If City shareholders really believe in pre-emption rights they will continue to oppose Barclays’ capital issue. While the institutions are now being offered a share, private investors remain excluded.
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Why should investors – nevermind the government – give the banks new capital when they were so inept at looking after the capital they had?
At last we know who caused the credit crunch. Not irresponsible lenders. Not even irresponsible borrowers. Not the hedge funds or SIVs or other vehicles that no-one understood before last August and which still defy comprehension. No, it was the credit-rating agencies.
Watching Bradford & Bingley struggle for survival is like watching an injured animal die slowly.
All company chairmen think the stockmarket undervalues their shares but however good they are at running their business, those directors have proved themselves very bad fund managers. They buy shares at the top – and then often sell them at the bottom.
Kitty Usher - a brighter Treasury minister than some in that building - has rightly told the European Union that inflated City pay rates are nothing to do with the UK government, nevermind the bureaucrats in Brussels. She is right not only because private-sector pay is not inside the politicians’ remit and she is right because the state couldn’t control it if it tried - but if City pay is not a matter for ministers, who should be controlling it?
Banking is a confidence trick: once people lose confidence in a bank it is exposed as nothing more than a highly-greed and potentially unstable business. And if that is true for retail banks it is even more true for the central banks under which they operate.
The Bank of England has survived for 300 years on that principle. An elevation of the Governor’s eyebrow has been a powerful signal because the banks at whom it was aimed have confidence in their central bank. It is thus important that the Bank does nothing to damage that confidence, yet a row is brewing that threatens to undermine its position.
Is Jonathan Ross really worth more than a FTSE chief executive? The BBC trustees have taken on the role of a remuneration committee and decided the £18m he is allegedly receiving over three years is the market rate but they seem to have failed to spot that the Beeb is the market.
There are so few customers for his sort of talent that this is an oligopsy - the buying equivalent of a monopoly. The only serious competition to sign up such celebrities is ITV with Channel 4 and Sky trailing behind. For radio there is even less competition. The BBC is thus not paying market rates when it takes on such talent, it is setting market rates.
Forget 200p a share, what exactly is the price of the Royal Bank of Scotland rights issue? Might it be that the regulators have given the bank the capital to rescue its weaker brethren?
There has been much negotiation between the Edinburgh bank, the Bank of England and the regulators to ensure the record £12m share issue gets away smoothly. We know part of the price of the package is the £50bn the Treasury is providing to the Bank to kick-start lending by banks like Royal. We know Royal has made the symbolic gesture of paying its next dividend in paper not cash – and paying less. We may find that heads rolling at Royal follow – but don’t bank on it.
British Airways’ chief executive Willie Walsh publicly accepted responsibility for the Terminal 5 fiasco, but does that mean his head should roll along with the operations director and customer services director?
The opening of the Heathrow terminal is a corporate disaster of the highest order. What should have been a major enhancement to BA’s market position – like the St Pancras terminal for Eurostar - has turned into a liability, both financially and reputationally.
