Comments for Bank Law Blog

Comment on The Wolfsberg Group by AML guidance « Bank Law Blog

AML guidance « Bank Law Blog — Wed, 11 Nov 2009 11:12:37 +0000

[...] Anti-Money Laundering and Counter Terrorist Financing policies”. It used to be 12 banks – my 2007 post. I gather from the website, Basel Institute on Governance (acronym, BIG) the Group came [...]

Comment on Home Repossession (Protection) Bill by Home Repossession (Protection) Bill « Bank Law Blog

Home Repossession (Protection) Bill « Bank Law Blog — Mon, 09 Nov 2009 10:36:02 +0000

[...] Repossession (Protection) Bill By 1banklawblogger The bill has been dropped. I commented on the introduction of this bill in February of this year and the implications for lenders. [...]

Comment on Bonuses by Daivyv

Daivyv — Wed, 30 Sep 2009 10:28:32 +0000

Not sure if this is serious evidence but it is interesting to reflect on Nils Pratley’s column in The Guardian today (30 Sept 09) on HSBC’s debt for equity swap at Jessops. He says “What, you may ask, was a conservative bank like HSBC doing lending £54m to a smallish high street operator in a market where the internet was driving down the profit margins of camera retailers?” He goes on “Jessops is another tale of those mad pre-credit crisis days when any company with a flimsy growth story could get a huge loan.”

Decisions to lend in circumstances that now raise eyebrows were made by many lenders pre-crunch of course, so apologies for picking on HSBC but it is now in the public domain. Was it reckless lending driven by the prospects of bonuses where over-optimism leads banks to become too generous and cut corners in their normal credit analysis? And would too much of that behaviour fuel the financial crisis? I suggest that it would, simply because too much credit overheats the financial system and, arguably, leads to crisis.

On the hot topic of banker’s bonuses, I think we should distinguish between the different types of bonuses, as some are more acceptable than others. Here are my definitions;

1. Crazy Bonuses – these are the ones that are paid to CEOs and the like, usually running into telephone numbers, relating to the performance of the business growth. Justified in principal, but out of proportion to the real world.

2. Bad Behaviour Bonuses – where lending or derivative products are driven by bankers and traders primarily with a bonus in mind, rather than whether the loan or product is right for the customer.

3. Retail Bonuses – where branch staff get a small extra reward for going the extra mile. Sometimes irritating for customers who get badgered, but reasonable to an extent as it recognises the extra effort put in by highly committed branch staff.

I would be interested in any other views.

Viv

Comment on Il Perugino and the Bankers’ Guild by Viv E

Viv E — Mon, 07 Sep 2009 08:48:39 +0000

So banking can be profitable while adopting the original Banking Code (known as the Cardinal Virtues). How very enlightening. I’m thinking of using this to illustrate the Customer Relationship Management part of the Applied Diploma of Corporate Banking which I tutor for the ifs!

Viv E

Comment on Home Repossession (Protection) Bill by 1banklawblogger

1banklawblogger — Fri, 06 Feb 2009 20:10:33 +0000

Yes, extraordinary isn’t it? It goes back to s 101 LPA 1925, though the reason you didn’t know that was that mainstream banks lenders rarely abuse the privilege and in any case, most now have made a point of going beyond the minimum guidelines discussed last autumn.

Comment on Home Repossession (Protection) Bill by Carl Gardner

Carl Gardner — Fri, 06 Feb 2009 18:49:59 +0000

Gosh! I’m amazed at the present state of the law – I though court proceedings were needed already!

Comment on The Banking Bill by Jim Hamilton

Jim Hamilton — Sun, 02 Nov 2008 14:13:41 +0000

This is an excellent piece on the new Banking bill. I believe this may be a precursor to any US legislation next year.

Also, thank you for listing my blog. It is quite an honor for me since I have endeavored to follow UK regulatory issues.

Jim

Comment on Changes to the clearing process by Do banks understand the clearing cycle? « Bank Law Blog

Do banks understand the clearing cycle? « Bank Law Blog — Fri, 22 Aug 2008 13:17:52 +0000

[...] Law Blogger posted on 2-4-6 in November [...]

Comment on “Rome I – Should the UK Opt in?” by Rome 1 conference « Bank Law Blog

Rome 1 conference « Bank Law Blog — Mon, 11 Aug 2008 07:35:02 +0000

[...] Earlier posts on this blog, when there was still some doubt as to whether the UK should join, are here. The conference will cover the position generally, and in the fields of financial services, [...]

Comment on New Banking Codes by Viv Edwards

Viv Edwards — Thu, 15 May 2008 21:16:59 +0000

An article in The Guardian headed “Bank of England warning on personal loan defaults” quotes the Banking Act report “Banks may need to guard against greater personal debt servicing difficulties should economic circumstances change”. What is most instructive is the date of this article – 12 May 1988!

Will we ever learn?