The next Banking crash?

[Odds]

The stock market rallied by the end of yesterday so does that mean 'crisis' averted?
Perhaps the measures put in place after the 2008 crash worked.

 

[JohnD]

The stock market rallied by the end of yesterday so does that mean 'crisis' averted?
Perhaps the measures put in place after the 2008 crash worked.

Yes, they are effective, except in countries like the US where the banking lobby prevented regulators applying Basel II controls to "small" banks on the grounds that they would be a needless burden.

SVB was the 16th largest US bank, so not exactly "small"

When times are good, the freebooting buccaneers pocket the profits as private capitalists.

When trouble strikes they become Socialists. "We're all in this together."

Sunak and Hunt had been keen to relax banking regulation in UK but have recently been warned not to be so effing stupid.

 

[Odds]

When times are good, the freebooting buccaneers pocket the profits as private capitalists.

When trouble strikes they become Socialists. "We're all in this together."

Sunak and Hunt had been keen to relax banking regulation in UK but have recently been warned not to be so effing stupid.

It's that aspect of the financial markets that angers me: like reckless gamblers at a casino they throw it all on 23-black without a care, knowing full well the government will always give them more chips to keep on playing the game.

 

[JohnD]

Credit Suisse next?

European bank regulators appear to be following the Basel conventions better than American ones.

Bank of America is nursing large unrealised losses but no doubt will get a helping hand without the indignity of collapse.

 

[Vinty]

government invest in 'some of our most promising companies in the UK' directly

I think that is similar to the Chinese model.
It worked well for the Chinese.

 

[motorbiking]

The vast majority of tech start-ups fail. We already have a very robust and well funded process for funding pre-IPO and start ups. It can make huge amounts of money for those who can create a company and get it to the point where it has sufficient income to be acquired. The UK punches well above its weight in the 10/10 and 20/20 (20%+ growth / 20%+ margin) PE segment.

Unfortunately many companies are over valued and the leadership get obsessed with making their quick million is stock, rather than looking after their customers and developing their product. A bit of leaning out in this market will probably be healthy.

 

[JohnD]

"UBS is in discussions to take over all or part of Credit Suisse, with the boards of Switzerland’s two biggest lenders set to meet separately over the weekend to consider Europe’s most consequential banking combination since the financial crisis, according to multiple people briefed on the talks"

"The Swiss National Bank and regulator Finma are orchestrating the talks in an attempt to shore up confidence in the country’s banking sector, the people said. Their intervention comes days after the central bank was forced to provide an emergency SFr50bn ($54bn) credit line to Credit Suisse."
FT.com

Worse than I thought, but an orderly takeover rather than a collapse.

 

[JohnD]

"There is no guarantee a deal will be reached. Credit Suisse declined to comment. UBS declined to comment, as did the Bank of England and the Federal Reserve. The Swiss National Bank did not respond to requests for comment.

This is a developing story. More to follow . . ."

Ibid.

 

[Justin Passing]

There's a ripple of people withdrawing their money to put it with banks "too big to fail", causing panic and liquidity issues.
It may clobber a few small banks.
Even under Basel 2 iirc the reserve holding only has to be quite low - 8% isn't it? It's complex, and time has passed.

If you have more than £85k in any of the "Who?" banks I'd consider shifting some of it. If a UK bank crashes you should get up to that amount back - eventually, in most cases. I don't think it's been tested. Some BS are part of banks so the same 85k is used.
WHich is safe? Well, HSBC didn't have to call on reserves even in 2008.

 

[ellal]

Well, HSBC didn't have to call on reserves even in 2008.

Maybe because it was a "preferred financial institution" for Mexican and Colombian drug cartels amongst other dodgy 'investors'?

Or because of their "abusive mortgage practices" during the crash?

And that's all that's been proven so far, but billions in fines already!

 

[Justin Passing]

Irrelevance AND purulence from Ellal as always.

Like many banks they've had half-assed allegations, and some fines, but the point is they're resilient enough to still be around - and buy up another bank's debt for £1.

The problems around at the moment are blamed on inadequate application of regulations in some less than huge banks, exacerbated by an unusually sudden hike in rates. "Contagion" is nervousness through banking as a whole, possibly causing problems for some.

 

[IT Minion]

Irrelevance AND purulence from Ellal as always.

Like many banks they've had half-assed allegations, and some fines, but the point is they're resilient enough to still be around - and buy up another bank's debt for £1.

The problems around at the moment are blamed on inadequate application of regulations in some less than huge banks, exacerbated by an unusually sudden hike in rates. "Contagion" is nervousness through banking as a whole, possibly causing problems for some.

HSBC had serious and epic issues about a decade ago.

HSBC to pay $1.9bn in US money laundering penalties

HSBC is to pay US authorities record penalties of $1.9bn (£1.2bn) after failing to prevent money passing to "drug kingpins and rogue nations".

www.bbc.com

They were too big to prosecute.

 

[Ihavenojob]

Gold's doing OK.

 

[Odds]

Gold's doing OK.

Gold is always the safe harbour.
Is that why you're collecting coins?

 

[Ihavenojob]

Gold is always the safe harbour.
Is that why you're collecting coins?

Yes, but mostly silver at present. I will sell some soon, then wait for the dip and buy some more.