Tim Worstall

  “Is someone making this up?” a Treasury spokesman asked. “Has anyone checked the date?”  

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Sharon Bowles, the UK Liberal Democrat MEP who chairs the EU parliament’s economic affairs committee, also proposed that “golden hellos” should be clawed back if performance fell short. Dear Lord, you’d think these people would be able to understand their own arguments, wouldn’t you? And the argument here is that a bonus encourages people to [...]

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Prudential email leak mocks ‘horrendous’ FSA policies Prudential is facing serious questions over its attitude towards the Financial Services Authority after a leaked email from one of the insurance company’s senior executives described the regulator’s policy plans as “ludicrous” and “horrendous”. Look, it’s bad enough having sanctimonious little prigs as regulators but there’s not requirement [...]

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The problem for the right in Britain and its big brother in the US is that, after 30 years of the conservative revolution, it is now wedded to the premodern view that risks in a market economy and society should be run as individualistically as possible, whether the risk is carried by a company launching [...]

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So, the earlier discussion of swaps prices showed that peeps here do indeed know their interest rate swaps from their elbows. So what we have here is a housing charity carrying some £5 million of floating rate debt. They rather think that now might be a good time to swap that into fixed rate debt. [...]

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This doen’t look good, does it? The FSA is one of the creditors of MF Global: The Financial Services Authority is also owed more than £750,000, However, amusing thought that is I sorta doubt that they were parking their money with the firm or playing on the futures markets. That’s rather more likely to be [...]

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The businesses have all claimed that banks profited at their expense and many were unaware of the significant costs attached to the products that were supposed to protect them from upward movements in interest rates. Typically sold between 2006 and 2008, businesses found themselves paying far higher rates of interest than they expected as Bank [...]

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£500,000 home loans backed by the taxpayer as NewBuy Guarantee scheme launched Up to 100,000 people will get Government support to buy homes worth up to £500,000 in a Coalition move to revive the middle-class dream of home ownership, ministers will announce. Doesn’t anyone, ever, have a look around the world to see the effet [...]

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I’m not sure that I believe these figures: Take the example of a five-year loan for £1m taken out in 2007. In this example the customer wants to fix their rate for the duration of the loan. The bank, with its sophisticated pricing systems, would look at the swap market and get the price of [...]

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So, we’ve got the FSA report into why HBOS fell over. Fascinating stuff really. For there’s not a derivative, toxic or not, in there. There’s not even trading problems. It was a simple, classic, over-extension of credit to the property sector. It’s happened before, no doubt it will happen again. But do note that: it’s [...]

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From what I can see Bob Diamond’s bonus is all in shares in Barclay’s. Something which rather changes matters. For, do you recall a few years back, the screaming was that it was the payment of bonuses in cash which was the cause of all the problems? Bankers would do stuff this year that they [...]

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There’s a certain truth to this. If we’re to copy bits of the German economy then we should probably be trying to copy the bits that work, not the bits that we like: KfW actually makes a somewhat odd role model. It is chaired by Cable’s equivalent in the German government, its funding coming almost [...]

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UKAR was so profitable that HM Treasury managed to smuggle £125 million out the door without calling it a dividend(dissembling, they called it an increase in the cost of the working capital facility). That’s in just one year. But that’s a fraction of the ongoing profitability in UKAR. UKAR is generating ongoing profits of £1.8 [...]

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More than 160 German tax collectors have volunteered for possible assignments in Greece to help the struggling Mediterranean country gather tax more efficiently, the finance ministry said in Berlin at the weekend.The offer risks fuelling resentment among Greeks who have already reacted angrily to earlier German calls for the appointment of a “budget commissioner” to [...]

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While many U.S. banks still have leverage ratios that are 10 times their assets, the banks of Germany have a leverage ratio 32 times their assets, and French banks are leveraged 26 times their assets. No wonder the banking sysytem’s in the crapper. The bloke responsible for the regulation of them for over a decade [...]

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At its nadir, sterling had lost 30% of its value against both the dollar and the euro – that’s amazing, considering that a devaluation of only 14% destroyed the Labour government’s reputation for economic competence in the late 1960s. There’s a difference between being in a fixed exchange rate system and having to devalue and [...]

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The investigation into a former trader at the company was triggered after a breach of the company’s own internal controls last August. A junior trader, who worked at the company’s investment arm, was dismissed after attempting the rogue trade, thought to have been worth about $150m and alleged to be linked to Argentine warrants. According [...]

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At a G20 summit in Mexico in two days the EU will plead for increased IMF contributions by non-euro countries to help shore up a eurozone “financial firewall” seen as vital to protecting Spain and Italy from Greek debt contagion. The IMF will refuse to make extra cash available to the EU and will threaten [...]

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The resulting depletion in retained profit, traditionally the biggest source of corporate investments, has dramatically undermined these corporations’ abilities to invest, further weakening their long-term competitiveness. Therefore, I concluded, unless we significantly restrict the freedom of movement for shareholders, through financial reregulation, and reward managers according to more long term-oriented performance measures than share prices, [...]

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Having mutuals in the banking system might be a good idea for all sorts of reasons. But not perhaps for the reason that so many here claim. Wh8ich is, of course, that mutuals wouldn’t have gone so gung ho into excessive housing finance and thus wouldn’t have pumped up the bubble that led to the [...]

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