"Hope this situation will not happen again. "This may be all in the United Kingdom experienced a crisis in the financial sector, especially for a United Kingdom bank system of emergency assistance. United Kingdom Government to rescue financial industry practices, including the direct injection of capital, acquisitions have been frozen assets, Government deposit guarantees, as well as the Bank of England (the United Kingdom's Central Bank) provided by the circulation of funds, the amount equivalent to the GDP of the United Kingdom 81.8%, totalling up to an astonishing 1.227 trillion pounds. Although these amounts are just reference number, which also includes a number of Government-provided deposit guarantees, in fact, less likely to be baggage claim or claims, but this remains an astronomical on this large scale financial tsunami a daunting task, and, consequently, on the economic stability of the United Kingdom have doubts, and thus to the city of London are nervous of confidence.
Prior to this, the international monetary and economic organizations have repeatedly on the scale of United Kingdom budget deficit, but further to warn pointed out that the United Kingdom in this global recession, the largest in the face of G20 budget deficit, the deficit next year will be expanded to 13.3% GDP, while at the same time period in the United States deficit is the equivalent of GDP 9.7%. But one of the three-letter on the body, but of Fitch company in the international monetary and economic organizations published data at the same time, once again confirmed the United Kingdom's creditworthiness rating is the highest AAA, looking as forward. Fitch expects United Kingdom Government on a banking recovery assistance to rescue the final cost of the financial industry is expected to be from 1450 million to 400 million pounds. According to the international monetary and economic organization estimated that in the current financial crisis, the world's leading rich countries government push to the total amount of the financial industry at 9.2 trillion, and the United Kingdom alone accounts for about one-fifth. The international monetary and economic organizations indicated that although the Government has finally be recovered the initial push to gold, but might still be a drag on the economic effects of follow-up, the next few years will accumulate huge deficits.
In response to the banking losses, United Kingdom Government tried many programmes, including on the nationalisation of the banks problem assets under the guarantee scheme. By the end of last month, the United Kingdom's largest mortgage provider — Lloyd Bank Group through the placement of shares to raise the 135 million, the total amount of financing is beyond HSBC Holdings March distribution shares for a size of 125 million, becoming the United Kingdom in the history of the largest stock exchanges. The placement of shares was Lloyd banking group to avoid joining United Kingdom Government implementation of asset security plan one of the measures taken. If the Group joined the programme, the United Kingdom Government holdings of the Group share increased from 43% to the ratio of majority holdings. According to Lloyd Bank Group Publishing statement, the group will be placing 365 million shares, the shareholder's shares per share can be 1.34 new shares. These policies enable Lloyds banking group stock price go up 2.6%.
Whereas the United Kingdom other big banks-Bank of Scotland (RBS) has agreed to participate in the United Kingdom Government assets guarantee scheme. According to the Bank and the Government's latest offers, RBS will bring the overall size of the encumbered assets from 3250 million reduction to 2820 billion pounds. United Kingdom Government will inject to the Royal Bank of Scotland then 255 million pounds. In this way, the Government in the row share will be 70% prior to 84%.
On the other hand, the city of London investment banking advisors were also submitted to the Government supervision enterprises related to the promotion of the report of the United Kingdom, including the bonus payment system. One of Morgan Stanley's Senior Adviser Walker suggested that the United Kingdom all commercial banks should at least pay bonuses to defer up to extend the period of five years, and have the right to recover the bonuses have been issued. If his proposal was implemented, the United Kingdom's Bank will have the world's most stringent bonus payment system. Walker also believes that unless pay policy is mandatory, otherwise the Bank will not automatically execute the policy. Walker calls for various commercial banks balance payment, and represent at least half of the bonus should be used as a long-term incentive in the release of three to five years, another part of the short-term bonus will be paid within three years, less than one third of the prize money within one year. If an employee has any misstatement or malfeasance, should allow the Bank to recover the bonuses. Walker in the report recommended that the Bank should disclose in the annual report of the annual salary of more than 100 million pounds of number of employees, and to distinguish between pay grades, including dividends and pension allocation, but having to announce the employee name. Plus Walker also recommends limiting non-Executive Director of the Bank; the establishment of supervisory management of capital and liquidity risk.
Currently, the United Kingdom Government has also sought to quell the voters of the United Kingdom filled with anger, the Bank because banks receiving Government provides hundreds of pounds of aid funds following the payment of a bonus. According to the United Kingdom financial services authority, the new Act, encourages mainly shares instead of cash bonuses to the employees.
United Kingdom's financial "black hole" does take several years to make up for it. But as you can see, the United Kingdom Government in trying by all means want to ensure that its leading position in the financial industry in the hope that the city of London will quickly restore their strength. Of course, the city of London is the "collapse", in addition to the specific historical origin, lies the city of London to its constantly keeping up with market development and complete financial and legal systems and policy environment, always try our best to meet the needs of the international financial services.
(Author of London European gold investment Chief Economist)
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