Barclays caught fiddling!(All the banks now!)

[metalblue]

Re: Barclays caught fiddling!

Complete separation of investment banking form the high street operations, a member of the FSA sitting on every board to oversee the operation and ensure they run within the law and a real focus on the banks finally delivering a service that the public deserves, with fair charges and responsible lending.

Also a future where bad banks are allowed to go to the wall but given the size of the derivatives black hole, I doubt that we will ever be in a position to allow it.

Any fair minded person has no issue with the Diamonds of this world earning huge salaries when he performs and brings not only profit to the business, but also a fair and valued service to the general public and the banks as a whole need to wake up and realise that it just isn't happening any more for many.

I pretty much agree with that 100%. Sometimes politicians can do little to control events, such is the strength of public feeling. I have no doubt that Cameron and Osbourne have sensed this, and however uncomfortable it may be to them, expect to see some pretty swingeing changes to the way banking is structured in this country.

They have, after all, got the outcome of the next General Election to think about.

Northern Rock wasnt a "casino" bank but it was caught up in the crisis.

What we need is a lot of small banks.

Right now we have a virtual monopoly run by the big four.

Northern Rock issued long-term loans and tried to cover that lending in the short-term and keep rolling the short-term loans for duration of the long-term loans. The idea being that the money you make on the long-term loan (higher interest) is greater than what it costs you on the short-term loans for the same period, and if the Northern Rock traders think the short-term rate goes higher they would try and cover the remaining term of the long-term loan. They got caught because their ability to borrow short-term (let alone long-term) at a rate that fitted their business model disappeared so they started rapidly losing money and we all know what happened after that.

In summary; they took large risks for large rewards...perhaps you might be forgiven for thinking the so-called "casino" approach.

@blueinsa, sounds fair to me fella

 

[twinkletoes]

Re: Barclays caught fiddling!

I pretty much agree with that 100%. Sometimes politicians can do little to control events, such is the strength of public feeling. I have no doubt that Cameron and Osbourne have sensed this, and however uncomfortable it may be to them, expect to see some pretty swingeing changes to the way banking is structured in this country.

They have, after all, got the outcome of the next General Election to think about.

Northern Rock wasnt a "casino" bank but it was caught up in the crisis.

What we need is a lot of small banks.

Right now we have a virtual monopoly run by the big four.

Northern Rock issued long-term loans and tried to cover that lending in the short-term and keep rolling the short-term loans for duration of the long-term loans. The idea being that the money you make on the long-term loan (higher interest) is greater than what it costs you on the short-term loans for the same period, and if the Northern Rock traders think the short-term rate goes higher they would try and cover the remaining term of the long-term loan. They got caught because their ability to borrow short-term (let alone long-term) at a rate that fitted their business model disappeared so they started rapidly losing money and we all know what happened after that.

In summary; they took large risks for large rewards...perhaps you might be forgiven for thinking the so-called "casino" approach.

@blueinsa, sounds fair to me fella

So it was a ponzi scheme.

 

[metalblue]

Re: Barclays caught fiddling!

Barclays reporting the practice does not exonerate them. I want all the banks and individuals involved in this grand-fraud fined to the hilt and some serious jail-terms handed out. Not just for the Barclays lot - but all of the banks involved.

Does the general public not realise how much they have been swindled in the past 7 years or more?

We've payed too much for loans, mortgages and credit cards 'cos the 'free-market' was 'fixed'. Small businesses have been mis-sold useless and expensive financial products, some people have gone bankrupt, had their houses repossessed. Even worse, some people have taken their own lives, killed their loved ones 'cos they can't cope with modern life and the financial pressures it brings. The banks with their fraudulent practices have aided and abetted many tragedies. You may think I'm exaggerating but these bankers have blood on their hands. And I want the bastards to pay.

If you read what I said you'd have seen that I did not suggest they should be exonerated (indeed in previous posts I have suggest the exact opposite) I was merely countering the suggestion there is going to be some sort of "cover-up".

As for the bit underlined I really don't know where to begin - most (~98%) of retail mortgages in the UK use the BoE Base Rate rather than LIBOR, some commerical loans and "specalist" mortgages would peg to LIBOR and the amounts involved are not known yet and we need to remember the difference in the LIBOR rate smoothed over time (the manipulation was down as well as up) will be probably close to 0 although it is highly likely that some people will have been negatively impacted (and some positively) both directly and indirectly and they need compensation. The chances that the level of rate manipulation directly led to any tragedies I think would be remote as the rate variations involved are pretty small and if you can't afford say a 0.25% move in a loan interest rate then you've got much bigger financial problems and, subject to circumstances having changed, should look into being mis-sold your loan.

I haven't read your earlier posts on the thread MB, so I'm not accusing you of sticking up for the banks or anything, I've no beef with you. I've just popped on to vent my spleen. You obviously have some insight into the goings-on of interest rates, I don't.

I'm coming from the angle of an 'ordinary Joe' whose only dealings with large financial institutions is paying my wages in and spending it on mortgages, credit cards cards etc. I don't know how the rates are set. I appreciate that The Stock Exchange is a big casino and that billions are won and lost everyday and it's a different world to the one I inhabit.

My anger comes from the fact that the big banks 'fixed the game', the people involved were meant to be from rival companies, not hand-in-glove with each other. The game was bent. As Pauldominic pointed out "LIBOR was at the heart of the crisis in 2008". This brought on the recession, with all the sub-prime debt impacted massively across the globe. Millions of people lost their jobs and were unable to keep up payments on their homes. It's not about 0.25% interest rate moves. It's about a much wider impact where families had their bread-winners slung on the scrapheap and the repercussions of that pressure. I stand by my "bankers have blood on their hands" statement. The fall-out of the past 5 years is enormous and many have lost their lives - this cannot be proved, but some people are so fragile and have money as their sole reason for being. When it's taken away they are lost and on the edge. The marriage might break down, the family home lost... what next? suicide? kill the ex? kill the kids?
It's all happened.

100% agree with you on the bit I've underlined.

I respectfully disagree with PD that LIBOR was the cause of the crisis but more of a consequence of the crisis, although I certainly agree LIBOR was lower during the crisis than reality suggested it should have been but compared to the Fed Rate it looked positively accurate, now I expect PD is coming at it from a "it didn't raise the alarm bells as early as it should" and he has a point however I don't think the outcome would have been any different.

The connection between the financial crisis and what has happened since then cannot be dismissed and you make some fair points about the social consequences that are often overlooked by the media but I think it important to seperate what has occured at Barclays (et-al) and the financial crisis. I know people want "heads" but in reality justice is only justice when the right people are brought to account.

 

[BlueTaylor91]

Re: Barclays caught fiddling!

The shareholders don't seem to be bothered about the recent news! Keeps rising and rising

 

[twinkletoes]

Re: Barclays caught fiddling!

The shareholders don't seem to be bothered about the recent news! Keeps rising and rising

Probably insider info or a bit of hedging.

 

[Swales lives]

Re: Barclays caught fiddling!

If you read what I said you'd have seen that I did not suggest they should be exonerated (indeed in previous posts I have suggest the exact opposite) I was merely countering the suggestion there is going to be some sort of "cover-up".

As for the bit underlined I really don't know where to begin - most (~98%) of retail mortgages in the UK use the BoE Base Rate rather than LIBOR, some commerical loans and "specalist" mortgages would peg to LIBOR and the amounts involved are not known yet and we need to remember the difference in the LIBOR rate smoothed over time (the manipulation was down as well as up) will be probably close to 0 although it is highly likely that some people will have been negatively impacted (and some positively) both directly and indirectly and they need compensation. The chances that the level of rate manipulation directly led to any tragedies I think would be remote as the rate variations involved are pretty small and if you can't afford say a 0.25% move in a loan interest rate then you've got much bigger financial problems and, subject to circumstances having changed, should look into being mis-sold your loan.

I haven't read your earlier posts on the thread MB, so I'm not accusing you of sticking up for the banks or anything, I've no beef with you. I've just popped on to vent my spleen. You obviously have some insight into the goings-on of interest rates, I don't.

I'm coming from the angle of an 'ordinary Joe' whose only dealings with large financial institutions is paying my wages in and spending it on mortgages, credit cards cards etc. I don't know how the rates are set. I appreciate that The Stock Exchange is a big casino and that billions are won and lost everyday and it's a different world to the one I inhabit.

My anger comes from the fact that the big banks 'fixed the game', the people involved were meant to be from rival companies, not hand-in-glove with each other. The game was bent. As Pauldominic pointed out "LIBOR was at the heart of the crisis in 2008". This brought on the recession, with all the sub-prime debt impacted massively across the globe. Millions of people lost their jobs and were unable to keep up payments on their homes. It's not about 0.25% interest rate moves. It's about a much wider impact where families had their bread-winners slung on the scrapheap and the repercussions of that pressure. I stand by my "bankers have blood on their hands" statement. The fall-out of the past 5 years is enormous and many have lost their lives - this cannot be proved, but some people are so fragile and have money as their sole reason for being. When it's taken away they are lost and on the edge. The marriage might break down, the family home lost... what next? suicide? kill the ex? kill the kids?
It's all happened.

100% agree with you on the bit I've underlined.

I respectfully disagree with PD that LIBOR was the cause of the crisis but more of a consequence of the crisis, although I certainly agree LIBOR was lower during the crisis than reality suggested it should have been but compared to the Fed Rate it looked positively accurate, now I expect PD is coming at it from a "it didn't raise the alarm bells as early as it should" and he has a point however I don't think the outcome would have been any different.

The connection between the financial crisis and what has happened since then cannot be dismissed and you make some fair points about the social consequences that are often overlooked by the media but I think it important to seperate what has occured at Barclays (et-al) and the financial crisis. I know people want "heads" but in reality justice is only justice when the right people are brought to account.

Fair enough and your last line is right. I want justice too. Not revenge, justice. I think I'll have a very long wait though.

Just heard on radio that Bob Diamond getting a £20-£30Million pay-off.
The mind boggles.

 

[twinkletoes]

Re: Barclays caught fiddling!

I haven't read your earlier posts on the thread MB, so I'm not accusing you of sticking up for the banks or anything, I've no beef with you. I've just popped on to vent my spleen. You obviously have some insight into the goings-on of interest rates, I don't.

I'm coming from the angle of an 'ordinary Joe' whose only dealings with large financial institutions is paying my wages in and spending it on mortgages, credit cards cards etc. I don't know how the rates are set. I appreciate that The Stock Exchange is a big casino and that billions are won and lost everyday and it's a different world to the one I inhabit.

My anger comes from the fact that the big banks 'fixed the game', the people involved were meant to be from rival companies, not hand-in-glove with each other. The game was bent. As Pauldominic pointed out "LIBOR was at the heart of the crisis in 2008". This brought on the recession, with all the sub-prime debt impacted massively across the globe. Millions of people lost their jobs and were unable to keep up payments on their homes. It's not about 0.25% interest rate moves. It's about a much wider impact where families had their bread-winners slung on the scrapheap and the repercussions of that pressure. I stand by my "bankers have blood on their hands" statement. The fall-out of the past 5 years is enormous and many have lost their lives - this cannot be proved, but some people are so fragile and have money as their sole reason for being. When it's taken away they are lost and on the edge. The marriage might break down, the family home lost... what next? suicide? kill the ex? kill the kids?
It's all happened.

100% agree with you on the bit I've underlined.

I respectfully disagree with PD that LIBOR was the cause of the crisis but more of a consequence of the crisis, although I certainly agree LIBOR was lower during the crisis than reality suggested it should have been but compared to the Fed Rate it looked positively accurate, now I expect PD is coming at it from a "it didn't raise the alarm bells as early as it should" and he has a point however I don't think the outcome would have been any different.

The connection between the financial crisis and what has happened since then cannot be dismissed and you make some fair points about the social consequences that are often overlooked by the media but I think it important to seperate what has occured at Barclays (et-al) and the financial crisis. I know people want "heads" but in reality justice is only justice when the right people are brought to account.

Fair enough and your last line is right. I want justice too. Not revenge, justice. I think I'll have a very long wait though.

Just heard on radio that Bob Diamond getting a £20-£30Million pay-off.
The mind boggles.

Hush money.

 

[metalblue]

Re: Barclays caught fiddling!

Northern Rock wasnt a "casino" bank but it was caught up in the crisis.

What we need is a lot of small banks.

Right now we have a virtual monopoly run by the big four.

Northern Rock issued long-term loans and tried to cover that lending in the short-term and keep rolling the short-term loans for duration of the long-term loans. The idea being that the money you make on the long-term loan (higher interest) is greater than what it costs you on the short-term loans for the same period, and if the Northern Rock traders think the short-term rate goes higher they would try and cover the remaining term of the long-term loan. They got caught because their ability to borrow short-term (let alone long-term) at a rate that fitted their business model disappeared so they started rapidly losing money and we all know what happened after that.

In summary; they took large risks for large rewards...perhaps you might be forgiven for thinking the so-called "casino" approach.

@blueinsa, sounds fair to me fella

So it was a ponzi scheme.

No that's something very different

 

[twinkletoes]

Re: Barclays caught fiddling!

Northern Rock issued long-term loans and tried to cover that lending in the short-term and keep rolling the short-term loans for duration of the long-term loans. The idea being that the money you make on the long-term loan (higher interest) is greater than what it costs you on the short-term loans for the same period, and if the Northern Rock traders think the short-term rate goes higher they would try and cover the remaining term of the long-term loan. They got caught because their ability to borrow short-term (let alone long-term) at a rate that fitted their business model disappeared so they started rapidly losing money and we all know what happened after that.

In summary; they took large risks for large rewards...perhaps you might be forgiven for thinking the so-called "casino" approach.

@blueinsa, sounds fair to me fella

So it was a ponzi scheme.

No that's something very different

I have to disagree with you there.

 

[metalblue]

Re: Barclays caught fiddling!

So it was a ponzi scheme.

No that's something very different

I have to disagree with you there.

It was neither fraudulent nor did it pay investors from the investment of others creating the illusion of "performance". It was a business model that was reliant on it's need to have constent access to the money markets - something we now see as a fundemental flaw but at the time? meh, it seemed reasonable.