OneGuyFromBarlick

Looking at the track record of the UK regulators in their efforts to stop our banking systems being used for international money laundering (See Private Eye articles ad infinitum on this matter) it doesn't surprise me to hear that the lady has managed to amass such a fortune. No doubt in cahoots with her father and whoever he was favouring to make money in Uzbekistan.
It strikes me that if we were to look too closely at the affairs of foreign investors in the UK we might have to examine the finances of our politicians and political players more closely as well. Starting with Tory Party Treasurers if you've been keeping up with the reports in PE!

The Silicon Valley Bank sold to HSBC for £1 is probably just to calm the markets. A second bank 'Signature Bank' has also gone belly up. Very little news on this at the moment. These 'bank runs' are becoming a problem shares in some of the major banks are falling . Santander down 7%. Don't worry they have plenty of money, your money, but don't ask for it back all at once because they haven't got it.

Keep calm and don't panic. I'm off to the bank to draw some money out.

When I read this post my mind went back to the white fiver. and I looked up exchange of notes on the BofE website.
"Since the Bank of England’s (the ‘Bank’) foundation in 1694 the Bank has issued notes promising to pay the bearer a sum of money. For much of its history the promise could be made good by the Bank paying out gold in exchange for its notes. The link with gold helped to maintain the value of the notes, although the link was sometimes suspended, for example in wartime. The link with gold was finally broken in 1931 and since that time there has been no other asset into which holders have the right to convert Bank of England notes. They can only be exchanged for other Bank of England notes. Nowadays public faith in the pound is maintained in a different way - through the Bank's operation of monetary policy, the object of which, by statute, is price stability."
This is just as well because I think everyone who has taken a passing interest in economics knows that no bank has physical assets large enough to cover all their issued paper currency, In other words if everybody asked for their money in gold or other assets it couldn't be covered.
In normal times I manage to suppress any fears I have about security but when we have a circumstance like this at the American Bank I can't help wondering.
For instance, how can what the banks are doing be legal? If any of us, as a private individual did the same thing, dispensed money we hadn't got we would be liable to be prosecuted for fraud but that doesn't apply to say the Bank of England.
All right it's an old question and I have had it answered before and understand the explanations but am still puzzled by the fact it's one law for them and another for me. Better not to think but just accept the status quo. But you can't help having disturbing thoughts when the system fails and a bank goes down.....
(For instance, the explanation from the BofE talks about 'price stability'. Not a lot of that about at the moment!)

It may be that the SVB collapse wasn't as simple as it looked. See THIS report in the Independent of rumours surrounding Credit Suisse.
Credit Suisse will borrow up to £44.5bn from the Swiss National Bank to strengthen its liquidity, the lender said. The troubled banking giant said it was taking decisive action to shore up its finances after its shares nosedived 30 per cent on Wednesday. Shares in the Swiss bank plummeted after its top shareholder Saudi National Bank said it would not provide any further financial assistance. However, Swiss regulators announced that the country’s central bank would give Credit Suisse liquidity if needed, helping mitigate earlier concerns. This comes after Wall Street expert Robert Kiyosaki, famed for predicting the Lehman Brothers’ failure, pegged Credit Suisse as the next major bank most likely to collapse.
I also saw an excoriating report in Private Eye on HSBC taking over the UK branch. They point out that HSBC has a terrible reputation, remember the US authorities fining them billions and only George Osborne intervening saved them from being barred from operating in the US?
We may not have heard the last of this......

The ripples from Credit Suisse are already causing some concern. Many of the European Central banks were getting ready to push up their interest rates to curb inflation. Big debates are going on whether to increase rates to curb inflation or risk further liquidity crisis (bank runs) in those banks who don't have enough cash in hand keep up with withdrawals. The BofE is in the same position initially suggesting a rate rise but now holding back. This is being spun as the UK's improved financial position but looking more like protecting the banking system.

I fear you are right Ken. We are being fed a lot of very dodgy explanations about financial matters at the moment and not just in the budget. Smoke and mirrors!
Later, at 05:00..... See THIS BBC report on the rescue of First National Bank in the US.
A group of big US banks has injected $30bn (£24.8bn) into a smaller regional bank, First Republic, which had been seen as at risk of failure. The move came as authorities in the US are trying to quell panic over the health of the banking system, after a series of bank collapses in the US. Worries about the sector have spread globally, raising fears of a crisis. US regulators called the move "most welcome", while the banks said their action reflected their "confidence". They said the banking system had plenty of cash and made big profits. "Recent events did nothing to change this," they said. "The actions of America's largest banks reflect their confidence in the country's banking system." Reports of plans for the aid from the 11 banks, led by JP Morgan and Citigroup, helped lift financial markets and sent shares in First Republic surging more than 20% at one point, triggering trading halts. But a sell-off started again in after-hours trade in a sign that concerns remain. The San Francisco-based firm had seen its share price plunge nearly 70% over the last week, as investors worried it was the next bank at risk of a rush of customers withdrawing their deposits. "This show of support by a group of large banks is most welcome, and demonstrates the resilience of the banking system," US financial officials said.

See THIS BBC report on the takeover of Credit Suisse by UBS.
"Troubled bank Credit Suisse has been rescued by its Swiss rival UBS in a government-backed deal. Sunday evening's announcement came after a weekend of emergency talks in Switzerland between the two banks and the country's financial regulators. The Swiss National Bank said the deal was the best way to restore the confidence of financial markets and to manage risks to the economy. The Bank of England said it welcomed the "comprehensive set of actions". Credit Suisse shareholders were deprived of a vote on the deal and will receive one share in UBS for every 22.48 shares they own, valuing the bank at $3.15bn (£2.6bn). At the close of business on Friday Credit Suisse was valued at around $8bn (£6.5bn). But the deal has achieved what regulators set out to do - secure a result before the financial markets opened on Monday. "
As the dust settles the financial world, while welcoming the Swiss actions, will be debating what has happened and how it affects first the Swiss position and second, other banks around the world. All will be keen to assert that they are secure.....

Funny how just before a bank sinks below the waves the CEO usually claims that the bank is sound has plenty of reserves and is profitable. No need to worry. After a weekend behind closed doors, smoke filled rooms, a merger is announced where the bank being taken over loses about 80% of its value and the new CEO claims that the new bank is sound has plenty of reserves and is profitable and adds stability to the markets.

Well spotted Ken! Funnily enough some of the Asian markets were showing signs of having noticed that as well and the UBS takeover of Credit Suisse wasn't being as effective there.
The bankers keep telling us that effective banking depends on trust in the system and yet they do things like engineer 'solutions' for problems like these that result in many people losing their deposits..... I'm no too sure I understand how that works......

Two things have torpedoed any hopes mortgage payers might have had of a halt in interest rate rises. First the surprise rise in the inflation rate yesterday and second the fact that the US Fed has raised their rates. Another blow for anyone paying a mortgage......

If the bank rate goes up the interest rate to depositors should also rise. Those banks who can raise their rates will attract more investment. Those who can't and because they are only paying a miserly rate will see funds flooding out of their banks setting off another series of bank runs and collapses.

Another one bites the dust. People will wring their hands and say how terrible it is but little thought will go to mortgage holders because they are small people and just part of the collateral damage.

See THIS BBC report about a new fund to compensate the victims of the Post Office Horizon scandal. If everyone keeps their promises (and they seem unequivocal about this) the victims who up to now have lost out will be fully compensated. Let's keep an eye on them.....
The government says it will pay "full and fair" compensation whatever the cost. "It's taken too long... it's a scandal that's needed righting for a long time," said Kevin Hollinrake, the Post Office Minister, who was appointed last autumn. He told the BBC the government would put all the victims back to where they were had the mistreatment not occurred. "We are very clear about that," he said. "For example, if they lost their house through bankruptcy that financial position should be restored and they should be compensated for that loss."
(I looked up the spelling of Mr Hollinrake's name and it is correct. Just a very distinctive way of spelling it.....)

See THIS news from the BofE.
Interest rates have been hiked to their highest for 14 years in an attempt to slow the soaring cost of living. The Bank of England's decision to lift rates to 4.25% from 4% comes after figures showed the cost of living rising by more than expected. Prices rose at a faster rate than expected last month driven by a sharp increase in the cost of food. The rate rise comes despite lingering worries over the global financial system after two US banks failed. The Bank has been steadily putting up interest rates in an attempt to tackle the soaring cost of living. Inflation, which is the rate at which prices rise, remains close to its highest level for 40 years - more than five times what it should be. The Bank voted to increase its benchmark rate to a fresh 14-year high following inflation increasing "unexpectedly", but it said price rises remained "likely to fall sharply over the rest of the year".
Regardless of the fine words, mortgage holders now have to deal with more demands on them. Deep Joy!

One of the matters that was being raised yesterday after the latest rise in base interest rates was the curious fact that interest on savings hasn't risen at all. I wonder how that can happen?

You may remember me banging on at some length about the causes of food inflation and the role of the supermarkets in stoking it up. 'Have a look at this latest report LINK.
UK grocery inflation has hit a new record high - with customers now paying hundreds more a year - but there are warnings the worst is yet to come as inflation for food hits 17.5%, Kantar Worldpanel reported households are now facing a potential £837 hike in the annual cost of their regular basket - although consumers are increasingly shopping around in a bid to find the best value. Its latest report said footfall was up in "every single grocer" over the four weeks to March 19, with households now visiting three or more of the top 10 retailers per month on average - with chains "battling it out" to get buyers through their doors.
Part of this fight for custom is price cutting, this starts by cutting prices to producers who refuse to produce and look for a different way to make a living. This means shortages of goods which in turn drives prices up as the supermarkets have to buy from sources who know they have them over a barrel. Hence rising prices and this isn't going to stop.
The government must take measures to make sure the supermarkets run the supply chain for the benefit of their customers and suppliers, not simply as a tool in their fight for market share.
I don't doubt I shall be back making this point again within a few weeks.....

FT main headline today: `EY banned from German audit work for 2 years after Wirecard scandal'
The watchdog has issued a 500,000 euro fine and penalised individuals.

As many expected, the GDP figures released this morning show zero growth for March. Deep Joy!

Stanley wrote: ↑13 Apr 2023, 06:30 As many expected, the GDP figures released this morning show zero growth for March. Deep Joy!

Of course these will be dismissed as inaccurate and with all probability be amended later on. Nobody can forecast what will happen in a years time. But promises about Bexit ( 20 years) or the CPTPP (25 years) will be spot on and totally reliable.

Too true Ken.....

No more Banks in Barlick to get us after today. Barclays closes for good a bit later today.

It was exceptionally busy yesterday and they ran out of actual cash so could not process some requested withdrawals and locked the door early. Sally and Mary went yesterday to try to do a bank transfer for Bosom Friends but after queuing for about 30 minutes to get in were knocked back. This was a purely electronic transaction which just needed authorising. Mary goes into the bank at least twice week with the takings from the shop, Sally is joint signatory to the accounts. They had to take ID though so were told to go back this morning. They did accept her passport photo though which as mentioned elsewhere looks nothing like her.

Barclays have been getting bad press in The Times - even more than they usually get. They seem to have no idea of what is meant by customer service.

On a different note, I wonder whether any of you saw this news recently. It's not to do with bankers but with an insurance company. I can't remember all the local details but it was an incident outside a village hall. People heard a loud crash, went outside and saw a car driving away quickly. A well-built, sturdy, low wall of local stone lies between the hall car park and the roadside pavement. A large part of it had been knocked down. Someone recorded the reg number of the car and found out who it belonged to.

The hall officials contacted the owner and obtained her insurance details, then got a solicitor to follow it up. The surprise came when she admitted being involved in the incident but told her insurance company that it wasn't her fault, "the wall fell on her car"! Then an even bigger surprise when the insurance company believed her and refused to pay for the wall to be repaired.

This attitude persisted until The Times contacted the insurance company for an explanation and in the end they admitted fault and paid up.

That remind me of the time when my car was run into at the side while I was stationary with the hand break applied. The party at faults insurance argued against the laws of physics and said that I ran into her. Problem was we were both covered by the same insurer, my car was about 8 years old at the time but a good runner, hers was brand new. That Was Norwich Union at the time who morphed into Aviva.

That reminds me of the driver who said the lamp standard had jumped out at him......
Peter says that Barclay's seem to have no idea of what is meant by customer service. It seems to me that applies to virtually all large business entities today. They all pay lip service to customer relations but balk at spending money on it.

Contrary to expectation the inflation rate for March is still over 10%. Fuel and food prices have had a large influence.
The Tories will say it has fallen but they will be disappointed, they were expecting to get below 10% instead they have 10.1%.

While fuel bills are dropping, they could have fooled me my April bill has risen from £330 to £390, food prices are rising holding inflation at 10.1%. This looks like people can still afford to eat. We must put a stop to this nonsense. Noises round the BofE suggest interest rate could rise again.
From the Guardian...

Bank of England expected to raise rates in May
The odds of the Bank of England raising interest rates again next month have jumped.
The money markets indicate there is a 97% chance that the BoE lifts Bank Rate by a quarter of one percentage point to 4.5% in May – up from an 82% chance yesterday.

By some perverse logic if the banks make it more expensive to buy houses and by extension higher rents resulting in higher inflation making food even more expensive which providing you can live without eating will be good for the economy.

What planet do these people live on?