George Osborne has got his retaliation for the bankers’ £6bn bonus spree in early – before most of them have been paid out.
At their very impressive economic briefing this morning analysts from the Institute for fiscal Studies and Barclays suggested that inflation was more of a danger than the Treasury and the Bank of England might think – because so much of the potential ability of the economy to produce goods and services was wiped out in the recession.
Diamond also kept stating that Barclays was a well managed bank that came through the crisis in good shape. This is a myth. Barclays had made $22.9bn in write downs by the first quarter of 2010.
What the bonus defenders always fail to mention is what would happen to these revenues if they were not paid out in staff remuneration. The answer is that that they would (or, at least, should) be used to increase a bank’s capital reserves.
Strange that Barclays and HSBC have been putting it about that if the Coalition mandates the separation of their retail and investment banking divisions, they will leave Britain. Is that a socially considerate response? Is that a moral response?
Look at the write downs for Barclays and RBS: $22.9bn and $26.5bn respectively. Those were mainly losses on toxic assets accumulated by Barclays Capital and ABN Amro, the investment banking divisions of the two British banks. Does that show admirable risk management?
If the banking world wanted to show the rest of us that things are back to “business as usual” they could not have found a more potent symbol than to have promoted the head of Barclays Capital, the so-called “casino” end of Barclays, to run the group as a whole.
Mr Diamond’s (right) operation was [...]
When Lehman Brothers collapsed in autumn 2008 it had estimated Tier 1 capital of 11 per cent, which was considered more than adequate by the regulatory authorities.
So now we know. Barclays is Britain’s strongest bank, and by quite some way. Even under a stressed scenario considered by Europe’s banking watchdogs it would have a tier one capital ratio of 13.7 per cent. You wouldn’t want to describe any bank as rock solid given the carnage of the past few years, but [...]
Latest from Independent journalists on Twitter