This week our diarists talk about the pressures on banks to lend again, the European elections and Sir Alan Sugar.
These diaries are written by people who work in finance and have had a front row seat as their industry goes through the biggest changes in decades.
They give us regular insiders' updates on the mood in the City of London and the dramatic changes in the world of finance.
"Laura" (not her real name) works for a commercial bank in London.
Remember when you could get a nice bit of business lending for about 1.5% over the base rate? Well, 'happy days' those deals are back
The sudden arrival of summer seems to have coincided with a return to the market for some business lending teams at various banks, with slightly concerning results.
Remember the heady days of Spring 2007 when you could get a nice bit of business lending for about 1.5% over the base rate? Well, 'happy days' everyone those kind of deals are back out there, though you do have to be lucky to find the few bank managers with the cahones to price it.
There is nothing like coming up to your half year financial report to focus the mind and remind you that your business is that of lending money.
In the past week alone I have seen a borrowing rate as low as 1.7% offered by a competitor which is getting into dangerous territory again.
I would like to say that the City has learnt from its mistakes and would never go down the buying business route at stupid rates to improve market share... but over the last couple of weeks it is painfully apparent that many are only able to operate on one setting.
And where is the regulator during all this? Pathetically no major reform has happened since the crunch, so in terms of how we lend and the charges we make it is exactly the same as pre-crunch.
Realistically two BNP MEPs are going to have zero impact on our daily lives - but the failure of our government in the European arena is already having an impact
MPs' expenses may still be trundling on but do staff at the FSA really deserve a bigger bonus than last year for not completing their job to reform the system and still not understanding what some of the big banks are up to? You would think this is an obvious no, but in the almost parallel universe which is Britain 2009, they've already received them.
The failure of the UK Government to block the European Union having ultimate control over financial regulation this week has been drowned out by the catastrophic Euro elections. Realistically two BNP MEPs are going to have zero impact on our daily lives - but the continued failure of our national government in the European arena is already having an impact.
We do not have the same economy as the rest of Europe, hence the single currency doesn't suit us, our economic cycle is not generally in sync, the market principles and ethos are also different. With this background, if the FSA cannot even work out how best to regulate the City, how does an unaccountable European quango expect to come up with a coherent and universal policy to cover all the different financial markets of member states? A better place to start would be to make a universal bank deposit guarantee scheme so savers deposits are never at risk again, as they were with the Icelandic banking collapse.
The authorities are too ready to take the word of the people running our financial services sector - and we the staff are getting fed up with it. If a bunch of middle managers can spot the bleeding obvious how is it still routinely missed by the regulators?
A few weeks ago I noted that the collective brain power of the City on a good day was more than a match for anything the regulators chucked at us - at this point it doesn't look like we even need to turn up.
"Stephen" (not his real name) has worked in the City of London for over a decade.
Why do markets crash in good times and rocket in bad? Is it because the markets are mad? Are they trying to trick us?
It was the crash of 1987 that finished off Thatcher, says Stephen
It's true that markets are often out of phase with the 'real' world, but the markets are neither perverse nor misanthropic. Markets anticipate the news, sometimes so well that you can predict the headlines. The markets do not lead the news as much as they produce it.
So if the crash of 1987 and the following recession did for Thatcher, it's no surprise that the crash of 2008, the greatest financial crash of all time, presaged the first unseating of a Speaker in 300 years and contempt for an entire political class.
In the Westminster bubble, however, the opposite view is held. Our political classes, so many of whom have never run their own businesses, believe they not only guide reality but create it.
Our leaders tried to engineer prosperity wholesale, forgetting that true prosperity has to emerge of its own course
The Anglo-Saxon economy had departed from reality long ago but our politicians were hell-bent on persuading us that everything was normal and well. Crises don't happen any more, they claimed. It's safe to pay ten times your combined income for a house. Credit will always be cheap and freely available. Eternal prosperity is assured. And so the propaganda went on.
Our leaders tried to engineer prosperity wholesale, forgetting that true prosperity has to emerge of its own course. Real prosperity comes from the ground up - from the people both making and needing things - not by proclamation from the top down.
They equated rising share and house prices with prosperity. Encouraging a generation to make no savings and pay absurd sums for houses, they left them more unprepared for crisis than any other before them. Before the Great Crash of 1929, mortgages and consumer credit were rare and the majority of citizens had savings; the US and UK were net lenders to the rest of the world. By 2007, the citizenry was indebted and the USA was the biggest borrower the world has ever seen.
Punishing the politicians
It's easy to claim that the anger just expressed in the European elections is due entirely to the expenses scandal. People protested against Labour by voting for other parties, it's alleged, and others protested against politicians in general through the low turnout.
Come off it! The public has a longer memory than that. Politicians are being punished for the empty promises of spin, a refusal to acknowledge reality and for the rise of the career politician who has never had a real job. The expenses scandal is simply the catalyst.
It's hard to know how things are going to play out. We are at a truly unique juncture. Down one path is economic ruin, the re-emergence of virulent nationalism and potential conflict, forces that our leaders thought they had abolished forever.
Stephen says the move to European integration has scared people
The move towards European integration has clearly scared an awful lot of people. It is apparently mistrusted and increasingly unwelcome. The risk is that it provokes age-old animosities, the very thing the European project was designed to prevent. And we'll likely get an early-warning of this if the increasingly controversial bailout programmes start to become a larger source of public anger than the expenses scandal. We should also pay attention to the movement to audit the Federal Reserve, which has the potential to ignite a scandal that could make ours seem like a quaintly British storm in a teacup.
Down another track is a steady and sober return to a less excessive normality, where politicians stick to simpler pledges and truer reassurances, where nations tolerate the shared global hangover and get on with the clean-up. In this case, Angela Merkel's recent outspoken warning against the central banks will probably go down as an insightful warning that was well-heeded.
Somehow the third way, that we'll somehow just muddle through and life will soon return to normal seems just too unlikely.
Meanwhile, how convenient for the bankers and their bailout trillions - which dwarf the expenses scandal and will cost each of us more - that the focus is elsewhere for now. With all of this the fate of Mr Brown seems inconsequential. Generational change is coming one way or an other.
"Anthony" (not his real name) works for an investment bank in the City.
Sir Alan Sugar shouldn't be so keen to push lending, says Anthony
Sir Alan Sugar fresh from appointing Yasmina as his Apprentice has been drafted in to provide some tabloid friendly spin to the dire state that Gordon Brown finds himself in. Apparently, he is going to lead a road show to boost bank lending.
Sugar states: "The banks have been told to help out and lend, but from what I hear that's not happening," but then goes onto say, "I can't put pressure on them but I can offer practical advice."
Well Sir Alan, or should I say Lord Sugar let me offer you some advice.
Instead of going round the country twisting bankers arms, visit Lord Turner at the FSA. Ask Lord Turner about the FSA stress tests. Ask him how the banks should apply the same risk criteria to lending that they did before the recession while staying within the new more stringent stress testing that will now be applied.
Here is an extract from the FSA announcement.
"The key challenge now is that the weakness of the financial system has produced an economic situation which may in future produce significant loan losses and further impair the strength of banks and building societies in an adverse feedback loop. The crucial issue for stress testing is not therefore, as it is sometimes suggested, to 'identify the bad assets on the bank's balance sheets', but to identify future potential loan losses even among loans which currently would not be considered impaired on an accounting basis."
"The current stress scenario models a recession more severe and more prolonged than those which the UK suffered in the 1980s and 1990s and therefore more severe than any other since the Second World War. It assumes a peak-to-trough fall in GDP of over 6%, with growth not returning until 2011 and only returning to trend growth rate in 2012. It models the impact of unemployment rising to just over 12% and, crucially, the impact of a 50% peak-to-trough fall in house prices and a 60% peak-to-trough fall in commercial property prices."
Now think about this - a 50% fall in house prices. Currently, we have a fall of less than 20%. Imagine the impact of another 30% drop.
These stress scenarios are far worse than anything we have experienced so far and in the end will mean that banks have to ramp up their capital as a buffer to pretend that lightning will strike twice and a worse recession than we have currently will knock the economy flat. What this means is that the capacity for banks to take risk has been severely curtailed.
So, Sir Alan what this means is that the slightly risky small business start up which the banks may have taken a punt on before will simply not happen because the regulators are paranoid about getting it wrong again and want the banks to be more risk averse and hold sack loads of capital to cover their risks.
Cash will be king
The reality of this recovery might be as David Smith Economics Editor of the Sunday Times has suggested that recovery will have to be financed out of income rather than borrowing.
In short, cash will be king which is probably the oldest and very first principle of good business.
The mentality of I Want It All, I Want It Now no longer applies, says Anthony
I think that is exactly where Angela Merkel is coming from when she slammed the Federal Reserve and Bank of England about printing money with its quantitative easing.
She says we cannot continue borrowing ourselves out of trouble. It is like my mother used to say. If you wanted something after the war you had to jolly well save for it and if you did not have the ability to save you did without.
The mentality of the Queen song - I Want It All - I Want It Now - no longer applies.
As I said Cash is King! And if the FSA is right about the stress test then World War Three cannot be far away! My point is that the stress test is so extreme that if that event occurred then we are all doomed. In those circumstances nobody would take risks least of all banks.
Meanwhile the value of Sterling has weakened with all the excitement over Gordon Brown's future. That is a classic foreign exchange market trader position. If you have uncertainty, Sell.
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