Tuesday, September 29, 2009

FT.com / Personal Finance - FSA gets tough on loan insurance industry

FT.com / Personal Finance - FSA gets tough on loan insurance industry: "“It is unacceptable that despite previous warnings about poor sales practices, backed by 22 enforcement cases and significant fines, the PPI sector still needs the FSA to intervene on this,” said Jon Pain, FSA managing director of retail markets."


Yes it is unacceptable Mr Pain, so why has it taken so long to see some action?

Tuesday, September 22, 2009

Weak sterling will deliver UK surplus - Telegraph

Weak sterling will deliver UK surplus - Telegraph

What the the regulator wants (below) doesn't appear to allow the people who manufacture things to obtain credit if needed so we wonder whether these people talk to each other. We doubt it.

Lord Turner keeps heat on bankers with further attack - Telegraph

Lord Turner keeps heat on bankers with further attack - Telegraph: "His comments come as regulators plan to limit the amount of profits banks can pay staff to ensure the money is used to replenish capital and help boost the flow of credit."

In the same paper (above) Goldman Sachs predict a surplus for the UK while the regulator squeezes money out of the credit market. How does that work?

Friday, September 18, 2009

Who is to blame for investors’ structured product losses? | Personal Investor | Citywire

Who is to blame for investors’ structured product losses? | Personal Investor | Citywire: "Meanwhile, as the FSA digs further into the detail of whom to blame, it has, thankfully, given the Financial Ombudsman Service the go-ahead to start investigating individual complaints."

Passing the buck once again, a vote winner? Not enough votes will be won to provide anyone with a better chance of winning the election. In fact there are enough people in the financial services sector to swing a vote either way, in the meantime they are, once again, simply the whipping boys and IFAs will be expected to pay for regulatory ineptitude.

The time will come when this shambles is seen by politicians for what it is, we give it 12 months.

Tuesday, September 15, 2009

There's no point naming and shaming the banks. They have no shame | Patrick Collinson | Money | guardian.co.uk

There's no point naming and shaming the banks. They have no shame | Patrick Collinson | Money | guardian.co.uk: "The thrust of consumer regulation in financial services over the past two years has been something called 'Treating Customers Fairly'. It's a worthy attempt to raise standards, but the reality is that it will probably turn into another box-ticking exercise that makes little substantive difference to the experience of customers (with the costs of this exercise passed on to, you guessed it, the customer).
What two decades of financial regulation – from Fimbra to Lautro to SIB and the much derided FSA – has taught us is that regulating the sales process, providing warnings and information to customers, and imposing fines where appropriate have not worked. The alternative, which the financial services industry has fought tooth and nail against for years, is direct product and price regulation."


Yes, regulation has failed, it will continue to do so if the regime isn't tweaked a bit.

Monday, September 14, 2009

Lehman collapse: Barack Obama unveils biggest regulatory overhaul 'since the Depression' - Telegraph

Lehman collapse: Barack Obama unveils biggest regulatory overhaul 'since the Depression' - Telegraph: "President Barack Obama has blamed “reckless behaviour and unchecked excess” at the heart of the financial system for causing the crisis that led to the implosion Lehman Brothers, alleging that too many bankers were “motivated only by the appetite for quick kills and bloated bonuses.”"

But what about Alan Greenspan of the Fed? What about Fannie Mae and all those lenders who were encouraged to lend to the people who could never repay the loans?

Everyone including (or particularly) the politicians and policy makers wre responisble for the mess we see around us. Blaming just one sector of financial services or society is simply passing the buck, those in power are good at covering their tracks.

FT.com / Comment / Opinion - Why a Lehman deal would not have saved us

FT.com / Comment / Opinion - Why a Lehman deal would not have saved us: "But there was a reason why no buyer could be found in this universe. Lehman was a firm in its death throes. It had lost $6.7bn in the space of six months. It had debts in excess of $600bn. Its assets were collapsing in value. Even when a deal with Barclays seemed within reach, the British Financial Services Authority vetoed it. Alistair Darling, the chancellor of the exchequer, made it clear: “We are not going to import your cancer.”"

FSA to take action against advisers over Lehman

More scapegoats for the regulators?

FSA strikes back on Lehman structured products - 14 September 2009

FSA strikes back on Lehman structured products - 14 September 2009: "If the client was misled as to the level of risk they were taking on, for example through the marketing literature of plans, they will potentially have some recourse.
However, some of the 6,000 clients will have invested with full knowledge of the risk they were accepting and here the adviser or the provider should not be held responsible for the client’s losses. But there is concern the FSA and Financial Ombudsman Service may not see things this way."

If someone was led to believe that there was no risk whatsoever it is arguable that they were misled. However, there is no such thing as a 100% guaranteed and risk free investment so any adviser worth his/her salt would not give such unfounded assurances, not even National savings is 100% safe. The problem lies with the FSA assuming all clients (not consumers) are in line for some compensation, is this a vote winner for politicians? Added to this is the unreasonable way the FOS automatically assumes guilt and then applies a fictitious deposit account which pays an impossible ammouint of interest when calculating redress.

Will the industry stand up to the politically influenced regulator?

Lehman Brothers - FSA to take action - Which? News

Lehman Brothers - FSA to take action - Which? News: "Dan Waters, retail policy director at the FSA, said: 'This is a hugely complex area and during our review we have looked at promotional literature, clarity of information, quality of advice, sales systems and controls, involving plan managers, providers and advisers.'"


FSA action over Lehman-backed structured products


So let me get this right the FSA is to retrospectively take action against those firms that sold Lehman-backed structured products.

Meanwhile the same FSA failed to regulate monitor or issue risk warnings about Lehman-backed structured products! Is the regulator the problem or the solution? Is this not like a drug agency failing to ensure the safety of Thalidomide before its launch, taking action against the pharmacists and doctors who dispensed the drug! My view would be that the Lehman-backed structured products should never have made it to the market and past the regulators – isn’t this what regulation should be all about?


Regards

SIMON MANSELL



This letter/e-mail is sent in Open Forum and any response may be held in open forum.

Friday, September 11, 2009

Gordon Brown issues posthumous apology to Bletchley Park codebreaker - Telegraph

Gordon Brown issues posthumous apology to Bletchley Park codebreaker - Telegraph: "“I am pleased to have the chance to say how deeply sorry I and we all are for happened to him. Alan and the many thousands of other gay men who were convicted as he was convicted, under homophobic laws, were treated terribly.”"

Yes, it is unforgivable to create such laws and inhumane to actually enforce them. Let us not forget current laws, the Financial Services and Markets Act 2000 is a prime example of attempting to subvert human rights and then allowing the people empowered by it to override existing statute (Limitation Act) because they are supposedly immune from prosecution even though they are part of a private company.

Sunday, September 6, 2009

George Osborne: FSA should veto excessive City bonuses - Telegraph

George Osborne: FSA should veto excessive City bonuses - Telegraph: "Mr Osborne said the Government and the FSA already have the powers to act.
'The Government and the regulator have a huge amount of leverage,' he said. 'We own half the banks and we are guaranteeing activities in the other half."

The politicians voted for the Financial Services and Markets Act, although it is rather late in the day, almost thirteen years late actually, they need to read it and work out what the FSA can and cannot do. It can bankrupt a one man band IFA firm but it can't do a thing about 'bonuses' no matter who earns them, justified or not, taxapayer funded or not.