How strong is Lloyds' recovery?

It is the HBOS shotgun marriage, stupid. We are where we are and Robert's analysis suggests a lengthy exit path for Lloyds. Is it too late to extract the HBOS problem which clearly was a Brown move to stave off outright nationalisation (a missed opportunity) and will increasingly become an obstacle to a Cable - Osborne banking restructuring.

Yes, they could shrink their business as a solution.

Or how about paying a substantially better rate to savers, thereby increasing the money they attract by honest means and giving them the funds to loan at a modest profit. Basically do some honest business to earn a living, like most proper businesses have to do.

Or is that too much to expect from a bunch of spivs who have got used to instantly earning billions on shoddy deals rather than honest business?

Credit Crunch 2. Unavoidable.

The finance sector in its present form is a burden the world cannot survive.

Robert,

"Only 61% of Lloyds' loans to customers are financed by deposits from customers,.."

Many have noted that Fractional Reserve Banking (FRB)is a confidence trick.

Once that confidence is gone we get a run on the bank and rightly so.

What we have here is not even FRB, but banks lending out money and then looking for the deposits later.

Is this why the £200 billion QE has had no affect? Banks sat on it instead of lending it out because they had ALREADY loaned it out pre-2008?

As for Daniels... " says he wishes to stay at the helm to build on the recovery under way at the bank."

Translates to "I will go when the GOLDEN goodbye is big enough"

> The remaining 39% comes from wholesale sources - and, as banks learned
> the hard way after the credit crunch started on 9 August 2007,
> these wholesale providers of funds can vanish overnight.

Remember that the run on Northern Rock started because of improvements in the reach of instant communication. With the right informant, the public can sense when a bank is on the ropes as easily as any lazy, stupid fatcat banker.

The implication? It means that deposits from customers can vanish as quickly as wholesale providers of funds. The old days when bankers could sail close to the wind are most decidedly over and done with, thanks to the Internet. It's drowned the banks once already, and we've only just begun. How many more dunkings can those dopes take?

I think its an odds on certainty the banks won't be repaying the treasury by the end of 2012. The wholesale funding has gone away for good if you ask me and the majority of that £132bn will be added to the bill already being paid by the taxpayers. They'll say they need a bit more time, and then a bit more, and a bit more, the can will be kicked ever further down the road and the cost will inevitably fall on us. I feel the public softening up process has started already, it will just be added to the deficit and the gravy train rumbles on....

2. At 11:38am on 04 Aug 2010, jon112uk wrote:

> is that too much to expect from a bunch of spivs who have got used
> to instantly earning billions on shoddy deals rather than honest business?

Don't worry, we'll have the usual suspects on line shortly to tell us how clever they are. They are too slow to realise there's a new thread, and they are still doing battle elsewhere!

No joke, those guys are slow dopes, but they'll catch on eventually.....

#2 jon112uk

Brilliant post that says iot all. But sadly I'll bet the bankers will choose to ignore it.

Along with Northern Rock returning to profit, this is good news for the UK economy and we should celebrate that our stakes in Lloyds TSB and RBS are now worth a lot more than what we paid for them.

Lloyds have reduced their impairment debt significantly (50%) from this time last year. Ironically impairments are largely in Ireland which has gone through savage austerity cuts in the last 12 months.

Oddly, the people who seemed most afeared the Bank Bailout would be a disaster are now the most eager to spend the profits from it. In my opinion any money we hope to make should be used on deficit reduction or at least a bank levy. Osborne should forget about breaking up banks and appeasing the public and I do at hope at least the coalition will use this money to lessen the burden of austerity cuts they intend to implement in the coming months.....

Lloyds could certainly attract more deposits by offering higher interest rates. The rates offered to businesses by NatWest and Santander on deposits of, say, £1,000,000 are significantly higher than those offered by Lloyds.

This comment was removed because the moderators found it broke the house rules. Explain.

The EC has commanded from high that Lloyds Banking Group is too big. Part of the reduction of the Group is to devest TSB from Lloyds. This should be hurried through and TSB returned to the high street in its 200th year.
TSB was always about ensuring the ordinary person was looked after and was never interested in the eye watering greed of the bigger banks. Lloyds have managed to drag it down during their 15 years marriage. Interstingly at merger Lloyds had 70% share of the enlarged Group and TSB 30%, but TSB more than doubled Lloyds TSB's account holders.
Its high time we once again had a Bank that likes to say YES!

Businesses aren't growing. The housing market has stagnated. Manufacturing has stopped. Unemployment is high. Interest rates are non-existant. The FTSE is the same level it was in 1997. Where did Lloyds suddenly get £1.6bn from?

You can hardly blame Lloyds for borrowing from the cheapest source available. I presume that as the repayment date to the treasury grows near they will have to source a higher percentage from regular depositors, which will lead to higher interest rates for savers. And spare a thought for the long suffering shareholders. There are about three million Lloyds bank shareholders who are also keen to know when they might see another dividend. God knows we have taken a big enough hit on the share price already.

This comment was removed because the moderators found it broke the house rules. Explain.

A terrible company with bullying rife in one section of the business that i used to work for, they do believe they are above the law. The deal with Halifax was pushed through illegally by the scorched earth policy prime minister!

They take bonuses and make huge profits off of our funding and we will not get much back in return thats for sure!

So many people believe this recession is gone forever and we'll all be rich property owners tomorrow! get real, wake up the gravy train has to stop somewhere and it will!

This comment was removed because the moderators found it broke the house rules. Explain.

There was a time when owners, shareholders and bond holders provided the capital for business investment, not banks. But in the heady days of cheap money we'd convinced ourselves there was no such thing as risk, and businesses, entrepreneurs, hedge funds and private equity (and some utility regulators) persuaded the banks to cough up instead for a measly interest rate.

Then we found there was risk after all and those miserly banks are refusing to take it for a low interest rate. How unfair and inconvenient is that!

Despite all the smoke and mirrors the debt problem hasn't gone away.

"Lloyds insists it can repay most of this by shrinking its balance sheet, by reducing how much it lends and invests - which of course has the effect of reducing its borrowing requirement. "

Errr - so where does that leave profit and share price Robert?

Lloyds has the most outstanding shares of any UK company (I believe) - so it doesn't take a mathematician to work out the impact on the Governments holding when the revenues (and consequently profits) decline because the balance sheet shrinks.

...in fact this post seems to be in direct conflict with your last one. Before you were talking about profit and paying back the taxpayer - so how do you do that with a shrinking business?

Pay back when? - 2099 perhaps? - we'll all be dead by then, no good to us!

2. At 11:38am on 04 Aug 2010, jon112uk

Excellent post - demonstrates the 'bankers thinking' very aptly.

The banks are more concerned with repairing their balance sheets than they are at helping those they plunged into adversity with their wrongful actions.

It seems as if the bank bail-out are just that; handouts with no strings attached.

We should have let them go to the wall. Once Northern Rock had sunk the others would have got the message and we wouldn't have a crisis.

As it is, we just gave into their blackmail to turn the ATM's off if we didn't pay up.

The stage is set for it all to happen again, but much worse this time as the fundamental problem of too much credit has not been addressed.

9. At 1:06pm on 04 Aug 2010, modest_mark wrote:

"Along with Northern Rock returning to profit, this is good news for the UK economy and we should celebrate that our stakes in Lloyds TSB and RBS are now worth a lot more than what we paid for them. "

The average purchase price (break even) for Lloyds has been calculated by the Treasury as 75p
The average purchase price (break even) of RBS was 50p

Now with RBS at 51.29 and Lloyds at 74.89 - can you please explain how you calculated our stakes are 'now worth a lot more than what we paid for them'

I'm guessing maths wasn't your strong point at school.

..and when you're done there - I'll explain to you why 'paper profit' is 'no profit' until it's realised.

Something bankers remember with their own balance sheets - but conveniently forget when it comes to Government stakes in their banks!

#9 modest-mark wrote

Along with Northern Rock returning to profit, this is good news for the UK economy and we should celebrate that our stakes in Lloyds TSB and RBS are now worth a lot more than what we paid for them.

-------------------------------------------------------------------------
Sorry modest, if our stakes in the above are now worth a lot more than we paid for them all we need to do is sell and get our money back??????

you must be a banker to come up wih a comment like that.they have a long way to go before we get any money back!!!!!!

This comment was removed because the moderators found it broke the house rules. Explain.

1. At 11:29am on 04 Aug 2010, watriler wrote:

"It is the HBOS shotgun marriage, stupid. We are where we are and Robert's analysis suggests a lengthy exit path for Lloyds. Is it too late to extract the HBOS problem which clearly was a Brown move to stave off outright nationalisation (a missed opportunity) and will increasingly become an obstacle to a Cable - Osborne banking restructuring. "

Where's your evidence of this forced marriage? - got any, or is this yet more hear say?

3. At 12:30pm on 04 Aug 2010, PacketRat wrote:

> Credit Crunch 2. Unavoidable. The finance sector in its present form
> is a burden the world cannot survive.

We all know that (apart, of course, from bankers, who are as slow as God's horses). The problem, as I see it, is this. When (say) Lloyds “makes” a billion pounds, the chumps who work down there think that _they've_ made a billion. They just can't figure out that making marks on their little tally sticks is NOT the same as actually making wealth! You have to do something for that.

Look, I know it's amazing that anyone could be so stupid. But that's really how it is – they really are that gullible. We'll need a fork lift truck to get them out of the way - but one way or the other, they just have to go before they cause the next meltdown.

#2 I agree entirely

Thats what Credit Unions do and have always done,and at the same time are doing it on a not for profit basis.It's about time the banks had their strangle-hold on the economy removed.

There are alternative business models-that have proven they work for over 200 years.We need to learn from the past not continue making the same old mistakes, remember Barings Bank?

Geerally the comments about spivs in banking are reaonable enough, given the dependence of most banks on casino winnings from investment banking arms. Of course, this comment does not apply to Lloyds as it was the only major bank to make most of its profits from its conservative retail operations, including a very profitable insurance arm. The spivs in this case were Brown, Darling and Balls - who strongarmed Lloyds into a takeover of HBOS whilst covering up its dependence on government funds, and Daniels - who put his career and standing with the powers that be above the interests of his shareholders. I long for the court case where all the papers and minutes are forced into the open.

I'm curious to understand a bit more about how the Taxpayer will get it's money back.

Are Lloyds & RBS paying a dividend on the taxpayers shareholding or are they just on a "loan repayment" plan, or both, ahead of some future sell off of our shareholding?

Secondly, assuming the shareholdings are sold off in the next 3 - 4 years, what does that do to the Budget deficit?...

There will not be credit crunch 2 or 3 or more. We are in credit crunch 1 and staay in that gear until collapse.

There is no way of re-expanding the bubble as the balloon has an unfixable hole

2012 will not just be remembered for the London Olympics

Flytrapper- spare a thought for the shareholders! What? i cant believe this person is on the same plnet as me!

What about sparing just a tiny weeny thought for the people of Britain who have been propping up banks for the last 2 years to now find them awash with money and not lending to deserving small businesses!

Its high time banks, shareholders and the finance world in general started thinking more long term and also about people who actually make things in Britain -yes there are some.

This comment was removed because the moderators found it broke the house rules. Explain.

Holy Comolli WOTW. 25 posts and 7 of them are yours, no doubt peddling the usual bank is bad message. Maybe we should change this section to "WOTW's comments with selected guest writers".

# 14 flytraper

I am a lloyds tsb shareholder i was also at one time employed by them.

However there is no god given right to be paid dividends or indeed see your investment increase in value, it's the risk you take when you invest in ordinary shares.The shareholders take the risk-have you never heard of the 'South Sea Bubble' Bubbles aren't new neither are they old. It always make me laugh when you here the meejha talk about unprecedented events and totally unforseen circumstances, have they never had a history lesson.
Perhaps the next big wheeze will be tulip bulbs?????

13. At 1:41pm on 04 Aug 2010, Muppet wrote:

"Businesses aren't growing. The housing market has stagnated. Manufacturing has stopped. Unemployment is high. Interest rates are non-existant. The FTSE is the same level it was in 1997. Where did Lloyds suddenly get £1.6bn from? "

The customer = the workforce = the taxpayer = the consumer = the saviour.

We're all the same person - as opposed to the 'other one'

Banker = The oligarth = The slave master = The profiteer = The ruling class = the parasite.

There are only 2 types of people in the Economic world - those who work and those who live off the rest of us that do.
Add these dates to you diary and we can show the slave masters who is really in charge.

https://bbc.kongjiang.org/www.bbc.co.uk/news/business-10853909

You don't need to be a member to join this club - most of you are already in it!

Robert,

I enjoy reading your commentaries - don't always agree with them but nevertheless appreciate their insight and timeliness, but I see absolutely no point to you publishing them in the form of an open-forum blog when the likes of writingsonthewall and Jacques Cartier then hijack the subsequent discussion with insulting and bullying posts. They are spoiling the entire purpose of your discussion forum. Not worth contributing if their likes are simply allowed to run amok.

The money Lloyds' owes is to the government who thus a part owner. When 2012 comes around the terms will simply be extended. Lyoyds can just increase the interest rate for government borrowing and make more money and the government will say that is fine as it is the taxpayers who will have the burden. Banking is not just government regulated, it is government facilitated. And the bonsues are coming up as well so this would be the wrong time to leave.

14. At 1:42pm on 04 Aug 2010, flytrapper wrote:

"And spare a thought for the long suffering shareholders. There are about three million Lloyds bank shareholders who are also keen to know when they might see another dividend. God knows we have taken a big enough hit on the share price already."

Shares can go down as well as up - was that not explained to you when you invested?
I find it hard to feel sorry for those who took the dividend but never questioned where it came from or how it was being made - or complained about the huge salaries the CEO's were awarding themselves - I guess you all sing on the way up - it's only on the way down you now start to ask questions.

If I were you I would liquidate everything you own in the stock market, because unless you're looking at a 30+ years investment, I can't see the 'old norm' being reached before then. Where is the demand going to come from? Domestically we've already spent the next 10 years and international demand is not heading our way (unless there's a new demand for weapons and army equipment) - like a world war - in which case the stock market will be worse as they don't like uncertainty.

I am very happy that the sum of my stock market exposure is less than £8000.

I don't listen to these "I paid off my mortgage with a trade on the stock market" fly-by nights, they're here today and gone tomorrow and often never existed to begin with.

They cannot protect your future income - anymore than Ladbrookes or Coral can. It's all a gamble - it's just sad that they're allowed to sell it as 'guaranteed'.

Ask the equitable life pensioners about 'guaranteed income' - I'm sure they'll be happy to inform you of the score.

16. At 1:50pm on 04 Aug 2010, onefumingcp wrote:

"A terrible company with bullying rife in one section of the business that i used to work for, they do believe they are above the law. The deal with Halifax was pushed through illegally by the scorched earth policy prime minister!"

YAWN - any evidence for that - or is tittle tattle now an acceptable form of proof?
Why have none of the Lloyds board made this claim if it were true? I know I wouldn't be taking a kicking for the Government.

"The big question, that matters to all of us, is whether it can shrink its balance sheet in this way without starving businesses and households of vital credit, without precipitating what I've called Credit Crunch 2."

I dont believe this is a big question for all of us at all.

Well managed SME's dont want to borrow
Well managed households dont want to borrow

Everyone is paying down their debt as quickly as possible to ensure that they are in a fair position to withstand the coming onslaught.

ALL except the US of A whos deficit is widening at an alarming rate as its teatering growth rate dwindles into double dip teritory.

The dollar is sinking and the FED will introduce another round of QE within weeks

28. At 2:15pm on 04 Aug 2010, alb1on wrote:

"The spivs in this case were Brown, Darling and Balls - who strongarmed Lloyds into a takeover of HBOS whilst covering up its dependence on government funds"

EVIDENCE?

I'm no fan of Gormless Brown, but fairs fair, the Lloyds deal was struck out of greed and not forced into by some totalitarian regime.

Do tell me, if Lloyds had said 'no' - what would have happened? - according to you (and others) they weren't in trouble because they ran a 'traditional banking' system, so they couldn't have 'support withdrawn' by the Government - it had no leverage with which to 'strongarm' with!!

Absolute nonsense - and this must be the 14th time today already!

29. At 2:17pm on 04 Aug 2010, steviedubu wrote:

"I'm curious to understand a bit more about how the Taxpayer will get it's money back."

...and quite right you should be....

"Are Lloyds & RBS paying a dividend on the taxpayers shareholding or are they just on a "loan repayment" plan, or both, ahead of some future sell off of our shareholding?"

No dividends on preference shares - and no dividends at all on the rest, until they're re-instated.

"Secondly, assuming the shareholdings are sold off in the next 3 - 4 years, what does that do to the Budget deficit?..."

Oh even if the shares are sold in the next 3-4 years, we'll be lucky if they cover the interest paid on the government debt racked up over the period.
This is known as opportunity cost - how much interest has been paid to borrow the money (from the bond markets) to take on this stake in lloyds.

Of course you are asking the right questions - I'll bet you my stake in Lloyds that this will be conveniently forgotten in 2020 when they're finally calling it a 'profitable excercise' for the Government.

#9 modest-mark wrote

Along with Northern Rock returning to profit, this is good news for the UK economy and we should celebrate that our stakes in Lloyds TSB and RBS are now worth a lot more than what we paid for them.

-------------------------------------------------------------------------
Sorry modest, if our stakes in the above are now worth a lot more than we paid for them all we need to do is sell and get our money back??????
.
.
.
.
.
This might help explain

https://www.guardian.co.uk/business/2010/aug/04/northern-rock-lloyds-rbs-profits

https://www.guardian.co.uk/business/2010/aug/04/lloyds-banking-group-profits-leap

At the moment it is only paper profits and the Treasury could not sell them to the market at these prices. To sell them in the open market would require a big discount so they would need to be much higher than the current market price. Obviously those who opposed the bank bailouts are not entitled to have an opinion on what the government should do with the profit they make. That would be rank hypocrisy.

There are billions of shares to dispose of so I would favour allowing the banks to initially buy back their own shares. The Treasury still gets the funds and the taxpayers remaining shares increase in value as the past dilution is partially reversed.

Anything we make should be used towards Deficit Reduction.

Speed up mods. 1 hour to get a comment through :(

Afternoon Robert,
did anyone notice the comment that "money set aside to cover bad loans fell from £13.4 billion to £6.5 billion"?
So this profit was an accounting trick!
"how much do you think our assets are impaired?"- "oh call it 50% so we make a profit this time around!"
Here's a challenge Mr Daniels and your magic circle, why don't you use your profit to buy back £1.6 billion of shares owned by the Government for cancellation??
No, on second thoughts, please use this money to pay your exhausted workers bonuses (nothing has changed since 2008).

36. At 3:20pm on 04 Aug 2010, Wunch wrote:
.......They are spoiling the entire purpose of your discussion forum. Not worth contributing if their likes are simply allowed to run amok.
------------------------------------------------
The clue is in "discussion forum". Everyone may push their point of view. Most views given are polarised. Some seem PR orientated. Some seem political and suited more to other BBC forums such as Nick Robinson's.
Others are wacky or insightful.
A degree of banter is desirable. A chance for all sides (for there are more than two) to get to know their "enemies".

33. At 3:02pm on 04 Aug 2010, SmilingEdBalls wrote:
Holy Comolli WOTW. 25 posts and 7 of them are yours, no doubt peddling the usual bank is bad message. Maybe we should change this section to "WOTW's comments with selected guest writers".

Swansea
You complained about Swansea being over dependent on vehicle licensing yesterday. Here's my analysis.

Economy
"Swansea originally developed as centre for metals and mining ... Of the 105,900 people ... over 90% are employed in the service sectors, with relatively high shares ... in public administration, education & health and banking, finance & insurance ..." [wikipedia]

Analysis
Real business - creates all the wealth - 10%
Public sector - socially useful activity - 45%
Parasite sector - sponges off other sectors - 45%

Sustainability
Zero

Solution
Invest money in the wealth creating sector. Firstly, confiscate (tax) it from the wealth destroying sector (parasite), and secondly if necessary cut back on the wealth consuming sector (public). This is the path to increased prosperity.

29. At 2:17pm on 04 Aug 2010, steviedubu wrote:

I'm curious to understand a bit more about how the Taxpayer will get it's money back.

It's like this...

Spiv banker: I've saved the bank.
Taxpayer: Great, can I have my money back?
Spiv banker: You already have it! Look at the share price.
Taxpayer: So I can sell them now?
Spiv banker: You don't understand, do you. You can't just go selling them off like that.
Taxpayer: So how do I get my money back? I need it.
Spiv banker: Just be patient.
Taxpayer: Oh. And another thing. Don't you think you are being a tad overgenerous with what you are taking out for yourself?
Spiv banker: What? Who saved the bank? Who got you out of trouble? Who is making billions? Where are you going to get talent like that? Unbelieeeevable! It was jolly nice meeting you, old boy.
Taxpayer: Oh, er, OK, well I suppose that's OK then. Er, thanks for sparing me the time.
Spiv banker: Cheerio.
Spiv banker [on phone]: Security, next time you let someone in wearing overalls, you're going to get outsourced.

We don't get our money back. You can't push these people round like silly little entities such as Spain or California.

I work for a company who have Lloyds as their bankers. We did have significant cash deposited with them but have moved it elsewhere as their rates are so poor. Their charges have gone up significantly in the last 12 months and the quality of service has declined very badly - I could almost say "collapsed". After 112 years with them as our principal banker we are seriously considering moving elsewhere and taking our money with us!

33. At 3:02pm on 04 Aug 2010, SmilingEdBalls wrote:
"Holy Comolli WOTW. 25 posts and 7 of them are yours, no doubt peddling the usual bank is bad message. Maybe we should change this section to "WOTW's comments with selected guest writers"."

It's funny you should say that.. I think WOTW should publish a book containing his collected comments made on here over the last few years. Anyone remember 'The Henry Root Letters'? WOTW is miles better. Just print them as they are - you don't even need to know what he was replying to for them to be absolute gems.

Until the day comes that the major banks can turn around and say we do not now, or will never again require the government to guarantee our deposits, then all this talk of being in profit is worthless....

And as for Eric not quitting, he should be sacked along with all other members of the board of all banks that require funding.But thats not going to happen they are too powerful a lobby now, and thats why we need a Parliament that represents our interests and not the corporate institutions, thats what they are supposed to be there for.....

I too would like them to increase the interest they pay on savings but then you can count on the bank bashers pointing out that the repayment of ‘our’ investment in them being 2099, so which is the better option, let me guess, the whole board of director to be fired and then jailed and ok while we are there let’s burn down the houses of parliament? If TSB are borrowing 39% of their needs from wholesale and are able to get it at LIBOR this would be more expensive then what they are paying savers so would expect them to try and wean themselves off wholesale sooner rather than later, a fine balancing act I think.

40. At 3:44pm on 04 Aug 2010, PetersKitchen wrote:

'The dollar is sinking and the FED will introduce another round of QE within weeks'

Weimar economics is coming to a country near you.

Frightening isn't it?

Put that in your fancy stress test!

45. At 4:12pm on 04 Aug 2010, splendidhashbrowns wrote:
Afternoon Robert,
did anyone notice the comment that "money set aside to cover bad loans fell from £13.4 billion to £6.5 billion"?
So this profit was an accounting trick!
"how much do you think our assets are impaired?"- "oh call it 50% so we make a profit this time around!""

Its not an accounting trick as such, it simply means the provisions for bad loans were too punitive in the previous year's accounts abd are now being partially released. Whether the previous years provisions were correctly calculated is another matter. Potentially there could have been an attitude that said "2009 is going to be dreadful - we might as well take all the bad news at once, and if things work out a bit better then we can move back into profitablility the following year". This is just speculation of course.

46. At 4:24pm on 04 Aug 2010, Kit Green wrote:
36. At 3:20pm on 04 Aug 2010, Wunch wrote:
.......They are spoiling the entire purpose of your discussion forum. Not worth contributing if their likes are simply allowed to run amok.
------------------------------------------------
The clue is in "discussion forum". Everyone may push their point of view. Most views given are polarised. Some seem PR orientated. Some seem political and suited more to other BBC forums such as Nick Robinson's.
Others are wacky or insightful.
A degree of banter is desirable. A chance for all sides (for there are more than two) to get to know their "enemies"."

I think the complaint is more about the volume of posts that WOTW makes. When there were 25 posts here he had submitted 28% of them, and now there are 50 posts this has dropped to a contribution of 22%. I'm sure you'll agree this is too many, especially seeing as many of his posts are repetitive and long winded, not to mention ill informed.

JC is also an offender, but to a lesser extent.

How strong is Lloyds' recovery?
About as strong as other large investment banks that have managed to fair better from their bad debts than initially thought.
How firmly based is Lloyds'recovery?
About as firmly as other large investment banks; some have done better than others with the initial bad debt assumption.
I would join those who argue that Lloyds is deriving too much funding from unreliable wholesale sources. This is called derivative trading.
Only 61% of Lloyds' loans to customers are financed by deposits from customers; this strikes me as really high, even though you add it's the lowest ratio for any big British bank.
The remaining 39% comes from wholesale sources, which need to be repaid by 2012. Lloyds plans repayment by shrinking its balance sheet; wow, isn't this what happened in Greece and other PIIG countries - they played around with the balance sheets, hiding certain debts or kicking them far into the future?
Lloyds also plans to reduce how much it lends and invests - which of course tells us absolutely nothing about its future or its borrowing requirement. Tell me Lloyds' capitilization and I will tell you how much it can lend and how much it can borrow.
You cannot shrink a balance sheet; you have to account for the items that are making the balance sheet smaller. This is called reputable accounting.
What is really deplorable is this:
In most cases the banks, especially the semi-nationalised lenders such as RBS and Lloyds, are charging up-front fees for new loans. On top of these exorbitant charges, banks are also demanding ever greater security against loans from small/medium busineses.
They say that banks must be more cautious about lending given the the recent economic collapse. They say they are 'risk averse'. But I say hogwash!
To me, it's disturbing that the same bankers who made such bad decisions are now using these bad decisions as an excuse to keep money out of the hands small/medium businesses.
It is a sad that the Government, which jumped in to rescue these banks cannot get these same banks to jump in with both feet and kickstart the economy. Shame! The banks seem more interested in building up their bonus package.
There must be (MUST BE)
- a wholesale reorganisation of commercial banking
- a split between commercial banking abd investment banking and
- the restoration of realistic lending arrangements.
The sooner the better.

33. At 3:02pm on 04 Aug 2010, SmilingEdBalls wrote:

"Holy Comolli WOTW. 25 posts and 7 of them are yours, no doubt peddling the usual bank is bad message. Maybe we should change this section to "WOTW's comments with selected guest writers"."

If you read them - you might learn something.

36. At 3:20pm on 04 Aug 2010, Wunch wrote:
"I enjoy reading your commentaries - don't always agree with them but nevertheless appreciate their insight and timeliness, but I see absolutely no point to you publishing them in the form of an open-forum blog when the likes of writingsonthewall and Jacques Cartier then hijack the subsequent discussion with insulting and bullying posts. They are spoiling the entire purpose of your discussion forum. Not worth contributing if their likes are simply allowed to run amok."



It's true. No one likes listening to undeserved criticism for just doing their jobs. Fortunately for us, bankers have earned the every bit of the pillorying they get on these blogs and a thousand times worse. What you're witnessing is just a tiny fraction of the public backlash against what the banks have done and continue to do.

Bankers made the mess, that means they get to lie in it.

If you don't want to hear it, then stop listening. The taxpayers aren't going to shut up.

36. At 3:20pm on 04 Aug 2010, Wunch wrote:

"Robert,

I enjoy reading your commentaries - don't always agree with them but nevertheless appreciate their insight and timeliness, but I see absolutely no point to you publishing them in the form of an open-forum blog when the likes of writingsonthewall and Jacques Cartier then hijack the subsequent discussion with insulting and bullying posts. They are spoiling the entire purpose of your discussion forum. Not worth contributing if their likes are simply allowed to run amok."

I think you're just sore because your beliefs about Capitalism are about as watertight as the sunken Titanic.
Sorry to break it to your so harshly - but there's no point beating around the bush anymore - there's not enought time left.

...and Jacques - stop running amok will you - you're upsetting the wallflowers!

This comment was removed because the moderators found it broke the house rules. Explain.

This comment was removed because the moderators found it broke the house rules. Explain.

50. At 4:48pm on 04 Aug 2010, the_fatcat wrote:

"It's funny you should say that.. I think WOTW should publish a book containing his collected comments made on here over the last few years. Anyone remember 'The Henry Root Letters'? WOTW is miles better. Just print them as they are - you don't even need to know what he was replying to for them to be absolute gems. "

I would never write a book - simply because I would have to go on awful shows like "the one show" and GMTV and promote it and have to listen to some of their vacuous bland analysis of a subject they don't understand and pretend that "they really get it" as my agent pushes for "worldwide sales" - all for my benefit of course (and not his bank balance)

....and why join the ranks of Jeffery Archer and Jordan when it's much more fun on here laughing at some of the ridiculous ideas people have about financial services, whilst watching the economic world implode.

It's time the government stopped walloping the banks over not lending enough. Stupid, if you ask me.

Banks make their profit by lending - usually scaling the fees/interest rate to the risk. A bank refusing to lend will fail at worst, do no good for its shareholders at least.

As I see it, the gov stance is another gaffe. I'm surprised that even Vince Cable hasn't spotted the paradox: a bank cannot build up its capital ratio AND throw money at everyone turning up on its step cap in hand.

Besides it is a fact that many businesses think it's best at the moment to lie low, avoid borrowing more than absolutely necessary. We HAVE to wean people off debt - businesses as well as persons. That won't please the banks because it'll dent their profits.

But you can't force a bank to lend. Even us taxpayers who own a substantial chunk of Lloyds would not want to see our money thrown frivolously around on any creaky, dodgy business proposition thrust before it. I certainly don't want Lloyds to force people to borrow which is what it seems to be coming to. Why can't politicians (some of them seasoned in finance and economics) think the situation through?

" Most of that £132bn comes from the Treasury's Credit Guarantee Scheme and the Bank of England's Special Liquidity Scheme - both of which need to be repaid by 2012."

Robert, do you want a bet that their need to repay this by 2012 will be outweighed by their ability?

The loan book is flat and they still need 32% of the funds from the VERY SPECIAL LIQUIDITY SCHEME to fund those loans so what are they going to do in 2012? Hope that deposits come to them in droves?

I think not - the writing is on the wall for Lloyds and the rest of them

I'm afraid one a bit billion after the giveaways of the past two years by the taxpayers is a tiddler in the ocean.

If it means they can show a profit because they didn't have to write down as much debt then it really doesn't give us confidence if there was a sovereign debt crisis tomorrow.

The sooner these gigantic money spongers are broken up into little pieces the sooner we can get back to some economic reality.

Why oh why did we ever lose all those independent banks and building societies?

Like the great British sports cars shown on Top Gear last night we can barely now remember their names. And this is supposed to be progress?

55. At 5:08pm on 04 Aug 2010, SmilingEdBalls wrote:

46. At 4:24pm on 04 Aug 2010, Kit Green wrote:
36. At 3:20pm on 04 Aug 2010, Wunch wrote:
.......They are spoiling the entire purpose of your discussion forum. Not worth contributing if their likes are simply allowed to run amok.
------------------------------------------------
The clue is in "discussion forum". Everyone may push their point of view. Most views given are polarised. Some seem PR orientated. Some seem political and suited more to other BBC forums such as Nick Robinson's.
Others are wacky or insightful.
A degree of banter is desirable. A chance for all sides (for there are more than two) to get to know their "enemies"."

I think the complaint is more about the volume of posts that WOTW makes.

WOTW rarely posts without adding value in the form of information and opinion on topic. His contribution is highly regarded by many. Jacques says it like it is, it is perfectly reasonable to remind us they are stupid, banksters, spivs or perps when we forget the causes of the credit crunch and who was responsible.

The reason only 61% of Lloyds loans to customers are funded by deposits to customers are because of the poor rates on offer.

If there's a Lloyds account with a half-decent rate, it usually only an introductory offer for 12 months, whereafter it reverts to peanuts.

And Lloyds will not even be paying peanuts interest on certain current accounts, from later this year.

They do seem to be improving overdraft arrangements, but as always this seems to be done in a way that penalises the responsible depositors in order to help the irresponsible borrowers...

Banking industry just doesn't seem right at the moment. Its favouring/encouraging the wrong things,

I think you'll find the £132b provided by the taxpayer/central banks is charged to the banks at a significantly higher interest rate than for example that paid by the government on gilts - the Government is making a fat profit out of these loans, as well as on all the arrangement fees, extra bank taxes and "insurance" fees charged to the banks.

These costs have to be borne by the banks' customers and their shareholders, who are the taxpayers and our pension funds in the main.

It has all turned out to be one huge stealth tax, which the Tories are are very happy to benefit from and perpetuate.

By all means blame greedy bankers for playing their part in getting us into the mess, but don't forget the Government and Bank of England who are more to blame for encouraging and mis-managing the credit boom and credit crunch.

Whilst journalists might revel in the thought of credit crunch 2, just as they revelled in helping destroy confidence in grabbing the headlines during credit crunch 1 - it is not going to happen.

"The financial system is broke and I see we just stay where we are," he said. ( Greenspan )

----------------------------------------------------

He told the Senate Banking Committee record low interest rates would still be needed to support economic recovery.

The Fed was also prepared to step in with "further policy actions" to boost the economy if needed, he added.(Bernanke)

-------------------------------------------------------

https://www.zerohedge.com/article/barclays-adds-monetization-confusion-not-qe1999-or-qe2-qe-lite

What else can we try mac Its bust?

#36. At 3:20pm on 04 Aug 2010, Wunch wrote:

"Robert,

I enjoy reading your commentaries - don't always agree with them but nevertheless appreciate their insight and timeliness, but I see absolutely no point to you publishing them in the form of an open-forum blog when the likes of writingsonthewall and Jacques Cartier then hijack the subsequent discussion with insulting and bullying posts. They are spoiling the entire purpose of your discussion forum. Not worth contributing if their likes are simply allowed to run amok."

So you're advocating the censorship of people you disagree with. Funny how the detractors are so certain that WOTW and JC are so misguided even though they're commenting from the "inside," spilling the beans so to speak.

For my part I also worked in banking and I'm seeing in WOTW and JC's posts what I already know, nothing more, nothing less. Profit has to come from somewhere, more worrying though is profit in a recession can only come from further wringing a virtually dry cloth, eventually they exert more and more pressure until the cloth either explodes under tension or their arms break.

This isn't about sustainability, greed, capitalism or [im]moral ethics, the bottom line is it's about the ability to repay by all parties, joe public, banks and governments. This ability is decreasing by the day but banks are living in the NOW not the future. While rates are low we can all repay, while we have jobs we can repay, while inflation is 3-4% we can repay. Any idiot can see one, maybe two or three of these drivers is going to change so I'm baffled at Lloyds clearly not having a huge provision for default, or is it more fantasy accounting based on hyperbole and inadequate forecasting.

Smell that parchment roast, the quill tips are a popping in that hot oven.

#68. At 6:36pm on 04 Aug 2010, TGR Worzel wrote:

"Banking industry just doesn't seem right at the moment. Its favouring/encouraging the wrong things,"

That's because it's the "wrong things" that are going to cause the bang when they go belly up. Serious question, which would you prefer to see, millions of Joe Soap's struggle to carry on paying their debts or millions of defaults with higher interest rates to attract the savers/sensible? John_From_Hendon need not answer :-)

66. At 6:07pm on 04 Aug 2010, virtualsilverlady wrote:
Why oh why did we ever lose all those independent banks and building societies?

IMHO 'cos they asked nicely, paid a lot of lobbyists and offered jobs to those who listened.

We need to get off this nightmare. The fix we are being offered is the problem in the first place. We, meaning the western economists and bankers have trotted around the world since the 80s handing out austerity wherever they could and destroyed societies in their wake saying they were there to rescue them from their woes. The countries fell apart. Funnily enough, the same economists were telling us to spend, spend, spend. Now there's a wee debt problme that requires austerity to sort it out. We sold our infrastructure, just like the third world countries did. Now here comes the austerity plan...

We hear a lot about the banks not lending as if this is the solution to our financial woes. Was it not this over lending that created the problem. As the banks are now making good profits it is obvious that the margin between lender and saver rates are to high. The economy will not expand if we just try to lend more. If we redress the poor saver rates we will increase the amount people have to spend, this will increase demand, which will lead to more investment to satisfy that demand. Why is it that the finacial experts go on about lending money rather than creating demand.

42. At 3:54pm on 04 Aug 2010, writingsonthewall wrote:

I'll bet you my stake in Lloyds that this will be conveniently forgotten in 2020 when they're finally calling it a 'profitable excercise' for the Government.

I'll hazard a guess that your stake in Lloyds (as a Taxpayer) is zero. Given the countless number of comments you have posted on this and other blogs, whinging about your experiences with opening a bank account without an overdraft, I'm guessing that you are sitting at home, thinking about how you are going to spend your next giro, having never contributed a penny into the system in your life.

My understanding of the 'crunch' debacle was that prior to Lloyds involvement with HBOS, that Lloyds were the strongest Bank.

I can only assume that they were cajoled into rescuing HBOS by the erstwhile Gordon Brown, to help save his, and his partys' skin.

It obviously failed miserably for both Lloyds and GB respectively.

GB seems to be keeping 'a low profile', I wonder why.

Lloyds can't exactly come out and say, they had a 'deal with not so Flashy Gordon'.

It, in retrospect was a bad decision, however I can understand why they did it, although it put them and their customers, borrowers and investors in a bad position.

I am not so sure what the alternative was at the time, do banks have a duty to customers, investors, the country, the government, the financial markets, at times like that, unheard of since 1929.

Their decision was impossible, I suspect the presure to accept the deal was impossible.

If they had rejected it where would our financial institutions be now, meltdown?

We do not know all the details, never will, but we need to be measured in our response to Lloyds predicament.

I am not a Lloyds shareholder, but am a customer, and was many years ago an employee.

Neil Hewitt

Has anyone noticed that there is a new £5 charge monthly from December for being overdrawn. This appears to supercede the allowed values dependent on the type of account held.

75. At 8:33pm on 04 Aug 2010, flickymcbean wrote:
42. At 3:54pm on 04 Aug 2010, writingsonthewall wrote:

I'll bet you my stake in Lloyds that this will be conveniently forgotten in 2020 when they're finally calling it a 'profitable excercise' for the Government.

I'll hazard a guess that your stake in Lloyds (as a Taxpayer) is zero. Given the countless number of comments you have posted on this and other blogs, whinging about your experiences with opening a bank account without an overdraft, I'm guessing that you are sitting at home, thinking about how you are going to spend your next giro, having never contributed a penny into the system in your life.
------------------------------------------------------------------

Your contribution to this debate is probably in line with your loins contribution to mankind flickymcbean

writingsonthewall

at 19 you wrote

"LLoyds has the most outstanding shares of any UK company (I believe) so it doesn't take a mathematician to work out the impact on the Government's holding when the revenues (and consequently profits) decline because the balance sheet shrinks"

Correct me if I am wrong, but the way Lloyds will be shrinking the balance sheet (when it gets on with disposing of the assets it will have to sell to meet the EU monopoly requirements or to rationalise the business where overlaps have occurred) would be to use the proceeds from the sales to return to shareholders by way of a share buy-back. Thus there would be a smaller balance sheet but a compensatory reduction of the number of shares in issue. And the relationship between the balance sheet, revenue and the shares in issue could remain constant always provided a reasonable value is obtained from the sale.

At present, the share price bears no relationship to the normal financial ratios like price to earnings and I suspect the balance sheet valuation of the assets and liabilities is equally removed from normal financial reality.

Incidentally, Daniels is looking and talking like a man who is about to get back on the juicy bonus trail. When I saw him at the shareholder meeting before the bid went through (and subsequently at the Select Committee) he looked like a man totally bemused by what was happening to him and gave the aura of someone dealing with a bunch of ingrates. A bit like Tony Hayward only without the excuse that the latter has for dealing with an accident rather than a self-inflicted wound..

WOTW re #41. You asked about the evidence for the misbehaviour of the government in the HBOS takeover. It is well documented that the government failed to publicly disclose that the value of loans to HBOS from the Bank of England was over £25 billion. If this information was then uncovered in due diligence (unlikely as the timetable imposed by the government made the usual thoroughness impossible) it was not disclosed in the documents provided to shareholders on which they voted for the takeover. Now that leaves two possibilities. Either you consider £25 billion such a trifling sum that it was immaterial to the takeover or you are PSP (Ed Balls nom de prat - Public School Prescott).

Downgrade your account to Classic or basic. Ghey will have to change their new rules

55. At 5:08pm on 04 Aug 2010, SmilingEdBalls wrote:

> JC is also an offender, but to a lesser extent.

Diddums?

Lloyds need to make money quick, the Loan Protection gravy train has expired with the announcement that they do not sell it anymore, so be aware when paying in at any Lloyds TSB Halifax Bos branch as a cashier is gonna be wanting to get you in to see a seller (A.K.A Account Manager.) to give you a loan/credit card/home insurance/ISA. Suprised they don't still sell gas and leccy!

And now they are going to charge all overdraft users a monthly fee of a fiver in Lloyds, but give you back the fiver if you are at the Halifax!

Miser Miser Baby!

80. At 9:02pm on 04 Aug 2010, alb1on wrote:

If I remember at the time, not one bank or finance house involved in the mess had any idea what debt they were carrying and had to call in experts to figure it out. The experts were expecting that work to take about maybe two years. Wasn't that on on of Robert's documentaries at the time - definitely teh BBC documentary where Darling described Fred the Shred as being clueless (in that he was sure his bank only had a cash flow problem, that's all) in the meeting with all the bankers at the Treasury one stomach churning weekend.

Refusing isn't the same as not knowing.

Even 'they'

Peston
Been watching your reports on TV today - You seem to once again be suffering from selective memory. How do you always forget to mention that LLoydstsb was sound to the core until your labour mates got them to save a Scottish bank from going belly up and taking the whole UK banking system with it??

#72. NorthSeaHalibut wrote:

"Serious question, which would you prefer to see, millions of Joe Soap's struggle to carry on paying their debts or millions of defaults with higher interest rates to attract the savers/sensible? John_From_Hendon need not answer :-)"

One often has to do things one need not do...

For one thing you present the situation regarding the sensitivity of debt and interest rates too starkly. The vast majority of debtors would not even see a change in their repayments if rates went up a couple of percentage points. Raising rates would however hit those that are using the absurd interest rates to invest in non-viable projects just because the money is free - but most rational business people don't do this.

The problem with near zero interest rates is not that people can borrow at them it is the psychology mindset of the borrower is so terrified by the imminent total collapse of the economy they will not invest in anything. Zero interest rates are the equivalent of kissing goodbye to the economy - that is the main fault of the absurd rates - apart from that the problem is that banks are rescued and permitted to pay gigantic bonuses without any sign of reform!

(I have shown previously that the effective base rate today is about 3.5 percent - for everyone except bankers!)

Lloyds and their like are putting extreme constraints on their terms to stop lending to what would have been deemed as strong propositions in the past. Lloyds are looking at a stress test of 200% of the capital and interest repayment just to CONSIDER if they can lend to a prospective customer and that is 4%-5% over base for a strong case. Some, RBS, are using a base rate of 6% plus the margin over base to asses serviceability then multiplying by 1.4 to 1.6 times. In the commercial investment property business no rents will ever meet these stupid, outlandish, unrealistic terms. No wonder they say there is no demand to lend. Commercial Finance Brokers such as myself scream at the television when out of touch fools like Daniels say there is little demand. Someone please take these banks into full public control and make them lend, I am not a commy but these liars need stopping from espousing these untruths. I have further evidence on the rest of these balance sheet improvers.

#84. Your point is well made about banks knowledge of their overall liabilities but that was not my point. HBOS had specific and relatively recently arranged loans of over £25 billion from the BoE and it is inconceivable that both they and the government did not have the information on those loans. I fully accept that many banks did not understand their full liabilities because of the leveraged nature of those liabilities attached to some debt instruments. That is another issue but not material to the charge of witholding material information regarding debt to the BoE.

I've just borrowed as much as I can and bought physical gold...

...do the same...or lose!


Lloyds chief says 'we can't force customers to take loans' as bank returns to profit
https://www.telegraph.co.uk/finance/newsbysector/epic/lloy/7927382/Lloyds-chief-says-we-cant-force-customers-to-take-loans-as-bank-returns-to-profit.html

The Phukaaawee masonic jail birds running the banking system will soon be back to their tradishanal plaaaintive cry.. Where the.......!

The taxpayers are merely subsidising the banksters state sponsored doodle doing at the quack of dawn ,where did /does the seedcorn go .

Lloyds and HBOS is simple and not very complicated.

Lloyds thought they could gain a large (in theory) profitable share of the UK market by acquiring HBOS in a way they could never do organically nor in usual circumstances due to competition concerns and the premium to pay on a bid. Same basic methodology that has enabled Santander to pick up A&L, B&B etc to grow in ways they could not organically at relatively low cost (at least in their thinking if not in practice for Lloyds at least). (It will be interesting to see how many of the customers Santander think they have bought from RBS actually retain their accounts - I presume that easy not cost reversion to their provider of choice will be made available to all the customers so arbitrarily sold off? It would be such a shame if all Santander got for it's 300 million were 318 shopfronts).

All HMG had to do was signal that there would be no protracted monopolies and mergers worries for Lloyds due to the circumstances of the times and Lloyds made a mess of the rest on their own with obviously p. poor due diligence which Daniels has admitted.

After all, if HBOS had not been in a bucketload of trouble then it would not have been available to Lloyds to acquire in the first place. That the due dilgence did not unearth just how much trouble nor quantify adequately the likely effect on the merged entity just goes to show the shortcomings of the DD carried out.

Their current state is the price of doing a poor job and taking excessive risks, that the shareholders (bar HMG) have not shunted the most/all the board out the door seems rather generous of them. HMG for sure were grateful for such a move, which avoided having to do a second RBS. If it had been any other way we would be seeing court actions by the financial sector shareholders, we aren't so there is obviously no evidence of anything untoward.

Like all the banks Lloyds will recover, though it's reputation of being a rather boring safe bank earned over the decades of its existence is however rather tarnished.

@ 36. At 3:20pm on 04 Aug 2010, Wunch wrote:

> Jacques Cartier then hijack the subsequent discussion with insulting and bullying posts.

Thanks for your kind words. I like feedback from fans, and it's good to know that my posts are having the desired effect among banker sycophants. Keep up the good work (if you do any, that is).

Quantitative easing and near zerow interest rates are the method used to preserve the statass quo by embalming its roundead up tutts in sillycon valley for the benefit of future generations of arkeyholeogists to ponder why such a big pyramid sellong scaaam was necesary for such small tutts in de nile to get to haven.

#87 John_from_Hendon wrote

John my post at #71 expanded on my reasons for my subsequent post at #72 but unfortunately only the latter post got past the mods making me look somewhat unconstructive. The irony is the censored post at #71 had a dig at censorship in it.

Back to serious "stuff" I need to ask you a question re this part of your post....

"For one thing you present the situation regarding the sensitivity of debt and interest rates too starkly. The vast majority of debtors would not even see a change in their repayments if rates went up a couple of percentage points."

Why don't you believe banks will retain their current differentials and raise rates in line with each rise in the base rate. Take me for instance, my current mortgage rate is 4.19% so why wouldn't it rise to 6.19% if the BoE base rate increased by a couple of percentage points? Serious question my friend as I'm curious why you don't think banks will continue their profiteering as much as they can while they're all in a hole.

96. At 08:59am on 05 Aug 2010, NorthSeaHalibut wrote:

Why don't you believe banks will retain their current differentials and raise rates in line with each rise in the base rate. Take me for instance, my current mortgage rate is 4.19% so why wouldn't it rise to 6.19% if the BoE base rate increased by a couple of percentage points? Serious question my friend as I'm curious why you don't think banks will continue their profiteering as much as they can while they're all in a hole."

This is an interesting question. To give another example, I have a credit card at 16% or whatever it is, which didn't reduce at all when the base rate went all the way down to 0.5%. If the base rate moved to 2.5% would they raise the rate on my card to 18%? I don't think that would wash with the public, but as you say it would hardly be a surprise if this was the bank's action.

In the longer term do we think banks will attempt to always keep this big differential between lending and borrowing which did not exist before?

Of course the banks need to tread a fine line between bankrupting people and still reeling the cash. Will be interesting to see what stance they take when interest rates do rise.

97. At 09:18am on 05 Aug 2010, SmilingEdBalls wrote:

Of course the banks need to tread a fine line between bankrupting people and still reeling the cash. Will be interesting to see what stance they take when interest rates do rise.

Banks make redundancies, outrageours overdraft charges, significant differentials bewteen base rate and lending rate, and seemingly lent out willy nilly to anyone no matter what their credit rating or expertise in finance, so what makes you think they care about the number of people facing bankruptcy as a result of their actions? If they were worried by that they'd be making sure we had growing employment via finding businesses.

Not sure, but the last time I looked, our employment rate isn't so good, neither is our housing market/housebuilding and then I look across the Atlantic so see dire straits all the way to Arizona and California. Turning east we can look straight across to Greece where we see no concern whatsoever, not from the banking gamblers.

@ 97. At 09:18am on 05 Aug 2010, SmilingEdBalls wrote:

> In the longer term do we think banks will attempt to always
> keep this big differential between lending and borrowing which
> did not exist before?

They will always take greed to its limit. That is how their reptilian brains are programmed.

Look, we can't afford to put them through years of rehab - they'd wreck the system again in that time. They need some kind of short, sharp, shock treatment. Lord Turner says they are socially useless, so perhaps Antisocial Banker Orders would be appropriate - we could call them ASBOs!

While we continue to feed the monster, how can this cycle ever stop, while I'm working, every month I feed money into RBS, transfer it to Lloyds, pay some to HSBC - I can't spend it quick enough for them not to try and profit from my paultry holdings during the monthly cycle. Someone needs to invent a new system of payment or develop a new co-op bank!