Loan Losses incurred by Banks

One has to wonder how banks manage to incur horrendous loan losses in the first place. While it is sometimes said that the only safe loans are extended to borrowers who do not need them it should be foremost on any banker's minds to make sure that loans can be repaid.
Apart for cases of fraudulent collusion between lender and borrower (unfortunately not as rare as naive observers assume) the source of loan losses is larger than can be explained with excuses such as 'unfortunate business conditions'.
A good example is the case of the staid Banque Cantonale de Geneve which in my opinion is straying too far from its area of competence. Financing a commodity trade involving Nigerian transactions is not something you expect a Swiss Cantonal Bank to get involved in. Forensic investigation into cases of loan write-offs would in most cases demonstrate that simple rules of common sense were absent in the decision making, - not only by the bank officers directly involved but all the way up the hierarchy of the institution.

FCA Interim Report on Fund Management

It is always reassuring that the cast of thousands employed in the recently-established regulatory silos are put to good use. Even if it is mostly confined to produce volumes of paper that unfortunates in the businesses that they are regulating are forced to plough through.

Does the Fund Management Industry need more 'oversight'? Maybe, but to a certain extent any imperfections are also the result of misguided legislation introduced by a succession of governments (and increasingly so by a EU and its assorted bureaucracies).

But what benefit will it bring to raise the fiduciary bar from a general obligation "to treat customers fairly" to a new requirement "to act in the best interests of investors"? No doubt that legions of (expensive) lawyers find this picking of words will go a long way to pay for their kids' school fees.

Even more expensive (for the investors, for as they will ultimately have to pick up the tab for this new boondoggle) would be the introduction of an "Independence Governance Board".  It will be most welcome to myriad retired professionals that will be employed to produce annual reports of the issues they have raised and management's response.

How the introduction of an all-inclusive charge could work in practice does not seem to be of major concern to the paper-pushers at the FCA. Trading in securities is still not free, even in the age of online dealing and wafer-thin commissions.

Professional/Institutional Investors are already more than able to analyse the performance and cost of investment propositions.

The FCA report is more relevant for the retail investor who may find it difficult to pick the right investment fund when there are many more funds than equities to choose from. So investors tend to rely on intermediaries - Private Bankers and IFA mostly - that do the selecting and monitoring for them. Maybe more transparency would be needed in that space? How many Private Banks publish their performance and fee schedules on a regular basis?

Asset Management Market Study, Interim Report, FCA

European Bank Troubles

Don't blame Politicians or Central Banks. Of course they must share the blame, but what about Top Management taking their eye off the ball, antiquated and hierarchical business structures, poor control over lending decisions, poor acquisition strategy and execution? Low or negative interest rates are a burden, but no one stops banks from charging interest rates that give them a positive margin - credit cards and small business loans are anything but cheap! And if you cannot use deposits then just charge customers penal interest rates, you owe them nothing, put the blame on thieving Central Banks and their paymasters in Politics!

Brexit - Impact on London Financial Centre

Merchants of doom are let loose by the result of the Out side winning the EU Referendum in the UK. All sorts of comments are made by objective and less objective parties. The surprise referendum result shocked quite a few and as the Remain side was expecting a win the resulting reaction was also emotionally charged. And many in the business and financial community favored staying in the EU. That our 'friends' on the other side of the Channel are fighting to get as much of the financial business as they can should surprise no one. One only wonders why they are so keen on activities that the political and cultural 'Elites' on the Continent seem to keen to despise in any case.

But how much business is going to move away from London?

The Brexit impact will be crucially dependent on the skill with with the Exit negotiations are handled by the British Officials.