UK’s FSA In Mercy Killing Of UK Bank Shareholders

Well, 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.

Subscribe by RSS Subscribe by Email