Is laissez-faire the right way to go? - 27 Apr 2010

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As the General Election approaches, we at BA Towers are trying to remain as resolutely impartial as we possibly can – at least in our public postings. Not only will there be enough election stuff doing the rounds in the next nine days to make even the most ardent Swingometer fan sick, but we don’t really see it as the media’s place to try to tell people or what will be best for the country overall.

However, I do now feel compelled to draw your attention to the recent proclamations of the Conservatives ‘big beast’, and former Chancellor of the Exchequer, Ken Clarke. The return to frontline politics of this Tory stalwart appears to be in almost direct response to the appointment of Lord Mandelson as Secretary of State for Business. Since then, the big-hitter has been quite quiet in many ways, going about his business mostly without causing too much of a stir.

That is until the run-in of the election campaign, when even the most reluctant party offi…

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How I Caused The Credit Crunch? - 21 May 2009

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I have just started to read the recently-published book by Tetsuya Ishikawa, ‘How I Caused the Credit Crunch’, and a mere few chapters in I’m hooked. The author has written was is in essence a personal account of the work he did in the banking sector that, he now sees, helped to cause the collapse of the banking system as it was.

The impressive part of this book is that despite being (one assumes) a first-time author, Ishikawa has managed to blend the facts of the work in which he was engaged into the style of a novel. Refreshingly open about his reasons for writing the book, the fact that he isn’t a trained writer, and his manipulation of names, places and the timing of events, the author has created a book that reads like a true account of the time.

I think it is fair to say that this won’t become some literary masterpiece, and don’t pick it up expecting to find th…

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Back to the 70s? - 23 Apr 2009

Posted by Paul Collins 1 comment

Yesterday’s Budget didn’t really contain much to stir the excitement of the masses, as predictably Alistair Darling was forced to start to claw back some of the money spent in propping up the economy. His fiscal measures to start the process of paying back the huge borrowings he has made to keep business and the economy running through the recession will likely have to be in place in some form or another for the next ten years or more. Perhaps this is typified by the raising of the limits on how much can be saved in an ISA each year to £10,200 – good news on the surface, but with interest rates at an all-time low, saving is not the most attractive option for cash.

The major headline-grabbing aspect of this Budget has been the introduction of a 50 per cent income tax band for those earning more than £150,000 per year, in an apparent attempt to make up some of the funding gap in the econom…

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Willing disbelief - 26 Mar 2009

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As you may already be aware (see below), I am currently in the process of sorting out my late grandfather’s will, as along with my brother, I have been named as joint executor for his estate. The process is proving to be both interesting and frustrating in equal measure – it involves a large amount of form-filling and sending off documentation, and then waiting for the wheels of bureaucracy to turn and send back the information we need.

In many ways, we are lucky: The estate itself is not complicated, and we are not hunting around for documentation and other files, as our grandfather was pretty meticulous about organizing his affairs. Alongside the inevitable lack of communication we are suffering from the banks, there is one thing that is beginning to annoy both my brother and myself.

In informing the various bodies who need to be aware of our grandfather’s passing, we are required to send in …

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Where there’s a will… - 17 Mar 2009

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Perhaps the title is a little too flippant, considering the content of this entry, but I’m going to try to approach this neutrally, at least on this occasion.

My grandfather recently passed away at the grand old age of 90 (not a bad innings, by any standards), and named my brother and I as joint executors of his Will. Never having done this sort of thing before, neither of us had much of a clue as to where to start. But having begun the process of sorting through papers and finances, I am beginning to see that this is going to be a fascinating process to be involved in – but that it will also have its frustrations.

The estate, such as it is, appears to be relatively straightforward. Mercifully, my grandfather was pretty meticulous about keeping his paperwork in order, so we seem to have everything in place at the moment from that side of things. For this reason, we have decided that we won’t be employing the services of a solicitor to handle the proc…

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Canadian clues - 27 Feb 2009

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It’s been quite a momentous week in the finance world. Thursday saw the announcement of the largest ever corporate loss in the history of business in the UK, the effects of which were exacerbated by the manner in which the issue of the former chief executive’s pension pot was revealed. Fred the Shred’s apparent point-blank refusal to give up any of his entitlement has been lambasted in most of the press today, though it may be a little unfair to single him alone out for criticism while the heads and former executives of the other major banks are doubtless sitting on their own healthy pension and payoff funds.

However, it was a different story altogether that caught my eye this week, and one which offers hope and a way forward for the banking and finance sectors in the major industrialized nations.

While virtually all of the major economies in the world have been sufferi…

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Small confidence - 13 Feb 2009

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Last week I attended a launch and networking event organised by Enterprise Nation to give some pointers as to the direction of home-based businesses in the coming year. More of the findings of their report can be found here.

However, this blog is not intended to discuss the report in itself, but to praise the attitude of the people I met there, and how we really can have high hopes for the future of business in this country. Home businesses are going to grow in their number and scope in the next few years – either people made redundant from the corporate world will set up on their own, or people within small and medium-sized companies will convert to home working to cut overheads through the recession.

But it is the enthusiasm with which all of the people I met are tackling the current ec…

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Frying pan or fire? - 26 Jan 2009

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Which situation is the best for our country? Would we be better off here, in the Eurozone, or in the US? While this seems a pretty pointless question given the state of the world’s finances at the moment, it is interesting to see that different parts of the global economy are suffering for different reasons. Most people aren’t going to be overly concerned with this question – a recession by one method is the same as a recession by any other means, isn’t it?

Well, not necessarily. If the recession is caused by one thing, it may make recover faster or slower than if the recession is caused by something else. It may also have an effect on the health of the banks and other major corporates in various different economic models.

Let’s look at an example. Spain has long seemed like the model of a modern European economy. Growing from a reasonably low base, it expanded with the aid of major overseas investment, an incredibly strong property sector and a …

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Draining confidence - 21 Jan 2009

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It seems that the latest attempt by the government to reassure the public, investors and the City that the UK banking system is sound, safe and solid has failed, at least in the immediate aftermath of the announcement of the new loan guarantee measures. Share prices for all of the major banks have collapsed within the space of the past two days – first with RBS announcing the largest corporate loss in the history of UK business, leading to a loss of more than 70 per cent of its share value; and then yesterday Lloyds TSB and Barclays suffered similar falls.

All of this points dismally towards a bleak future for the banks. Even with – or perhaps because of - what some see as a blank cheque from the government to cover their exposure to toxic loans, consumers and investors have little confidence that they will be able to carry out their market functions effectively.

This does lead one to thinking, are we being a little pessimistic about the banks? There i…

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Banks bailed again - 19 Jan 2009

Posted by Paul Collins 2 comments

Sometimes, on rare occasions, coincidents occur that are difficult to believe. Today, 19th January, is said to be the most depressing day of the year. Known as Blue Monday, it is certain there will be plenty of people around the country today who are looking at the latest government wheeze to get us spending money again who feel their hearts sinking.

One thing is for sure, one group of people who won’t be feeling too depressed today are the bosses of the big banks. They will have discovered over the weekend that the government is pumping yet more money into the creaking banking sector, the state will be taking even more shares in the most vulnerable bank, RBS, and we the public will be backing up the banks even further by guaranteeing bad loans if the banks start lending to mortgage customers again.

The use of this state guarantee to back up the attractively-named toxic loans, is perhaps the hardest for the public to swallow. The use of public money to s…

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After the storm - 16 Jan 2009

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The credit crunch has been one of the most significant developments in the economic lifetime of this country. No-one has ever seen a global situation like it before, and it is very unlikely that we will ever see anything of the like again in the foreseeable future.

Of course, the current worldwide economic slowdown is far from over yet, and in order to keep track of what is going on in the business world, as well as what banks and governments are doing to try to ease the situation, it is necessary to keep a constant watch on reports, blogs and other sources.

However, there will be an end to it all. At one point in November it appeared that the whole stock exchange was about to fall apart, along with most of the banks, building societies and even, in the case of Iceland, whole countries. Inevitably, thoughts begin to turn to the future, and how the global economy will be shaped in the years to come. While no-one has a crystal ball, there are some signs begi…

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Credit crunch jargon - 16 Jan 2009

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To many people who aren’t specialists in the field, the worlds of banking, finance and economics can at times seem to be completely alien. Not only do they deal in concepts and strategies that seem to be nebulous at best and completely intangible at worst, but most of the processes by which huge sums of money are gained or lost are shrouded in secrecy, lack of regulation and opaqueness.

To make it even harder for the lay person to find a way through the financial jungle, there is a whole dictionary of technical language, jargon and acronyms to translate just to understand what is going on. The credit crunch has brought some of these to the fore, but even the phrase ‘credit crunch’ is something we had no idea about two years ago, so it just goes to show how quickly things change and adapt. While there are far too many to go through them all, four of the more important ones are below:

Quantitative easing – An impressive-sounding term, which on…

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