The FT has reported:
The Bank of England is exploring ways to relax ringfencing rules that force UK lenders to separate their retail operations from other activities, as it aims to head off calls to scrap the regime entirely.
Sam Woods, head of the BoE's Prudential Regulation Authority, has told staff supervising the banking sector to draw up options for diluting the ringfencing rules without losing the core protection they provide for retail deposits, according to people briefed on the work.
It would seem as if everything learned in 2008 has been completely forgotten by the current economic leadership of this country.
We just need to wait for the next crash to happen. It most certainly will.
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I wonder what the rationalisation is? Who has been “massaged” How? Was Reeves consulted/briefed?
Oh and “Prudential Regulation Authority” – motto? – “Helping The financially reckless”
(& back to the land of info asymmetry – where those gaming the system know more than those regulating it).
Over to you Col Smithers for some background
Investment banks take huge risks because they know they will be bailed out by their central banks, so the more everyday banking is exposed to this, the bigger the pay out.
This of course is unacceptable and madness, but the callous logic of it is inescapable.
And then when it’s all over, we can blame teachers, immigrants, poor people etc.
Your cynicism is justified.
Cynicism?
Scepticism. I will always give the banking sector the chance to do the right the thing.
The fact that they’re incapable of it speaks for them.
@PSR
Which Investment banks were ‘bailed out’ by the UK Government in the 2008/2009 credit crisis?
The banking system failed.
Investment banks are a part of that system, albeit not mainstream.
The whole abankign system failed.
It follows, investment banks were bailed out.
Don’t call again: your mindset is far too linear (and small) for here.
Be very afraid, another massive recession is on the way if this is allowed.
So for those who have savings, stay within the £85,000 FSCS protection limit with a single institution; check that they have a FCA registration number (‘FRN’), and that it’s not the same as another institution where you have savings; consider NS&I for (probably) greater protection; keep abreast of developments on these proposed changes to the ringfencing rules, and watch out for a potential increase in the £85,000 limit to £110,000 some time between December 2025 and May 2026. Or have a bloody good holiday.
Good advice.
A very dangerous move. Obviously they have not learnt the lessons of 2008.
Sometimes I think of a comment made in the New York Times:
“It is a well-known characteristic of “boom times” that the idea of their being terminated in the old, unpleasant way is rarely recognised as possible”
Its date? September 1929.
So true.
Momentary lapse earlier. Should have said ” …….. Or give generously to one of the charities doing their best to cope with the awful atrocities happening in our world.”
So, from what you have told us on this website Richard is to follow the money.
What explicitly happens when things crash? I’m old enough to remember for example the 2008 run on Northern Rock and the subsequent austerity that we are all currently living through. House prices fell and mortgagees left in negative equity.
My then Civil Service wages were dumbed down to average under 1% for the next decade. But I was already far below the average salary with credit card debts and no savings. So a run on banks (which will get bailed out. So any small amount of savings stays there unaffected?
So a stock market value crash impacts personal pensions for example. My wife and I are nearing sixty so her personal one will be affected. That I understand.
How will the average poor household with no savings or personal pensions and renting be affected?
I suppose these questions are along the lines of your other post , what questions would you like answered but this comment is relating to the upcoming crash , which affects us all.
Who loses most? Middle class families with mortgages? Trying to follow the money but a crash means winners as well as losers.
Thanks
Can you repost this on the post I did on suggested video questions? I will then have a reference to it that I might not lose. Thanks
You can always switch your personal pensions to the cash/deposit fund(s). Minimal returns but reasonably safe.
That was my choice a while ago.
Appreciated Mark,
We’ve set her projected retirement age at 60 as soon as it might become apparent that Trump might rock the markets. Hopefully that will settle things a little bit still lost 6% on 3rd April, now recovered to same. Was wondering whether to draw now or just convert all to cash
Darren
In fairness to mark, he cannot answer that question. You could ask him professionally, if you want. I am sure he would not mind if I provided an appropriate email address, but he must let me know for GDPR reasons.
Richard
We are in the late stages of the central banking economic cycle, which now dominates all other economic cycles
I can’t believe the utter stupidity being spouted here by the BoE.
I can believe the utter stupidity being spouted by banks.
Far too big for their boots.
Back in 2008, at the height of the “Great Financial Crisis”, the late Ian Rushbrook of Personal Assets Trust tried to explain the idea of then then Credit Event Horizon (from which we have never really recovered) by quoting from Douglas Adams’s The Restaurant at the End of the Universe. This is worth repeating here in the context of what seems to be to be unfolding in front of us.
“Many years ago this was a thriving, happy planet – people, cities, shops, a normal world. Except that on the high streets of these cities there were slightly more shoe shops than one might have thought necessary. And slowly, insidiously, the numbers of these shoe shops were increasing. It’s a well-known economic phenomenon but tragic to see it in operation, for the more shoe shops there were, the more shoes they had to make and the worse the shoes and more unwearable they became. And the worse they were to wear, the more people had to buy to keep themselves shod, and the more the shops proliferated, until the whole economy of the place passed what I believe is termed the Shoe Event Horizon, and it became no longer economically possible to build anything other than shoe shops. Result – collapse, ruin, famine.”
Just as in 2008, the problem the world faces today is one of far too much debt extended through the banking system, conventionally thinking, and the chief risk is of contagion between the financial system and the real economy. In other words, perhaps we may see yet another “credit crunch” where lending seizes up. That would be very bad.
Very good.
Rationale seems to be to align UK with US under the Orange Menace.
Am I an idealist?
Perhaps
Am I a pragmatist?
Always
Could I make a difference right now as chancellor?
For sure
Would my solutions amount to ‘bad medicine’?
Hell no
It really is a no-brainer, helping the UK economy to help Britons. Why can’t the voters see this?
Starmer and co