Monthly Archives: October 2008

For those of us without a PhD in finance, the £200bn “special liquidity scheme” is difficult to comprehend. But taxpayers should pay attention.

The Bank of England is allowing hard-pressed banks to take the assets they are unable to sell in the market and swap them for crisp, clean Treasury bills. Read more

Will Westminter follow the lead of the US congressman who has forced nine big US banks to declare the size of bonuses awarded to all their staff?

As he issued the order, the tenacious Henry Waxman questioned “the appropriateness of depleting the capital that taxpayers just injected into the banks through the payment of billions of dollars in bonuses, especially after one of the financial industry’s worst years on record”. Read more

Here are George Osborne’s views — stated less than two weeks ago — on irresponsible politicians (i.e. Vince Cable) who call on the Bank of England to slash interest rates:

I do not think that it is particular sensible either for politicians speaking from the frontbench to call on the Bank to cut or increase interest rates. Indeed, I make it a practice not to comment on them.

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Gordon Brown’s mantra of “global solutions to global problems” is rarely followed by details of the institutional reform he envisages. He prefers to discuss why the reforms are needed, rather than highlight the power broking required to set them up.

On Monday, he made an exception. During a Q&A session he said he wanted the International Monetary Fund to be “more like an independent central bank rather than a political committee”. It is a revealing quote. Read more

The story of the weekend was surely the Mail on Sunday exclusive on Britain disposing of a camel saddle presented to Tony Blair by Muammer Gaddafi of Libya. The gesture of solidarity was apparently sold at auction for the princely sum of £20.

This revelation comes days after Gordon Brown withdrew an invitation for Mr Gaddafi to attend the London oil summit, which has been downgraded to ministerial level. Read more

For those wanting to know more about Oleg Deripaska’s ailing metals empire, Catherine Belton’s weekend piece is indispensable. One observer likens the Russian oligarch’s business to a house of cards.

A worrying aspect for UK taxpayers is who he owes money to. Mr Deripaska is presently scrambling to repay Royal Bank of Scotland, a UK bank that is set to be part-nationalised. In this small and indirect way, Britain is exposed to the Russian oligarch’s financial fortunes. Read more

The recent news that David Cameron has hired a PR firm (“Pretty Little Head”) to reach out to women voters brings back memories of the mid-1990s for some.

George Parker, now FT political editor, wrote a story suggesting that Tony Blair had changed his hair style to appeal to women voters. Blair had “flattened his bouffant” after a panel of females said they didn’t like it. Read more

The FT has obtained the full transcript of Alistair Darling’s conversation with Iceland’s finance minister. David Ibison wrote a piece about some of it today and we’re writing more about it tomorrow. But I wanted to share the most important exchange with you first. Enjoy.

Árni M Mathiesen: Hello Read more

lembit1.JPGWhich politician “on first name terms with the nation” is “swallowing hard” for his party, working “right at the coalface” and offering a “colourful alternative” to the “ordinary members” selecting the next Liberal Democrat president?

Why, Lembit Opik of course. Read more

tillman.jpgAll the evidence suggests that allowing corporate donors does nothing for transparency or the simplicity of the political finance system.

Peter Riddell’s piece neatly exposes the logical contortions in electoral law. Why should a foreigner banned from donating be permitted to give as much as they like via their wholly-owned EU based company, as long as it does business in the UK? Read more

A worthy code to limit the number of home repossession cases reaching court was issued on Wednesday. It won praise from all sides — lenders, ministers, housing charities, opposition politicians. That alone tells you something is not quite right.The “pre-action protocol” includes all the right things to make repossession a “last resort”. But it does not change the rights of borrowers or lenders. Rather it offers a code for lenders to follow if they want to be more lenient than required by law.

So it says a lender “could” offer to extend the term of a mortgage from, say, 25 to 35 years. But if the lender decides this is a silly idea that will lose him money, a judge lacks the power to make him do it when it comes to court. Cash strapped homeowners have no more legal protection today than they did last week. No wonder lenders are happy. Read more

In March 2007 I was covering business rather than politics. One balmy evening that month I boarded a huge luxury yacht in Cannes as the guest of a real estate billionaire (well, he was at the time).

Most of the guests were Arab investors, middle-aged British businessmen or good-time girls in their early 20s. Read more

Amid the furore over George Osborne’s meeting with Oleg Deripaska, it is worth highlighting what the shadow chancellor thinks about people who made their money in Russia during the wild 1990s.

In a speech to Demos in late August, Mr Osborne said: “In the free-for-all of Russia in the immediate aftermath of the collapse of communism, instead of fair reward for effort we saw the unfair wholesale transfer of state resources to individuals.” Read more

The Conservatives have proposed a VAT holiday for struggling small businesses.

A six-month deferment would prevent some companies “going to the wall,” according to George Osborne. Read more

It has been described by one former cabinet minister as the ultimate Keynesian move  – the nationalisation of the housebuilding industry.

Frank Dobson, former health secretary, said this would be a way of spending money to create “useful wealth”. ”I think he [Mr Brown] has got an appetite for this. He is attempting to minimise the impact on everyone else from banking lunacy and he’ll be looking for anything practical.” Read more

Gordon Brown has long preached the need for financial transparency. As part owner of a handful of banks, it is perhaps time for the prime minister to lead by example.

Two “special purpose vehicles” used by HBOS and Lloyds could be a good place to start. The “conduits” hold billions of pounds of asset backed securities — Lloyds’ conduit “Cancara” comprises about £11.6bn of assets while HBOS has £16.2bn in “Grampian”. Read more


reubenbrothers.jpgThere’s lots of talk in Westminster over Peter Mandelson’s meetings with Oleg Deripaska, a Russian billionaire who owns the world’s biggest aluminium producer.

This makes Mr Deripaska the third aluminium tycoon to have played a walk-on role in British politics. Read more

At some point the government may not be able to raise any more money in the gilt markets.

That’s my interpretation of comments made yesterday at a Treasury sub-committee by Robert Stheeman, chief executive of the Debt Management Office. Read more

You may have missed the FT article this morning about the Audit Commission – guardian of the public purse – leaving £10m in Icelandic banks.

This is one you couldn’t make up. The chief press officer for the watchdog (“We promote value for money for taxpayers”) spent about 10 minutes on the phone yesterday refusing to confirm or deny the rumours flying around Whitehall about the missing millions. We wrote it anyway.   Read more