The Great Debate UK

from From Reuters.com:

How has the credit crisis affected you?

By Reuters Staff
August 18, 2009

The demise of Lehman Brothers a year ago sparked a collapse in financial market confidence and set of a series of reactions that have spread hardship into the four corners of the globe.

HSBC tortoise will outpace Barclays hare

August 3, 2009

REUTERS– Margaret Doyle is a Reuters columnist. The opinions expressed are her own –
Barclays’ and HSBC’s interim results are a study in contrasts. Barclays has used the credit crunch to make a bet-the-farm move into the investment banking big-league, a bet that has so far paid off. HSBC, in comparison, chastened by its flawed move into the U.S. subprime market, has returned to its conservative roots.
John Varley, Barclays’ chief executive, gives the usual guff about “staying close to our customers and clients”. In truth, Barclays’ 3 billion pounds of profit in the first half owes much more to its investment banking division, enlarged by its opportunistic acquisition of Lehman Brothers’ North American unit last autumn, than to its traditional banking businesses.
Barclays Capital (BarCap) more than doubled revenues to 10.5 billion pounds, and doubled pre-tax profits to 1 billion pounds. As with rivals, the star performer was fixed income, currencies and commodities where banks are profiting thanks to their access to very cheap central bank funding.
This is just as well, because Barcap is still carrying plenty of toxic assets left over from the credit boom. These cost it 4.7 billion pounds in gross writedowns and impairments in the first half. Given that it still has other dodgy exposures, including assets worth more than 7 billion pounds guaranteed by ailing monoline insurers, further losses seem likely. Barclays cannot rely on other parts of the bank to come to its rescue: profits in traditional retail and commercial banking businesses all collapsed as impairments soared.
HSBC’s global banking and markets (GBM) division also delivered a record performance, more than doubling its first-half profits, to $6.3 billion. However, HSBC has long resisted the charms of investment banking, and runs GBM as a complement to its existing global commercial banking franchise. Despite the juicy returns currently on offer, this is unlikely to change.
HSBC has its own sizeable bit of historical baggage in the form of Household, the U.S. consumer lender that is now being expunged from the record, though not without considerable additional losses.
Many suspected that HSBC would use its bumper $17.8 billion rights issue this spring to acquire divisions of ailing rival banks at bargain basement prices. So far, it has resisted, instead bolstering its tier 1 capital ratio to 10.1 percent.
Rather, it is building on its position as the world’s leading international bank (especially now with Citi holed under the waterline) organically. While cash-strapped rivals retreat from China, HSBC is investing in its Chinese operations. It has been the first international bank to settle cross-border trade in renminbi (yuan). It is on track to have 100 outlets, including many in rural China, by year end, more than any other international bank. Such loyalty will not go unnoticed in Beijing.
Which bank is better positioned for the new environment? That depends partly on the speed of the recovery. Barclays has so far performed a dazzling high-wire act, avoiding state capital by spreading its losses over a number of years and by selling its Barclays Global Investors arm. But this is hard to sustain if the downturn turns out to be prolonged. Meanwhile, once banking conditions return to normal, central banks will cease to flush investment banks with cheap cash and investment banking profits are bound to tumble. The HSBC tortoise looks set to leave the Barclays hare far behind.

from The Great Debate:

U.S. should batten down the TARP

By J Saft
May 15, 2009

James Saft Great Debate -- James Saft is a Reuters columnist. The opinions expressed are his own --

The U.S. faces a lengthening series of request from industries and interests seeking shelter under the Troubled Asset Relief Program, most of which it should dismiss out of hand.

from The Great Debate:

Time for China’s banks to think local

May 11, 2009

wei_gu_debate-- Wei Gu is a Reuters columnist. The opinions expressed are her own --

When foreign strategic investors were invited to take stakes in Chinese banks, the word "strategic" had a clear meaning for their hosts.

from The Great Debate:

Barclays monoline insurance ploy pays off

May 7, 2009

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

By Margaret Doyle

Barclays has avoided the dead hand of state shareholding and, on Thursday's evidence, it looks as though it will escape completely.

Ask the regulator

By Reuters Staff
March 2, 2009

Hector Sants, Chief Executive of the Financial Services Authority, has agreed to take questions from Reuters readers after he delivers his first major speech on the future of financial market supervision on March 12th at the Thomson Reuters Building in London.

from The Great Debate:

Turning the tables: Can you help Davos leaders?

By Reuters Staff
January 27, 2009

Klaus SchwabDavos is a well-rehearsed event and everyone knows the part they should play. Business and political leaders gather each year to tackle the major challenges of a global economy while the rest of the world, or those of its citizens who are interested, look on from afar. But this year, for obvious reasons, things are different. The notion of leadership has been coupled in the public mind with that of responsibility. The tone here is a little more humble and the attitude more open-minded. There's a recognition that new thinking is required.  A suitable time, perhaps, to turn the tables on convention and have Davos delegates ask the questions they can't answer and for global citizens to offer solutions.

from The Great Debate:

Credit control will be much more intrusive in future

January 26, 2009

John Kemp Great Debate-- John Kemp is a Reuters columnist. The views expressed are his own --

The international system of bank regulation, epitomised by the Basle II process and the light-touch principles-based regulation of Britain's Financial Services Authority (FSA) has comprehensively failed.

from The Great Debate:

A new direction in global financial regulation

January 26, 2009

John Kemp Great Debate-- John Kemp is a Reuters columnist.  The views expressed are his own --

UK Prime Minister Gordon Brown's call today for a new G20 charter of principles on financial regulation  reflects an emerging consensus among policymakers that, once the immediate crisis has passed, the regulatory framework must be fundamentally redesigned.

from UK News:

Banks rescue package: will they start lending again?

January 19, 2009

Melanie Bien, director, Savills Private Finance, is a guest commentator. The opinions expressed in this commentary are her own.