Northern Rock will increase rates on selected residential Fixed and Tracker products by up to 0.20% with effect from Friday 27 November.

2 Year Fixed rates now available from:
3.89% up to 70% LTV with a £595 Product Fee for purchase customers
or a £995 Product Fee and incentives of free basic valuation fees and free standard legal costs for Remortgage customers.

2 Year Tracker rates now available from:

2.79% (BOE + 2.29%) up to 70% LTV with a £595 Product Fee for purchase customers

or a £995 Product Fee and free basic valuation fees and free standard legal costs for Remortgage customers.

2 Year Fixed rate Intermediary Exclusive withdrawn.

End dates extended to 1 March.

Please call us on 08456 800898 or 01245 398466 for further details of the Northern Rock Mortgage Range

A queue for risk

The Treasury plan to remove the 100% guarantee on Northern Rock is a reminder of the enduring impact of poor risk management in banking.

But risk is the flip side of opportunity. If we wanted to avoid all risks, no ship would ever leave port. So organisations have to manage risk.

But the traditional approach – identify risks, assess likelihood, evaluate impact, identify actions – often neglects wider people and strategic issues.

Here are some of the problems and solutions I’ve come up with when reviewing risk management procedures and projects in the public and private sector:

• A new organisation had a good list of necessary actions to manage risk. But it was not being implemented. I turned it into a project with monthly reports to the Board.
• Staff were too frightened, of being shot as the messenger, to report risks truthfully. This is common. I have tried telling the CEO directly, creating a forum for staff to do so without blame and when time permits, have changed the underlying culture.
• The Board couldn’t get a grip on the transformation programme because they were swamped with long reports. I wrote an eight page summary, with two internal staff , concentrating on the key elements - a programme initiation document.
• The team in a caseworking organisation hadn’t  considered the impact on reputation of several risks materialising at once. Together, we developed a way of managing legacy cases that mitigated this danger.

When I’m delivering projects, I aim to manage by pulse beats, not by post mortems. This means keeping a finger on the pulse, being alert to warning antennae and acting before issues become problem, rather than trying to work out why the patient has died.

As Rosabeth Moss Kanter, a professor at Harvard Business School said, “The challenge is to learn to dance on a shifting carpet, rather than seeing the carpet pulled out from underneath.”

Captain Chesley Sullenberger, the pilot who successfully crash landed on the Hudson River after colliding with a flock of geese, is a good example. The captain saved 155 passengers lives by being prepared (he had studied past water landings), and confident enough to make the snap decision to land on water. And to write a book about it.

Picture by Dominic

by Clive Booth, for Public Affairs and Media Relations Blog, November 6, 2009.

From 1986 to 2000, the UK saw the demutualisation of 10 of its building societies. Today, every one of these new banks has been taken over by larger banks or have been nationalised. After the apparent failure of the demutualisation experiment, now could be the time to reconsider the role of Mutuals in the UK’s financial sector.

A new consideration of Mutuals has become especially pertinent in light of the recent global economic conditions, which were caused in part by the overly risky behaviour of commercial banks. Indeed, the aggressive lending policy pursued by a demutualised Northern Rock directly contributed its exposure to the sub-prime crisis and downfall.

There were reasons, of course, for the demutualisations in the first place – namely the problems building societies had with competing with the larger commercial banks that were able to access almost unlimited finance…(continue reading)

Gefunden bei sueddeutsche.de:

Großbritannien

Darlings neue Bankenwelt

03.11.2009, 17:35

Von Andreas Oldag, London

Schrumpfkur für Lloyds und die Royal Bank of Scotland: Die Institute werden drastisch zurechtgestutzt – zugleich kündigt die britische Regierung weitere Hilfen an.

Der britische Finanzminister Alistair Darling hat einen ehrgeizigen Plan zur Neuordnung des Bankenmarktes verkündet. Die teilverstaatlichten Großbanken Royal Bank of Scotland (RBS) und Lloyds Banking Group müssen in den nächsten zwei bis drei Jahren erhebliche Teile ihres Geschäfts verkaufen. Zugleich will Darling 30 Milliarden Pfund (33 Milliarden Euro) an weiteren Hilfen bereitstellen.

Als Gegenleistung haben die Institute zugesagt, Bonusleistungen für Manager künftig stärker zu begrenzen. “Wenn wir das alles nicht machen, würde das System in sich zusammenbrechen. Dann hätten wir das totale Chaos”, warnte der Labour-Politiker in London. Premierminister Gordon Brown äußerte sich optimistisch, dass die öffentlichen Gelder zugunsten der Banken langfristig in den Staatshaushalt zurückfließen. Am Ende würden “die Banken dem Steuerzahler mehr überweisen als umgekehrt”, meinte der Premier.

Indes hat sich auch Bundesbank-Präsident Axel Weber in die Debatte um die Neuordnung der europäischen Bankenbranche eingemischt. Er warnte davor, Banken und Finanzmärkte mit einer zu raschen Einführung höherer Eigenkapitalanforderungen unter Druck zu setzen. “Die Stärkung der Eigenkapitalbasis der Banken ist sicherlich die wichtigste, aber zugleich auch die schwierigste Aufgabe auf der regulatorischen Reformagenda”, erklärte Weber in Luxemburg.

Verkauf von Geschäftsbereichen

Infolge der öffentlichen britischen Hilfen erhöht sich der Staatsanteil an RBS von derzeit gut 70 auf 84 Prozent. Der Finanzkonzern mit Hauptsitz im schottischen Edinburgh nimmt weiterhin an einem staatlichen Programm zur Absicherung fauler Wertpapiere teil. Insgesamt soll die Bank weitere Hilfsgelder in Höhe von 25,5 Milliarden Pfund erhalten. Lloyds scheidet dagegen aus dem Programm aus. Die Bank plant eine Kapitalerhöhung von 13,5 Milliarden Pfund.

Davon übernimmt der Staat 5,7 Milliarden Pfund. Der Staatsanteil beläuft sich bei Lloyds derzeit auf 43 Prozent. “Die Gruppe hat in den vergangenen Monaten eine starke Leistung gezeigt”, erklärte Lloyds-Chef Eric Daniels. Lloyds hatte sich allerdings in der Finanzkrise mit der von der Labour-Regierung unterstützten Übernahme des Konkurrenten HBOS verkalkuliert. RBS und Lloyds sollen sich nun von erheblichen Bereichen ihres Geschäfts trennen.

Dabei geht es vor allem um bis zu 900 Filialen. RBS soll sich sowohl vom Versicherungsgeschäft als auch von Teilen des Rohstoffhandels trennen. Angeblich könnte sich hierfür auch der deutsche Allianz-Konzern interessieren, hieß es Londoner Branchenkreisen. In Deutschland will RBS auf jeden Fall weiterhin tätig bleiben.

Nach wie vor gilt RBS als größter Problemfall in der britischen Bankenbranche. Unter dem früheren Chef Fred Goodwin hatte sich das Institut bei der Übernahme des niederländischen Konkurrenten ABN Amro verhoben. Nach Meinung von Branchenkennern stand RBS im vergangenen Jahr vor der Pleite. Goodwin wollte RBS zu einem der global führenden Finanzkonzerne ausbauen.

Käufer gesucht

Als Sonderfall gilt dagegen der bereits zu 100 Prozent verstaatlichte Baufinanzierer Northern Rock. Das Institut hat zwar nicht die Größe, um den gesamten Bankenmarkt in den Abgrund zu reißen. Doch es ist für Labour aus politischen Gründen wichtig, weil viele Kleinsparer ihr Geld bei Northern Rock angelegt haben. Das Institut soll jetzt ebenfalls aufgespalten werden. Mit seinen Plänen reagiert London auf den Druck der EU-Kommission. Die Brüsseler Wettbewerbshüter haben Bedenken wegen der zu großen Marktmacht von Lloyds und RBS.

Für die Labour-Regierung geht es jetzt darum, Kaufinteressenten für die abgespaltenen Geschäftsbereiche zu finden. Dem Vernehmen nach haben die Supermarktkette Tesco und die Virgin-Gruppe des Unternehmers Richard Branson Interesse. Sie könnten sich dann etwa zehn Prozent zusätzlich am Privatkunden-Geschäft auf der Insel sichern. Ins Spiel könnten jedoch auch große Kapitalbeteiligungsgesellschaften aus den USA wie beispielsweise Blackstone kommen. “Wir schaffen mehr Wettbewerb im Banksektor und sorgen dafür, dass unsere Banken auf solidem Fundament stehen”, erklärte Premierminister Brown.

Gewerkschaften fürchten indes, dass durch die Zerschlagung der beiden Banken 25 000 Arbeitsplätze auf dem Spiel stehen. Die Opposition im Unterhaus kritisierte, die neuen Hilfen seien noch größer als die des Vorjahres. Es gebe aber immer noch keine Garantie, dass die Kreditvergabe wieder fließt.

(SZ vom 04.11.2009/tob)

This week, EU competition commissioner Neelie Kroes has set in motion profound changes to the UK banking system. As a result of her decree, the big boys – Lloyds Banking Group and RBS – which have been in receipt of so much of our money will be broken up. For much the same reason, the more specialised Northern Rock is being split into a “good” and “bad” bank, with the good part being speedily returned to the private sector.

The net result will be transformation of our high street banks. Three new banks will come on the scene, accounting for about 15% of the market, and they will not be owned by any of the Big Five that currently dominate our system.

That means more competition. But there are other reasons for predicting a better deal for consumers – and better career opportunities for marketers – over the next five years. Shorn of the cartel power that goes with being a part of a global bancassurance operation, retail banks will have to fight harder for their funds. And there’s only one place they’re going to be getting them: from you and me. That means more customer focus, and more scope for marketing ingenuity.

More in my column this week.

by Thinking Made Easy, Ocotber 30, 2009.

Research aims to demonstrate limitations of that assumption, propose alternative conceptual framework suitable to research analysis. Arguing that banks are distinguished by complex structure of information asymmetry arising from presence of regulation by showing how regulation limits power of markets to discipline the bank, owners, managers thus argue that regulation must be seen as external force, which alter parameters of risks and governance in banks. Research will be analyzing effective Risk Management in conjunction with effective Corporate Governance in the Banking industry.

Notably, the new term ‘Enterprise Risk Management (ERM) is popular way of describing the application of risk management throughout banks and or financial institutions rather than only in selected business areas or disciplines. However, in the banking industry, ERM is still handled at the functional level. Research interest then is on how Risk Management can be shifted from the FUNCTIONAL to the ORGANISATIONAL (Board) level. Primary and secondary research is needed to provide insights as to why some organizations are responding to changing risk profiles by embracing ERM and others are not…(continue reading)

So Northern Rock is to be split into two, and receive another £8 billion of taxpayers money. Not my area of expertise, but it seems to me that this is good news for the region..

The Journal seem to think that guarantees will be made so that the ‘good bank’ stays in Newcastle, and have a quote from Deputy Regional Minister Roberta Blackman Woods hinting in that direction. The fact that Tesco are creating 1000 jobs here makes them the favourite to purchase the new ‘good bank’. Either way this looks like being brilliant news for the Tyneside economy.

But will it become a mutual, like the sensible and secure old Northern Rock Building Society before Adam Applegarth was let loose in the asylum.  I love mutuals and co-ops, but it’s difficult to see how this can be done. The tax-payer owns the new ‘good’ bank and can’t give it away for free, certainly not with the current public spending projections. The depositors are going to have to buy it from us. But how are they going to find the billions of pounds that Tesco or Virgin are willing to pay? I guess they could borrow against future profits, but that seems too difficult. A mutual Northern Rock sounds like a pipe-dream I’m afraid.

As someone that believes that we should mutualise the whole economy (and the state for that matter) I obviously welcome the news that the UK government is under some pressure to mutualise Northern Rock. No doubt it has something to do with this campaign from the Co-Operative Party.

It almost certainly won’t happen. Britain is in dire financial straits at the moment and the vaunted £11bn sale price would make a huge difference to the government coffers. I’m curious though to know whether the government necessarily has to forgo all of the £11bn if it does choose to mutualise the Rock. Mutualising something does not necessarily mean you have to give it away. I’ll defer to someone with better knowledge of the mutualisation process but surely the government could just sell the assets or the whole company into a specially created, limited by guarantee company. The value of the business would then sit as a debt to the government to be repaid as and when both parties saw fit.

The value of Northern Rock as a mutual would be significantly lower than as a profit-making, shareholder-owned company. Valuing mutuals is a tricky business at least from a traditional financial viewpoint. Generally the value of a company is determined by the sum of its expected future cashflows. Mutuals never return money to shareholders (although they might make limited distributions to members). Furthermore they generally do not pursue profit at least not as a primary goal; a very successful mutual could in theory make absolutely no money. (In practice mutuals need to target some kind of profit in order to insure against downturns in business or unforeseen events. That said mutuals are far less risky than shareholder owned companies: they are run for the long term; they do not have to answer to get-rich-quick short term investors; they typically only operate in industries with established, persistent, non-cyclical customer demand; they can rely on a core of customers who don’t just like the products but actually believe in the process that delivers them.) The only remaining way to value a mutual would be on its net asset or break-up value. I daren’t look at Northern Rock’s accounts but with almost £25bn owed to the government already as a result of the bailout I suspect that the net assets (if there are any at all) are looking decidedly pitiful. (I did just have a look: net assets of £800k as at 30 June 2009; a little bit less than £11bn). The government could effectively set its own valuation but it would have to be reasonable. The repayment terms of any loan would have to allow the newly formed mutual to offer a competitive product in the marketplace. As a customer looking for banking products why would I choose to go with a bank owing huge amounts to the government

In a slightly paradoxical aside I also just found out that the former non-executive Chairman of Northern Rock, who oversaw the executive board as it spun the roulette wheel, was popular science writer Matt Ridley, the author of the Origins of Virtue, a book about social cooperation, morality and altruism. No doubt if Northern Rock had hit the jackpot he would have  lobbied the board vociferously to donate the ensuing profits to charity.

Today the European Union has agreed that Northern Rock can be split into 2 banks, relieving pressure on the tax payer.

Reports say that the bank will be split into a ‘good bank’ and a ‘bad bank’. The bad bank will be the one that repays the tax payer for bailing it out, and the good bank will probably be put up for sale/re-floated onto the stock exchange once again.

Charming! What does this mean for us? Well, if you have a mortgage with what will be the bad bank, then you’ll know about it as it will stay under government control. Does this mean that your business isn’t good enough for a bank being sold?

The likes of Lloyds and RBS are also believed to be thinking along the same lines. This would mean that Cheltenham and Gloucester would possibly be ’spun off’ as they say. RBS are also be lined up to do the same with some of its smaller brands.

Not by itself, no.  But Web 2.0, in particular the data-mashups on the comparison websites, the blogosphere and the consumer discussion boards, made the banking crisis broader and deeper than it would otherwise have been.  Or so I have just concluded, though I’ve not heard anyone else saying this.

‘How so?’ you ask.

Every now and again you come across a piece of research so startling that you have to get up at 6 in the morning and blog about it.  OK, I appreciate it is slightly odd to be reading a Deutsche Bank Research paper in bed at 05:45 am but I find I study best in the mornings, ok?

So here it is.

In 3 years the percentage of people who shopped around for financial products went up from 15% to 55%.

Consumer Empowerment 2002-2005

This is good, yes?  We get better value for money and it’s an end to the miss-selling scandals of the 1980s and 1990s.  The consumer wins and Martin Lewis rules, right?

Right?

Ri-ight.  And I certainly do use comparison web-sites to shop around for financial services and utilities. But…

But presumably if you flip this around it means that during the middle three years of this decade the banks found they could no longer rely on inertia to sell 85% of their products for them.  And that, my chickadees, is an astonishing upheaval.  And I believe that the graph above  goes a long way towards telling us why the credit crunch (the consequences of which will outlast the lifespan of my pension) was so deep and so disturbingly global.

You see, this swing in consumer habits is astonishing. It is a tectonic shift in the financial services industry in its own right.  It’s huge.  And it tells us a lot about the pressures that the retail banks were under during the period leading up to the crisis last  year to create comparison-site winners.  No bloody wonder that when Northern Rock created that pernicous 125% mortgage the Coventry and HBOS followed suit.  They had to, or lose business.  And no wonder that a niche and specialist product – the self certified mortgage – ended up comprising almost half the mortgage market. The market over-heated when information became friction-free, the regulators didn’t stop the bankers and the bankers couldn’t stop themselves.

I won’t say that Martin Lewis made them do it, but I will say that bad business drives out good.  Putting it simply, the banks cut margins to the point where they couldn’t afford the products they sold us.   The chart above just puts numbers on the pressures they were under: in 2002 a bank or insurance company could, it seems, rely on 85% of its customers not to shop around for the best deal.  So it was relatively easy for it to sell us sustainable products that were not artificially competitive. And, yes, it could also miss-sell us inappropriate products; the force has a light side and a dark side after all.  But in three short years, by 2005, it seems that only 45% of it’s customers would buy the first product they’re offered.  As I said, I would love to know what that figure is now.

For a while, this unsustainable business put artificial pressure on the sustainable businesses. Look at the period from 2003 to 2006 in the chart below.  HBOS’s lending products were super-competitive, it was increasingly successful, and it left Lloyds TSB standing. But as we can see, early in 2007 the chickens tumbled home to roost.

LLoyds vs HBOS share movements 2002-2009

(Unfortunately the Telegraph’s excellent free charting service does not let me plot a specific stock against its sector but HBOS tracked the sector and Lloyds didn’t).

And Iceland? Could Iceland’s banks have grown their foreign business in the way that’s charted below without individuals and organisations overseas shopping around on-line?

Growth of Icelandic Financial Services 2001-2008

I don’t know the answer to that question. It could be co-incidence; I have to admit that the paper I got the chart from argues against interventionism, but I needed to reference Iceland again to justify a cheap headline.  However, the chart above indicates that Iceland’s foreign assets and liabilities appear to have gone up six- or eight-fold between 2002 and 2005, and it seems implausible to me that Iceland could have got so much consumer business in that time without consumers responding to online reviews and advertising.

So – is this yet another case of my only love springing from my only hate?

Web 2.0 is immensely liberating.  It is amazing that we have so much access to so much competitive information.  It is great for us as individuals that we can protect ourselves from being ripped off by banks and utilities.  But there’s no two ways about it – Web 2.0 changed consumers’ financial services buying patterns in a way that amplified the competitive pressures on the retail banks, and that is the untold story of the credit crunch.

As my grandmother used to warn me: too much ice-cream is bad for you.

Philip Bagus and David Howden (2009)
Iceland’s Banking Crisis: The Meltdown of an Interventionist Financial System

Stefan Heng, Thomas Meyer, Antje Stobbe (2007)
Implications of Web 2.0 for Financial Institutions: Be a Driver, Not a Passenger

LONDON (AFP) –

The European Commission is expected to approve plans to break up and sell nationalised British bank Northern Rock in the wake of the financial crisis, reports said Wednesday.

State rescued Royal Bank of Scotland and Lloyds Banking Group will also be partially sold off in coming years in British government-backed plans to create more competition in the market, according to the Independent.

“We are keen to see greater competition in the banking sector as soon as possible,” an unnamed British government source was quoted by the paper as saying.

The three British banks received huge government bailouts at the height of the global economic crisis. Authorities are concerned about state-backed banks having a stranglehold on the market.

EU Competition Commissioner Neelie Kroes is set to approve the split of Northern Rock into a “good” profitable section with n…

See the full post at EU to back split of UK\’s Northern Rock: reports

The debate as to what to do to try to prevent a repeat of what I like to term the Great Crunch absolutely amazes me. There is virtually no analysis of what actually happened; instead the debate is dominated, it seems, by pre-existing prejudices. The whole financial crisis was caused by a cascade of bankruptcies, starting with so-called sub-prime lenders in the US and ending with Lehman’s failure, after which the authorities finally took decisive action.

Let’s start first with the least of the culprits. I worked myself into a bit of a lather late yesterday after reading a column by Vince Cable in the Times – see my comment there at 10:23pm on 20/10/09.

Why oh why do we persist in trying to devise policies to save people from themselves? Drugs? Ban them! Totally ineffective, in fact counterproductive, in fact worse than counterproductive in that the policy creates worse problems than those it doesn’t solve.

What we should be doing, in general, is equipping people to save themselves from themselves.

Tightening regulation of lending, it seems to me, is part of a paternalistic infantilising trend in our doomed Western societies that has been repeatedly shown to fail. It’s the wrong design principle, as was pointed out – to make a leftfield connection – in a thoughtful letter from Merrelyn Emery in last week’s New Scientist. Merrelyn notes “[t]he unstable nature of DP1 [hierarchical] systems” in comparison to “DP2″ type systems “in which adaptation depends on regulatory systems built into the operational parts of the system itself”. Quite so.

Back to Vince in the Times. Vince, it seems, very much approves of the regulatory proposals announced yesterday by the FSA’s Hector Sants. If there is a shred of understanding in my grasp of recent history, the FSA, of course, has shown itself to be entirely incompetent in enforcing the regulations it already imposes, so one has to imagine that tighter checks on mortgage borrowers will also be ineffectual.

The whole proposition makes absolutely no sense. It rests on no sound analysis. Here’s a more subtle way in which it will fail. Mortgage defaults in the UK are an inevitable result of this or any other recession. They arise because mortgages are a 25 year commitment, a long-term loan, whereas income is paid on a short-term basis. Mortgagees are no different to banks which lend long-term and borrow short-term. Proving your income at the time you take out a mortgage has minimal bearing on your ability to pay the mortgage over the long-term. As the economy now comes out of recession the housing market will pick up. Happy days will be here again, and the buyers will be once more out in force. Inevitably a proportion of them will lose their jobs in the next recession.

In actual fact, banks diversify their risk when they offer mortgages to those with sources of income other than regular employment. We know that employees will be made redundant in the next recession. Many some of those with other forms of income may well continue to be able to pay their debts.

If we’re to put the onus on banks the problem never ends: next we’ll be asking banks to evaluate the security of mortgagees’ employment. Then we’ll be requiring them to ensure mortgagees have access to funds to pay the mortgage if they lose their job and so on…

Hey why not take the same approach in other areas of life? Why not, for example, mandate bar staff to ensure customers can actually afford to buy the booze they want? Oh, sorry, our paternalistic policy for drink is to put the price up. That’s odd, because in earlier eras the problem with heavy drinkers was not so much that they destroyed their health or caused a nuisance in the town centre. Rather it was that they destroyed the family finances.

No, no no! What’s needed is tough love. People need to take responsibility for their own finances. What sort of policies would this imply?

Well, first, it might be an idea to tell people that the economy experiences ups and downs. Companies fail. Even in the public sector people can be laid off. So those planning to take on a mortgage need to judge what would happen if their personal circumstances changed. Do they have sufficient savings to tide themselves over? Could a couple pay a mortgage on one salary?

Second, we need to look at the balance between greed and fear in the housing market. When the market is rising people pile in. And I don’t blame them. This time round we’ve sent the message that there’s not much to be afraid of. The dominant narrative consumed and constructed by those who drove house prices to unsustainable levels is characterised by indignation against the banks rather than by remorse, by scapegoating rather than by learning. And there’s more: many have been saved by low Standard Variable Rates (SVRs). There’ve been few stories of borrowers being pursued for their debts. Compared to the 1990s we now have Individual Voluntary Agreements (IVAs) and one year rather than 3 year bankruptcy arrangements. As I pointed out a couple of weeks ago, we’re even allowing people to take banks to court over perfectly clear mortgage terms.

In actual fact, as the ultimate inditement of complete regulatory incompetence, I can’t help observing that right now I’m sure I’m not alone in having just taken on board the lesson that I should have run with the herd and taken on a mortgage when I had the chance! Regardless of house prices.

My recommendations are completely opposed to current mainstream thinking. But perhaps that’s because I’m looking at what actually happened. The whole financial crisis was caused by a cascade of bankruptcies, starting with so-called sub-prime lenders in the US. Why Northern Rock was left floundering when it was, and ultimately nationalised is still completely beyond me, but A&L, B&B and HBoS failed to a greater or lesser extent because of fears about defaults in the UK housing market. NR would presumably have been in trouble later on had the odious Mervyn King not decided to “make an example” of its reliance on money-market funding. The cascade continued as even the soundest banks were stressed by a secondary source of losses: the recession arising from the original financial crisis.

So to snuff out the next one, why don’t we start at the beginning of the cascade by increasing the value of these dodgy mortgage debts?

Here’s my recommendation: treat debts from bankruptcy in a similar way to the UK’s student loans. That is, attempt to collect them directly through a levy on income (above a subsistence threshold) until they are repaid or for life and beyond. In effect, a bankrupt would pay higher levels of tax in the future. (I should add, that the level of interest would be low on bankruptcy debts, because the might of the state is to be employed to collect them). On death, any estate would first be used to pay off bankruptcy debts. The whole concept of bankruptcy needs to be rethought. We need to consider the general interest. At the moment, every time someone goes bankrupt, others must pay, increasing the risk that they too will get into financial difficulty. Why on Earth do we retain the archaic notion that bankruptcy can be “discharged”?

The effect on the bankruptcy cascade would be to increase the value of debts. Those sub-prime mortgage-backed securities (MBSs) would have been worth more than they were when the housing bubble burst.

That’s the stick. But we don’t want to be using it all the time. We also need policies so that the risk of bankruptcy is minimised:
- we need stable house prices;
- we need to hold house prices at the low end at an affordable level for those on the lowest incomes: in short, we need to raise the minimum wage and keep it in line with house prices.

Análisis del Rescate Financiero del corazón del Sistema Financiero Mundial

Por Dr. Juan Chamero, Universidad Caece

En su artículo editorial Timeline: Credit crunch to downturn, Cronograma de la Desaparición Estrepitosa del Crédito Bancario, del 7 de Agosto del año 2009, la BBC de Londres analiza en profundidad la historia completa …….

Hace dos años, comienza diciendo al artículo, poca gente conocía el término “credit crunch” un neologismo que ya se ha incorporado en casi todos los idiomas por “severa escasez – corte- de dinero o crédito”. Todo habría comenzado el 9 de Agosto del año 2007 cuando malas noticias provenientes del Banco BNP Paribas de Francia dispararon la suba de los costos del crédito. No obstante las raíces del fenómeno comenzaron bastante antes.

El artículo procede luego amostrar en detalle un cronograma de la crisis a partir del año 2004. No vamos a entrar con mayor detalle en el análisis de las causas de ésta crisis pues ya lo hemos hecho en otras entradas de éste Blog. Lo que sí presentamos traducido es la infografía seriada que explica con claridad en 10pasos el proceso de “Ayuda” o “Rescate” o “Salvataje” del corazón del Sistema Financiero Mundial.

Diapositiva 1

La mayor parte de los analistas relacionan la actual crisis financiera mundial, de la que algunos pocos países dicen estar saliendo, a las hipotecas “sub prime”, mediante las cuales los bancos de Estados Unidos otorgaron préstamos de alto riesgo a gente de pobres historias crediticias. Estos préstamos y otros vienen empaquetados en “porfolios”, fondos o carteras denominados CDOs, por Obligaciones Colateralizadas, las que a su vez fueron vendidas globalmente

deuda tóxica 1

 Diapositiva 2

La caída de precios inmobiliarios y las altas tasas de interés condujeron a que mucha gente no pudiera amortizar sus hipotecas. Los inversores sufrieron pérdidas, provocando en ellos una actitud negativa a aceptar más CDOs. Los mercados de crédito se fueron congelando a medida que los propios bancos se iban negando a prestarse entre si, por ignorar cuánto de “incobrable” había realmente en los “libros reales” de sus competidores.

deuda tóxica 2

Diapostiva 3

El impacto de las hipotecas de baja calidad se difundió rápidamente en el resto del mundo. Las pérdidas fueron consideradas por bancos inversores de países tan “distantes” como  Australia. Las empresas cancelaron ventas de bonos valoradas en billones de dólares, alegando condiciones excepcionalmente negativas del mercado.

deuda tóxica 3

 Diapositiva 4

 La Reserva Federal de Estados Unidos y el Banco Central de Europa trataron de alentar a los mercados financieros poniendo fondos extraordinarios a disposición de los bancos para que a su vez estos presten en términos mas favorables. Las tasas de interés fueron también cortadas para animar este proceso de recuperación, a la larga, de “credibilidad del sistema financiero”.

deuda tóxica 4

 Diapositiva 5

Pero esta ayuda de corto plazo no resolvió la crisis de liquidez del sistema – o disponibilidad de dinero corriente- porque los bancos seguían siendo extremadamente cautos en prestarse entre sí. La falta de crédito a bancos, empresas e individuos, trajo aparejada la amenaza de la recesión, pérdidas de puestos de trabajo, quiebras y alzas en los costos de vida globales.

deuda tóxica 5

 Diapositiva 6

El banco Northern Rock del Reino Unido busco un préstamo de emergencia para permanecer a flote, a causa de una “corrida” en la que sus clientes retiraron depósitos por 2 billones de libras esterlinas. El banco fue luego nacionalizado. En Estados Unidos el Bear Stearns condujo a una crisis de confianza en el sector financiero y al colapso de los bancos de inversiones.

deuda tóxica 6

 Diapositiva 7

En búsqueda de una solución de largo plazo, el gobierno de Estados Unidos aprobó una ayuda financiera de 700 billones de dólares para, a la larga, adquirir las deudas de dudoso recupero de Wall Street, a cambio de una participación importante en los activos bursátiles del sistema bancario. El gobierno de Estados Unidos pensó en obtener el dinero de los mercados financieros mundiales en la esperanza de poder luego devolverlos, una vez que se restableciera el mercado inmobiliario. Ver en la figura la adquisición de los denominados “activos tóxicos” (“Toxic Assets”).

deuda tóxica 7

 Diapositiva 8

El gobierno del Reino Unido lanza a su vez su plan de rescate, poniéndolo a disponibilidad de ocho principales bancos e inmobiliarias a cambio de paquetes de acciones preferidas. Como retorno a su inversión-rescate, el gobierno espera una participación activa en el sistema bancario del Reino Unido, aunque hasta ahora no está en claro el “quantum” de esa participación.

deuda tóxica 8

 Diapositiva 9

Las economías alrededor del mundo se han visto afectadas por esta restricción del crédito. Los gobiernos mueven a sus bancas nacionales, desde Islandia a Francia. Los bancos centrales de Estados Unidos, Canadá y de algunos países europeos, tomaron la increíble y sin precedentes decisión de coordinar un corte de medio puntos en las tasas de interés en un esfuerzo para aliviar la crisis. 

deuda tóxica 9

Diapositiva 10

Las acciones en los mercados bursátiles han experimentado bajas y subas, proliferando noticias de fallas, recuperaciones y más ayudas. Mientras las acciones de los bancos han sido afectadas por las deudas irrecuperables, los comerciantes minoristas se han visto golpeados por la desesperanza de los consumidores golpeados por las bajas en los precios inmobiliarios y el aumento de la inseguridad laboral.

deuda tóxica 10

 Reflexión: ¿se pudo o se puede hacer algo mejor?

Ante este salvataje de los más ricos resulta lógico que nos preguntemos si en el mundo no se toman medidas más radicales y menos egoístas porque los gobiernos están al servicio de los más poderosos  o simplemente  porque no estamos -nosotros y nuestros gobiernos- preparados para tomarlas. Los actuales sistemas políticos, sociales y económicos de prácticamente todos los países del mundo están preparado para concretar este tipo de rescates en forma muy expeditiva, digamos en cuestión de días. Pero combatir el desempleo mediante ayudas a la industria y creando puestos de trabajo, aún con disponibilidad de ingentes recursos y con poder político, implica la toma de medidas complejas, revolucionarias y de resultados imprevisibles. Recordemos que uno de los objetivos de la China de Mao era que cada familia china poseyera un chancho por año y muchos años después y sin haberlo logrado, entra a competir para ser potencia mundial, con mucho menos esfuerzo y en forma menos traumática. Hoy no todas las familias chinas pueden disponer de un chaancho por año. Similarmente la India, posible aliada de China en el super complejo Chindia, es hoy considerada una nación desarrollada pero como hace siglos sin haber aún podido erradicar la pobreza extrema.  

Esto ocurre con las ayudas de todo tipo, incluso las ayudas para emergencias vitales: por ejemplo el país o bloque económico X decide dar ayuda humanitaria a países de la región Y. Lo ideal sería que la ayuda fuera directamente del país o bloque X a la gente de los países de la región Y, cosa que muchas veces se ha intentado hacer con mayoría de fracasos y muy contados éxitos. Por ello, los países ricos optan por quedar en paz con sus conciencias entregando las ayudas a entidades internacionales del tipo ONG supuestamente eficientes y solidarias, las que hacen lo que saben y pueden abasteciendo sospechosamente corruptas cadenas de distribución de las ayudas que se van progresivamente adelgazando hasta desaparecer, y las más de las veces sin llegar a quien lo necesita.   Es de esperar que el ser humano reaccione antes que sea demasiado tarde y que el rescate sea imposible aún para los más poderosos.

The leader of the Liberal Democrats, Nick Clegg, was correct when he referred to David Cameron as the biggest conman in British Politics. Cameron, along with Osbourne are a complete disaster. They have said nothing of substance….ever. They are merely riding the tidal wave of anti-Gordon Brown sentiment. They don’t need to say a word, they are destined to become the next PM and Chancellor of Britain. They are Friedmanites in ideology, but why don’t they say so? I’d suggest it’s because people weren’t that keen on Milton Friedman’s experiment here in Britain in the 1980s, and they aren’t likely to have forgotten the misery it caused.

Watching shadow Chancellor George Osbourne on Sky News (which is apparently trying to take over the World at the minute….. unsurprising, given that it’s run by Murdoch) talk about the Country being in financial ruin, whilst stood on the steps of his Notting Hill home, was a little bit cheeky to say the very least. The Conservatives, are certainly up to their old, regular tricks.

What they have rather cleverly managed to achieve, bewilders me, and destroys what little faith I have left in the British public. They have managed to turn the debate toward public spending cuts. The public are now engrossed in talk of public spending cuts, as if it’s going to be the saviour of Britain. One thing is for certain, without investment over the past year in public services, by the Government and opposed by the Tories, we’d be in much deeper mess than we are now.

Now, they don’t ever mention that public spending cuts should only come when the economy improves and we can afford to cut the deficit a little, so as to keep as many in work as possible; the way the Tories speak of spending cuts is in the context of the tough times we’re in today, as if spending needs to be cut immediately! Which, it doesn’t. They are no different. Fight for the Country, put your life on the line when war rears it’s ugly head…..and then work for next to nothing (they opposed the minimum wage) when you return.

It is interesting that they’ve taken this route, but it’s an illusion. It is simply a smoke screen to take our minds off the real problem. The system of economics that the Tories themselves brought into the Country in 1979, failed miserably. Yet they cling to it. They’re anti-Brown, when the Country is anti-Brown, they’re climate change progressives when the Country is climate change progressive, they then hide behind manipulative terms like “progressive Conservatives“, suggesting they are capable of changing their colours. They aren’t capable of changing their colours. How did we get to spending cuts? The real issue is the economic structure. Deregulated, free for all, Capitalism does not work. It failed. It is no surprise that the financial crises we now find ourselves in, came directly from the two epicentres of the neo-liberalist agenda of the 80s; America and Britain. They instilled into the minds of a generation the idea that we must all strive to own our own home by any means necessary. Fast forward thirty years, and the sub-prime market melts down horrifically. It allowed banks to inflate beyond destruction, steal, bribe, corrupt their way through life, and then it brought the entire World down with it. You can be thrown in jail for robbing money, on any street in the World…..apart from Wall Street. The Thatcherite revolution destroyed the power of the unions, yet masturbated the egos and gave power to arguably a bigger threat than the unions….big business and the financial sector. The Thatcher era, lead into the Blair era, which will lead into the Cameron era. There is no real change. It’s the the same tired message. Cameron will not address this. He will carry on, and we’ll hit another financial crises when the next deregulated financial bubble of unsustainable growth bursts. Neo-liberalism, whilst cloaked in manipulative language such as “freedom” is merely the horrendous suggestion that a stable economy is built on immense debt and excessive risk taking.

The Tories have made the wrong call on pretty much everything, since this crises began. They opposed the stimulus. They opposed the bank bailouts. They opposed further regulation of the utterly immoral financial sector. In fact, in early 2007, the produced a report that called for the TOTAL deregulation of the financial sector, which means sub prime would be the least of our problems. They are just a nightmare of a party. They are the problem, not the solution. The idea that regulations that exist to protect consumers against con tricks like sub prime, should be rolled back to allow the free market to flourish, is a Conservative/Republican ideology, an epic failure of an ideology. The idea that markets will deliver respectable services, when unhindered, is simply ridiculous. With the regulations pulled back, the corrupt banks were able to look to short term gain, without assessing the risk of long term Global meltdown. Sub Prime was a scam, the epitome of the heartless unhindered greed of a Conservative ideology, that failed miserably.

It follows then, that those who support the Conservative ideology of less government intervention (I have little faith in government, but I have far more faith in government, than in the private sector) would support Matt Ridley’s ideal, that less government intervention in the financial sector is preferable to sustain a healthy financial industry. That Socialism is a great evil. Of course, Matt Ridley was on the board of Northern Rock when it collapsed, due to it’s ridiculously over risky business model, unethical with it’s saver’s money, leading to Socialism bailing it out (which Ridley didn’t seem to complain about).

Why are we complaining about Government? The market placed failed. And why isn’t Gordon Brown (who is hugely responsible for this mess) saying “okay, I made a mistake, I followed on where Conservatism left off, and it failed, miserably. Time to do it the right way!“?
The Conservatives aren’t offering anything different, the Conservatives are being Conservatives. This is what they do. Tax cuts for the rich, public service cuts, and lack of support for those struggling the most. It’s an ideal time to be a Tory.

I guarantee nothing will change. Banks will go back to excessive risk taking (worse than before, given the roll backs in regulations likely to come from the next Tory government), another bubble will appear, there will be widespread misery, job loss, suicide rates will shoot up, homes repossessed, but those at the top will enjoy greater wealth than ever before, and the bubble and will eventually burst, in 20+ years time, and we will be faced with another round of Socialism having to bail out the miserable failure of Capitalism. They have simply been incredibly clever in turning the debate away from the failures of free market capitalism (I haven’t heard Cameron mention anything like closing Corporate tax loopholes), and onto the role and financing of the public sector.

To sum up, I wont be voting Conservative, ever!

Some definitions

Before we start, I have tried to distinguish between “Regulation” and “Supervision” in the posting. I believe the distinction is at the heart of many of the current finanicl environment problems and that recognising this and addressing the issues posed will make matters much better in the future.

As I understand it, ‘regulation’ relates to the proper and orderly functioning of markets. It has two main features: making the cost of operating in the market as low as possible, and making sure that the conditions for fair trading within the market are in place. It is on a par with the function of weights and measures inspectors in a market.

‘Supervision’ on the other hand, is a function designed to preserve the overall existence and reputation of the market. A supervisor, shall we say, sits on a higher intellectual plane than a practitioner or market member, and is tolerated and respected by the market because its presence leads external parties to believe the market is worth investing in.

So making sure that regulations are followed is first and foremost a regulatory task. Normally adherence to regulations is a very black and white business, either you do (and it can be shown) or you don’t (and it’s easy to tell). While transgressing regulations may have a bad moral and reputational effect on a market, normally it’s just a matter of proper functioning in the way that practitioners prefer (a bit like offside in football).

Supervision on the other hand is much harder to define in practical terms. A market supervisor is someone (or something) which seeks constantly to validate the honesty and probity of its members, or to place such constraints on them that easily committed dishonesty is rendered more harmful to the organisation committing it than to the market, and certainly to the counterparty in trades. It also examines innovation to make sure that in its judgement, the new practices do not threaten the market’s existence or reputation. A supervisor is someone who analyses risk and makes judgement, not on the grounds of strict rules (that’s the regulator) but on grounds of a general belief as to the soundness and probity of an action of business model.

The Rules

1.  Improve and increase supervision of market activities

The current crisis was one of supervision, or rather lack of it. Not regulation. Supervisors should go to sleep at night worried that they have missed something.

2. Reduce regulation selectively

Most recent regulation has not improved the market but has impose a huge and harmful cost on it. Regulators should go to sleep at night happy that all the trades have been cleared. Bad regulation imposes costs on the good practitioners without differentially impeding the bad.

3. Increase exchange traded business by selective capital requirements

On exchanges, exposure is known, managed and is paid for in a fair and reasonable way. Institutions are margined using real fungible liquid assets a) immidiately on trading b)  daily using proper mark to market techniques, not self-serving ones with inherent conflicts of interest.

Commodity exchanges margin speculative trading much higher than hedging, similarly central banks should margin off balance sheet and structured finance in proportion to its complexity and liquidity – and non-exchange instruments are not liquid.

4. Increase speed of intervention by statutory responsibility

The Barings, Johnson Matthey and BCCI crises were all tackled fast and ruthlessly by the Bank of England – they were not major problems. Northern Rock, a much smaller problem destroyed confidence in the retail market and the Bank’s ability to handle problems.

5. Reduce and avoid creation of international regulation and supervision except where domain clear

Basel II was part of the problem, international regulation is invariably slow, inaccurate and polluted by national political considerations (e.g. the French and Germans). You need the weapons of 2009 to fight the financial battles of 2009, not those of 1995 or 1989. Turning up at El Alamein with lots of men with sticks would probably not have helped Montgomery. Turning up to fight the Taliban in 2009  with Eurofighters is unlikely to be successful.

6. Risk bearers should be primary domain of regulation and supervision

Skin in the game is good. The Bank used to (and probably still does) believe that its job is to support the City globally.

7. Make auditors responsible to shareholders, not managers

Conflict of interest- Quis custodiet ipsos custodies? – Easy answer, those who suffer from their failure.

8. Make shareholders responsible for remuneration

Conflict of interest- Ditto

9. Ban movement of staff between regulator / supervisor and regulated / supervised organisations for all senior positions

Conflict of interest- Ditto

10. Too big to fail is too big

When a market participant becomes so big that it cannot be effectively or adequately supervised, the market becomes unstable. A supervisor must insist that it leaves the market before the damage can be done.

Der Artikel versucht zu erklären, was im Falle eines Kollaps des internationalen Finanzsystems auf uns zukommt – beschreibt aber eher die bisherigen Meilensteine der Krise (Lehman-Pleite, Northern Rock, Bear Stearns und HRE).

Gefunden bei bazonline.ch:

Was, wenn das Weltfinanzsystem abstürzt?

Von Constantin Seibt. Aktualisiert um 17:05 Uhr

Letztes Jahr war es fast soweit: Nach dem Lehman-Konkurs stand das Weltfinanzsystem vor dem Zusammenbruch. Was zum Teufel wäre dann passiert?

Ohne hätte man nicht einmal ruhig sterben können. Am 12. Oktober 2008, einen Monat nach dem Crash der Lehman Brothers, beschlossen die britischen Beerdigungsunternehmer, Tote zukünftig nur noch gegen Cash zu bestatten. Sie taten dies «angesichts der finanziellen Instabilität in der Finanzkrise» und weil viele Hinterbliebene monatelang nicht zahlten.

Mit dem Prinzip Sarg-nur-gegen-Cash machten die Bestatter den ersten Schritt in eine Zukunft, die im letzten Herbst plötzlich fast Wirklichkeit wurde. Eine Zukunft, die kein Banker, kein Politiker, kein Professor geplant oder auch nur angedacht hatte: die Welt nach dem Zusammenbruch des internationalen Finanzsystems.

Möglich wurde diese durch einen Mann mit ausgestopftem Gorilla im Büro: Richard Fuld, Chef der Lehman Brothers, der seinen Spitznamen «Gorilla» mochte. So nannte man ihn, weil er nicht reden konnte, sondern nur knurren. Wenn er etwas sagte, dann Dinge wie über seine Konkurrenzbanker: «Ich will ihnen das Herz herausreissen und es vor ihren Augen essen, während sie noch leben.»

Fuld hatte 40 Jahre zuvor als Buchhalter bei Lehman angefangen; später trohnte er über der Bank wie ein Kriegsgott. Lehman war zwar nur mittelgross, aber berüchtigt für ihren Ehrgeiz: Sie machte Jahr für Jahr 25 Prozent Gewinn.

Eine Kaskade kurzfristiger Kredite

Das hiess: Lehman war Spezialist für volles Risiko – und spekulierte mit 37 mal mehr geliehenem Geld als die Bank besass. Und das investierte sie meist in langfristige Projekte: Pipelines, Immobilien, Rohstoffe. Kurz: Lehman investierte in Dinge, die sich nicht von heute auf morgen verkaufen liessen. Finanziert wurde dies durch eine Kaskade von immer wieder erneuerten kurzfristigen Krediten. (Kurzfristig hatte den Vorteil, dass der Zinssatz niedrig war.)

Dann kam die Finanzkrise. Sie mottete vom 2007 bis Sommer 2008 wie ein Schwelfeuer. Phasen des Ausbruchs (Milliardenabschreiber, Panik bei der britischen Immobilienbank Northern Rock, Notverkauf der US-Investmentbank Bear Stearns) wechselten mit fast reiner Luft, Optimismus und steigender Börse: Nur Wochen vor dem Bankrott von Lehman sahen Bankchefs wie Josef Ackermann «das Schlimmste hinter uns».

Lehmans Verhängnis war, dass das Misstrauen trotzdem weiter mottete. Nach Bear Stearns fragten sich die Banker, wer der nächste Kandidat für eine Pleite wäre. Die Vermutung war: Lehman. Und so erneuerte niemand die kurzfristigen Kredite. Lehman brauchte verzweifelt Cash. Aber zu verkaufen hatten sie wenig – und dies bei fallenden Börsen zu elenden Preisen. Nun gab erst recht niemand Kredit.

«Du hast keine Ahnung.»

Fuld selbst beging zwei entscheidende Fehler: Den ersten machte er 2006, als er Lehman ein Giftfass in die Vitrine setzte. Auf dem Höhepunkt der Immobilienblase kaufte er für 15 Milliarden Immobilien. Und feuerte seinen Riskomanager, der davor warnte, mit den Worten: «Du bist alt geworden. Du traust dich nichts mehr.» Fulds zweiter Fehler war sein Hass. Noch im Sommer 2008 schlug er Hilfsgeld der Regierung aus. Und als eine Übernahme erwogen wurde, sagte er zum Finanzminister: «Du bist lange raus aus dem Geschäft. Du hast keine Ahnung. Ich verkaufe nicht.»

Der Hass war gegenseitig. Der Finanzminister der USA war Henry Paulson, der Ex-Chef von Lehmans grösstem Konkurrenten Goldman Sachs. Die Lehman-Banker sahen sich als die Hemdsärmeltypen an der Wallstreet und verachteten die arroganten Harvard-Diplom-Arschlöcher von Goldman. Und umgekehrt.

War es also der persönliche Ekel zwischen den Bankbossen? War es schlicht Überlastung von Paulson, der nachts vor Angst «nur noch ein, zwei Stunden» schlief und der überdies noch am gleichen Wochenende die grössere Investmentbank Merrill Lynch retten musste? War es ein Exempel der USA, um zu zeigen, dass nicht jede bankrotte Bank gerettet würde?

Teuerster Fehler der Geschichte

Niemand weiss es bis heute. Klar ist nur, dass Paulson es versäumte, der britischen Barclays Bank eine Ausfallgarantie zu geben, um die ausgeblutete Lehman zu übernehmen. Und damit den wohl teuersten Fehler der Wirtschaftsgeschichte beging. Als er Lehman am Montag, 15. September in den Konkurs gehen liess.

Tags darauf freuten sich nur die Zeitungen. Die NZZ etwa lobte die ordnungspolitisch korrekte Strafe für Lehman und sprach von «einem reinigenden Gewitter». Doch das Gewitter entpuppte sich als Hurrikan. Denn weltweit mutierten plötzlich sämtliche Banken zu Lehmans: Nach der Pleite der weltbekannten Bank waren plötzlich alle verdächtig. Das Ausleihen von Geld von Bank zu Bank stoppte völlig. Niemand vertraute niemandem mehr. Innert weniger Tage standen Dutzende von Banken vor der Pleite.

Nicht die Leute auf der Strasse, die Profis gerieten durch Lehman in Panik. Dadurch, dass Lehman einer der grössten Derivathändler war, blieb unklar, welcher Handelspartner eventuell Verluste machen würde: Verluste, die theoretisch gross genug sein konnten, auch die gesündeste Bank zu killen.

Und so stand über Wochen das globale Finanzsystem kurz vor dem Zusammenbruch. Und damit die Welt vor.

Ja, vor was? Eigentlich ist die Welt bekannt, vermessen, erobert: von den Gipfeln bis zu den Tiefen des Ozeans. Und Theorien gibt es zu allem – von der ersten Zelle bis zum Kältetod des Universums.

«Stellen Sie sich das Schlimmste vor!»

Nur zum Zusammenbruch des Finanzsystems gibt es nichts. Es scheint einer der letzten ungedachten, weissen Flecke des Planeten: In einer Woche Recherche fand sich kein Artikel, keine Studie und niemand, der je etwas dazu gelesen hatte: Banker, Wirtschaftsjournalisten sagten dazu alle das gleiche wie der Wirtschaftsprofessor Peter Bofinger: «Es ist undenkbar» und «Stellen Sie sich das Schlimmste vor!»

Klar ist nur: Die Profis rechneten damit. Der Chef der 800-Milliarden-Dollar-Investmentfirma Pimco, Mohamed El-Erian, schickte zwei Mal seine Frau vorsorglich zum Bankomaten: einmal nach dem Konkurs von Lehman, einmal bei den Beratungen um das 700-Milliarden-Dollar-Finanzpaket im amerikanischen Kongress: «Wäre es nicht bewilligt worden, wäre das System binnen Stunden zusammengebrochen.»

Anzeichen von Panik gab es überall: In Europa wurden 500-Euro-Noten knapp. In Singapur verstopften 700 riesige Containerschiffe den Hafen, gestoppt von ihren Reedereien. In Amerika stand nur Stunden nach Lehman der Versicherungsgigant AIG auf der Kippe, der den grossen Banken Hunderte von Milliarden an Risiken versichert und damit aus den Büchern der Institute genommen hatte.

Was also wäre passiert? Wenn etwa AIG nicht mit 120 Milliarden Dollar verstaatlicht worden wäre? Oder ohne die Milliarden für Citigroup und den Rest der grossen Banken?

Klar ist nur: Einen zweiten Grosskonkurs in den Tagen nach Lehman hätte das System nicht überlebt. Die Gefahr bestand gerade in den zahlreichen Versicherungen, die die Banken gegenseitig auf ihre Geschäfte abgeschlossen hatten: Beim Kippen eines der Partner, wären die Risiken mit vollem Wert und voller Wucht bei den anderen in die Bücher gekommen – und die Banken, die fast alle kaum Eigenkapital hatten, wären eine nach der anderen über Nacht faktisch pleite gewesen.

«Wie eine atomare Kettenreaktion»

«Der Bank-Bank-Markt war klinisch tot. Noch ein Konkurs – und nach drei Tagen wären drei grosse Banken dicht gewesen. Und drei Tage später 1500 Banken», sagte ein Banker von Credit Suisse. «Der letzte Herbst war eine aufregende Zeit.» Die nächsten Schritte würden dann «logisch wie eine atomare Kettenreaktion» (so der Banker) folgen: Panik, gestürmte Schalterhallen, Schliessung der restlichen Banken. Und darauf: Tote Bankomaten, wertlose Kreditkarten, keine Überweisungen mehr. Alle Transaktionen auf Cash.

Und dann? Plünderungen? Aufstände? Lynchmorde? Oder im Gegenteil: Nachbarschaftshilfe? Annahme von privaten Schuldscheinen? Also: handgemachte ad-hoc-Währungen? Würden Bauern reich werden wie am Ende des Weltkriegs, wo bei einigen die Perser dreilagig im Kuhstall lagen? Wären es schöne oder schreckliche Wochen der Anarchie?

Hier ist der Punkt erreicht, wo niemand Genaues weiss. Es gibt keine historische Parallele. Klar ist nur, dass die Banken im Fall eines Systemkollapses geschlossen und verstaatlicht worden wären: «Die Nationalbank wäre etwa 200 Mal grösser geworden», so der Banker. Und der Zürcher Wirtschaftsgeschichtsprofessor Tobias Straumann sagt: «Die Nationalbanken hätten irgendwie die Notleitungen für den Kapitalverkehr legen müssen.» Ob irgendein Plan dafür existierte, weiss niemand.

Minuten vom totalen Crash entfernt

Dabei war die Welt am 29. September 2008 nur Minuten davon entfernt: Als die Deutsche Bundeskanzlerin Angela Merkel den Banker Josef Ackermann nur eine Viertelstunde vor dem schon beschlossenen Konkurs der Hypo Real Estate Bank erreichte und mit ihm einen Deal zur Rettung schloss. Die Bank hatte über 100 Milliarden ausserhalb ihrer offiziellen Bilanz in Irland verlocht – die Schäden bei ihrem Konkurs wären verheerender als bei Lehman gewesen. Hätte damals Ackermanns Akku gestreikt, sähe die Welt heute vielleicht sehr anders aus.

So kündigten die Finanzminister an: «Wir werden alles tun, was es braucht». Und sie logen nicht. Sie pumpten innert Monaten über 1100 Milliarden in die Banken und Konjunkturprogramme, die Nationalbanken fluteten den Kreditmarkt für Banken mit Gratisgeld und kauften für hunderte von Milliarden ihre Giftmüllpapiere.

Die Widerherstellung des Vertrauens in das Finanzsystem nach dem Lehman-Konkurs wurde zum teuersten Unternehmen in der Geschichte der Menschheit. Die Krise selbst vernichtete nach Schätzungen des IWF 10′500 Milliarden Dollar.

Ende 2008 zahlten sich die Wallstreet-Banker 18 Milliarden Dollar an Boni aus – den sechsthöchsten Betrag aller Zeiten. Sie kassierten damit exakt das zehnfache der 1,8 Milliarden, die im gleichen Jahr von sämtlichen Staaten der Welt als Hilfe gegen den Hunger aufgebracht wurden. Für eine Milliarde Menschen. (Tages-Anzeiger)

Erstellt: 12.09.2009, 04:00 Uhr

The Bank of England, the FSA and Zombies
When Barings collapsed on a Friday evening, the Bank summoned the senor bankers from all of the major institutions in London. When LTCM fell over, the Fed did the same. Both of them got one (or more) of the attending institutions to pile in, take over the failing operation and make absolutely sure that when the doors next opened, everything that needed to be done to preserve the confidence of the market was in place.
When Northern Rock hit the skids, and when Lehman’s looked dodgy, neither institution was able to act promptly. The problems got bigger and bigger. In the UK, Northern Rock, a building society with a bad funding model became the first UK banking institution in over 150 years to have a run on its deposits. This was more than two world wars, the Great Depression and a host of financial disasters had achieved.
In the USA, Lehman’s began the toppling of a whole series of institutions, from Merrill Lynch to AIG.
With hindsight, it is clear that the ‘old’ model – pile in fix it and then worry about what to do with the assets – was far more effective than the newer ‘let’s sit around for a while and see what we can think of’ model.
Hit hard, hit early, use unnecessary violence.
It works on zombies too. As a paper by Munz et al (“WHEN ZOMBIES ATTACK!: MATHEMATICAL
MODELLING OF AN OUTBREAK OF ZOMBIE INFECTION” – ISBN 978-1-60741-347-9, http://www.mathstat.uottawa.ca/~rsmith/Zombies.pdf)

Zombies are creatures which are the result of some kind of infection acting on normal humans. The infection can be passed from zombie to human, and zombies can also be created from dead humans. Zombies can be killed by special methods.

The model assumes that it is possible for a human to survive a zombie attack, and that the rate of infection is high and it is swift in onset.

A variety of options are modelled, including quarantine, development of treatment and co-existence, however, in most cases these tactics fail and the ‘susceptible’ (i.e. normal human) population is eradicated. The paper shows that by far the best and most effective method is to deal with an infectious outbreak of this nature is to hit it hard, early and aggressively.

Does this give us a model which applies to the world banking system? Well, the analogies seem good: sound banks coming into contact with ‘infected’ ones may well succumb very rapidly (Lloyds TSB with HBOS, Bank of America with Merrill Lynch). Slow action by central banks certainly made the crisis much worse as first the money markets, then the commercial sources of credit dried up.

Only by effectively neutralising the zombie banks (HBOS, RBS, Bank of America post Merrill acquisition) with vast amounts of funding from governments could the infection be stopped. And the paper also states that even in the event of a cure being found, that humans (read, “surviving banks”) will be few in number and susceptible to new infection. The danger does not go away.

So the moral of the story? The authors of the paper say:

“While aggressive quarantine may contain the epidemic, or a cure may lead to coexistence of humans and zombies, the most effective way to contain the rise of the undead is to hit hard and hit often. As seen in the movies, it is imperative that zombies are dealt with quickly, or else we are all in a great deal of trouble.”

This was what the old wisdom of the Bank of England suggested. And it seems to be as true for banking crises as for zombies.

by Ruth Sunderland for the Guardian, August 23, 2009.

Women still face a steep climb to the top table.

Research commissioned by the Observer has revealed that UK boardrooms are still overwhelmingly male-dominated, despite the fact that more than nine out of 10 companies claim to have an equal opportunities policy in place.

Women occupy only 242 out of 2,742 seats on the boards of FTSE 350 companies, according to a study by The Co-operative Asset Management as part of our Good Companies Guide series of reports into ethical and socially responsible practice in corporate Britain.

More than 130 companies out of those surveyed had an all-male board and the vast majority of female directorships are non-executive. Women hold only 34 executive board seats out of a possible 970.

As a result of this work, Co-operative intends in future to consider gender and diversity when it is assessing companies from an ethical, social and governance perspective.

John Reizenstein, managing director of Co-operative Asset Management, said: “It’s a commonplace that women and minorities ought to be better represented in boards and other top positions. But does it make good business sense? Our report shows that leading UK plcs believe an inclusive, progressive approach brings real benefits, but also shows that too many companies still appear to pay the issue lip service. We think organisations which foster diversity at the top have an advantage over those which don’t.”…(continue reading)