Could or should the city be sacrificed for good brexit deal??

[sidicks]

AW111 said:

Is it mean of me to post this here? :

http://www.abc.net.au/news/2016-07-21/hsbc-currenc...

"US authorities have charged two senior currency traders from global bank, HSBC, with conspiracy to defraud a client by orchestrating a multi-million-dollar "front running" scheme which involved a $US3.5 billion currency transaction.

HSBC's global head of foreign exchange cash trading, Mark Johnson (50), and the bank's former head of currency trading in Europe, Middle East and Africa, Stuart Scott (43), were both arrested."

This is the sort of thing that gives banks a bad name.

I can't imagine anyone would disagree with you. There are some immoral people in all industries.

[anonymous-user]

stongle said:

I’m probably wasting my time here...

Good post but yes I suspect you are. If you're not digging it out the ground and turning it into a bridge or an engine block you're a parasite.

[RYH64E]

sidicks said:

I can't imagine anyone would disagree with you. There are some immoral people in all industries.

Even the immoral ones pay taxes (usually)...

[SidewaysSi]

There are immoral people in all industries as stated and the press love some bank bashing which in turn has affected the population's view on the industry (including on here). The fact that financial services benefits everyone in the UK far more than just about any other industry matters little.

"Corrupt whistle builder defrauds company" doesn't carry the same weight. The anti-London and anti-city feeling is very short sighted.

[Mrr T]

Mr Whippy said:

Well I've asked numerous times where the money comes from, but I've been told it's not important, only that some of it goes to HMRC.

So where does the money that the City makes from financial services come from?


If I had a clear answer then I could alter my opinion, but so far there is no basis for an altered view. I just feel like I'm reading half arguments from people possibly defending their position on a protectionist gravy train.

Dave

Dave
It seems most on here do not want or have time to answer your fundamental question. What does the financial services industry do for us.
The reason most will not answer is the post is simply too long. But here goes.
I will use Tesco as my example because I have used it in presentations I have used before, I would like to use another example because of the Tesco problems but no time for research. I apologise if I use many technical terms which I do not have time to explain but a google will normally help and if you have specific question I will answer when I have time.
So when do Tesco use the financial services (FS) industry (by this I mean a regulated company):
1. Most obviously Tesco need its FS to operate its accounts.
2. Tesco is a worldwide business and receives lots of payments by credit/debit cards it needs FS to collect all that money and pay it over to Tesco FS accounts.
3. Tesco also collects cash worldwide from customers and needs FS to deposit that cash.
4. Tesco do not want lot of money left in 1,000 of accounts around the world. It needs to consolidate that cash so it can invest it, legal and efficiently, this cash may have to cross borders electronically. FS will provide services to Tesco to do this legally and efficiently.
5. Tesco need to invest their cash surplus. Look on their balance sheet they hold a lot of cash. They will lend the money to FS companies.
6. It’s likely Tesco do not want to lend all to FS on fixed terms it may, want to buy commercial deposits (CD), commercial paper (CP), floating rate notes (FRN), or even government bonds Treasury bonds). To do this it buys from a FS company.
7. Tesco as a sophisticated investor so may try to protect returns on its cash by using futures and options which it will buy for an FS company.
8. Tesco are paid in the local currency but buy worldwide. They will need to exchange the local currency for the currencies they are buying with a FS company.
9. Tesco knows this differences will always exists so it my hedge positions forward with futures or options, or may even appoint advisers to manage the exposures all will be FS companies.
10. Tesco also need at times to borrow money. It will do so from banks who are FS companies. However, it’s expensive for large companies to borrow from banks (bank just sit between lenders and borrowers). So large long term borrowing will be via corporate bonds. These may be in a local market or international issues. For a bond issue Tesco need advisors, lawyers, issuers who will normally underwrite the issue, mangers of the payments on the issue, CSD’s or ICSD’s, people who are prepared to guarantee to buy and sell the bond so investor know they can sell if needed, finally buyers of the bong. All these will be FS companies.
11. Tesco also need auditors who are also FS companies.
12. Tesco may want to buy or sell companies it will normally take the advice and use the services of FS companies.
13. Tesco may want to raise cash via equity, it will need a FS company to advise, underwrite and trade the issue.
14. Tesco also have lots of premises and plant etc. which needs insuring with a FS company.
15. Tesco also offer banking and insurance service all off which will be guaranteed by FS companies.
16. Tesco also have a pension fund they will appoint FS companies to decide what to invest in.
17. The pension fund will need to make sure its investments are safe so it will have to appoint a FS custodian.
18. The pension fund will also need fund valuation services, advisors who are all FS companies.
I am sure I have missed off many other services so please add.
So now ask what does a financial services company do for me.

[AC43]

Mrr T said:

So now ask what does a financial services company do for me.

There's business journo from the FT who was recently presenting to an audience in Newcastle and he mentioned GDP.

A Geordie heckler immediately piped up "that's your GDP mate, not mine!"

Errr.....right.

[wc98]

///ajd said:

no need, just be a fisherman, more lucrative innit

more lucrative than many industries. a scallop fishing friend of mine owned his first ferrari at 21 and his "toy boat" as he calls it that we go recreational fishing in is 150k worth. last engine change on his big boat was over 100k .his view out the office window every day at sea is priceless.

will be more than a few on here earning more i would imagine, but there are not many minimum wage earners in the commercial fishing industry. word is the blokes on the big pelagic boats that only work around 10 weeks every year earn around 100k.

[Whoozit]

wc98 said:

more lucrative than many industries. a scallop fishing friend of mine owned his first ferrari at 21 and his "toy boat" as he calls it that we go recreational fishing in is 150k worth. last engine change on his big boat was over 100k .his view out the office window every day at sea is priceless.

will be more than a few on here earning more i would imagine, but there are not many minimum wage earners in the commercial fishing industry. word is the blokes on the big pelagic boats that only work around 10 weeks every year earn around 100k.

Great, good to hear. Then why do we not have a sufficiently large fishing sector to make a meaningful impact on GDP and tax revenues?

And please don't say it's because of the EU, the example above demonstrates that's not the issue.

[amgmcqueen]

kurt535 said:

amgmcqueen said:

SidewaysSi said:

This thread is hilarious. It's why the UK population should not have been asked to vote on something they have no fking clue about.

The whole thing is bloody ridiculous IMO.

If you are unhappy about the result there is only really one person to blame.

I very much doubt the greedy banks were at the top of the priority list for people voting Brexit.

I love that turn of phrase, greedy banks. banks have their rules set by organisations such as the FCA, previously the SFA, who essentially deliver rules and regs deemed appropriate. tony blair loved the banks and ultimately gave them the spare rope to hang us all. since the dump of 2007/8/9, bank liquidity and lending requirements have got tighter and tighter (try simply porting a mortgage to see how bad). worst thing was so much toxic debt generated from people not being truthful on their mortgage applications.

Who authorised PPI?

[Whoozit]

amgmcqueen said:

Who authorised PPI?

It made sense for banks, to reduce their risk to lower-rated borrowers, and reduce the need to rely on the State as lender of last resort. You know, since we all hate having banks go bust and take our savings with them. What everyone conveniently forgets is that without the PPI, those borrowers would not have been able to borrow so much. Even today the claims companies ask "Were you mis-sold PPI", not whether you were offered it at all.

The deemed mistakes primarily arose from bundling/selling process, not from the product itself. Hindsight is a wonderful thing.

Edited by Whoozit on Thursday 21st July 20:48

[SidewaysSi]

amgmcqueen said:

kurt535 said:

amgmcqueen said:

SidewaysSi said:

This thread is hilarious. It's why the UK population should not have been asked to vote on something they have no fking clue about.

The whole thing is bloody ridiculous IMO.

If you are unhappy about the result there is only really one person to blame.

I very much doubt the greedy banks were at the top of the priority list for people voting Brexit.

I love that turn of phrase, greedy banks. banks have their rules set by organisations such as the FCA, previously the SFA, who essentially deliver rules and regs deemed appropriate. tony blair loved the banks and ultimately gave them the spare rope to hang us all. since the dump of 2007/8/9, bank liquidity and lending requirements have got tighter and tighter (try simply porting a mortgage to see how bad). worst thing was so much toxic debt generated from people not being truthful on their mortgage applications.

Who authorised PPI?

Those fking rich bankers. Brexit will show them. I work as hard as them and they do nothing for me.

[Murph7355]

To sacrifice anything contributing 10-15% of your GDP in its entirety would be stupid in the extreme. But I simply don't see that happening no matter what approach is taken in the next couple of years.

What we should be doing, and what we should have been doing for at least the last 10 years, is strengthening our other industry sectors so that "the city" ("Financial Services" industry) has less of an overall input (and hence impact if it nose dives).

A better balance is the healthiest option in nearly every sphere of life

[pim]

Of course having a more diverse economy is how a big European Country like Britain should be run.

[Zod]

AC43 said:

There's business journo from the FT who was recently presenting to an audience in Newcastle and he mentioned GDP.

A Geordie heckler immediately piped up "that's your GDP mate, not mine!"

Errr.....right.

If he was a net recipient from the system, then he was right!

[Wills2]

jjlynn27 said:

Wills2 said:

Can we not have both? I don't see why we have to give away the financial sector to gain anything, after all what would we gain?

It would be great if we could balance out the economy and actually create a northern power house after all it was once thus.

Why do you think it's not anymore?

Many reasons too numerous to list and fully understand or even for people to agree on, I'm sure you have your own view.

[Mr Whippy]

ATG said:

Mr Whippy said:

ATG said:

Dave, you're asking a lot of entirely reasonable questions given a position of entirely understandably limited knowledge, but they do seem to be overlaid with some preconceived notions that there's evil lurking out there somewhere.

It's not preconceived notions of evil, it's just a critical standpoint.

They're a business just like any other, they manage all my wealth. I can't accumulate or store wealth without using their system. They have somewhat of a monopoly.
If I tried to use all cash then government think I'm a terrorist or a tax avoider/evader, or something else unsavoury.

It's reasonable to be critical of banks motives rather than just assuming they do everything in my own best interests.

They have a monopoly in the same sense that collectively toothbrush manufacturers have a monopoly on toothbrushes. I.e. they don't have a monopoly in any sense at all.

The toothbrush analogy is poor.

I can make a toothbrush and use it without falling foul of government regulations. I can even make up my own method of cleaning my teeth and get by.

I can't do the same with banking and managing my own money.

Everything else except digital fiat is becoming increasingly difficult to use or regulated out of relevance. That is a protectionist, or monopolistic position for the banks to occupy imo.

[Whoozit]

Mr Whippy said:

Everything else except digital fiat is becoming increasingly difficult to use or regulated out of relevance. That is a protectionist, or monopolistic position for the banks to occupy imo.

Hardly a fair comment given the dozen-odd challenger banks both Bricks-and-mortar and online established in the UK since the financial crisis, don't you think?

[Mr Whippy]

Mrr T said:

Mr Whippy said:

Well I've asked numerous times where the money comes from, but I've been told it's not important, only that some of it goes to HMRC.

So where does the money that the City makes from financial services come from?


If I had a clear answer then I could alter my opinion, but so far there is no basis for an altered view. I just feel like I'm reading half arguments from people possibly defending their position on a protectionist gravy train.

Dave

Dave
It seems most on here do not want or have time to answer your fundamental question. What does the financial services industry do for us.
The reason most will not answer is the post is simply too long. But here goes.
I will use Tesco as my example because I have used it in presentations I have used before, I would like to use another example because of the Tesco problems but no time for research. I apologise if I use many technical terms which I do not have time to explain but a google will normally help and if you have specific question I will answer when I have time.
So when do Tesco use the financial services (FS) industry (by this I mean a regulated company):
1. Most obviously Tesco need its FS to operate its accounts.
2. Tesco is a worldwide business and receives lots of payments by credit/debit cards it needs FS to collect all that money and pay it over to Tesco FS accounts.
3. Tesco also collects cash worldwide from customers and needs FS to deposit that cash.
4. Tesco do not want lot of money left in 1,000 of accounts around the world. It needs to consolidate that cash so it can invest it, legal and efficiently, this cash may have to cross borders electronically. FS will provide services to Tesco to do this legally and efficiently.
5. Tesco need to invest their cash surplus. Look on their balance sheet they hold a lot of cash. They will lend the money to FS companies.
6. It’s likely Tesco do not want to lend all to FS on fixed terms it may, want to buy commercial deposits (CD), commercial paper (CP), floating rate notes (FRN), or even government bonds Treasury bonds). To do this it buys from a FS company.
7. Tesco as a sophisticated investor so may try to protect returns on its cash by using futures and options which it will buy for an FS company.
8. Tesco are paid in the local currency but buy worldwide. They will need to exchange the local currency for the currencies they are buying with a FS company.
9. Tesco knows this differences will always exists so it my hedge positions forward with futures or options, or may even appoint advisers to manage the exposures all will be FS companies.
10. Tesco also need at times to borrow money. It will do so from banks who are FS companies. However, it’s expensive for large companies to borrow from banks (bank just sit between lenders and borrowers). So large long term borrowing will be via corporate bonds. These may be in a local market or international issues. For a bond issue Tesco need advisors, lawyers, issuers who will normally underwrite the issue, mangers of the payments on the issue, CSD’s or ICSD’s, people who are prepared to guarantee to buy and sell the bond so investor know they can sell if needed, finally buyers of the bong. All these will be FS companies.
11. Tesco also need auditors who are also FS companies.
12. Tesco may want to buy or sell companies it will normally take the advice and use the services of FS companies.
13. Tesco may want to raise cash via equity, it will need a FS company to advise, underwrite and trade the issue.
14. Tesco also have lots of premises and plant etc. which needs insuring with a FS company.
15. Tesco also offer banking and insurance service all off which will be guaranteed by FS companies.
16. Tesco also have a pension fund they will appoint FS companies to decide what to invest in.
17. The pension fund will need to make sure its investments are safe so it will have to appoint a FS custodian.
18. The pension fund will also need fund valuation services, advisors who are all FS companies.
I am sure I have missed off many other services so please add.
So now ask what does a financial services company do for me.

Thanks for the relevant reply!

But they're still doing nothing for me.

They're just taking their money management cut for managing money. Just like the janitor gets paid to sweep the floors, the people tidying the accounts get their pay too.

So are the banking regulations broken then?

Why did companies like Tesco aggregating their revenue and investing their spare cash, and doing normal businesses as you noted, cause the 2008 crash?


So what activities also occur in the City that cause these economic crashes?

Something clearly occurs that makes these risks apparent. Tesco doing normal business shouldn't, should it?


Dave

[Sylvaforever]

To the OP-No.

[Mr Whippy]

Whoozit said:

Mr Whippy said:

Everything else except digital fiat is becoming increasingly difficult to use or regulated out of relevance. That is a protectionist, or monopolistic position for the banks to occupy imo.

Hardly a fair comment given the dozen-odd challenger banks both Bricks-and-mortar and online established in the UK since the financial crisis, don't you think?

But they all use digital fiat don't they?

And none of them store your money, they just turn you into a creditor. Why?

Why doesn't the entire 'everyday' banking system work based on credit? All the money is there to be withdrawn by the credit holders if required?

That'd save the BofE needing to provide liquidity wouldn't it?

Surely all that money should exist?