In White House meeting, Obama calls on banks to increase lending

 sourced from The Washington Post 

By Binyamin Appelbaum and Michael A. Fletcher

Washington Post Staff Writer
Tuesday, December 15, 2009

President Obama exhorted the nation’s biggest banks on Monday to make “extraordinary” efforts to increase lending, even as some of those firms are racing to distance themselves from government control.

The nation’s most powerful bankers sat in the Roosevelt Room at the White House and nodded as the president spoke, but some executives and industry officials said afterward that increasing lending is largely beyond their ability.

Meanwhile, Citigroup and Wells Fargo announced plans Monday to spend billions of dollars — not on lending, but to repay federal aid. Citigroup chief executive Vikram Pandit missed the White House meeting to rally investor support.

Bank executives say they itch to make profitable loans, as many as possible, but are struggling to find qualified borrowers. They also say that the administration is asking for increased lending even as it pursues financial reforms that will limit the ability of banks to make loans.

Some note that a recession caused by an orgy of lending must be solved in part through greater restraint.

Obama has come under increasing pressure to demonstrate his concern for the plight of Americans caught in a rising tide of joblessness, even as the larger economy appears headed to recovery. The White House portrayed Monday’s meeting as a chance for the president to channel the anger of Americans who think federal programs intended to revive the broader economy have succeeded only in restoring Wall Street’s profitability.

“America’s banks received extraordinary assistance from American taxpayers to rebuild their industry,” the president said after the meeting. “And now that they’re back on their feet, we expect an extraordinary commitment from them to help rebuild our economy.”

Obama added that he expects not just effort but “results.”

Some administration officials privately conceded that borrowing always declines during recessions, and that they are struggling to find effective ways of spurring new lending. Furthermore, the administration’s options continued to be constrained by the belief of many officials that meddling in the details of banking is counterproductive.

The administration also is surrendering a measure of leverage over the industry as banks repay federal aid provided under the Troubled Assets Relief Program — although officials are eager to shed the political baggage of aiding big Wall Street firms. With the announcements Monday by Citigroup and Wells Fargo that they would repay federal aid, all of the nine major banks that got money late last year will be on track to pay it back.

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Full impact of recession yet to hit UK public sector, study claims

Research says that effects of downturn will not hit some parts of Britain for several months – and that local councils need to prepare for this ‘aftershock’

 

The full cost of the worst global downturn since the second world war has yet to hit Britain’s local and central government finances, new research reveals .

Analysis by data company Experian shows that the recession – in terms of unemployment, debt, fraud and increasing demand for public services – will not hit some areas of the UK for another seven months and, in some places, will be felt for many years after growth resumes.

Experian found that the south, from Kent through to Cornwall, was feeling the least impact from the recession; the midlands, Wales and the north-east the severest impact; with Scotland between the two extremes.

Local authority areas that would be hit hardest, it said, were Blaenau Gwent, Kingston-upon-Hull, Inverclyde, Glasgow and Wolverhampton. Areas that would suffer the least included the City of London, Kensington and Chelsea, and Westminster.

Charlotte Hogg, managing director of Experian, said: “The tremors of the recession may have been felt in many households and businesses, but local and central government now needs to brace itself for the aftershock.

“So far, the public sector has been cushioned by government investment and spending. But with unemployment rising, revenues falling and the need for public spending cuts, local authorities need to think how they can do more for less.”

Over the next 10 years, Experian expects London, Edinburgh and Leeds, as well as a number of other major northern cities, to prosper the most. However, many Scottish locations such as Dumfries and Galloway, East Dunbartonshire, South Ayrshire and Argyll and Bute as well as English local authorities including Copeland, Malvern Hills, Weymouth and Portland, West Somerset and Stafford will take much longer to recover from recession due to persistent unemployment and deprivation problems.

According to the research, the people who will experience the greatest levels of financial stress are young single people on limited incomes who rent small flats from local councils or housing associations, and older pensioners who have found their retirement incomes eroded by inflation and are dependent on state pensions.

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Banks 'show first recovery signs'

Financial firms may be recovering, with business volumes growing for the first time in two years, a survey has shown.

Confidence among banks is growing for the first time since June 2007

Business increased in three months to early September, said 7% of those surveyed by PricewaterhouseCoopers and business organisation the CBI.

But building societies returned to feeling “downbeat” and business levels were weak in other areas, suggesting the recovery still has a way to go.

“Future demand is still a major concern,” said the researchers.

‘Upswing’

On balance, 36% of financial services firms are more optimistic about the general business situation than in June.

Filed under: banking sector, bbc, news, recession, banking, banking sector, banks, bbc, borrowers, business, capitalism, CBI, financial, recovering, recovery, recovery signs

US jobless rate at 26-year high

US employers cut 216,000 jobs in August, pushing the unemployment rate up to 9.7%, a 26-year high, official figures show.

There are signs of improvement in the labour market

The unemployment rate rose after dipping to 9.4% in July but the Labor Department said the job loss figure was the smallest in a year.

Since the start of the recession in December 2007, the economy has shed 6.9 million jobs, the department said.

Jobs have been lost across manufacturing and service industries.

Total unemployment stands at 14.9 million.

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Brown urges G20 to keep spending

Mr Brown told the summit the global economy was at a critical juncture

It would be “a serious mistake” for rich nations to scale back plans to support the global economy, Prime Minister Gordon Brown has said.

Mr Brown told a meeting of G20 finance ministers that despite “tentative signs of recovery”, cutting spending could cause another “downward lurch”.

He called on ministers to fully implement the $5tn fiscal expansion plan agreed at last April’s summit.

Mr Brown also said there must be new global “binding rules” on bankers’ pay.

‘Exit strategies’

Mr Brown told the meeting at the Treasury that the global economy was now at a “critical juncture”.

Germany and France, which are both officially out of the recession, want the G20 to start discussing “exit strategies”, but Mr Brown warned against any such move.

He said it could lead to a reduction in growth and employment and “worsen governments’ debt positions over the longer term”.

“It is clear in my view that too early a withdrawal of vital support could undermine the tentative signs of recovery we are now seeing and lead to a further downward lurch in business and consumer confidence,” he said.

“The stakes are simply too high to get these judgements wrong, so to decide now that it is time to start withdrawing and reversing the exceptional measures we have taken would in my judgement be a serious mistake.”

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Recession 'delaying retirement'

Some people are delaying retirement while others are still putting more in their pension pot in the recession, two separate surveys suggest.

The recession has affected the value of pension pots

A third of people who are still working and aged over 55 said they would put off plans to retire, according to a poll by pension advisers MGM Advantage.

And Aon Consulting said that one in five workers was increasing contributions during the downturn.

Pension pot values have been hit by falling share prices in the last year.

“One of the most worrying consequences of the economic turmoil is the knock-on effect for those approaching retirement,” said Craig Fazzini-Jones, director at MGM Advantage.

See the state of the UK’s private sector final salary schemes

Filed under: banking sector, bbc, British Goverment, news, banking sector, banks, bbc, business, capitalism, consumer, delaying retirment, downturn, economy, news, pension, recession, retirement, stay old and working, UK, UK economy, world, years

Will this new tax work or do we need stronger action

Why do we in Britain seem to find things difficult, so the government as created an authority called the FSA (Financial Services Authority), which in principal is a good idea, but they have not the power to in-force changes onto the banking sector. So a new tax is being developed to control the banks bonuses. Now the idea behind this tax is that

“tax on financial transactions in the City would cut banks’ profits, and thereby reduce the funds available for bonuses.” says Lord Turner

But unfortunately i believe that from passed behaviour from the banking sector that when the bank has less profits, all that will happen is this will get passed down to the shop floor. So the high up people within banks will take what their want which will just less for everyone else.

-  by recession2009

 

Lord Turner backs new banking tax

The boss of the UK’s financial watchdog has said he backs a new tax on banks as a means to prevent excess bonus payments in the industry.

Lord Turner made the comments in a roundtable discussion

 

Lord Turner, the chairman of the Financial Services Authority (FSA), also said much of the activities of the City of London were “socially useless”.

The FSA said Lord Turner’s comments came in a roundtable discussion, and were “not setting out any new policy”.

The FSA does not have the power to introduce such a tax.

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As France start taking action should Britain follow

As French government start taking action against big bonuses paid to bankers, should Britain now start enacting the same action.

Yes I agree people should be rewarded for good business, but should also not get rewarded for bad business. Unless government bring in measures to control the banking sector bonuses the situation will only continue to get worse.

The problem is that at no point has anyone from the banking section apologised for the bonuses paided, I guess that is what anoses me the most. It is just rich people getting richer and people  on the shop floor getting stepped on. As more companies close pension schemes what is going to happen to the everyday person.  - by recession2009

French banks back bonus reforms

French banks have agreed to bring in a new system of performance-related pay, following controversy over the high levels of bonuses paid to traders.

President Sarkozy wants tighter control on bank bonuses

 

France’s banking federation said there would be penalties for those who lost money as well as rewards for success.

The statement came after bank officials held talks in Paris with President Nicolas Sarkozy.

President Sarkozy asked the banks to report to him on their bonus policies amid pressure to curb excesses.

In April, G20 leaders pledged to apply tough new policies on compensation.

Mr Sarkozy said after the meeting that he would continue to press for tougher controls on bankers’ bonuses at the next G20 summit in the US city of Pittsburgh in September.

Filed under: banking sector, bbc, British Goverment, news, recession, banking bonuses, banking sector, banks, bbc, britain, business, capitalism, consumer, downturn, economy, France, global recession, Goverment, news, President Sarkozy, richer, UK economy, world, years

Steady rise in mortgage approvals

The number of mortgages approved for house purchases by the major High Street banks has risen for the seventh month in a row, figures show.

The BBA reports figures for the major High Street banks

 

The British Bankers’ Association (BBA) said approvals in July stood at 38,181, a rise of 7.4% compared with June.

The data suggests that the rise in activity and house prices could stretch into the autumn.

However, the group warned that new lending was below seasonal expectations despite greater demand from borrowers.

sourced from The BBC

Filed under: banking sector, bbc, British Goverment, high street, homes, housing, news, recession, banking sector, banks, BBA, bbc, borrowers, britain, British Bankers' Association, business, capitalism, high street, mortgages, news, Steady rise in mortgage approvals

Recession in Britain 'at an end'

Confidence among business professionals has surged, suggesting the recession is at an end, a survey has said.

The banking sector saw a big rise in confidence

 

The Institute of Chartered Accountants’ index of business confidence rose to 4.8 at the end of June, from -28.2 in March, the biggest rise for two years.

However, chief executive Michael Izza warned against “underestimating” the challenges ahead for businesses.

The institute predicts the UK economy will grow by 0.5% in the third quarter.

Its forecast comes after the economy shrank by 0.8% in the second quarter of the year.

More than 1,000 chartered accountants were surveyed across England, Wales and Scotland.

“This quarter’s Business Confidence Monitor suggests that the UK recession is at an end,” said Mr Izza.

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