Now raising intellectual capital

Kingman to go private


John KingmanSo John Kingman is leaving UK Financial Investments “in due course” to spend more time with the private sector. That, at least, is the line put out by Robert Peston, the BBC reporter who could sometimes be confused for his personal press officer, on his blog.

As Pesto observes:

He’s wanted to move into the private sector for a couple of years – and said as much to the Treasury’s permanent secretary, Nick Macpherson, last summer.

That Kingman is leaving so soon into his mission may, as Pesto observes, occasion surprise. He slyly implies that Kingman is leaving to avoid political interference by the beastly Tories should they win office.

In reality, he’s probably moving on because he rightly perceives that it is going to be a long and thankless slog at UKFI. The shares will take years to sell, and in the meantime UKFI will probably be the whipping boy for a government that wants to get the best price for its shares while urging banks to lend more, protect consumers, etc.

Sir Win FTW at Lloyd’s Banking Group

It’s good to hear that Win Bischoff has a list of priorities in his new role as chairman of Lloyds Banking Group <LLOY.L>. Reviewing the position of chief executive Eric Daniels is apparently not at the top of it.

So what should he be doing when he formally takes the chair on Sept. 15?
The first thing is to accelerate the integration of HBOS into Lloyds. The group needs to stop dribbling out restructuring announcements (a few job losses here, a few there) and come clean about what it needs to do to secure the synergies that were promised from this ill-starred transaction.

from Margaret Doyle:

IASB sticks to its fair value guns

LONDON, July 15 (Reuters) –David Tweedie, chairman of the International Accounting Standards Board, has responded to demands that he revise the controversial standard on financial instruments by strengthening controversial “mark to market” accounting. He should be careful he does not derail progress towards global accounting standards in the process.

The existing standard, IAS39, allows banks and insurers to classify financial instruments and measure impairment in many ways. Tweedie wants just two measurement bases – amortised cost and fair value -  and one impairment method for amortised cost.

Managing incentives, UK banks edition

Confused about the British government’s approach to its bank investments? You’re in good company. Consider the following statements from Royal Bank of Scotland and its main shareholder(emphasis is ours):

June 23rd: Sir Philip Hampton, chairman of RBS, on the £9.6m cash-and-shares pay package awarded to Stephen Hester, the bank’s chief executive:

A Tale of Two Citi’s

Here’s a summer quiz: Identify the following two US banks:

1. This institution has been profitable throughout the credit crisis. Last year, it reported net income of $6bn on revenues of $60bn, despite taking big hits in its consumer operations in North and South America in the fourth quarter. At the end of the first quarter the bank had total assets of $958 billion, supported by a healthy deposit base of $660 billion.

2. The second institution lost a massive $36 billion last year. Even net revenues were negative to the tune of almost $7 billion. This bank had a $662 billion balance sheet at the end of the first quarter, but deposits of just $88 billion.

from Margaret Doyle:

COLUMN –One cheer for Darling’s reform: Margaret Doyle

Margaret Doyle is a Reuters columnist. The opinions expressed are her own

By Margaret Doyle

LONDON, July 8 (Reuters) – Alastair Darling has ignored the first rule of holes: if you’re in one, stop digging. He could have produced a few motherhood-and-apple pie reforms of the banking system, to give the impression of activity. Instead, he has dug in, proposing an upgrade of Britain’s failed “tripartite” system of regulation.

No one expected him to admit as much, but the arrangement that split responsibility between the Treasury, the Bank of England and the Financial Services Authority (FSA), was doomed from the start.