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Banking in the spotlight Barclays goes one too far for the establishment

#1 User is offline   scotto 

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Posted 03 July 2012 - 10:18 AM

Interesting news that finally - two rounds of GFC later - the British government has decided to put banking and financial practices under the spotlight.
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#2 User is offline   Bam 

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Posted 08 July 2012 - 09:28 AM

It's a start, but much more needs to be done.

On this topic Alan Kohler has an opinion piece that is worth a read: Banking is a cartel where prices are fixed twice. He compares the way different central banks set their rates. He is scathing of the LIBOR:

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LIBOR is calculated at 11am each day by Thomson Reuters on behalf of the British Bankers Association (BBA). Groups of banks on 10 currency panels are asked: "At what rate could you borrow funds, were you to do so by asking for and then accepting inter-bank offers in a reasonable market size just prior to 11am?" I kid you not.

He also praises the RBA's model for lending rates and comments on the USA Fed's relatively complex methods.
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#3 User is offline   GeorgeParsons 

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Posted 08 July 2012 - 10:30 AM

Good article. Thanks. Kohler is an interesting economist, particularly strong in quantitative work,but able to explain complex problems clearly and concisely.
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#4 User is offline   scotto 

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Posted 09 July 2012 - 05:17 AM

I read Kohler's article, he's generally very good. I'm glad to see that the Brits are going ahead with their plan to re-separate investment and retail banking. I'm not sure that the US has decided to reinstitute this yet.
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#5 User is offline   scotto 

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Posted 10 July 2012 - 08:24 AM

Here's an article right on the money regarding banking and finance practice [see what I did there? huh?].
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#6 User is offline   scotto 

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Posted 11 July 2012 - 01:18 PM

Alan Kohler has been at it again, this time with an interesting review of large-scale economic realities. Essentially he's talking about the credit boom and glut we've had in the 30 years leading up to the GFC.
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#7 User is offline   Frogman 

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Posted 18 July 2012 - 09:13 AM

So now HSBC is up to its eyeballs in drug money, having ignored massive amounts of red flags.

How many different scandals involving the finance industry do we have to sit through before someone thinks "hang on. this shit isnt working properly"

And how many more scandals do we have to read where the head of the bank or whatever resigns with a golden handshake, instead of being prosecuted to the full extent of the law? How many people were sent to jail for completely and utterly fucking up the worlds finance system with the GFC? The LIBOR scandal? This new HSBC one?
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#8 User is offline   GeorgeParsons 

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Posted 18 July 2012 - 11:46 AM

View PostFrogman, on 18 July 2012 - 09:13 AM, said:

So now HSBC is up to its eyeballs in drug money, having ignored massive amounts of red flags.

How many different scandals involving the finance industry do we have to sit through before someone thinks "hang on. this shit isnt working properly"

And how many more scandals do we have to read where the head of the bank or whatever resigns with a golden handshake, instead of being prosecuted to the full extent of the law? How many people were sent to jail for completely and utterly fucking up the worlds finance system with the GFC? The LIBOR scandal? This new HSBC one?
If you run a capitalist system this is the inevitable result.The solution is obvious too!
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#9 User is offline   Frogman 

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Posted 18 July 2012 - 11:49 AM

View PostGeorgeParsons, on 18 July 2012 - 11:46 AM, said:

If you run a capitalist system this is the inevitable result.The solution is obvious too!

I disagree. If you let capitalism run unchecked, then this is the result. We have a fairly robust set of rules and regs in Australia (compare BBSW to LIBOR and groan at how shithouse and fucking stupid the LIBOR system is) and for the most part, we have avoided major scandals.

Rules and regs should be coupled with a regulatory body that actually has teeth and will take action against aberrant behaviour. But the proper solution is to either nationalise the banks, or force them to become not for profit.

There is also a growing body of research that is showing that if the best and brightest minds are attracted to the finance industry because of the dollars earned, then that detracts from every single other sector of the economy, and ruins innovation and research, because the people with the best ideas are using them to turn piles of money into more piles of money, which doesn't help the nation as much as innovation in other areas.
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#10 User is offline   GeorgeParsons 

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Posted 18 July 2012 - 01:44 PM

How do you check capitalism? Civilising capitalism is like civilising tigers. It won't work.
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#11 User is offline   Frogman 

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Posted 18 July 2012 - 01:50 PM

View PostGeorgeParsons, on 18 July 2012 - 01:44 PM, said:

How do you check capitalism? Civilising capitalism is like civilising tigers. It won't work.

I told you. Rules and regulations with a regulatory body that can enforce severe sanctions.

I would also add in that you would have to remove any lobbying ability so they cant change the rules by greasing palms, but that sort of goes without saying.
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#12 User is offline   icey 

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Posted 18 July 2012 - 02:39 PM

View PostFrogman, on 18 July 2012 - 11:49 AM, said:

But the proper solution is to either nationalise the banks, or force them to become not for profit.


Perhaps you'd like to address one of the big four banks' next shareholder's meeting with your novel ideas? Your chance to win friends and influence people!

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There is also a growing body of research that is showing ....


I feel there's something missing from your post frog.
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#13 User is offline   icey 

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Posted 18 July 2012 - 02:43 PM

View PostGeorgeParsons, on 18 July 2012 - 11:46 AM, said:

If you run a capitalist system this is the inevitable result.The solution is obvious too!


There have been rare instances of corruption in non-capitalist societies too, would you agree? "Absolute power" and all that kinda stuff.
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#14 User is offline   GeorgeParsons 

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Posted 18 July 2012 - 02:53 PM

View Posticey, on 18 July 2012 - 02:43 PM, said:

There have been rare instances of corruption in non-capitalist societies too, would you agree? "Absolute power" and all that kinda stuff.
I don't want to trivialise the answer but there are very few non capitalist societies ,especially in a globalised world. I can't think of one.
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#15 User is offline   icey 

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Posted 18 July 2012 - 03:36 PM

View PostGeorgeParsons, on 18 July 2012 - 02:53 PM, said:

I don't want to trivialise the answer but there are very few non capitalist societies ,especially in a globalised world. I can't think of one.


That's OK. Capitalism prevails.
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#16 User is offline   GeorgeParsons 

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Posted 18 July 2012 - 03:48 PM

View Posticey, on 18 July 2012 - 03:36 PM, said:

That's OK. Capitalism prevails.
At this point in History.
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#17 User is offline   scotto 

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Posted 19 July 2012 - 08:53 AM

I agree that robust regulation is part of the answer. There have been other parts suggested, like triple bottom-line accounting, however I don't see that these are widespread.

I think some solutions are well understood, like seperating high street and commercial banking however the spine of many governments is lacking.
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#18 User is offline   HDMC 

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Posted 19 July 2012 - 09:08 AM

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#19 User is offline   scotto 

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Posted 25 July 2012 - 06:18 AM

Put that guy in charge! Now!

By the way, how do I find that on YT? I want to post it everywhere I can.
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#20 User is offline   scotto 

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Posted 26 July 2012 - 12:56 PM

An interesting reaction from a former big banker to the ongoing crisis. Split up the banks; take more action to regulate.
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