Defaulting banks - where will it stop?

[Greg Burnham]

It is an interesting fact that never have I seen housing prices fall so drastically AND interest rates fall similarly drastically at the SAME time! Normally,
as housing prices fall, interest rates rise. And vice versa: as housing prices rise, interest rates fall. However, in the current market housing prices fell
AND interest rates fell to all time lows.

So, why can't people with good jobs, great credit scores, and over 30% cash to put toward a downpayment still oftentimes fail to qualify for a loan? This
is contrived--without question, in my view. If one talked to the majority of San Diego Real Estate Agents I would not be surprised if they agreed with what
I wrote. Yet it is disturbing.

[Magda Hassan]

JUAN GONZÁLEZ: Well, let's go on to HSBC. The banking giant has escaped indictment for laundering billions of dollars for Mexican drug cartels and groups linked to al-Qaeda. The bank reportedly supplied a billion dollars to a firm whose founder had ties to al-Qaeda and shipped billions in cash from Mexico to the United States despite warnings the money was coming from drug cartels. Earlier this year, a Senate investigation concluded that HSBC provided a, quote, "gateway for terrorists to gain access to U.S. dollars and the U.S. financial system."

Despite evidence of wrongdoing, the Justice Department has allowed the bank to avoid prosecution and pay a $1.9 billion fine. No top HSBC officials will face charges.

I'm pretty sure if I (knowingly or otherwise) supplied money or services to drug cartels or Al Qaida I would be in prison....

[Peter Lemkin]

JUAN GONZÁLEZ: Well, let's go on to HSBC. The banking giant has escaped indictment for laundering billions of dollars for Mexican drug cartels and groups linked to al-Qaeda. The bank reportedly supplied a billion dollars to a firm whose founder had ties to al-Qaeda and shipped billions in cash from Mexico to the United States despite warnings the money was coming from drug cartels. Earlier this year, a Senate investigation concluded that HSBC provided a, quote, "gateway for terrorists to gain access to U.S. dollars and the U.S. financial system."

Despite evidence of wrongdoing, the Justice Department has allowed the bank to avoid prosecution and pay a $1.9 billion fine. No top HSBC officials will face charges.

I'm pretty sure if I (knowingly or otherwise) supplied money or services to drug cartels or Al Qaida I would be in prison....

Yeah....with your political views, even a 120$ contribution to a charity that the USA or one of its doggies believes is a front for some terrorist group - as opposed to one of OUR terror groups - you'd be in deep shit!....and looking at possible prison. But, a banker.....they have a get-out-of-jail-free card...and don't share your political views.

[Jan Klimkowski]

Yet more proof that there's one rule for us, and another rule for the bankers.

Britain paid an extra £10BILLION to bail out Irish banks in back-door deal through RBS

Ulster Bank has received more than £10bn from parent Royal Bank of Scotland to cover losses since 2008
Bank operates predominately in Republic of Ireland
Figures come as MPs discuss breaking up RBS into 'good' and 'bad' banks

By Matt West Daily Mail

PUBLISHED: 10:25, 10 June 2013 | UPDATED: 11:00, 10 June 2013


British taxpayers have paid more than £10bilion by the back door to bail out the Irish economy in an agreement that was never approved by Parliament, it emerged today.

The figure is more than three times the £3.25billion pumped into Ireland by the British government and approved by Parliament as part of a wider European Union/International Monetary Fund backed bailout of the Irish economy in November 2010.

The additional funds were given to Ulster Bank, a subsidiary of the Royal Bank of Scotland which is 81 per cent owned by the taxpayer, after the Government rescued the over-stretched bank to the tune of £45billion five years ago.

New figures filed by the Dublin-based lender at the Companies Registration Office show it has received an injection of £14.3billion from RBS to cover loans which have gone bad since the collapse of the Irish housing market in 2008 as well as future losses.

Analysis by investment bank, Investec, has showed bad loans at Ulster Bank, which despite its name operates predominately in the Republic of Ireland, so far account for £12.7billion out of a total of £44.3billion in bad debts at RBS since the start of the financial crisis.

Had the taxpayer not bailed out RBS, the bank would not have been able to support its Irish subsidiary. The consequences for the Irish economy would have been severe and it is unlikely Ireland would have been able to absorb the losses at the nation's third largest bank.

Investec's banking analyst Ian Gordon told The Times that losses at Ulster Bank represent roughly a quarter of RBS' losses to date.

When RBS failed Ulster Bank accounted for only around 10 per cent of group loans yet cumulative Irish impairments since then have been around £12.7billion and over just the past three years Ireland has contributed around half of all RBS bad debts,' Mr Gordon told the newspaper.

The figures come as MPs on the independent Banking Commission prepare to discuss the future of RBS and whether to split the bank into a good bank and a bad bank similar to the break-up of Northern Rock in order to allow RBS to be returned to private hands.

Despite the Chancellor George Osborne making it clear he will resist attempts to break up RBS, the Treasury is keen to sell its stake in the bank and Lloyds Banking Group, which is 39 per cent taxpayer owned, or at least to have started the process, by the time of the 2015 general election.

The Treasury is far closer to achieving this aim with Lloyds, which last month announced pre-tax profits had leapt to £2billion in the first three months of this year, compared to £497million a year earlier.

Lloyds' share price surged on the news and recently passed the Government's break-even point of 61p per share, which would allow the Government to recoup the £37billion it gave the bank to save it from collapse. Lloyds' shares were today trading at 62.2p.

Lloyds pumped €8billion (£6.81billion) of capital into its own Irish subsidiary between late 2008 and 2010, when it let its local banking licence lapse and took the loans into its own books.

The severe losses suffered by certain UK lenders in Ireland partly reflects the aggressive lending practices they employed here," said Philip O'Sullivan, chief economist at Dublin-based NCB Stockbroker
Ulster Bank's net loss narrowed to £2.2billion from £2.8billionn in 2011, as loan impairment losses fell 37 per cent to £2.34billion. The capital injection from RBS last year was the smallest since 2009, the bank said.

Ulster Bank has received a £2.93billion capital injection from RBS last year alone. The lender, which was bought by RBS in 2000, under Sir Fred Goodwins' strategy of acquiring businesses to gain market share doubled its assets to £55billion in the four years before Ireland's property bubble burst, according to a report published in 2011 by the Financial Services Authority.

[David Guyatt]

One ring to bring them all and in the darkness bind them.

[David Guyatt]

To paraphrase a well known movie line: "that dog don't hunt".

It's simply PR for Mr & Mrs Average who are shocked and Awed at the absence of punishment thus far meted out by our Hon. and Rt. Hon. Pols, even though as taxpayers, they have to stump up the huge bill for bailing out greedy and crooked bankers. The government will make polite noises and proceed to forget about the proposals thereafter.

Basically, it's far too little, far too late. If there was any seriousness in this, bankers would already be facing prosecution and sentencing, and some would already be doing time in prison. Fat chance of that.

Banking Commission: Bankers should face threat of jail and loss of bonuses

Senior bankers should face jail and the loss of millions of pounds in bonuses if they are involved in a future banking collapse, according to a report by a cross-party group of MPs and peers.

Andrew Tyrie MP, the chairman of the Commission on Banking Standards, warned that bankers had escaped 'personal responsibility' for their actions









By Harry Wilson, Banking Editor

12:00AM BST 19 Jun 2013

340 Comments


The Government has been urged to introduce a new criminal offence for "senior persons" who run banks in a "reckless manner", as well as much more stringent clawback rules that could see managers being stripped of several years' worth of pay.

Andrew Tyrie MP, the chairman of the Commission on Banking Standards, warned that bankers had escaped "personal responsibility" for their actions, and said that drastic reforms were the only way to restore trust in banks.

"Where the standards of individuals, especially those in senior roles, have fallen short, clear lines of accountability and enforceable sanctions are needed," Mr Tyrie said.

Among the main recommendations of the 570-page report are:

A new regime for approving "senior persons"

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Up to 10-year deferrals of bonuses
A criminal offence for running a bank in a "reckless manner"
The cancellation of all bonuses for managers if a bank "requires direct taxpayer support"
A government inquiry into the break-up of Royal Bank of Scotland. It said RBS was holding back Britain's economic recovery and ministers should consider breaking it up into a good and bad bank.
The government had interfered in the running of the bailed out banks RBS and Lloyds is a way the was "not acceptable, and it called for the UKFI, which manages the taxpayer stakes in the banks, to be scrapped because it can't escape political interference.
The report is the fifth and final publication by the commission, whose members included Justin Welby, the Archbishop of Canterbury; Lord Lawson, a former Chancellor of the Exchequer; and Lord Turnbull, a former head of the Civil Service.
George Osborne will be expected to respond to the report's main conclusions during his annual Mansion House speech on Wednesday evening.
The Chancellor, who set up the commission last year in the wake of the Libor-rigging scandal, is expected broadly to endorse the group's findings, as well as giving further details on the Government's plans for the privatisations of RBS and Lloyds Banking Group.
"The Government publicly welcomes the commission's recommendations on increased personal responsibility, especially at a senior level, increased professional judgment by regulators and better functioning markets. We will now get on with a swift response and will report before the summer recess," said a spokesman for the Treasury.
Recommendations requiring legislation are expected to be added to the Banking Bill that is currently going through Parliament, meaning a criminal law for bankers could be in place before the end of 2015.
The "senior person regime" would probably require new primary legislation and would replace the current "approved persons" process run by the Financial Conduct Authority, Britain's market regulator.
Under the new system, senior managers would have to sign up to a new code of conduct and, according to the commission, would be "fully and unambiguously aware of those responsibilities".
In addition, executives will face having an increased proportion of any bonus shifted from share-based payments into so-called "bail-in bonds" that would be expected to bear the first losses should their bank get into trouble. The commission is also proposing changes to bank boardrooms, which would mean chairmen given "personal responsibility" for ensuring the functioning of their boards, as well ordering directors to prioritise "financial safety over shareholder interests".
The report also calls for several follow-up inquiries, including a study by the Competition and Markets Authority into the retail and SME banking sectors, as well as ordering the Treasury to investigate how changes to the tax laws could be used to encourage alternative financial providers to banks.
The report's criticisms and recommendations are not just reserved for the banks. Auditors are accused of being "cheerleaders".
"Audited accounts conspicuously failed accurately to inform their users about the financial condition of banks," said the commission, which has proposed that lenders should be required to produce separate accounts for "regulatory purposes".
Shareholders have been criticised for being "ill-equipped" to challenge bank directors, while ratings agencies are described in the report as companies that have "business models founded on a conflict of interest".
"Culture change is essential if the public is to be better served by the banking industry and we are to enjoy the benefits of having a strong global financial services industry without allowing it to hold taxpayers and the wider economy to ransom," said Pat McFadden MP, a Labour member of the commission.
The British Bankers' Association said the document was the "most significant report into banking for a generation" and would help UK lenders become the "gold standard for professionalism and integrity".
Shadow chancellor Ed Balls described the commission's work as a "radical blueprint" for change and said the Government must "get on and implement this report".
Other groups were less impressed, with the New Economics Foundation (NEF) saying the report was a "gentle step rather than a great leap forward".
"Holding senior bank officials to account is important for justice, but it is unlikely to cause a significant shift in the behaviour of our banks. At the height of the boom, most bankers were not deliberately engaging in wrong-doing, they simply suffered from group-think," said Lydia Prieg at the NEF.
In addition to the report, the commission has also produced an in-depth study into the collapse of HBOS that led to the bank's former chief executive, James Crosby, recently giving up his knighthood.
The commission's work cost £850,000 and featured innovations such as the use of independent counsel to question witnesses, a first for a parliamentary committee.
Mr Tyrie is expected to keep up the pressure on the Government to implement the reforms through the Treasury Select Committee, of which he is chairman.
Prime Minister David Cameron's spokesman said the government would respond "swiftly" to the report.

[Magda Hassan]

Wake me up when they actually start jailing the bastards. Pass me popcorn whe they start hanging from lamp posts. :popcorn:

[Jan Klimkowski]

Pass me popcorn whe they start hanging from lamp posts. :popcorn:

The banking class save that for bankers who seek to "betray" the secrets.

Ask Calvi.

Whilst holding the Tarot Fool.

The British Bankers' Association said the document was the "most significant report into banking for a generation" and would help UK lenders become the "gold standard for professionalism and integrity".
Shadow chancellor Ed Balls described the commission's work as a "radical blueprint" for change and said the Government must "get on and implement this report".

Um, so the criminals are now living the life on their fat cat pensions and seven figure bonuses and these tools describe the report as "the gold standard".

The gold standard clearly means letting criminals walk away with the filthy lucre of their crimes, and spouting empty tosh about radical principles.

[Jan Klimkowski]

Sometimes satire is the purest form of truth.

Via Zero Hedge.

Fact Or Fiction: Financial Sector Thinks It's About Ready To Ruin World Again

Submitted by Tyler Durden on 06/22/2013 09:34 -0400


Claiming that enough time had surely passed since they last caused a global economic meltdown, top executives from the U.S. financial sector told reporters Monday that they are just about ready to completely destroy the world again.

Representatives from all major banking and investment institutions cited recent increases in consumer spending, rebounding home prices, and a stabilizing unemployment rate as confirmation that the time had once again come to inflict another round of catastrophic financial losses on individuals and businesses worldwide.

"It's been about five or six years since we last crippled every major market on the planet, so it seems like the time is right for us to get back out there and start ruining the lives of billions of people again," said Goldman Sachs CEO Lloyd Blankfein. "We gave it some time and let everyone get a little comfortable, and now we're looking to get back on the old horse, shatter some consumer confidence, and flat-out kill any optimism for a stable global economy for years to come."

"People are beginning to feel at ease spending money and investing in their futures again," Blankfein continued. "That's the perfect time to step in and do what we do best: rip the heart right out of the world's economy."

According to sources, the overwhelming majority of investment bankers are "ready to get the ball rolling" by approving a host of complex and poorly understood debt-backed securities that are doomed to quickly default, as well as issuing startlingly high-risk loans certain to drive thousands of companies into insolvency.

Top-level executives also told reporters that when it comes to depleting the life savings of millions of people and sending every major national economy into a tailspin, they feel "refreshed and raring to go."

"The other day I actually overheard someone on the sidewalk utter the words I'm saving up for retirement,' and right away I thought to myself, Well, time to get down to work,'" said Morgan Stanley chairman James P. Gorman, adding that the increasing number of individuals entertaining ideas of starting their own businesses or buying houses was the financial sector's cue to set off another devastating global recession. "We're definitely thinking on a huge scale again, because we all really enjoy toying with the livelihoods of millions of people overseas and forcing them to wonder why reckless, split-second decisions made thousands of miles away dictate their whole country's socioeconomic future."

"Plus, it'll be nice to finally wipe out the Euro once and for all this time," Gorman added.

While most private equity firms, investment banks, and hedge funds are reportedly still undecided on the precise route to take in order to torpedo the job market and crash all international stock exchanges, sources confirmed they are nearly in position to resume gambling away trillions of dollars belonging to the American populace.

"We've got a lot of options on the table; it's just a matter of picking which one we want to use to paralyze every single sector of the world economy," said Capital One executive vice president Peter Schnall. "We already burst the dot-com and housing bubbles, so this time we can maybe mix it up by popping the education bubble and shattering the lives of everyone with outstanding student loans. Or maybe we'll artificially inflate prices of stocks in social media companies and then pull the rug out, bankrupting every investor tied to companies like Facebook and Twitter. Or do both."

"On second thought, maybe we'll wipe out the housing market again too, just for the hell of it," Schnall quickly added. "Might as well, right?"

According to a recent survey of Wall Street officials, 82 percent said they were "excited to shake off the rust" and send the Dow and NASDAQ into another freefall. Additionally, 75 percent of respondents admitted they have been "champing at the bit" for months to wholly undermine the nation's local banks and money market accounts, leaving Americans too terrified to leave their savings anywhere.

Moreover, the chief financial officers from Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo unanimously told reporters that it has been "way too long" since they last saw the utterly dejected faces of American families whose homes had just been foreclosed on due to circumstances totally beyond their control.

"Now that the public's efforts to curtail questionable Wall Street trading practices have all but ceased, it's time for us to bring the world to its knees again," said AIG CEO Robert Benmosche. "There are still plenty of opaque financial derivatives, high-frequency trading operations, and off-balance sheet transactions out there, all with virtually no federal regulation. Trust me, we can definitely work with that. And if anything, we can always just lobby for further concessions and deregulation in Washingtonwhich, by the way, is so, so easy to doand then we can cause as much damage as we want."

Added Benmosche, "And while we're at it, we'll make sure we once again come away from this whole thing scot-free and far wealthier."

(Source: the Onion)

[David Guyatt]

Delicious.