Sunday, 27 January 2013

hello. I'm Nigel and I'm a serial banker

Just like a 12-step process, our world can
be cleansed of the Banker Virus of 2008-
Infinity.

Announcement:
Meeting, this Friday, at the YMCA hall, Shoreditch. 
Bring your own booze.

Guru: Let's begin
Nigel: Hello, I’M a BANKSTER & my BANK is a ZOMBIE
everybody: WTF , Nigel?

Checkitout:  TELEGRAPH

Banks must be honest about their toxic losses

This weekend, I'm feeling somewhat vindicated. More significantly, perhaps, for the first time in quite a while, I'm also rather hopeful.
Ever since the sub-prime crisis exploded, Western banks have been harbouring huge hidden liabilities, burying them using off-balance sheet vehicles, complicit auditors and a host of obfuscation tactics. Photo: PA
By Liam Halligan, Economic Agenda
6:00PM GMT 01 Dec 2012
Vindication comes in the form of the latest Stability Report from the Bank of England's Financial Policy Committee, published last Thursday. For a long time, this column has focused on the multi-billion pound undeclared losses on the balance sheets of the UK's largest banks as the major reason why our economy remains moribund and unable to stage a recovery. The FPC has just shown that it not only agrees with that view but wants to take some action.
Ever since the sub-prime crisis exploded, Western banks have been harbouring huge hidden liabilities, burying them using off-balance sheet vehicles, complicit auditors and a host of obfuscation tactics. Financial markets know this, which is why banks have been trading at extremely low "price-to-book" valuations – with many priced at less than the value of their tangible assets.
If the UK economy is to fire on all cylinders again, our banks badly need to raise fresh capital, so providing finance to the creditworthy businesses that will pull us out of the recession danger-zone. Our politicians stick with the "growth versus austerity" soap opera, trading ideological jibes as they argue over future taxation and spending plans that are anyway largely fiction.
The genuine cause of our economic torpor, meanwhile, is that banks aren't raising the new private sector capital needed to kick-start investment and commerce. That, in turn, is because no one trusts their accounts given the huge smouldering sub-prime related losses which bank executives are pretending don't exist.
What's needed is "full disclosure", forcing the banks to recognise such losses, taking the hit, and moving on. Some banks would fail, of course, executive egos would be bruised and reputations would suffer.