UK’s FSA In Mercy Killing Of UK Bank Shareholders
By Capitalists@Work on January 6, 2009 | More Posts By Capitalists@Work | Author's WebsiteWell, that could be one view of the FSA’s decision to allow the banning of short selling UK financial shares to lapse on 16th January.
I don’t subscribe to the view that it was shorting that caused the bank share prices all their pain; it was their dodgy balance sheets.
Sadly, these are not improving very fast and so the situation remains that shorting may re-commence with a vengeance.
Perhaps the one chink of light for the Bank Shareholders is that the Hedgies are a bit shorter of ammo than they used to be.
In reality, let us hope that the FSA and the Treasury are speaking about this; there will need to be some sort of shoring up announcement from the Government to help support their own shareholding position. I expect that to be announcing some guarantees for future, erm, non-dodgy?, loans made by the banks. As an outlier there is the chance a ‘bad bank’ (AKA Northern Wreck) will be created to stiff taxpayers for generations to come.
Either way, if the Government announces nothing expect a wild times in financial shares from mid-Jan…
Posted in Categories: Contributor, Economy, External Research, UK.
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