would be interesting.

  • Comment number 17.

    I agree with Leftie (4)Capital ratio is only meaningful if the banks do not overreach themselves with outrageous risks and yet to be thought of off the wall packaging of tradable debts. In addition to separating the retail from the gambling elements it is close supervision that is needed with criminal penalties for governance offences. A retained public sector in banking is essential for the government to have supervision of these weapons of mass wealth destruction.

  • Comment number 18.

    Robert Peston.

    "If we want to avoid future financial crises that impoverish us all.."

    way too late, right now something like one in five Britons live on or below 'the breadline', hard to imagine that policies proposed by the current government will alleviate their poverty.

  • Comment number 19.

    14. At 11:10am on 13 Sep 2010, Absurdity101 wrote:
    "We've been presented with a fait accompli."
    or should that be a 'fiat accompli'?


    Give me good old fashioned Govt created Fiat money over gold any day of the week so long as its not adulterated by private banks.
    Can we also have some half decent economists please ?

    Robert Well done for highlighting the need to shake people out of their apathy and for a forum that allows us to express our views. I just wish a few more people would look up from their tellys and start asking questions.

  • Comment number 20.

    "And many of you have responded with apt and passionate comments."

    Yay, Robert reads our posts! Lately I have been dispondent and haven't commented as much but I have found a new wind in my sails.

    Ahem, back to the subject matter. The capital required by all banks around the world during the credit crisis is proof that capital adequacy and solvency rules do not work. Had the banks held capital at the new levels over the past few years, they would have still suffered a similar fate.

    Robert, I am sure you have access to better resources than I do, could you please write a short article on the actual process used to determine capital requirements? In my experience it is so subjective that it simply masks the truth. The Lehman Brothers example of Repo 105 is a well documented example. If I took out a mortgage with only 7% deposit and at 3-4 times my salary any shock in interest rates, property values, inflation, job security/salary level is very unlikely to be tolerated by me. Same applies for banks, only difference is they are all largely self-cert mortgages when it comes to assessing and reporting their own capital levels.

  • Comment number 21.

    As to the effect on the availability of credit, I can’t help but think that it is not necessarily a bad thing that there may be less credit available. Granted, I know that this is probably not the case for businesses who rely on the flow of credit provided from banks to operate – stifling economic growth etc. etc. – and I know I will probably argued down for suggesting it. But the way in which individuals consume credit could do with being restricted in my opinion. 100% mortgages are a no-brainer, idiotic idea, and feed into an unhealthy, unique obsession with home-ownership in the UK, which has significantly contributed to a grossly over-inflated housing market. Perhaps with less credit available more consideration will be paid to the ability of the individual to actually repay the loan. Call me crazy, but even in the case of businesses, borrowing money on the gamble of an alleged ‘investment’ return just shouldn’t happen. You want to expand your business? Get an investor. You want a flashy new car? Save up. You want to gamble? Go to a casino, or join the army.

    Stupid credit at stupid rates is a disease.

    But then perhaps I’m just being naïve and what will actually turn out to be the case is that banks will continue what they are doing, but simply pass on the cost of holding more capital onto us through inflated interest rates (shock horror). The regular day-to-day banking of us lowly savers will continue to buffer the banks in their ‘investment’ practices, and we will pay to insure them against their future risks. We will continue to get nothing for saving, as usual.

    Separate the two forms of banking as soon as possible and be done with it. If Barclays Capital and friends want to play black jack with obscene amounts of money, and fail, let them.

    If we face a similar crisis to this one in 60 years (I’m sorry Robert, I think it will be a lot sooner than that), 10% tier 1 capital will be about as much use as a chocolate fireguard.

  • Comment number 22.

    #15 creditunionhero

    I've been with my local credit union for the last 5 years. A brilliant institution that doesn't get enough recognition in these days of excess. Responsible, personal service, open on Saturdays and evenings and operating exclusively for the benefit of the members. My dividend outperforms any of the banks offerings.

    I'll second your cause. We should stop lending our money to the banks and start lending it to those in our own communities to strengthen our bonds and common purpose.

    It is high time we took back the word bonus and applied it to such rare occurences as new schools and hospitals not built on PFI, roads without tolls and other socially useful infrastructure.

    In the last few years the word bonus has meant affront to me. Time to take it back, move YOUR money to YOUR community.

    Let's award ourselves the bonuses, not the parasites in the city.

  • Comment number 23.

    I think the issue with the media reporting the story is that:

    1. there is little immedite impact on people. The impact will be in the months and years ahead when overdrafts, bank loans and mortgages become much harder to obtain
    2. There is no jealousy involved in the story (as there is with bankers bonuses)

  • Comment number 24.

    "If we want to avoid future financial crises that impoverish us all, we've got to pin our hopes on the effectiveness of these new rules - which also cover the amount of cash banks have to hold against the threat of runs, the longevity of their own debts and the risks that banks attach to different kinds of loans (among other things)."

    ----------------------------------------------------------------
    Or we can just let the Banks fail, default on the manufactured debt and issue our own currency extinguishing artificial budgets and debt payments that are unnecessary.

    Putting the masses in perpetual poverty at the expense of 10 or so "financial families"

    This “agreement” was not approved by the people that have supported these institutions against their failure and is just a device to keep us silent while they continue to recapitalise their failed system while de-capitalising us all or should that be decapitating us all


  • Comment number 25.

    RE: AgeTheGod 11:16am

    Well pointed out - I sincerely hope this gets the floor time it deserves, rather than it fizzing away into the shadowy depths of Whitehall where all the truly reforming ideas normally get hidden away.

  • Comment number 26.

    Having read your posts on the new Basel rules then I agree that you have provided a lot of helpful information to the public Robert so thank you for that. However it might have been more seemly to let others give you credit rather than taking it for yourself...
    On the deal itself I too am curious that you think it will be 60 years before the next banking crisis.I notice that several commentators on here have already questioned this and I noticed this on notayesmanseconomics blog.
    "The banking model is unchanged and will presumably break again as time progresses. As financial crises appear to be becoming more frequent the next one looks likely to occur before this Basel 111 agreement is even in full operation."
    So you may yet get the opportunity to tell us about the next banking crisis Robert. http://notayesmanseconomics.wordpress.com

  • Comment number 27.

    19. At 11:27am on 13 Sep 2010, Alesha Soba wrote:
    14. At 11:10am on 13 Sep 2010, Absurdity101 wrote:
    "We've been presented with a fait accompli."
    or should that be a 'fiat accompli'?


    Give me good old fashioned Govt created Fiat money over gold any day of the week so long as its not adulterated by private banks.
    Can we also have some half decent economists please ?

    ----------------------------------------------------------------------

    I agree, it just made me chuckle. The present control of fiat currency by private banks is the problem not the concept of fiat currency controlled by those we elect. We just have to make sure we're better at electing them...that could be tricky given that a huge percentage of the population have no clue what is going on or how to answer the question asked at an election, i.e. "who is most fit to govern us".

  • Comment number 28.

    Splendid article, Robert, one of your best! Comment #3 starts a little unkindly but finally echoes your sentiments in layman's terms, #13 is more to the point and I agree with every word of #20.

    I hope you will send an autographed copy of your post to everyone who is anyone in the Treasury and Bank of England, come to think of it, all the other Banks, too.

  • Comment number 29.

    I am a strong advocate of using Credit Unions as an alternative to banks, sadly most are not yet large enough to replace banks. They need support and they need it now.We require a step change in thinking to bring about significant change. I know that WOTW makes regular posts on here about the "revolution" but we don't revolution in the UK, but it could be a "quiet" revolution.Lets just get rid of the banks in an orderly calm move to a business with a totally different ethos.

  • Comment number 30.

    Robert,

    60 years to the next financial crisis - you'll be lucky!

  • Comment number 31.

    After years of study I now see that we are trying to fit a plunder-based money system which benefits a few onto a democratic framework where all citizens have human rights.
    The private Fractional Reserve money system just does not fit, no matter how much it is altered. The creation and control of credit must belong to the people for the benefit of all.
    Problem mainly solved!

  • Comment number 32.

    31. At 11:59am on 13 Sep 2010, thomas_paine

    I agree.

  • Comment number 33.

    A Money Reform movement does exist although you would not know it via the mass media.
    The Bromsgrove Group will be meeting at the end of October to discuss these important matters.
    There is hope but education is vital and so is the reform of money and not people.

  • Comment number 34.

    33. At 12:03pm on 13 Sep 2010, thomas_paine wrote:
    The Bromsgrove Group will be meeting at the end of October to discuss these important matters.

    Bill Steer, the creator of the Secret of Oz video, is apparently attending the Bromsgrove meeting. I've tried to find details. Is it a public conference ?

  • Comment number 35.

    This quote from this story http://www.bbc.co.uk/news/uk-11279763 says it all about what the financial crisis and current plans to cut the deficit have achieved so far regarding the redistribution of wealth within society

    "While bonuses are set to be higher than last year in FTSE 100 firms, they will be lower in FTSE 250 companies, the report said."

    So the pool of monies becomes increasingly concentrated in the higher up stratus of society.

    What worries me most is that no one seems able to offer any genuine alternatives to what is already on the table.... actually that isn't true I'm sure that people are but it's just that they're not being openly discussed and things are rarely as black and white as this situation is being portrayed.

    I'm in no way connected to finance, banking, business, so it's not my place to offer these ideas but it would be comforting to know that there are people out there who are genuinely trying to come up with solutions and that these people are being listened to and their ideas discussed..... even if it turns out that the best solution is the one currently being instigated.

  • Comment number 36.

    #22. szjon wrote:

    I've been with my local credit union for the last 5 years. A brilliant institution that doesn't get enough recognition in these days of excess. Responsible, personal service, open on Saturdays and evenings and operating exclusively for the benefit of the members. My dividend outperforms any of the banks offerings.

    Does your credit union offer you a debit card? Mortgage? ISA? Can you set up direct debits and standing orders? Can you get at your money when you're in Tokyo or Tashkent?

    No? Then perhaps we're not yet at the point where we can manage without banks.

  • Comment number 37.

    Re the "60 years to the next crisis": J.K. Galbraith, who was very interested in collective economic psychology, reckoned that it usually took 15-20 years for "financial amnesia" to set in. After this time, anyone who mentioned past mistakes would be accused of precipitating the next crisis. As Robert knows, the whistle-blower gets the blame, not the criminal. Galbraith received regular death threats over the course of his life. I think he regarded it as a sign that he was doing his job properly!

  • Comment number 38.

    Robert I think this is a great article.

    The new Basel arrangements are the result of intense lobbying behind the scenes from the most powerful people and institutions in the world - banks.

    Governments are aware of what is going on but have not acted. If any in government disagree (do you think a Conservative government would do anything different?), they are powerless to change things and have no choice but to do as required - shut up and implement the new Basel rules in their countries.

    Banks and the people who run them hold us all to ransom - heads I win, tails you lose.

    The media who address the majority in the UK feed us a diet of Cheryl Cole/X factor and football rather than focus on the issues that should matter to us. I wonder if this is deliberate.

    So what has changed after excesses in banking caused the worst recession since the 1930s and resulted in lost jobs, lost homes, destruction of wealth, and now the most savage round of government spending cuts in the UK in living memory?

    Not much.

    The only way to change this is stop using banks. If we stop providing them with our deposits they will be far less powerful. Use credit unions/building societies instead.

  • Comment number 39.

    To Mr Peston:

    This Wednesday, Douglas Carswell MP will introduce legislation into the UK parliament that takes the first step towards ending fractional reserve banking.

    Given that a member of parliament, a person elected by the people, is endeavouring to try and put an end to fractional reserve banking, and a similar group of people in the USA are endeavouring to do the same;

    And that irrespective of race, religion, political persuasion, skin colour or nationality, most people don’t want to see their children enter a life of what many describe as ‘debt slavery’.

    Do you think now would be a good time to address this issue in one of your articles?


  • Comment number 40.

    #21 wrote
    "But the way in which individuals consume credit could do with being restricted in my opinion. 100% mortgages are a no-brainer, idiotic idea, "

    ========================

    As with my ideas it is not necessarily idiotic but they way it got applied went way, way beyond what was sensible.

    Lets suppose you have a borrower earning £500,000 a year. He has savings of £200-300,000 in long term deposits and shares. He wants to borrow £250,000 to buy a property worth £250,000 (100% mortgage). He want to borrow it rather than use his savings because (a) interest rates are very low and (b) would cost him to break into the savings earlier than maturity. 100% mortgage is clearly a decent loan because the value of the property is not particularly vital to the likely ability of borrower to meet his mortgage payments.

    Lets suppose we have another borrower, again wanting to borrow £250,000 to buy a £250,000 house. This borrower earns £50,000 and all his/her savings will be used up in paying stamp duty and moving costs. Here making a 100% loan is definitely idiotic because in effect the bank is gambling on property prices, if the borrower is made redundant there is no ability to meet the mortgage repayments.

    The problem in the last few years is that both borrowers and lenders failed to pay sufficient attention to the affordability of the mortgage - both just assumed that the property value would go up. This was remarkably silly. There is nothing wrong with borrowing if you can afford the repayments. The problem is that in the UK we seem incapable of understanding affordability and then compound it by not building into the affordability calculations any extra cushion for things not going perfectly

  • Comment number 41.

    You have to laugh really, the answer to riding out the next crisis is - "keep more cash in the bank" and "Don't lend unwisely or too cheaply"

    Brilliant - work of genius is that!

  • Comment number 42.

    "For television and radio, they are a nightmare, because they rarely give interviews for broadcast. Their press conferences are few and far between. And their press releases are hopeless at translating the arcana of bank regulation into concepts that most can understand."
    -----------------------------------------------------------------------

    1. Rarely give interviews
    2. No press conferences
    3. The arcana of bank regulation

    Because the sole aim is to to maintain a world system of financial control in their private hands able to dominate and control the political system of each country and the economy of the world as a whole.

    Accountable to nobody other than themselves.

    How long will you be allowed to bang this drum Robert?
    Will we see your post "moderated" soon?

  • Comment number 43.

    “Allow me to issue and control a nation’s currency, and I care not who makes its laws.”

    Mayer Amschel Bauer Rothschild, 1791

  • Comment number 44.

    36. At 12:13pm on 13 Sep 2010, rbs_temp wrote:

    "Does your credit union offer you a debit card? Mortgage? ISA? Can you set up direct debits and standing orders? Can you get at your money when you're in Tokyo or Tashkent?

    No? Then perhaps we're not yet at the point where we can manage without banks."

    Building Societies do all of the above.

    And you are missing the point on purpose.

  • Comment number 45.

    " If we want to avoid future financial crises that impoverish us all, we've got to pin our hopes on the effectiveness of these new rules "
    Too little to late. I am massive underwhelmed. Robert, there is an ever increasing group of us on your blog who are of the view that whole sale monetary reform is the only long term solution. These new rules carefully crafted by vested interests are simply to keep the money machine going as long as possible. Their short sighted-ness will be their downfall. What we need you to do Robert, is a proper analysis of the fractional reserve banking system, and the money creation machine for the general populus who needs help to understand, and then a proper assessment of ALL options including monetary reform. Panorma for example would be a good starting point. These issues are so important and yet completed ignored by the main stream media, all I hear is cuts or cuts but not yet! This is only a tiny fraction of the real picture. The licence fee payers need more for their money.

  • Comment number 46.

    The following was taken directly off the “BIS" – Bank of International Settlement - the club that controls the worlds currency and its govermments. If you needed persuading that it is the Banks that control your/our government then the seond sentence should make things clearer for you.

    "National implementation by member countries will begin on 1 January 2013. Member countries and regulations before this date. As of 1 January 2013, banks will be required to meet the following new minimum requirements in relation to risk-weighted assets (RWAs):
    3.5% common equity/RWAs;
    4.5% Tier 1 capital/RWAs, and
    8.0% total capital/RWAs."

  • Comment number 47.

    So despite the fact that we all know Capitalism collapsed we have just signed up to it for the future simply because we can't contrive what else to do - did anyone anywhere really even consider an alternative i wonder. Is voracious greed, no matter how bridled, really the best catalyst we can contrive to safeguard our species and our planet for the tomorrow. How terribly sad and what an indicator it is as to what entities really control our lives. Greed 1, humanity 0

  • Comment number 48.

    Just read this elsewhere;
    "But to ease the burden, regulators gave the banks transition periods to comply. These periods, extending in some cases to January 2019 or later, are longer than many analysts had expected."
    No wonder the banks are happy. The whole thing is a sham.
    Rest assured, these measures will achieve nothing, it just more of the rearranging the deck chairs on the titanic again.

  • Comment number 49.

    I agree with the first point - we should be asking if the current financial and governance systems are fit for purpose, given the massive challenges we are going to face over the next 50 or 100 years. Overpopulation will drive this, not enough food, water, power, etc for the 10 or 12 billion people who will need it. It will be interesting to see the reaction when we have to cull (Kill ?)several billion people for manking to survive. (It would be nice to see an alternative to this)
    Unless we make radical changes then we are just going to watch mankind suffer on a scale we have never seen (actually WE won't watch, we will all be in a better place).
    Alternatively we can go on paying bankers huge amounts of money for contributing very little to society and keep re-arranging the deckchairs.....and telling ourselves that this stuff is important.

  • Comment number 50.

    @41 "keep more cash in the bank"

    There's actually a bit of a problem with this. :-) Money in itself is worthless unless there are the goods and services to exchange it for. The availability of these in the future is affected by the rate of money being spent now.

    To take a very simplistic example: if nobody buys cabbages this year, it won't mean that twice as many cabbages will be available next year, it will mean that there are none because the farmer doesn't plant any.

    I think we need wholesale money reform. Perhaps we need restrictions on cash savings, which would force people to either spend or invest. It would change but not destroy building societies. Mortgage payments would become part repayment, part rent. Similarly, savers would be rewarded with part interest, part dividend. And stopping banks from creating money would stop house and other prices being inflated by a chimera.

  • Comment number 51.

    > For banks, what's been concluded is the equivalent of a
    > climate-change deal: an attempt to reverse potentially lethal
    > global warming in the financial sector.

    You either underestimate real global warming, or you attach far too much importance to the trivial work of bankers. Whatever this crowd of village idiots decide, we have real problems to solve, not pointless, abstract ones relating their computer records!

    Please try to keep a sense of perspective in future.


  • Comment number 52.

    #36 rbstemp

    I'm sure you spend the day standing on your head, your view always appears upside down.

    It's the banks that couldn't manage without us, not the other way around. That's why they try to get more and more control. A parasite does not kill its host.

  • Comment number 53.

    50. At 12:58pm on 13 Sep 2010, Sasha Clarkson wrote:
    I think we need wholesale money reform. Perhaps we need restrictions on cash savings, which would force people to either spend or invest

    I agree that individual 'financial wealth' is not healthy, possibly not even to the indivdual.
    What about Govt not issuing gilts forcing those talented pension fund managers to invest in the real economy.
    That would kill 2 birds with one stone.

  • Comment number 54.

    To 45. At 12:33pm on 13 Sep 2010, Averagejoe

    Here's a link for you, sadly not a video, instead 320 pages of pdf.
    The mystery of banking by Murray Rothbard
    [Unsuitable/Broken URL removed by Moderator]

    Flog your way though this and you get to understand the interaction between the central banks and commercial banks.
    On the plus side it is understandable.

  • Comment number 55.

    # 36 rbs-temp wrote

    Does your credit union offer you a debit card? Mortgage? ISA? Can you set up direct debits and standing orders? Can you get at your money when you're in Tokyo or Tashkent?

    No? Then perhaps we're not yet at the point where we can manage without banks.
    ------------------------------------------------------------------------
    I,m a member of a Credit Union, we offer mortgages and ISA's (it pay's 3% on its cash ISA what's RBS pay? and other credit unions offer current accounts DDM's standing orders and debit cards.Others have also pointed out Building Societies, Guess what, we don't need banks.We can manage with organisations that don't see profit as their sole purpose.

  • Comment number 56.

    @ 36. At 12:13pm on 13 Sep 2010, rbs_temp wrote:

    >> #22. szjon wrote:
    >>
    >> I've been with my local credit union for the last 5 years. A
    >> brilliant institution that doesn't get enough recognition in
    >> these days of excess.

    > Mortgage? Can you set up direct debits and standing orders? Does
    > your credit union offer you a debit card?

    Use a building society. There's no need at all for risky, bloated, greedy bankers and pariahs!

    > ISA?

    Self select! No need for a bank.

    > Can you get at your money when you're in Tokyo or Tashkent?

    Let's think. I'm more interested in Trelogan and Trelawnyd! Oh ... I appear
    to be at the point where I _can_ manage without banks! No mercy - let's let them have it!

  • Comment number 57.

    Sasha, thanks for pointing this out to people. If you are really concerned for your future then don't put your cash in the bank. Use it to buy some land and cabbage-seeds. Works for me :o)

  • Comment number 58.

    WOTW:

    "Here's a simple plan.

    1) Start with deciding what the basic needs or the population are
    2) Move all our resources into providing those needs at 0 cost and in a totally sustainable way
    3) Then it doesn't matter what happens next, we will have eradicated poverty, homelessness and placed the sustainable building blocks of the future. Nobody will need to work, only those who choose to work will do so - and that will be to provide non-essential desires and wants (should they choose to)
    If I want a car, then I shall build it myself - I will need to be built with the materials around me, with what I can access - i.e. 100% sustainable. I then pay the full (economic and environmental) cost for that car - there is no surplus. Chances are I would weigh up the time taken to build a car and opt for a bike instead - a decision which millions of people fail to make every day because the cost of the car (as presented in monetary terms) is not accurate."

    Number 1 would take longer to work out than the period of time it relates to (unless you mean to it trivally, e.g food and water rather than quantities etc.)

    Number 2 requires theft of private property.

    Number 3 is just bonkers. In your utopia, everyone decides to not have luxury goods such as a car because they decide it's not worth it. I'm afraid without capitalism they wouldn't be able to find anyone who would build it for them and as they lack the skills wouldn't attempt it. This is not a free choice.

    Your simple plan betrays your ignorance of the real world. I suggest you get your hair cut and get a real job.

  • Comment number 59.

    I doubt of anyone will get at the truth of these discusiions between bankers and regulators apart from those who are included in the talks.

    After all they messed everything up in the first place and I don't think they have been able to find the answers to how to fix it.

    What we have here is a hedge against the next stage of the deflation of the asset bubble. Let's see what happens next as money becomes more expensive and difficult to borrow.

  • Comment number 60.

    Robert

    Please focus on the important stuff - will Chantelle and Preston be able to make a go of it second time around?

  • Comment number 61.


    Some interesting points made here but a couple of observations:

    1) I think its grossly unfair to lump all regulators in with the same group as bankers. Take Mervyn King for instance – here’s someone who could quite easily earn a multiple of his current salary at an international bank but he chooses not to because he presumably enjoys what he does and the contribution to the nation he makes. Back in the very early part of the crisis you may remember he was very reluctant to intervene in Northern Rock because he didn’t want to reinforce moral hazard –the idea that if you as a banker make poor investment decisions you get bailed out, but if you make good decisions you get to keep the profits. Unfortunately his stance got overtaken by events and the imminent threat of the collapse of the entire financial system. I think its pretty obvious by what he has said since that he was extremely unhappy that we had to bail the big banks out (either explicitly or by association) as a nation. The BoE is working on a number of initiatives to try and ensure that in the future a large bank in difficulty will be wound up in an orderly fashion. Not easy but I have no doubt in the sincerity of their aims, and indeed the sincerity of most of the regulators involved in constructing and implementing Basel III. I think many people on this blog are themselves guilty of trying to over-simplify the problem.
    2) We had fractional reserve banking before we had fiat money. Please try and separate the two concepts. Personally, I’m very interested in the fiat money debate as it is still a relatively untested concept in its longevity (a bit like European monetary union) and we have seen numerous financial crises arguably perpetuated by it.
    3) The forthcoming coalition cuts, or deficit reduction plans as I prefer to call them are in part deemed necessary because of the reduction in tax receipts caused by banking losses and a failure of financial services in the UK to recover their prior “profitability”. Getting rid of the banks, however that is going to be achieved, will not improve this situation. Its pure delusion to think that in a high wage economy with hardly any remaining natural resources we are going to grow our way out of the deficit solely through manufacturing industries however much paper money you throw at them.

  • Comment number 62.

    36. At 12:13pm on 13 Sep 2010, rbs_temp wrote:
    Does your credit union offer you a debit card? Mortgage? ISA? Can you set up direct debits and standing orders? Can you get at your money when you're in Tokyo or Tashkent?


    One in five of the population live in poverty. They won't be going to Japan any time in the next soon. The average wage is about 22K/annum. I doubt they'll be going either, not while they are busy clearing any debts rather than going to Japan.



  • Comment number 63.

    What was concluded in negotiations behind closed doors in the Swiss city of Basel last night wasn't much less important to all of us than the Copenhagen debacle. So where's the media circus? Where are the screaming headlines?

    Look Robert, if they great unwashed masses had a clue what they were up to what do you think would have happened?

    2 billion dollars in security for the G20 meeting? Well, bankers have to be seen to be frugal while they issue the global rules!

    And anyway, this stuff is more difficult to explain than whether Harry has a knee op or not so why would editors bother sending their journalists?

  • Comment number 64.

    @16. At 11:16am on 13 Sep 2010, AgeTheGod wrote:
    "Taking back control of our currency coupled with the Basel rules will be a huge step to bringing the banks back in line."
    If we really had control of our currency then Basel would be completely irrelevant and nobody would care about what the bankers were doing.
    @48. At 12:55pm on 13 Sep 2010, Averagejoe wrote:
    "No wonder the banks are happy. The whole thing is a sham."
    'Twas ever thus. I can't see just yet another recession suddenly causing the banking fraternity to admit that they're a bunch of useless shysters.

  • Comment number 65.

    @36. At 12:13pm on 13 Sep 2010, rbs_temp wrote:
    "Does your credit union offer you a debit card? Mortgage? ISA? Can you set up direct debits and standing orders? Can you get at your money when you're in Tokyo or Tashkent?
    No? Then perhaps we're not yet at the point where we can manage without banks."
    Please explain in simple terms how offering a piece of plastic and adminstering a computer system can create a global financial cock-up. That can only be done through sheer incompetence or fraud. Or both.

  • Comment number 66.

    I have emailed Downing Street and asked him to clarify that as a member of the Bank of International Settlements we must translate the rules into national laws and regulations before 1st January 2013 and how does that effect our democracy.

    10 unelected bankers in the BIS club TELLING countries to enact Laws confirming THEIR new regulations.

    How will this new ACT go through Parliament I wonder?

  • Comment number 67.

    ANOTHER DAY, ANOTHER PESTON BANKING BLOG.

  • Comment number 68.

    Yes you have all done a wonderful job of completely missing the point. 7% is meaningless without a redefinition of "7% of what?" It is 7% - instead of 4% - of the face value of banks' deals multiplied by the bank's own assessment of the degree of risk in each deal. A mortgage of 85% of "value" (i.e. of price) might get a 10% risk-weighting, meaning the capital held is Face value x 10% x 7% = 0.7%. That's very thin but OK when house prices never fall more than 15%. Northern Rock over-traded precisely under these computations, confirmed for them by their auditor, PwC: nothing to do with liquidity. Basel III will alleviate this flaw, but not remove it.

  • Comment number 69.

    More bonuses for the privileged, a mindless attack on the posties.

    The old greed was spiralling remuneration. The new greed is driving down the living standards of the poor. It's the same greed.

    Sorry Robert, I can't get excited about Basel III, probably because I don't really understand it. It just doesn't feel like we're out the woods yet.

    I've never been a union member or supporter, but I'm going to head down to my local offices and offer my support for the TUC's "broad solidarity alliance of unions and communities under threat". We Brits are a docile and deferential bunch, but I think szjon at #8 made a powerful comment.

  • Comment number 70.

    54. At 1:15pm on 13 Sep 2010, Dempster wrote:
    To 45. At 12:33pm on 13 Sep 2010, Averagejoe

    Here's a link for you, sadly not a video, instead 320 pages of pdf.
    The mystery of banking by Murray Rothbard
    [Unsuitable/Broken URL removed by Moderator]

    Flog your way though this and you get to understand the interaction between the central banks and commercial banks.
    On the plus side it is understandable.

    ...........
    Found it. Thanks Dempster, always keen to increase my knowledge base. Keep up the good work and the support for change. When the 'normal' solutions completely fail, they will have no choice but to look outside the box.

  • Comment number 71.

    For television and radio, they are a nightmare, because they rarely give interviews for broadcast. Their press conferences are few and far between. And their press releases are hopeless at translating the arcana of bank regulation into concepts that most can understand.

    Well, investigative jounalism is the answer, isn't it. Every single journalist and ever user of the media should listen to this and think about what Bill Moyers is saying, about the situation he is describing.
    http://www.democracynow.org/2008/6/9/moyers

    Journalists have a serious responsibility. But we, the public have a responsibility to demand the journalists do a job, a decent job.

    And when someone who justifies their industry by claiming intelligence, then you should expect them to be at least intelligent enough to explain themselves. If they can't do that you really need to dig deep into why they have the job in the first place (and maybe what they are talking about is another fancy product to be feared)

  • Comment number 72.

    39. At 12:16pm on 13 Sep 2010, Dempster wrote:
    "This Wednesday, Douglas Carswell MP will introduce legislation into the UK parliament that takes the first step towards ending fractional reserve banking.""Do you think now would be a good time to address this issue in one of your articles?"


    I second that. Robert does seem to have made the claim that he actually reads his blogs.
    So step up Robert, be a brave fellow and lets have a real piece of serious investigative journalism about the inner workings of our insidious debt based, fractional reserve fiat money system that robs the majority of society to favour a tiny elite who have become fat, corrupt and rich beyond the dreams of avarice.

    Douglas Carswell MP is stepping up to the plate. Why not join him?

  • Comment number 73.

    "So if you can find me many stories in the past few days or months that matter as much, then I'll acknowledge I'm living on a different planet from you."

    Robert, any story in the last few days or months is more important than this pathetic attempt to soothe the 'mushroom' public

    The fact that all the Capitalist nations have managed to get their legislators to agree on something isn't that surprising - except for NWO conspiracy theorists who will be shaking in their boots awaiting the new 'global currency'.

    The truth is that this is merely a bad solution to a still unrecognised problem.

    Go back to 2008, add in those 7% capital ratios into the mix and you get....

    Northern rock still going bust
    RBS still require bailout
    Lloyds still requires APS scheme
    Other banks still fail
    Lehmans would still have failed
    Bear stearns would still need taking over.

    ....because unless anyone can demonstrate that any of the above were within a margin of 7% of total assets - then this fix is the bad joke it's meant to be.

    Come on folks, we went on a 200 mile journey with 100 miles worth of fuel in the tank, we ran out - so the solution is to add 7% to the tank???

    Who makes up this stuff? What a banana - total and utter waste of time and probably mountains of paper too.

    "What was concluded in negotiations behind closed doors in the Swiss city of Basel last night wasn't much less important to all of us than the Copenhagen debacle. So where's the media circus? Where are the screaming headlines? "

    ...maybe it's because they know this doesn't fix anything - if the public accept this as a 'fix' - then they shall deserve the next banking crisis that occurs and all it's ramifications.

    I have to admit, I thought the regulators would come up with a better smokescreen than this one - I mean a child of 5 could come up with a more robust solution.

    Fortunately this looks like it matters less and less now - without the work force to extract surplus value from - the banks won't make any money - and that means you could have a 700% capital ration increase and it won't make a jot of difference.

    Look at mortgage approvals - great, up 7%.

    ...then look at this graph and show me what 7% does for this dire picture....

    http://www.housepricecrash.co.uk/graphs-mortgage-approvals.php

    Percentages can be deceptive - that's why they're used. The true picture is collapse and sustained collapse - it's called fundamental logic and it cannot be beaten.

  • Comment number 74.

    58 Lindsay_from_Hendon - I'm all for having a pop at the Marxists and WOTW is a jolly good sport, but picking on him when he's not even on the blog seems a little unfair and, dare I say, obsessive.
    I think there are plenty of us here who, as AverageJoe and many others point out, just want us to consider root & branch reform of the structure and underlying failures in the economy and society more broadly - and would view the extremes of post-Marxist dialgoue as being no more relevant than original and best bits of Marx and Engels, but at least WOTW and others have a view and are looking for change. Debating the size of the Capital Adequacy ratio, or what is Tier 1 capital etc... is pointless. We remain fixed on that small area of the debate that the lords & masters are willing to have in public. The agenda has been set, and WOTW and anyone else who is willing to call for change should be applauded (even if you believe that humankind is too flawed for communism or it's many iterations to function)

  • Comment number 75.

    36. At 12:13pm on 13 Sep 2010, rbs_temp wrote:

    "No? Then perhaps we're not yet at the point where we can manage without banks."

    Still trying to tell us how we need the banks? - well the credit union has one big advantage over the banks....it's going to be there in 3 years time!!

    Don't you read the news RBS_temp? - for someone as well informed as you I would have thought it was essential.

    The new ratio was announced and we already have 1 bank scrambling around to raise capital and there are more expected.

    "However, bankers expect a wave of capital raisings in the second half of the year, with Deutsche Bank's EUR9.8 billion capital raising announced Sunday, while M&A has returned to the corporate agenda. "

    http://online.wsj.com/article/BT-CO-20100913-705267.html

    ...so what does that tell you about their current capital position?

    Will you still be here in 2012 when the world is in econommic chaos so I can laud it over how wrong you were?

    I shall be looking forward to that (the lauding, not the economic collapse of the western world - it's going to be a drag)

    Oh look, the sun is shining - must mean the new banking rules are going to solve the problem!

  • Comment number 76.

    23. At 11:34am on 13 Sep 2010, ltfcunited wrote:

    "2. There is no jealousy involved in the story (as there is with bankers bonuses)"

    Jealousy? - those bankers can pay themselves what they like as long as they meet 2 conditions.

    1) They can do their job - currently F for fail in case you didn't notice.
    2) They can explain where the bonus is sourced from - and that the people it was taken from find that acceptable (which of course they won't, because most of them don't know it's going on)

    If those two criteria could be fulfilled then I say - pay them.

    Alas, there isn't a single banker who can generate wealth without abusing their capital position.

    ....and that's why they call it Capitalism (or didn't anyone realise that?)

    Accumulate capital - use that capital position to accumulate more capital, without actually lifting a finger or taking any risk (as it turns out)

  • Comment number 77.

    47. At 12:53pm on 13 Sep 2010, Glennda40 wrote:

    "Greed 1, humanity 0"

    it's time for humanity to level the score.

    TO THE STREETS!

  • Comment number 78.

    RP: 'I don't suppose most British people, including our lawmakers, would therefore have much of a clue that agreement has been reached on the most important global initiative to learn the lessons of the 2008 banking crisis and correct them.'
    ----------------------------------------------------------------------
    Robert, Are you saying that no-one from HM Treasury and the Bank of England were participating in the making of these rules? Are you saying that no-one from HM Treasury and the Bank of England were even observing the making of these rules?

  • Comment number 79.

    #58 Lindsey from la la land stated;

    Number 3 is just bonkers. In your utopia, everyone decides to not have luxury goods such as a car because they decide it's not worth it. I'm afraid without capitalism they wouldn't be able to find anyone who would build it for them and as they lack the skills wouldn't attempt it. This is not a free choice.

    Your simple plan betrays your ignorance of the real world. I suggest you get your hair cut and get a real job.

    ------------------------------------------------------------------------
    Are you suggesting that in your "real world" it's ok for those needing luxury goods to rape the planet of natural resources to provide a "free choice"
    What free choice do a large part of the worlds population have with regard to access to food and water. Perhaps you can explain to them that your free choice of luxury goods is more important than their free choice of food and water?

    Of course we wouldn't want to deprive our banking friends of their free choice to a bonus, we wouldn't want them to start a revolution would we now? Well not in Hendon anyway. (Not that any self respecting capitalist banker would want to live in Hendon, or Switzerland for that matter).

  • Comment number 80.

    Unlike the politicians at Copenhagen, the central bank governors and heads of banking supervision who form the oversight body of the Basel Committee on Banking Supervision - which decides these vital rules for banks - well, they don't exactly court the media.

    For television and radio, they are a nightmare, because they rarely give interviews for broadcast. Their press conferences are few and far between. And their press releases are hopeless at translating the arcana of bank regulation into concepts that most can understand.
    -------------------------------------------------------------------------
    Robert, This may sound like cynicism, but this is a bit of a non story, is it not?

    Why not Blog 'Agreement Reached in Basle - New Rules on Reserves for Banks'?

  • Comment number 81.

    65. At 1:54pm on 13 Sep 2010, Stuart Wilson

    You'll have to lay off rbs_temp (I know, I'm a hypocrite) - because he's the last one left I think.

    When I started on here about 2 years ago this blog was flooded with banking apologists trying to explain how:
    a) It was the Governments fault
    b) The recession isn't that bad anyway
    c) Banks are vital for us to do 'anything'

    Now they have almost all left - you see the arguments they present are destroyed every single day as the crisis continues. The jobs are still being destroyed and the banks profits are only coming from cost reduction (through job losses) - thereby compounding the PSBR problem (that's why the Tories are keen to cut it before 4 million start claiming)

    I actually feel a little sorry for them all now - except that they tried to support a system which promoted greed and selfishness - I mean it's never nice to lose an argument, and it's worse when you're totally trounced by simple logic and reason.

    When they're all gone, we can then start on solutionising - becaue there's no point even looking at solutions until everyone agrees this system is broken.

  • Comment number 82.

    RP: 'You might also ask where our MPs have been while unelected central bankers and regulators have trampled on territory that they would surely regard as their own, viz the fundamental laws that affect how British domiciled banks conduct their affairs.

    So if you felt there had been something of a democratic failure here, you might have a point.'
    -------------------------------------------------------------------------
    Robert, So are you saying other countries had their PMs and Chancellors present, and we did not?

  • Comment number 83.

    62. At 1:42pm on 13 Sep 2010, copperDolomite wrote:

    "One in five of the population live in poverty. They won't be going to Japan any time in the next soon. The average wage is about 22K/annum. I doubt they'll be going either, not while they are busy clearing any debts rather than going to Japan."

    ...well you won't be getting any money from Japanese banks, that's for sure!

    http://www.ft.com/cms/s/0/f60080f6-bcfd-11df-954b-00144feab49a.html

    Oh dear, can't move for disaster stories this morning, you can always tell a 'bad news day' because the bulls in the FTSE start buying thinking "this must be the bottom this time.....surely?"

  • Comment number 84.

    That's pathetic moderators...

    http://www.bbc.co.uk/news/business-11281410

    Surely reject that pitiful offer.

    ONE OUT - ALL OUT!

    ...now someone from Geneva or Basel come and lecture me on what's best for the UK please, I love it when the cowards who left the country try and advise us from afar.

    You made your choice - now stick with it.
    (although I bet most of them still live in Chobham - or Hendon perhaps)

  • Comment number 85.

    67. At 1:56pm on 13 Sep 2010, nilihist wrote:

    "ANOTHER DAY, ANOTHER PESTON BANKING BLOG."

    CAPS LOCK STILL STUCK MATE!

  • Comment number 86.

    Some interesting gems on the meritocracy website.

    (Source: Superclass: The Global Power Elite and the World They Are Making by David Rothkopf.)

    1. The world is controlled by a global elite of approximately 6,000 people.
    2. 94% of them are men, and their average age is 60.
    3. 2% of the world's population own 50% of the world's wealth.
    4. 1,100 billionaires have double the assets of the world's poorest 2.5 billion people.
    5.The world's 50 largest financial institutions control a third of the world's assets.
    6.The world's 250 biggest companies generate sales of about a third of the world's GDP.



    58. At 1:29pm on 13 Sep 2010, Lindsay_from_Hendon complains that the reallocation of this wealth "requires theft of private property."

    Stealing the plunder from the biggest thieves in world history?

    So be it.

  • Comment number 87.

    RP: 'Well, it's not really happened. I've banged on and on and on in posts here about the importance of what was being discussed by the Basel Committee. And many of you have responded with apt and passionate comments.

    But you are the exception. There's been little populist debate about how much capital and liquidity banks ought to hold for our own welfare. We've been presented with a fait accompli.'
    -----------------------------------------------------------------------
    Robert, So all that talk during the General Election did not really happen?

    Robert, You are a good journalist but overworked and tired. Thanks for letting me play Editor. You deserve a good rest. Look forward to having you back in a few days.

  • Comment number 88.

    71. At 2:06pm on 13 Sep 2010, copperDolomite wrote:

    "Well, investigative jounalism is the answer, isn't it."

    Yes Robert - come and interview me - you've got my email address. I'll fill you in on 'the score' of how banks really work.

    One condition - I get to go up against Bob Diamond. I'll make that Paxman look like a pussy cat when I'm done with Diamond.

    I bet you I can make him cry when I carefully explain to him the misery and deprevation his greed causes all around the world.

    Law of unintended consequences - while you can't see it, you can't feel guilty about it - well it just requires some vision.

    ...now wasn't Dickens's Christmas carol the same story essentially? - it's time for a re-run.

  • Comment number 89.

    64. At 1:50pm on 13 Sep 2010, Stuart Wilson wrote:
    If we really had control of our currency then Basel would be completely irrelevant and nobody would care about what the bankers were doing.”

    I was aware of the potential redundancy of Basel but Basel is now approved so no point in revoking it just because the Fractional Reserve Banking proposal might make it redundant.

    The key question is whether you are going to pick nits with me or contact your MP.

    The former may be fun and makes you feel satisfied but will definitely not get anything changed.

    The latter choice of contacting your MP may be a long shot but it’s better than no shot at all and there are enough of them in marginal seats that hopefully will be worried enough to at least get the debate started.

    It’s easily done at http://www.writetothem.com/ (assuming you live somewhere with a UK Postcode of course).

  • Comment number 90.

    77 WOTW - I think we're more than 1 - nil down to be honest-

    The game isn't over, but if we manage to get out of this with a draw I'll eat my hat

  • Comment number 91.

    69. At 2:05pm on 13 Sep 2010, PacketRat wrote:

    "I've never been a union member or supporter, but I'm going to head down to my local offices and offer my support for the TUC's "broad solidarity alliance of unions and communities under threat". We Brits are a docile and deferential bunch, but I think szjon at #8 made a powerful comment."

    Anyone in Manchester, get yourselves down to the TUC conference and let then know you want to see coordinated action against the cuts. Send a shiver through the halls of Government.

    “If you are far from the enemy, make him believe you are near.”

    Sun Tsu - Art of war.

  • Comment number 92.

    68. At 2:01pm on 13 Sep 2010, bobbythedazzler wrote:

    "Yes you have all done a wonderful job of completely missing the point."

    Really - I think we all got the point exactly.

    Add 7% to the Capital ratio of Northern Rock on 2007 and tell us if it would still be here today?

    ...come on....we're all waiting....

    Even better, work out how much quicker (and more affective) the 'liquidity crisis' would have been with all the other banks trying to add an extra 7% onto their Capital levels at the time - whoops, there's even less liquidity in the system and we lose more banks.

    Well done regulators - another 'well thought out plan'.
    Normally they put in a fix to prevent the last crisis, omitting to recognise that the next crisis is never going to be like the last.

    ...now they haven't even put in a fix to prevent the last crisis! - they're getting worse not better at it

    Is there anyone left involved in this mess who has any semblence of competence?

  • Comment number 93.

    "But do you remember how much coverage there was of the Copenhagen climate change conference, both the hopes attached to it and the massive disappointment when it failed?"

    "What was concluded in negotiations behind closed doors in the Swiss city of Basel last night wasn't much less important to all of us than the Copenhagen debacle. So where's the media circus? Where are the screaming headlines? "

    Do you think that it may be the absence of the media circus, screaming headlines and playing to the audience actually helped for a deal to be reached.

    With regards to the implication that self agreement is in some way a democratic failure i disagree. Do you really think people who fiddle their expenses for all they can (apologies to the MP's who don't) are better able to determine good practice than bankers themselves?

    If for once i can agree with Jacques Cartier, Trelogan and Trelawnyd would survive a financial meltdown. Whether they can survice climagte change is a different matter.

  • Comment number 94.

    EjSwede:

    Great post. Borderline too reasonable for this blog ;)

  • Comment number 95.

    #75 WOTW

    Haha! 'Banks rush to bolster fig teams'

    Oh the irony!

    From wikipedia.

    A fig leaf is the covering up of an act or an object that is embarrassing or disagreeable. The term is a metaphorical reference to the Biblical Book of Genesis, in which Adam and Eve used fig leaves to cover "their nakedness" after eating the fruit from the Tree of Knowledge of Good and Evil.

    Made my day did that. Time to throw them out of the garden methinks?

  • Comment number 96.

    74. At 2:13pm on 13 Sep 2010, ejSwede wrote:

    Don't worry Lindsay_from_Hendon is just showing sour grapes.

    Also they are extremely confused as they don't realise I'm not a Marxist.

    For the hundreth time - I only refer to Marx for his excellent critique of Capitalism - for what he wrote, 95% was about Capitalism and only 5% was about communism.

    Capitalists cannot - and refuse to understand this. This is for the simple fact that nobody can explain why his critique was wrong.
    Hayek did explain why communism wouldn't work - but didn't explain why Capitalism would.

    I shall answer Lindsay in a moment...

  • Comment number 97.

    If all the drugs smugglers, cartels & Barons got together in some mountain retreat to thrash out new rules on the availability, legality supply/demand mechanics of the narcotics trade - and then expected Governments around the World to implement the directives,... would this be acceptable?

  • Comment number 98.

    #58, Lindsay_from_Hendon . . . .

    WOTW: "1) Start with deciding what the basic needs or the population are"

    LFH: "Number 1 would take longer to work out than the period of time it relates to (unless you mean to it trivally, e.g food and water rather than quantities etc.)"

    How did you work that out? Or did it come from a consultant? I'd have thought it was basically an energy sum, followed by a decision on how to extract/generate the energy required.

  • Comment number 99.

    58. At 1:29pm on 13 Sep 2010, Lindsay_from_Hendon wrote:

    "Number 1 would take longer to work out than the period of time it relates to (unless you mean to it trivally, e.g food and water rather than quantities etc.)"

    Yes - that's what 'abundance' means Lindsay.

    "Number 2 requires theft of private property."

    Property theft? - Who owns the land? - you, me, God Mother earth? - who are you 'stealing' it from? It was here long before you and I arrived (and will be here long after we're gone) - so at best you're 'renting it' - there is no ownership.
    Also, property ownership is dictated by use - not by legal enforcement - this is another classic misunderstanding Capitalists make about property ownership.

    "Number 3 is just bonkers. In your utopia, everyone decides to not have luxury goods such as a car because they decide it's not worth it."

    ...and perhaps you wouldn't have people driving 500 metres to the shops in a car? (like I know someone who does) Maybe this is exactly why we need such a system, because at the moment the true cost of our decisions is being hidden.
    Are you going to wait for the first natural resource to run out (probably oil) before you realise it?

    "I'm afraid without capitalism they wouldn't be able to find anyone who would build it for them and as they lack the skills wouldn't attempt it. This is not a free choice."

    I could build a car, I may work in finance, but I know how an internal combustion engine works. Besides, it would force me to find a cheaper, better and more accessible alternative - doesn't that sound like 'innovation' to you?
    The difference is I'm driven by sustainability in my innovation - not the pure monetary profit - as in your world.

    "Your simple plan betrays your ignorance of the real world. I suggest you get your hair cut and get a real job."

    Now that's just predjudice - if you're going to argue a point, lets not make assumptions about appearance shall we?
    (especially as I am nearly 100% bald, oh and could you define a 'real' job please? - I presume finance isn't 'real' - or does that undermine your argument)

    Must do better next time Lindsay - did it take you all weekend to think that up?

  • Comment number 100.

    Robert,

    The BBC may have managed to "explain" this story to the masses (or would "sell" be a better word?). But it doesn't appear that many people on this blog are buying into it.

 

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