The Great Debate UK
Sir Win Bischoff appears to relish a challenge. His brief spell as chairman of Citigroup was spent resisting regulators who wanted to break up the bank. If the veteran banker takes over as chairman of Lloyds Banking Group, his first fight will be with competition authorities in Brussels. This is one battle where it would be better if Sir Win did not live up to his name.
Neelie Kroes, Europe’s competition commissioner, says Lloyds and Royal Bank of Scotland could be forced to sell significant assets in order to win approval from Brussels for the vast amounts of government support they have received. Kroes has a track record in this area. Commerzbank and West LB have been forced to sell assets equivalent to about 40 percent of their balance sheets in return for EU approval of government recapitalisations.
The Commission has two objectives: to limit the duration of state aid, and minimise any competitive distortions that arise from public support. Typically, banks that receive state aid grow too big, too quickly, and have to shrink before they can stand on their own. The main question is how swiftly they should be forced to do so. Here, the Commission is prepared to be lenient. Commerzbank has apparently been given 2014 to sell its Eurohypo real estate division.
The crisis at Northern Rock marked the beginning of Britain’s slide into large-scale state ownership of the banking system. Returning the mortgage lender to the private sector would be a sign that normal service is being resumed. But rumours that the British government is poised to sell Northern Rock, are premature. Suggestions the government could do so at a profit are even more far-fetched.
Prime Minister Gordon Brown is apparently keen to offload the Rock, ideally “at a substantial profit” before the general election, which must be held before next summer. According to the Times, the prime minister “wants desperately to avoid a Conservative government taking the credit”.
Reports in the media about job losses are commonplace these days, with young people’s struggle to find work dominating coverage. Yet at the other end of the age spectrum, the lives and future prospects of older workers have been set in turmoil by the recession.
- Suren Surendiran is the spokesman for the British Tamils Forum. The opinions expressed are his own. -
The war against Tamils has ended, if we believe the statements coming from Sri Lankan state news media and the carefully orchestrated propaganda campaign.
Whatever reservations there might be over the way the leaked information was obtained, the publication of hitherto secret details about the endemic abuse of MPs’ expenses was without doubt in the public interest.
Belgians may like a tasty cheval-burger with their frites, but they ought to desist from flogging a dead one. The European Commission has thrown out an attempt to have the sale of Fortis Bank in Belgium to BNP Paribas cancelled, but the rebels are now threatening to take their case to the European Court of Justice.
Not exactly shock and awe as the MPC keeps base rates on hold at 0.5 percent while the most recent financial surveys have been unanimous in expecting a no change decision for some time now. It was always going to be an MPC meeting to discuss whether or not to persevere with quantitative easing. The difficulty for the MPC is that it is too early to judge the effectiveness of the quantitative easing. Clearly the Bank of England would prefer to wait at least until it publishes new quarterly growth and inflation forecasts to explain how it wishes to proceed.
from Africa News blog:
Far from being all bad news for Africa, the global financial crisis is a chance to break a dependence on development aid that has kept it in poverty, argues Zambian economist Dambisa Moyo, who has just published a new book “Dead Aid”.
Moyo’s book, her first, comes out at a time when Western campaigners, financial institutions and some African governments have been warning of the danger posed to Africa by the crisis and calling for more money from developed countries as a result. The former World Bank and Goldman Sachs economist spoke to Reuters in London.