Lloyds Bank profits

Lloyds Bank has today announced that its pre-tax profits for 2022 were £6.9 billion, and that it has increased its bonus pool by 12% to £446 million – the largest it has been in four years.

The results follow news that NatWest, Barclays and HSBC made a collective £26.6 billion of profits for 2022. Overall, the ‘Big Four’ banks’ bonus pools total £5.4 billion, following the government’s removal of the cap on bankers’ bonuses late last year.

This, coupled with the source of these profits being largely due to interest rate rises from the Bank of England, has renewed calls from Positive Money for a windfall tax on banks’ excess profits.

They are directing supporters to a petition, calling for Chancellor Jeremy Hunt to introduce this tax.

— source positivemoney.org | 22 Feb 2023

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HSBC profits

HSBC has today announced that its profits for 2022 were £14.5 billion. Its profits for the last quarter of 2022 were £4.3 billion, up more than 90% from the same period in 2021.

The results follow news last week that NatWest and Barclays made a collective £12.1 billion of profits for 2022. HSBC is using its profits to make its largest dividend payout to shareholders since 2018.

This, coupled with the source of these profits being largely due to interest rate rises from the Bank of England, has renewed calls from Positive Money for a windfall tax on banks’ excess profits.

They are directing supporters to a petition, calling for Chancellor Jeremy Hunt to introduce this tax, with more bumper profits and bonuses likely to be announced by Lloyds Bank tomorrow.

— source positivemoney.org | 21 Feb 2023

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Banking Crisis 3.0: Time to Change the Rules of the Game

On CNN March 14, Roger Altman, a former deputy Treasury secretary in the Clinton administration, said that American banks were on the verge of being nationalized:

What the authorities did over the weekend was absolutely profound. They guaranteed the deposits, all of them, at Silicon Valley Bank. What that really means … is that they have guaranteed the entire deposit base of the U.S. financial system. The entire deposit base. Why? Because you can’t guarantee all the deposits in Silicon Valley Bank and then the next day say to the depositors, say, at First Republic, sorry, yours aren’t guaranteed. Of course they are.

… So this is a breathtaking step which effectively nationalizes or federalizes the deposit base of the U.S. financial system.

The deposit base of the financial system has not actually been nationalized, but Congress is considering modifications to the FDIC insurance limit. Meanwhile, one state that does not face those problems is North Dakota, where its state-owned bank acts as a “mini-Fed” for the state. But first, a closer look at the issues.

Bail In, Bail Out, or “Socialism for the Rich”?

On Friday, March 10, Silicon Valley Bank (SVB) was put into receivership by the Federal Deposit Insurance Corporation (FDIC). The FDIC announced that deposits over the $250,000 insurance limit would get an advance dividend within the next week, and would receive a receivership certificate for the rest of the funds. Most of the depositors were venture-

— source ellenbrown.com | Ellen Brown | Mar 24, 2023

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What Will Happen When Banks Go Bust? Bank Runs, Bail-Ins and Systemic Risk

Financial podcasts have been featuring ominous headlines lately along the lines of “Your Bank Can Legally Seize Your Money” and “Banks Can STEAL Your Money?! Here’s How!” The reference is to “bail-ins:” the provision under the 2010 Dodd-Frank Act allowing Systemically Important Financial Institutions (SIFIs, basically the biggest banks) to bail in or expropriate their creditors’ money in the event of insolvency. The problem is that depositors are classed as “creditors.” So how big is the risk to your deposit account? Part I of this two part article will review the bail-in issue. Part II will look at the derivatives risk that could trigger the next global financial crisis.

From Bailouts to Bail-Ins

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 states in its preamble that it will “protect the American taxpayer by ending bailouts.” But it does this under Title II by imposing the losses of insolvent financial companies on their common and preferred stockholders, debtholders, and other unsecured creditors, through an “orderly resolution” plan known as a “bail-in.”

The point of an orderly resolution under the Act is not to make depositors and other creditors whole. It is to prevent a systemwide disorderly resolution of the sort that followed the Lehman Brothers bankruptcy in 2008. Under the old liquidation rules, an insolvent bank was actually “liquidated”—its assets were sold off to repay depositors and creditors.

In an “orderly resolution,” the accounts of depositors and other creditors are emptied to keep the insolvent bank in business. And even if you are getting only a few cents a

— source ellenbrown.com | Ellen Brown | Feb 25, 2023

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Banks Recover only 13% of Rs 10 Lakh Crore Loans Written off in Last 5 Years

Banks have recovered only 13% of a staggering amount of loans worth more than Rs 10 lakh crore loans written off in the last five years.

According to a right-to-information request filed by The Indian Express with the Reserve Bank of India (RBI), banks were able to recover just Rs 1,32,036 crore by writing off debts in the last five years. The write-off helped banks reduce their non-performing assets (NPAs) by Rs 10,09,510 crore.

The mega write-off, which would have been enough to eliminate 61% of the projected gross fiscal deficit of Rs 16.61 lakh crore for 2022–23, reduced NPAs to Rs 7,29,388 crore as of March 2022, the RTI revealed. According to the RBI, write-offs reduced NPAs by Rs 13,22,309 crore in the last 10 years.

— source newsclick.in | 21 Nov 2022

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How Activists Are Trying to Change the Way Banking Gets Done

With $10 trillion in assets at their collective disposal, big banks like Chase and Wells Fargo could do a lot of good. Yet, despite being “too big to fail,” these banks fail people every day. Whether it’s the persistent use of predatory practices, their enduring discrimination, or their insistent investment in exploitative and extractive industries, these formidable financial institutions have a corrosive influence on our country.

Yet, in spite of this, local governments put their assets—the collective wealth of communities collected through taxes—in the hands of these institutions. In New York City alone, $100 billion in the city’s money is handled by private banks every year. While the city’s assets sit in the corporate coffers of these Wall Street staples, the banks are free to invest them at their discretion. Their sole goal: pump up their profits. The result is that public dollars may be invested in projects that act against the public good, such as speculative real estate, private prisons, and fossil fuels.

To address these and other overlapping injustices, New York City’s New Economy Project, a community-based organization dedicated to advancing economic justice, has coordinated

— source yesmagazine.org | Syris Valentine | Nov 9, 2022

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To tackle the cost of living we need to align banks with public purpose

carrot with a stick? We can not only look to the past for inspiration on how to do this, but to the digital money of the future.

With inflation high, public spending and central bank ‘money printing’ has become the scapegoat, leading to calls for spending cuts and/or higher interest rates to combat it. This not only overlooks how inflation is being driven primarily by supply shocks beyond our immediate control, but also the fact that most of the money in our economy is not ‘printed’ by the state, but created by private banks when they make loans – the vast majority of which goes towards bidding up the price of existing assets (including commodities we rely on) rather than increasing the economy’s productive capacity.

Responding to inflation by simply raising the base rate will raise the cost of all investment, including the kinds that will increase supply capacity. We know that a genuinely fair green transition – which would bring down energy costs and ensure price stability – will require huge amounts of public investment, which higher interest rates will only make more expensive. We need a more sophisticated approach to ensure our short term response to inflation doesn’t jeopardise longer term sustainability and the need to genuinely

— source positivemoney.org | Simon Youel | Aug 9, 2022

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