WEEKLY COMMENT 12-12-2013

WEEKLY COMMENT 12-12-2013

By Barry Edwards

The Bank of England’s plans for SME’s

 

The new authority given to the Bank of England (BofE) by parliament since the financial crisis has given its senior management real responsibility to oversee banks to prevent a similar disaster happening again. Their powers are comprehensive and allow proper control over lending practices that were not part of their concern since the creation of the former regulator, the Financial Services Authority (FSA).

Ever since the disbandment of the FSA, the new organisations that have been created to manage the financial community have been very proactive in advising and suggesting how banks and the associated institutions should act. This has been well received by those people connected with the financial system as the BofE is the only authority that can effectively influence behaviour and prevent contravention of the rules. read more

WEEKLY COMMENT 5-12-2013

WEEKLY COMMENT 5-12-2013

By Barry Edwards

The Autumn Statement

 

The autumn statement was not an event that will change the course of history or anyone’s perception of the future of the UK economy. Overall, the speech was received well and most people seem to be content with the confirmation that the plans the government is following will continue now the economy has finally started to get up some steam.

It looks as though we should expect some form of tax cuts as we near the election in 2015 which is the usual policy most governments have practised in the past. Most of the fiscal stimulus that was announced was published prior to the statement apart from the business rate changes for the retail sector. There has been some serious lobbying for this and therefore it is not surprising this has been accepted as affordable by the coalition. read more

SMS Marketing showed great reults on Black Friday

Although not all sales data from Black Friday is in, the signs are that it has made a big difference to  the 2013 holiday shopping season already.

SMS marketing has played a big role in the big business that retailers large and small enjoyed over the weekend.

One of the biggest players is ‘Best Buy’ and since last month, the electronics retail giant has been dramatically ramping up efforts to text consumers with relevant offers, information, and promotions this month in hopes of generating more foot traffic. read more

WEEKLY COMMENT 28-11-2013

 

WEEKLY COMMENT 28-11-2013

By Barry Edwards

The Royal Bank of Scotland (RBS) Admonishment

 

The Royal Bank of Scotland (RBS) has not had a good week. Two reports have been issued, one accusing it of cheating customers who were in difficulty and the other, the second report by Sir Andrew Large continuing on from the first critical analysis issued on the 1st of November. It would be fair to say that RBS has been singled out but is certainly not the only bank that practised the activities that have been denigrated. read more

WEEKLY COMMENT 21-11-2013

 

WEEKLY COMMENT 21-11-2013

By Barry Edwards

OECD and the new world of finance

 

The Organisation for Economic Co-operation and Development (OECD) has released its forecasts for 2014/2015 and the comment about the UK is reassuring in this report. The Chancellor of the Exchequer has instantly picked this up to promote his economic management skills and who can blame him! You can see the relevant UK section in the report by clicking on the link below;

http://www.keepeek.com/Digital-Asset-Management/oecd/economics/oecd-economic-outlook-volume-2013-issue-2_eco_outlook-v2013-2-en#page120 read more

WEEKLY COMMENT 14-11-2013

WEEKLY COMMENT 14-11-2013

By Barry Edwards

China’s New Economic Vision

 

Last Tuesday the Chinese President, Xi Jinping, issued a communique about the decisions made at the ‘third plenum’ of the Chinese Communist party’s 18th Central Committee. This eagerly awaited announcement did not give a lot of detail but hinted at some of the decisions that were made.

In China, plenums are not held very often but they do set out the course of the planning of the economy and have been instrumental in changing the progress of the country. The first one, in 1978, was the most dramatic since it set China on its path of economic development changing the disastrous effects of the Cultural Revolution imposed on the country by Chairman Mao. read more

WEEKLY COMMENT 7-11-2013

WEEKLY COMMENT 7-11-2013

By Barry Edwards

Banker’s SME lending review

The RBS independent lending review by Sir Andrew Large and the consultancy Oliver Wyman was published on the 1st of November. It was commissioned to look at the SME market in particular and it made some revealing observations about the RBS approach which were certainly not flattering.

You can read the complete report by clicking on the link below:-

http://www.independentlendingreview.co.uk/RBSILRSummary_and_Recommendations.pdf

The recommendations proposed by Sir Andrew are similar to the paper we have posted on this site called ‘Venture Beyond’ which you can read if you click on the title in the right hand column of this page. Most of the advice is based around support, good monitoring and proper customer management together with flexible funding arrangements which you would think is an obvious and sensible way to manage this market for a bank. read more

WEEKLY COMMENT 31-10-2013

WEEKLY COMMENT 31-10-2013

By Barry Edwards

‘We Are Open for Business’ says the Governor

Mark Carney, the new Governor of the Bank of England (BofE) gave a speech at an event to celebrate the 125th anniversary of the Financial Times. He gave a good description of the problems created by the financial crisis and the steps that have been taken to prevent a disaster like that happening again. He also explained how the BofE will be much more proactive in financial markets and provide liquidity to all involved in the financial system without the stigma that has traditionally prevented banks from accessing the facilities of the BofE in the past. read more

WEEKLY COMMENT 24-10-2013

 

 

WEEKLY COMMENT 24-10-2013

By Barry Edwards

A New Concept in Business Funding

 

Non-bank lending to small and medium sized enterprises (SME’s) has hit a five year high while main bank lending has declined for the fifth year since 2008. The figures highlighted by the National association of Commercial Finance Brokers and the Asset Based Finance Association clearly shows that there is a noticeable shift in the way companies are accessing finance.

The slack in traditional lending to SME’s is being taken up by invoice discounters, asset based lending of all kinds and alternative funders, namely peer-to-peer lenders and crowd funding. It is clear that SME’s have become aware of other sources and are actively engaging in utilising the facilities of these new finance organisations. read more

WEEKLY COMMENT 17-10-2013

WEEKLY COMMENT 17-10-2013

By Barry Edwards

The investment dilemma

 

The consequences of defaulting on USA government bonds were too much to bear for the politicians and they finally agreed to increase the amount of debt that can be issued by the Treasury. Under the American constitution, Congress has to authorise the amount of debt that can be issued which is done by giving a debt limit that has to be passed in both houses of Congress.

The USA is the only country that has this restriction and that is why we see regular dispute and initial refusal by the opposition to increase the limit without conditions. It has happened many times before and has been as close as this on a few occasions in the past. The justification for this behaviour is that the American constitution intentionally allows Congress to challenge the President on all matters to prevent a concentration of power to a small group of people. read more

WEEKLY COMMENT 10-10-2013

WEEKLY COMMENT 10-10-2013

By Barry Edwards

A Personal View of the UK Economy

 

Over the last six months the growth in the UK economy has surprised most people since there was no obvious sign that business activity had improved substantially. The IMF, the OECD and the Bank of England have doubled their forecasts for growth in the UK economy for 2014. The government has given itself a pat on the back for being so skilled at managing the economy while the opposition have had no choice but to fall into line with the forecasts; they have changed tack and emphasise the lack of improvement in wages when household costs are continuing to rise. read more

WEEKLY COMMENT 3-10-2013

WEEKLY COMMENT 3-10-2013

By Barry Edwards

The Madness of Congress and the Wrong Approach about ‘Help-to-Buy Mortgages

 

Closing down government funded initiatives and stopping payment of salaries to government employees is a uniquely American political negotiating tactic. This is the 17th shut down since 1977; It could not happen anywhere else in the world, even in other countries that have a democracy. The rest of the world is amazed that the biggest economy in the world has a system that allows politicians to play games with the livelihoods of decent upstanding people who are purely doing the job they have been employed to do. read more