Forward Guidance

Posted on May 6, 2013 by William Webster

Forecasting is a major pastime in financial markets. Economic indicators are pre-estimated. Company results are projected. Macro indicators are anticipated. This has huge entertainment value and when the outcome is unexpected prices change. But can forecasting affect the future? Some … Continue reading →

Posted in Financial Markets |

The new regime

Posted on April 12, 2013 by William Webster

On 1st April 2013 prudential regulation came under the responsibility of the PRA. This covers 1,700 firms with resources focused on category 1 and 2 firms.  It’s at an early stage but you have to ask whether there are going … Continue reading →

Posted in Uncategorized |

Zero bank failure – shift in thinking

Posted on March 1, 2013 by William Webster

Be careful what you wish for. Bankers have for the past five years wanted less regulatory interference. But in a badly damaged financial system this was wishful thinking. Regulators and politicians just couldn’t take the chance of a major bank … Continue reading →

Posted in Financial Markets |

Escape Velocity

Posted on February 10, 2013 by William Webster

The great experiment called QE is about reducing leverage through the devaluation of money. The main thrust is to make sure that real interest rates are negative throughout the curve. This favours borrowers over investors. What’s frustrating for the central … Continue reading →

Posted in Financial Markets |

Index Linked Gilts – C for financial management

Posted on January 10, 2013 by William Webster

The recommendation by the ONS not to alter the calculation of RPI for index linked products is common sense. This is good news for both investors and the Treasury. Investors had bought RPI protection and it was disingenuous to consider … Continue reading →

Posted in Financial Markets |

Index Linked Gilts

Posted on November 24, 2012 by William Webster

Bond investors accept credit and market risk but one thing that’s far less easy to stomach is unilateral changes to terms and conditions. And from what I see that’s what could happen in the index linked gilts market. Linkers are … Continue reading →

Posted in Financial Markets |

Segregating bankers and regulators

Posted on October 4, 2012 by William Webster

Back in the 1990s a bank was getting a difficult time from the regulator. The regulator didn’t have the same muscle as today but it could still restrict activity. Did the bank improve its risk control? No. The regulator was … Continue reading →

Posted in Financial Markets |

Solar panels and QE

Posted on September 5, 2012 by William Webster

On 12th July 2012 the Bank of England released a study on Quantitative Easing, (The Distributional Effects of Asset Purchases).  The paper, requested by the Treasury Committee concedes that QE has had a distributional effect benefiting wealth holders. It also … Continue reading →

Posted in Financial Markets |

Drains up

Posted on July 13, 2012 by William Webster

The financial crisis had many perpetrators but now this is about to change. In future there will be one that gets blamed. Since 2007 we have been trying to find out, with little success, who is guilty for the mess … Continue reading →

Posted in Financial Markets |

Banking Culture

Posted on July 13, 2012 by William Webster

Barclays £59.5m fine rests on two aspects of Libor “fixing”: Profit. As Trader B explains: “I really need a very very low 3m fixing on Monday – preferably we get kicked out. We have about 80 yards [billion] fixing for … Continue reading →

Posted in Financial Markets |