2010: A knife-edge year for banking

too many people want to hit the banks hard in an act of revenge. In the absence of any signifant  manufacturing base in this country, we need to re-bulid the banking system as quickly as possible having learnt from their mistakes.  What we do not want to do is apply punitive regulation that makes one of this country's few remaining competitive industries uncompetitive. www.factoringquoteuk.com

Is the 'down' on Banks really revenge, or disappointment at having to bail out risk takers with public money

Surely the whole concept of risk is that an equivalent downside exists, and unfortunately the Banks have taken the upside and ended up mutualising the downside; purely because they were perceived as too big to fail and lose customer deposits

Any entrepreneur would love to have their downside underwritten in this way and this is one of the great failings of the current Banking system & also the bonus culture.

Basing bonuses on trades (i.e. Barings - Nick Leeson) was shown to be a flawed model in 1995 and yet little has been done to address the issue since then - why not?

All that happens with each successive disaster is the trite message '.. lets learn from our mistakes and move on ..'.; regrettably the learning process never happens and its business as usual with Banks investing in ever more exotic products.

To this extent one would challenge any firm to be able to audit some of the more unusual products and as a result the risk is largely unquantifiable - is this acceptable?

It is interesting viewing the ways in which different sectors regard their customer’s money

• One may remember Farepak in 2006 - problem was that Farepak was under no obligation to ring-fence the cash handed over by customers for the purpose of buying their pre-ordered goods and this caused public outrage
• Yet the Banks seem to regard customer’s funds as fair game and the only reason the Banks were bailed out this time around was because their customer’s money was at stake

With this in mind surely the fundamental question has to be:

What measures do the Banks propose to implement to ensure that if we have a repeat of the Northern Rock etc. scenario the Bank concerned can go to the wall and yet their customer’s money remains secure, without the intervention of the Treasury?

Once we have a satisfactory answer to this question then we can move on