April 16th, 2012 In this speech the economist and author John Kay examined how the financial sector continues to make — or claims to make — returns-on-equity which are way in excess of any reasonable estimate of cost of capital. Kay, a visiting professor at London School of Economics, examined various possible reasons but then focused on [...]
November 30th, 2011 I had a bizarre sense of déjà vu yesterday on learning of the mass downgrade of 37 of the world’s largest banks, including the Royal Bank of Scotland, by Standard & Poor’s. Something very similar took place in July 2007, when Moody’s downgraded hundreds of CDOs – opaque bundles of securitized ‘toxic’ subprime [...]
October 30th, 2011 Calls for a radical rethink of the political and economic system from the “HBOS whistleblower”, Paul Moore, could not have come at a more appropriate time. Moore — who was personally fired by HBOS chief executive Sir James Crosby in November 2004 after seeking to warn the bank’s board that its sales-mad [...]
By Ian Fraser Published: QFINANCE Date: October 20th, 2011 There may be a good few Maoists, Trotskyists, Anarcho-Syndicalists and even the odd deluded benefit scrounger among them, but it is simply wrong to characterize the Occupy Wall Street protestors who are camping out in 1,500 cities worldwide as wanting to overthrow capitalism, in the same way [...]
October 5th, 2011 David Cameron displayed an astonishing lack of understanding of the banking sector in his interview with Sarah Montague on the BBC Radio 4 Today programme on Tuesday morning (as I’m afraid did Sarah, given her blinkered obsession with “bonuses”). If Cameron’s stumbling performance was due to ignorance, then it’s simply inexcusable. If [...]
September 29th, 2011 It’s incredible how some journalists got it so wrong about the City of London just prior to the crash of 2007-09. In January 2007 Time Magazine’s Adam Smith wrote an unctuous feature about the Square Mile which lavished praise on Gordon Brown’s “light touch” approach to financial regulation. In his second paragraph, [...]
By Ian Fraser Published: Sunday Herald Date: September 3rd, 2011 As leader of the opposition, David Cameron gave the impression he intended to be tough on the banks. In an interview with Sky News in January 2009, he called for criminal actions against bankers and earlier said we needed “a day of reckoning” for those [...]
August 11th, 2011 When my ex-boss Roger Neill launched the Centre for Creativity at City University London in winter of 2009, he staged a “Big City Brainstorm” which pulled together a diverse group of people – including several from the City of London. Roger and other people behind the CfC wanted to find ways of addressing [...]
August 4th, 2011 It must have seemed a good idea at the time. The Smurfs were welcomed by the New York Stock Exchange on Wall Street last Friday, July 29th, to ring the opening bell. This may have been a good move for Sony Pictures, which has a movie to plug but it has turned [...]
June 10th, 2011 The credit rating agencies performed so woefully in the run-up to the global financial crisis, one might have thought they would be utterly discredited by now. One of the agencies most heinous mistakes was their rampant mislabeling of residential mortgage-backed securities (RMBS) and collateralized debt obligations (CDOs) in 2004-07. At the time, the rating [...]