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Feb 9, 2011
via Breakingviews

UK banks got better end of government showdown

By George Hay
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

LONDON — UK banks have got the better of their showdown with the government. After months of discussions, the UK coalition finally revealed details of “Project Merlin” on Feb. 9. It may look as if George Osborne, the Chancellor of the Exchequer, has won major concessions from lenders. Almost the exact opposite is true.

Jan 27, 2011

Lloyds’ defence against surgery doesn’t convince

– The author is a Reuters Breakingviews columnist. The opinions
– The author is a Reuters Breakingviews columnist. The opinions
expressed are his own –

By George Hay

LONDON, Jan 27 (Reuters Breakingviews) – Lloyds Banking
Group (LLOY.L: Quote, Profile, Research) has failed to find a magic bullet that could kill
off the threat of radical surgery. The UK lender, whose
acquisition of rival HBOS pushed its share of the current
account market to 30 percent, has made a fulsome submission to
the Independent Commission on Banking, arguing why this dominant
position doesn’t matter. But it isn’t convincing.

Jan 13, 2011
via Breakingviews

UK bank pay exposure could be counter-productive

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

LONDON — The UK coalition’s mutterings about greater bonus disclosure look counter-productive. The Liberal Democrats, the government’s embattled junior partner, are understandably anxious to show voters they understand public anger about excessive banker pay. But publishing banks’ highest pay packages is not the way to go about it.

Dec 24, 2010

UK banking inquiry won’t be a pushover

– The author is a Reuters Breakingviews columnist. The opinions
– The author is a Reuters Breakingviews columnist. The opinions
expressed are his own –

By George Hay

LONDON, Dec 24 (Reuters Breakingviews) – The UK’s banking
commission won’t be a pushover. The independent body, set up to
study the structure and competitiveness of UK banks in the wake
of the financial crisis, delivers its final report in September.
Few expect it to go for the nuclear option of formally breaking
up investment and retail banks. But that doesn’t mean the likes
of Barclays (BARC.L: Quote, Profile, Research) and Lloyds Banking Group (LLOY.L: Quote, Profile, Research) can
relax.

Dec 22, 2010

Cable’s muzzling is Christmas present for banks

– The author is a Reuters Breakingviews columnist. The opinions
– The author is a Reuters Breakingviews columnist. The opinions
expressed are his own –

By George Hay

LONDON, Dec 22 (Reuters Breakingviews) – Christmas has come
early for Britain’s banks. Until now, their yuletide good cheer
had been dampened by the threat of serious structural change
when the UK’s independent commission on banking reports next
September. Now the main champion of bank break-ups has himself
been weakened.

Dec 21, 2010

RBS should pay no cash bonuses for 2010

– The author is a Reuters Breakingviews columnist. The opinions
– The author is a Reuters Breakingviews columnist. The opinions
expressed are his own –

By George Hay

LONDON, Dec 21 (Reuters Breakingviews) – Royal Bank of
Scotland (RBS.L: Quote, Profile, Research) should scrap cash bonuses for 2010. Last year,
the board of the all-but-nationalised lender nearly quit
following a clash with the UK government over how much to pay
its investment bankers. Something big is needed to avoid a
similar drama this time around.

Nov 24, 2010
via Breakingviews

Irish bank restructuring has tidy if slow solution

Ireland’s bloated banking sector needs fewer, smaller lenders. A sovereign bailout should provide breathing space to perform a radical restructuring. But a fire sale of Irish banking assets is not the only way to cut the banks down to size.

The combined liabilities of Ireland’s domestic lenders, both private and state owned, exceed 500 billion euros, or four times Irish GDP. The country’s likely 90 billion euro bailout will deliver resources to recapitalize the banks and guarantee wholesale funding for several years. In that time, the sector could be redrawn.

Nov 17, 2010
via Breakingviews

Irish bank rescue could cost over 100 bln euros

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

An Irish bank rescue could cost over 100 billion euros. That’s the rough amount needed to fund Allied Irish Banks, Bank of Ireland and Anglo Irish Bank for three years, while recapitalising them to a point where they might regain the confidence of the markets. But the euro zone may not actually have to shell out anything like that much.

Nov 4, 2010
via Breakingviews

Buffett may struggle to repeat his Swiss Re exit

Warren Buffett may struggle to repeat his Swiss Re exit. The legendary investor bailed out three big beasts during the financial crisis: the Swiss insurer, GE and Goldman Sachs. The Sage of Omaha has allowed Swiss Re to buy back its expensive convertible stock early. He may have less scope to be as generous with the other two.

Of the three deals, Buffett’s $3.1 billion investment in Swiss Re convertible shares had the most strings attached. Negotiated at the depths of the market slump, the stock paid a 12 percent annual coupon until March 2012, when it would convert into ordinary shares at a price of 25 Swiss francs.

Oct 14, 2010

Barclays eyes new bond to meet capital demands

LONDON, Oct 14 (Reuters) – Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) is working on a
new capital instrument that would allow it to meet regulators’
capital demands without issuing equity, a person familiar with
the situation has told Reuters Breakingviews.

The UK bank is examining a debt instrument that has been
dubbed a “step down, step up” bond. If the bank’s core Tier 1
ratio fell below 7 percent, holders would suffer a haircut of as
much as 30 percent.

    • About George

      "George Hay coordinates European financial coverage and writes about macroeconomics, the euro zone and UK/European financial policy. He covered European banks for Breakingviews during the financial crisis, and has also worked as a correspondent for AFX News and at United Business Media. He attended Edinburgh University and his work has been recognised at the UK’s Business Journalist of the Year Awards. Follow George on Twitter @gfhay"
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