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More QE please....and interest rates...

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Comments

  • grizzly1911
    grizzly1911 Posts: 9,965 Forumite
    Thrugelmir wrote: »
    Banks are hardly in a fit state to divide. The investment banking arms are the profitable parts of the UK majors. Retail banks will require recapitalisation before splitting. .

    Banks in general may well be required to raise capital this year to strengthen their balance sheets.

    Banks made healthy profits before all the speculative investmnent banking bits came along. Why has the capital not gone into the reatil arms?

    Have we really only saved the investment arms so they can go off once more to wreak havoc?
    "If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....

    "big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Banks made healthy profits before all the speculative investmnent banking bits came along. Why has the capital not gone into the reatil arms?

    PPI payouts are coming off retail profits.

    Santander is cutting back on mortgage lending to focus on SME lending. As more profitable and is a better use of capital.
  • grizzly1911
    grizzly1911 Posts: 9,965 Forumite
    Thrugelmir wrote: »
    PPI payouts are coming off retail profits.

    Santander is cutting back on mortgage lending to focus on SME lending. As more profitable and is a better use of capital.

    Surely the PPI "profits" helped fuel the investment binge? When I said were profitable I was thinking pre PPI.

    When I say retail I don't mean personal, small business alone I would expect it to include SMEs and the less sexy large corporates too.
    "If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....

    "big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    When I said were profitable I was thinking pre PPI.

    Then you going back to an era when both interest rates and interest rates were higher. A position which will take another 5 - 10 years to achieve. From 2001 onwards difficult to understand what the true profitability was. Until all the historic issues are put to bed.

    Libor claims will follow now.
  • Graham_Devon
    Graham_Devon Posts: 58,560 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    So where did the collosal PPI profits go?
  • grizzly1911
    grizzly1911 Posts: 9,965 Forumite
    Thrugelmir wrote: »
    Then you going back to an era when both interest rates and interest rates were higher. A position which will take another 5 - 10 years to achieve. From 2001 onwards difficult to understand what the true profitability was. Until all the historic issues are put to bed.

    Libor claims will follow now.


    Why would high interest rates make any difference to retail in the broadest sense? Their profitability comes out of the margin which is adjusted relative to risk, lending fees and money transmission costs doesn't it?
    "If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....

    "big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham
  • grizzly1911
    grizzly1911 Posts: 9,965 Forumite
    So where did the collosal PPI profits go?

    Bad debts , losses on trading and some pretty hefty dividends and some ridiculous bonuses for those in the sexy areas.
    "If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....

    "big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    So where did the collosal PPI profits go?

    Back to customers plus interest.

    So costing the banks more than they made.
  • grizzly1911
    grizzly1911 Posts: 9,965 Forumite
    Thrugelmir wrote: »
    Back to customers plus interest.

    So costing the banks more than they made.


    As it is recent and current profits that are making these repayments what happened to the original profits?
    "If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....

    "big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    As it is recent and current profits that are making these repayments what happened to the original profits?

    Relent. As formed part of capital reserves.
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