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lairdostevo

Listed below are comments made by lairdostevo between Wednesday, 18th March 2009 and Thursday, 26th November 2009.

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We'll pay for banks to be virtuous 11:05am on 26 Nov 2009 Just had an e-mail telling me that the FSA has appointed Nomura chairman, Colin Marshall, as a senior adviser on corporate governance just days after it fined Nomura £1.75m for systems and controls failings!

What does Robert think of that, I wonder? As an IFA I can tell you that my thoughts are unprintable!
Presbyterians cry out to Gordon Brown 1:56pm on 04 Jun 2009 I have clients who, against my advice, 'invested' in the PMS. They wanted to do so for two reasons - (1) they had the prospect of a greater return than that available from a bank/building society account and (2) they felt it was the right thing to do to help their church.

The reaction of PMS 'investors' is a classic example of modern society's thinking. What I call the "Something has gone wrong but it couldn't possibly be my fault for being foolish so who can I find to blame" syndrome. Several Pontius Pilate handwashings later (the Presbyterian's Church's nothing to do with us/it's an attack by Satan, the Secretary of State telling that it's a matter for the Assembly to which Arlene Foster replies that it isn't) we are no further forward.

Meanwhile, back In London, the City regulator, The Financial Services Authority(FSA), has stated "The FSA's normal practice is neither to confirm nor deny that we are investigating a particular firm or individual. However, in the light of the information already in the public domain about the FSA's involvement and the public interest in this case, the FSA can confirm that it has investigated the activities of Presbyterian Mutual Society (PMS), now in administration, to consider if it was conducting regulated activities without the necessary authorisation or exemption.

We have concluded our investigation and have decided that it was conducting regulated activities without the necessary authorisation or exemption. However, on the basis of the information currently available to us, and applying the criteria in the Code for Crown Prosecutors, we have decided that it would not be right for us to take a case against any of those involved in running the PMS. However, we remain in touch with the administrator and, if further information comes to light relating to the issues we have investigated, we will look into it."

Two utter disgraces here, in my view : (1) that the PMS was getting involved in activities it wasn't allowed to and (2) that the FSA isn't prepared to act on a clear breach. If I, or my firm was to breach FSA regulations I'd be likely to be fined/struck off - quite right too.

All that said, whilst I have sympathy for those caught up in the demise of the PMS (many by investing far too heavily in the one institution, which is never wise) I am truly furious that they are trying to get the government (i.e. we taxpayers) to bail them out by comparing an investment in the PMS with investing in a bank or building society - they are completely different - PMS investments up to £20,000 bought shares in the PMS and amounts in excess of that were loans, which can go bad you know!
FSA say 'more capital, less risk' 2:36pm on 18 Mar 2009 Lord Turner talks a good game - it will be interesting to see if he plays one - it would come as a pleasant surprise.

It's a pity he hasn't taken action on mortgages. There's a serious need to reduce loan-to-value ratios and earnings multiples sooner rather than later. By the time the consultation paper is out in September and there's been time for feedback, probably a further consultation paper, more feedback etc etc we could be in the NEXT recession!

The 'worry' seems to be that if banks all of a sudden start to lend prudently, then no-one will be able to get a loan. As I'm not aware of anyone who have died by having to rent a house as opposed to buying one, I don't see what all the fuss is about - lower multiples would drive 1st time buyer prices down and lead to better affordability - surely both are good things?

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