That’s the provocative question posed by Willem Buiter. His latest, characteristically lengthy, blog post tackles the regulatory vogue for forcing banks to hold much greater reserves of liquid assets – in practice, government bonds.
Shares in Lloyds Banking Group are worth 150 pence apiece, according to the analysts from Royal Bank of Scotland, who think the shares offer “a compelling restructuring opportunity” around today’s 95 pence.
from Neil Unmack:
That's the message given by Moody's today on the resilience of UK mortgage-backed securities to the current downturn. The survey is based on so-called master trusts, a kind of securitization vehicle first applied to U.K. mortgages about a decade ago which quickly became the most efficient way for a large bank to securitize home loans. The master trusts grew so big that they now finance about a fifth of all UK home loans (although a large chunk of this must have been from deals issued by banks after the credit crisis to use as collateral for borrowing with the central banks).
So 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.
from Neil Collins:
The shareholders in Northern Rock have been wiped out, but all the various classes of bondholder have - so far - been paid out on time. That may be about to change. The European Commission is about to rule on the sensitive issue of the state aid poured into the failed bank nearly two years ago, and the UK government may offer to bite the bondholders as a quid pro quo for Commission approval.