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UK banks 'still short of capital'

24

Comments

  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    purch wrote: »
    Good old Vanilla.

    The Rocky Road with extra sprinkles seemed like a good idea at the time, but left a nasty taste.

    There is an idea that the markets are in some kind of stasis, and that not a lot is happening, but in most areas it is business as usual and has been throughout the crisis.

    It's a great time to be in fixed income. Our fixed income boss is a very happy man right now. Yield compression means he's returning almost 10% from bonds that yield 4-6%!
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Generali wrote: »
    You'd be surprised actually. CDOs not so much but there's a market for vanilla, high quality RMBS.

    JP Morgan has bought 90% of securitised UK mortgage debt since 2008. Banks in Europe are more interested in their own capital positions and home markets.
  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    Thrugelmir wrote: »
    JP Morgan has bought 90% of securitised UK mortgage debt since 2008. Banks in Europe are more interested in their own capital positions and home markets.

    Banks are only one group of buyers though. Pension funds are looking for high quality fixed income assets with a decent yield. RMBS can fall into that category.
  • pqrdef
    pqrdef Posts: 4,552 Forumite
    The banks need more capital? They had loads before the crash. All safely tucked away in AAA-rated securities, as I recall.

    So where should they put it now? Gilts are a guaranteed loser at current prices. The BoE doesn't want it, it's been flying kites about negative interest rates. Lend it to SMEs? That'll be crashproof.

    Perhaps they should just put the money in the bank.
    "It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis
  • wotsthat
    wotsthat Posts: 11,325 Forumite
    http://www.bankofengland.co.uk/publications/Pages/news/2013/013.aspx
    The PRA should take steps to ensure that, by the end of 2013, major UK banks and building societies hold capital resources equivalent to at least 7% of their risk-weighted assets, as assessed on the basis described in Recommendation 1. Relative to that benchmark, major UK banks and building societies in aggregate currently have a shortfall in capital of around £25 billion.

    No bank or building society named but Lloyds share price has spiked up.
  • pqrdef
    pqrdef Posts: 4,552 Forumite
    wotsthat wrote: »
    No bank or building society named but Lloyds share price has spiked up.
    They'll be able to do a rights issue then. Don't all rush.
    "It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    pqrdef wrote: »
    They'll be able to do a rights issue then. Don't all rush.

    Banks will become suitable investments again. Merely a matter of timing when to buy.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    wotsthat wrote: »
    http://www.bankofengland.co.uk/publications/Pages/news/2013/013.aspx



    No bank or building society named but Lloyds share price has spiked up.

    Nationwide maybe the Building Society. Their 2% above base SVR mortgage rate is costing them dearly.
  • IronWolf
    IronWolf Posts: 6,445 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    and at the same time we're telling them to hand out 95% mortgages and risky loans to small businesses

    and we wonder why the banks aren't functioning properly....
    Faith, hope, charity, these three; but the greatest of these is charity.
  • Radiantsoul
    Radiantsoul Posts: 2,096 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Thrugelmir wrote: »
    Nationwide maybe the Building Society. Their 2% above base SVR mortgage rate is costing them dearly.

    Maybe, there loses are more in commercial property though.
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