Profits warnings are common during recessions but the oddest seen so far comes from Goldshield Group. The new owner has looked at the books and said that for several years the pills company’s profits may have been understated. Yes, understated.
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The stock market’s reaction to Prudential’s (LON:PRU) planned record rights issue is ungrateful. After all the mega-refinancings to fill black holes in balance sheets, this is a share issue based on expansion rather than rescue.
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Why bother being boss of a big bank if you are not allowed to take the rewards? Lloyds Banking Group’s chief executive has followed Barclays’ and RBSs in bowing to public pressure in rejecting bonuses. Yet while they make the sacrifice, bankers at lower levels keep their windfalls.
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Supermarkets are probably the most competitive business in the UK. Why then are they being lumbered with an ombudsman, a new supplier code and all the compliance bureaucracy that goes with them?
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If we don’t want banks running private-equity operations, why do we want private equity operations running banks? In the eagerness to come up with a new banking model for the post-crash era, we mustn’t simply welcome any alternative.
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President Obama’s call to make banks shed risky trading – effectively a new Glass-Steagall Act – is not off the UK agenda, despite being dismissed by government ministers. The architect of the plan, former Federal Reserve chairman Paul Volcker, is coming to the House of Commons to outline his plan.
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Banks have done few favours for small companies since the credit crunch. Now the government – which has no love of banks either, having ruined the national accounts to rescue them – is looking for ways to cut out the traditional lenders.
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If a 50 per cent tax on bonuses is not enough to stop bankers boosting their own pay, what does it take?
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Commercial property values are rising again and no-one should be more pleased than the owners of Britain’s banks – ie, us. Balance sheet write-offs could soon be replaced by write-backs.
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Let the banks pay their inflated bonuses – but force them to back each £1bn awarded with another £1bn of new capital. It could be a better brake on bonuses than a windfall tax on the banks or higher income tax for the bankers.
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