Sunday, September 25, 2011


El Informe Vickers de la Comisión Indepediente sobre la Actividad Bancaria en el Reino Unido ha sido hecho público este mes.El Informe resalta la necesidad de separar las actividades de banca minorista de las de banca de inversión con objeto de evitar reproducir en el futuro la situación que ha llevado a la actual crisis y que los contribuyentes queden prendidos del anzuelo del riesgo así generado.

Las conclusiones del Informe son introducidas así por Sir John Vickers:

"Future stability requires that UK banks should have more equity capital and loss-absorbing debt – beyond what has so far been internationally agreed – and that their retail banking activities should be structurally separated, by a ring-fence, from wholesale and investment banking activities. As many have commented, the big question is how. Structural separation would bring three main benefits:

it would help insulate vital UK retail banking services from global financial shocks, which is of particular importance given the way that major UK banks combine retail banking with global wholesale/investment banking;

it would make it easier and less costly to sort out banks – whether retail or investment banks – that still got into trouble despite greater loss-absorbing capacity. This is all part of getting taxpayers off the hook for the banks; and

it would be good for competitiveness because UK retail banking can be made safer while international standards apply to the global wholesale and investment banking activities of UK banks.

So why not go for total separation? Because a strong ring-fence can get the same, if not more, stability benefits at much lower economic cost. In particular, if one part of the bank is doing well, it can still support the other. We are recommending a strong ring-fence – otherwise there would be little point in having one – but also a flexible one.

This in essence is how it would work.

Only ring-fenced banks would supply the core domestic retail banking services of taking deposits from ordinary individuals and SMEs and providing them with overdrafts.

Ring-fenced banks could not undertake trading or markets business, or do derivatives (other than hedging retail risks) or supply services to overseas (in the sense of non-European) customers, or services (other than payments services) resulting in exposures to financial companies.

Other activities – such as lending to large domestic non-financial companies – would be allowed either side of the fence.

The aggregate balance sheet of UK banks exceeds £6 trillion – more than four times annual UK output. On the basis above, between a sixth and a third of the balance sheet would be inside the fence. Ring-fenced banks could be self-standing, or subsidiary companies in wider banking groups. They would have their own capital, which could not be depleted below safe limits, and governance arrangements to ensure independence. To protect the integrity of the ring-fence, their dealings with other parts of their banking group would be limited to those generally permissible between third parties. As well as helping insulate UK retail banking from global shocks, ring-fencing would provide a sound long-term framework for the supply of credit in the economy. In particular, retail deposits – now around £1 trillion – would fund loans to households and businesses in the domestic economy, not investment banking.

The other element of reform for financial stability concerns the ability of banks, especially those of systemic importance, to bear losses. On this our main recommendations are:

that large ring-fenced banks should have equity capital of at least 10% of risk-weighted assets and corresponding limits on overall leverage;

that the retail and other activities of large banks should have primary loss-absorbing capacity – equity plus long-term unsecured debt (‘bail-in bonds’) that readily bears loss at the point of failure – of 17%-20% of risk-weighted assets. Remaining unsecured debt should also bear loss on failure if necessary; and

depositor preference, so that insured deposits rank above all other unsecured debt.

There is a strong case for higher capital requirements internationally than we propose for UK banks, and without ring-fencing we would have recommended substantially higher levels. As with our proposals as a whole, however, we have taken full account of UK competitiveness in the context of international regulation,

and of transitional issues. Our recommendations reinforce and go substantially beyond other reform initiatives under way, and we have had careful regard to their cumulative impact. Our financial stability proposals may increase some banks’ costs of capital and unsecured debt, especially outside the ring-fence. But that is largely a consequence of returning risk-bearing to where it should be – with investors and not taxpayers. This is a benefit, not a cost, to the economy as a whole, and will better discipline risk-taking. That said, improved financial stability does not come for free. But its costs are greatly outweighed by the gains of fewer crises, less damaging crises, and a healthier environment for investment in the UK economy. Just as financial stability benefits the economy overall, it is good for the City too. A more stable domestic banking system will underpin, not jeopardise, the competitiveness of the UK as an international financial centre. Competition Our competition recommendations are also in accord with the Interim Report. Competition in UK retail banking has not been properly effective. Markets for personal current accounts and SME banking services are concentrated, the more so since the crisis, which saw challengers to the large incumbents fail or be taken over. Conditions for well-informed customer choice are not good, in part because of difficulties of switching between banks. Some competition has been misdirected – to exploit lack of consumer awareness or poor financial regulation. And the implicit government guarantee favours larger banks. Our financial stability proposals address this last point. Our other main competition recommendations are:

that the Government seeks agreement with Lloyds to ensure that the divestiture that is under way leads to the emergence of a strong challenger bank. This is not likely to happen with the divestiture as it stands, in view of its prospective share of personal current accounts and large funding gap;

the introduction within two years of a switching system based on redirection for personal and small business current accounts. This would provide customers with a seamless switching service free of cost and risk. This should be complemented by measures to enhance transparency so that customers can make well-informed choices about the services that best meet their banking needs; and

that competition is made central to financial regulation by giving the new Financial Conduct Authority a clear duty to promote effective competition. Among other things this would give the necessary impetus to efforts to promote transparency and tackle barriers to entry and growth by rivals to the incumbents.

We are not at this point recommending that markets for banking services be referred to the Competition Commission, but a referral should be actively considered if any of these conditions is not met by 2015. Implementation Policy decisions following our Report are for Government and Parliament to make. It would be good all round, not least for financial markets, if the Government could establish its policy by the end of this year, and if legislation could be passed well within the current Parliament. A separate question is the timetable for implementation if the proposed reforms are adopted. The package of recommendations to promote financial stability consists of moderate elements but is fundamental and far-reaching. It could not all sensibly be implemented by 2015 even with legislation enacted next year.

The deadline for implementation of the internationally-agreed Basel III capital standards is the start of 2019. Our recommendations on capital, loss-absorbing debt and depositor preference go considerably further, but we see no case for extending that deadline. Neither would we require acceleration ahead of Basel. In any case, once policy is clear, market disciplines might operate sooner than regulatory timetables. Structural reform would inevitably take time following legislation and subsequent regulatory rule-making, but should be complete by the Basel date of 2019 at the latest, and preferably sooner. This may seem a long time. It is. But short-termism got us into this mess and we need long-termism to build a more stable system for the future. On this basis the reforms that we recommend pose no significant risk to the economic recovery. The lesson from recent weakness, and the strains shown by banks, is just how important it is to reform the banking system. The ‘too big to fail’ problem must not be recast as a ‘too delicate to reform’ problem. Ring-fencing will strengthen, not weaken, the framework for the supply of bank credit to households and businesses in the economy. Retail deposits will fund that flow of domestic credit, separate from global wholesale and investment banking. Higher capital standards, which can be achieved over seven years, represent just a few percentage points of bank balance sheets. The most rapid growth of those balance sheets has related to global wholesale and investment banking, and bank lending to other financial institutions. Credit supply to the domestic economy now accounts for a fraction of UK banks’ balance sheets. In many respects, then, our recommendations would restore UK banking closer to how it used to be – with better-capitalised, less leveraged banking more focused on the needs of savers and borrowers in the domestic economy. At the same time UK banks would be free to flourish in global markets, but without UK taxpayer support. Our banks are at the heart of the financial system and hence of the market economy. The opportunity must be seized to establish a much more secure foundation for the UK banking system of the future. "

Sir John Vickers

Final Report Publication

Independent Commission on Banking



Sunday, September 18, 2011


apoyado un estudio sobre las hipotéticas consecuencias de compensar las posiciones acreedoras y deudoras en deuda pública que mantienen los países de la eurozona con la idea de aclarar la situación y ver si los resultados sugieren una vía de salida a la crisis menos traumática.

La situación de partida, en Mayo de 2011, y la situción final, después de la hipotética compensación, son las que se resumen en los cuadros arriba reproducidos.El primero es el de la situación "neta" después de compensaciones y el segundo el de la situación previa.

Los autores resumen los resultados así:

"The EU countries in the study can reduce their total debt by 64% through cross cancellation of interlinked debt;

Six countries – Ireland, Italy, Spain, Britain, France and Germany – can write off more than 50% of their outstanding debt;

Three countries - Ireland, Italy, and Germany – can reduce their obligations such that they owe more than €1bn to only 2 other countries.


Around 50% of Portugal’s debt is owed to Spain;

Ireland and Italy can write off all of their debt to other PIIGS countries, and Ireland can reduce its debt from almost 130% of GDP to under 20% of GDP;

Greece can reduce their debt by 20%, with 60% owed to France and 30% to Germany;

Britain has the highest absolute amount of debt before and after the write off (owed mostly to Spain and Germany) but can reduce their debt to GDP ratio by 34 percentage points;

France can virtually eliminate its debt (by 99.76%) – reducing it to just 0.06% of GDP;"

Es un inicio para intentar desmadejar la tela de araña de la deuda.La circunstancia de que mucha deuda esté interrelacionada ofrece una oprtunidad para resolver el problema.

La web del estudio

Un link al estudio completo

Friday, September 16, 2011


Uno de los problemas más graves de Europa es que los verdaderos debates sobre la situación actual de la crisis del sistema monetario tienen lugar, más frecuentemente, fuera de sus fronteras.

Así lo pone de manifiesto el comentario y los cuadros del mismo aquí reproducidos, después de que la crisis haya sido dilatada de nuevo con el nuevo programa de liquidez de los bancos centrales a los bancos de la eurozona.

El comentario se refiere, agudamente, al momento “Lehman” europeo y a la envergadura y aparente imposibilidad de un programa como el TARP americano a nivel europeo.

“The most scathing report describing in exquisite detail the coming financial apocalypse in Europe comes not from some fringe blogger or soundbite striving politician, but from perpetual bulge bracket wannabe, Jefferies and specifically its chief market strategist David Zervos.

The bottom line is that it looks like a Lehman like event is about to be unleashed on Europe WITHOUT an effective TARP like structure fully in place. Now maybe, just maybe, they can do what the US did and build one on the fly - wiping out a few institutions and then using an expanded EFSF/Eurobond structure to prevent systemic collapse. But politically that is increasingly feeling like a long shot. Rather it looks like we will get 17 TARPs - one for each country. That is going to require a US style socialization of each banking system - with many WAMUs, Wachovias, AIGs and IndyMacs along the way. The road map for Europe is still 2008 in the US, with the end game a country by country socialization of their commercial banks. The fact is that the Germans are NOT going to pay for pan European structure to recap French and Italian banks - even though it is probably a more cost effective solution for both the German banks and taxpayers....Expect a massive policy response in Europe and a move towards financial market nationlaization that will make the US experience look like a walk in the park. " Must read for anyone who wants a glimpse of the endgame. Oh, good luck China. You'll need it.”

Esta es la historia completa