FSA Chief Gets Tough on the Square Mile

Hector Sants, the FSA chief executive has said that he is “determined to correct” the attitudes within the square mile that people were not afraid of the FSA.

 

Mr Sants, has warned that people in the square mile and the broader financial services industry should be frightened of FSA, indicating that the FSA will be introducing a more proactive and thorough approach to regulation of financial services. The new approach is likely to be more intrusive and direct.

 

Mr Sants, has indicated that compliance will move away from box ticking to a thorough approach to regulation that will involve a review of the outcomes of the actions that financial services firms take.

 

In a strong warning he mentioned that the FSA may use its wider powers of prosecution to deliver their mandate. In the current climate and with a government that needs to save face, and be seen to be doing something many financial services firms should begin to re-think how they approach compliance with the newer focus on accountability.

 

The additional checks and balances that have been pushed onto borrowers in terms of their personal finance by lenders, seem to be getting pushed on financial services firms by the FSA. This surely can be no bad thing in the long run for individuals and the economy as greater responsibility with ones personal finance, can only provide greater security for the individual and investors, lenders and financial services companies.

New interest rate cut savages savers

With the bank of England’s decision to cut interest rates to a record low, savers will be particulary hard hit with income from savings taking a huge hit in the last few months. With even ISA’s not looking very appealing to savers it is increasingly becoming more attractive for savers to move their money into low risk investments with higher yields. For those investors with a good understanding of the property market, and a good handle on their personal finance some great deals can be found in the buy to let market.

With asset prices reducing, some investors with cash to hand are moving their money from savings accounts to property. Some of our readers have informed us that great deals can be found giving an opportunistic investor great yields.

If you’re a saver and have a personal story to tell us about how you plan to beat the low interest rate get in touch   

How do you feel about insuring Lloyds banking groups riskiest asset?

The BBC has just reported that the tax payer is going to take an even bigger stake in the Lloyds banking group. The treasury hopes that by insuring up to 260 billion pounds to protect the banks riskiest assets. That this will help increase confidence in an already shattered banking system. When we are all being asked to tighten up our own personal finance, we are then seeing tax revenues being ploughed into

 

The government is still desperately trying to avoid having to Nationalize the banks as this will cause it further embarrassment. But as the BBC report there are some which say that a full nationalization of the banks will do more to restore confidence then the government’s asset protection scheme.

 

Let us know what you think about chancellor’s latest announcement?

Lloyds shares fall further

More bad news for the UK taxpayer emerged this morning as Lloyds Banking Group shares took a tumble of 20% on the back of it’s takeover of HBOS and the latest profit warning put out on Friday by the latter sending shockwaves through the market amid fears it may require further state capital or even worse need to be fully nationalised.

Unbelievably Lloyds appeared  surprised when it announced on Friday that HBOS would make a pretax loss  of  £10bn, in excess of  expectations due to a jump in losses on corporate loans at the tail end of last year. The news had the immediate effect of wiping a third off the value of shares in the bank on Friday and has continued to see further losses on the stockmarket this morning.

The Art and Science of Saving

For most of us, putting aside a fixed amount of perfectly good money each month is hard work, but the fact is you can save, even if it’s only a small amount.

No matter what your age, gender, race or professional status, you should think of saving as a fixed monthly expense, a regular part of your budget, just like your car or mortgage payments. As a rule, you should aim to save at least 5 to 10 per cent of your pay each month. Read more

Banks fail to pass on interest rate cuts

Further cuts to UK interest rates will not guarantee cheaper mortgages, brokers have warned. Last month a number of lenders cut their standard variable rates (SVRs), including Abbey, Coventry Building Society and Standard Life. But only one of them Standard Life mirrored the most recent half per cent base rate reduction.

Since UK interest rates were cut to 4.5 per cent in late September, half of all mortgage lenders have resisted passing on any of the reduction in their variable rates. Read more

Barclays banks profits drop

UK bank Barclays has seen annual profits drop to £7.08bn, including a net loss of nearly £1.6bn stemming from turbulence on the global credit markets.

Bank profits fell by 1.1% from £7.13bn a year earlier, but met market forecasts. Barclays’ shares have fallen 42% in the past year on uncertainty over its exposure to US sub-prime mortgages following the US housing slowdown. Read more

FSA will take tougher stance on inside dealing

Senior management in investment banks face a greater chance of being prosecuted for maintaining weak defences against insider dealing, even in the absence of specific instances of market abuse over the past year.

Last month it launched it first criminal prosecution, having previously relied on civil proceedings. Read more

Concerns over online banking checks

Security extras such as number fobs, card readers and password checks might make consumers more wary of net bank websites, they fear.

The warning comes as research shows how phishing gangs are targeting attempts to grab customer login details.

But the UK body overseeing net banking says figures show criminals are getting away with less from online accounts. Read more

City watchdog put ban on bank short-selling

A City watchdog earlier this week took drastic measures of banning the short-selling of financial stocks a move unprecedented in modern times.

The temporary ban was agreed ay a meeting at 11 Downing Street between Alistair Darling, chancellor, Mervyn King, Bank of England governor, Sir Callum McCarthy, outgoing Financial Services Authority chairman, and his successor, Lord Turner. Read more