The Great Debate UK
from The Great Debate:
UK takes right step on too-big banks
(James Saft is a Reuters columnist. The opinions expressed are his own)
So it can be done after all.
Britain is poised to take tough steps to break up the large banks it rescued, setting it in stark contrast to the United States, which seems set on a policy of shoring up the unfair advantages it grants its too-big-to-fail banks while regulating around the edges.
It is quite a change for Britain, which has a sorry history of self-serving self-regulation in financial services combined with limp and outgunned official control.
Chancellor of the Exchequer Alistair Darling on Sunday told the BBC that Lloyds, RBS and Northern Rock would be partly broken up and assets sold to new entrants into the banking market. Large existing competitors such as HSBC are expected to be blocked from making bids for the assets.
Britain took over Northern Rock after a run on the bank and its rescue of Lloyds and RBS left it with stakes of 43 and 70 percent, respectively.
from DealZone:
Should Ken Lewis get his payday?
Ken Lewis started at Bank of America 40 years ago, working his way up from junior credit analyst to the CEO suite. His employment contract at the nation's largest banks obviously predates the government's bailout of Bank of America. Yet pay czar Kenneth Feinberg may have a say on whether he cashes in on retirement benefits and accumulated compensation worth $125 million.
Some argue it is simply inappropriate for Feinberg to try to tackle Lewis' retirement package.
from The Great Debate:
New BofA chairman must prove independence
-- Jonathan Ford is a Reuters columnist. The opinions expressed are his own --
Shareholders in Bank of America must be hugging themselves at their sheer audacity. They have plucked up the courage to say boo to Ken Lewis, the bank's all-powerful chairman and chief executive.
A shareholder vote on April 29 forced Lewis to relinquish the first of those roles to an "independent chairman". This role will now be taken by Walter Massey.
from The Great Debate:
U.S. mouth writing checks its body won’t cash
-- James Saft is a Reuters columnist. The opinions expressed are his own --
A look at credit insurance prices for U.S. banks shows that market thinks the government's mouth is writing checks its body can't or won't cash.
Despite a blistering rally in bank shares and Herculean efforts by the U.S. to build confidence in its financial sector, the price of insuring some leading banks' debt against default has increased markedly in recent weeks.
from The Great Debate:
Nationalization: Terrible but inevitable
-- James Saft is a Reuters columnist. The opinions expressed are his own --
Nationalization of weak banks in Britain and the United States may be preferable to current plans for insurance and soft "bad banks" schemes which risk being swamped by future losses as assets, especially real estate, continue to crater.
An insurance program, getting banks to identify their riskiest assets to the government which will insure them for a fee, is one of the main planks of a UK plan to bail out banks unveiled this week.
from The Great Debate:
Credit cards unkindest cut for U.S. consumers
-- James Saft is a Reuters columnist. The opinions expressed are his own --
Government intervention or not, banks will be cutting up America's credit cards at an unprecedented rate, with grave implications for the economy and company profits.
The U.S. Federal Reserve last week added more nutrition to its alphabet soup of rescue programs when it unveiled the Term Asset-backed Securities Loan Facility (TALF), under which, among other things, it will lend up to $200 billion to investors in securities backed by credit-card, auto and student loans.
