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 [...]
By Ian Fraser Published: Sunday Herald Date: September 11th, 2011 NBNK REFUTES CLAIM AS SPECULATION OVER BANKING DEAL GROWS BY IAN FRASER The possible sale of Clydesdale Bank to an untested London-based shell company, NBNK Investments, risks triggering a rash of home repossessions and corporate bankruptcies across Scotland, according to a leading European banking expert. [...]
By Ian Fraser Published: QFINANCE Date: July 11th, 2011 Accountancy has changed beyond recognition since the 1970s. At that time the accountancy professor Roy Sidebotham wrote: “There seems to be no limit to the optimism of businessmen… which the growing complexity of the market opens up. The first line of defence of investors and creditors is the [...]
June 26th, 2011 My work on the flawed nature of “mark-to-market” accounting and IFRS accounting standards has been included as supporting evidence in attempts by Steve Baker, the Conservative MP for Wycombe, to introduce to the UK parliament a private members bill that would transform how banks report their financial performance. Baker, a former Lehman [...]
January 16th, 2011 I have long seen BGC Partners’ David Buik as the “Sir Bufton Tufton” of the City: old-fashioned, bigoted and 100% out-of-touch with modern realities. These impressions were reinforced when I read Buik’s contribution to the bonuses debate, published by the Independent on Monday. Buik opened by shedding a few crocodile tears for [...]
December 21st, 2010 Today’s biggest financial news story was that the New York attorney-general is suing the accountancy firm Ernst & Young for fraud following its alleged role in the cooking the Lehman Brothers books in the years prior to the investment bank’s September 2008 demise. I’d like to focus here on the way in [...]
December 21st, 2010 In this remarkable interview, Stanford University’s professor Joseph A. Grundfest talks Charlie T. Munger, vice-chairman of Berkshire Hathaway. It might be an old interview (I think it dates from about December 2008) but it remains a truly remarkable piece and, in my view, it is a must watch. Munger puts his finger [...]
December 3rd, 2010 (update 3) The Financial Services Authority’s obsession with “light touch”, laissez-faire regulation in 1997-2008 did more than anything to transform London into the “Wild West” of finance. US investment banks dramatically built up their presences in the UK capital in the period: they knew they could rely on the FSA to turn [...]
December 2nd, 2010 The Financial Services Authority this morning declared that, after a 17-month “investigation”, it has concluded that none of the RBS directors who led the bank to the biggest banking failure in history, costing the British taxpayer a total of £1.3 trillion to bail out, did anything wrong. In an article called The [...]
By Ian Fraser Published: Financial Times (FTfm) Date: June 21st, 2010 The ghost of a dead economist was haunting the Zermatt Summit, a new annual event on the subject of ‘humanizing globalization’ held earlier this month. Several speakers at the three-day conference, held in the picturesque Swiss alpine resort in the shadow of the Matterhorn, [...]