The UK's Non-Bank Banks and High LIBOR
London, UK - 10 September 2007, 09:32 GMT
Dear ATCA Colleagues
[Please note that the views presented by individual contributors
are not necessarily representative of the views of ATCA, which is neutral.
ATCA conducts collective Socratic dialogue on global opportunities and threats.]
We are grateful to:
. Andrew Hunt, Founder and Consultant Economist, Andrew Hunt Economics, City
of London, UK, for "The UK's Non-Bank Banks and High LIBOR;"
Dear DK and Colleagues
Re: The UK's Non-Bank Banks and High LIBOR
In theory, most UK loans and mortgages are made by deposit taking organisations
(ie banks and building societies) and this would suggest that the UK should,
at first sight, have been relatively insulated from the current non-bank crisis.
Of course, some banks have direct sub-prime exposure and they have lent to
hedge funds and the like that may have in turn invested in these markets and
thus we can expect the banks to take some 'hits' to their asset books but
the threat from these events would not seem to justify the continued high
risk premium being faced by the banks when they seek to borrow at LIBOR from
the inter bank markets. Some have suggested that the particular problems in
the GBP inter bank markets have been the result of the BoE's tardy reaction
and supposed miserly Victorian attitudes but this explanation appears too
simplistic.
[CONTINUES] [ATCA
Membership]
Andrew Hunt
Andrew Hunt is Founder and Consultant Economist at Andrew Hunt Economics.
The consultancy was formed in 2001 when he left Dresdner Asset Management,
where he had been Chief International Economist. He first joined Dresdner
in 1987 after a brief internship at Lehman Brothers. He worked for four years
in the Dresdner London office, covering the G7 Economies, before moving to
Hong Kong in 1991 in order to spend more time working in the Pacific Area.
Whilst in Hong Kong, he formed strong links with many regional central banks,
and the local hedge fund community. Consequently, he was heavily involved
in the events surrounding the Asian Crisis. In 1997, he returned to London
and took up his international role in the renamed Dresdner RCM Global Investors.
During his time at DRCM, he was a frequent visitor to Australia in both research
and marketing capacities. Since 2001, he has operated his own economics consultancy.
His current client list includes around 40 large fund managers, hedge funds
and family offices, although he also consults to some multinational companies
and central banks. In order to fulfil his research role, he travels extensively
in the USA, Europe and the Asia Pacific region. He is 41 years old with an
honours degree in economics from Bristol University. He, and his partner Tracy,
live within the UK and have just taken delivery of their first child.
[ENDS]
We are grateful to:
. The ATCA Research & Analysis Wing (RAW), based in Canary Wharf, London,
UK, for "Worst Financial Crisis in 20 Years
and the 10 Day Debt Bomb;"
+ DK Matai, Executive Chairman, mi2g, ATCA, The Philanthropia, based in
Canary Wharf, London, UK, for "Breach-of-Trust
in Computing Platforms: Systemic Risk & Black Swans;"
+ The ATCA Research & Analysis Wing (RAW), based in Canary Wharf, London,
UK, for "ATCA QUERY: The Question of Trust;"
. Dr Harald Malmgren, CEO, Malmgren Global, based in Washington, DC, USA,
and The ATCA Research & Analysis Wing (RAW), based in Canary Wharf,
London, UK for "Central Banks' Intervention
and Europa;"
. Hamid Hakimzadeh, Hedge Fund Specialist, based in Buckinghamshire, England,
UK, for "The Physics of Humpty Dumpty;"
and
. Nigel Reed, Senior Analyst, Financial Markets, based in Cornwall, England,
UK, for "China, Japan & US T-Bonds."
* The ATCA Research & Analysis Wing (RAW), based in Canary Wharf, London,
UK, for "Credit Card Debt Default - The Domino
Crisis post Sub-Prime Overflow;"
* Dr George Feiger, President & CEO, Contango Capital Advisors, based
in Berkeley, California, USA for "Responsibility
for Credit, Securitisation and Moral Hazard."
. Anthony Whitehouse, Founder, Bittiner Whitehouse (now Maitland), Geneva,
Switzerland, for "Blame and Sanctions in the
Credit Crunch;"
. Prof Prabhu Guptara, Executive Director, Organisational Development, Wolfsberg
(UBS), Switzerland, for "Unique Problems with
1990s Japan;"
. The ATCA Research & Analysis Wing (RAW), based in Canary Wharf, London,
UK, and Dr Harald Malmgren, CEO, Malmgren Global, based in Washington, DC,
USA, for "Central Bankers, Monetary Policy
and Moral Hazard;"
* William Sturge, Partner, Reinsurance, Lawrence Graham (LG) based in Central
London, UK, for "Litigation Exposure and Insurances
that may Respond;"
. Peter Tasker, Founding Partner, Arcus Investment, based in Tokyo, Japan,
for "Invaluable Lessons from 1990s Japan -
Risks of Schadenfreude;"
. Andrew Leung, CEO, AL International, London, UK, and frequent visitor
to China for "The China Dimension of The
Global Credit Crunch;"
* The ATCA Research & Analysis Wing (RAW), based in Canary Wharf, London,
UK, and Dr Harald Malmgren based in Washington, DC, USA for "Off-Balance
Sheet Conduits & SIVs Raise Wider Concerns;"
* Prof Charles Calomiris, Columbia Business School, New York & Prof
Joseph Mason, LeBow College of Business, Drexel University, Philadelphia,
USA for "The Conflict of Rating Agencies and
Regulation - We need a Better Way to Judge Risk;"
. Dr George Feiger, President & CEO, Contango Capital Advisors, based
in Berkeley, California, USA for, "Questioning
the Views of a Nobel Laureate;"
. Prof Joseph Stiglitz, Nobel Laureate in Economics (2001), Columbia University,
New York, USA , for "Day of Reckoning for Americans
who lived Beyond their Means;"
. Dr George Feiger, President & CEO, Contango Capital Advisors, based
in Berkeley, California, USA for "Suggestions
for Resolving Sub-Prime Dilemma Step by Step;"
* Dr Harald Malmgren, CEO, Malmgren Global, based in Washington, DC, USA
for "Understanding Rating Agencies beyond
the Sub-Prime Meltdown;"
* The ATCA Research and Analysis Wing (RAW), based in Canary Wharf, London,
UK, for "Asymmetric Knowledge Risk and Market
Deadlock;"
* Anthony Whitehouse, Founder, Bittiner Whitehouse (now Maitland), Geneva,
Switzerland, for "High Credit Ratings and Breakdown
of Trust;"
* John Pickering, Vice-Chairman, Labour Finance and Industry Group, based
in London and Tunbridge Wells, UK, for "Role
of Auditors;"
* The ATCA Research and Analysis Wing (RAW), based in Canary Wharf, London,
UK, for "ATCA QUERY: Role of Credit Rating
Agencies;"
. Peter Tasker, Founding Partner, Arcus Investment, based in Tokyo, Japan,
for "Resilience of Corporate Profits &
Sub-Prime Fiasco -- Global View from Japan;"
. Daniel Morler, Head of Middle East, LGT Private Bank, based in Vaduz,
Liechtenstein, for "Human Factor, Information
Lag, Geo-Politics and Central Banks;"
. Justin Urquhart Stewart, Director, Seven Investment Management, London,
UK, for "Pride Before the Fall -- Those Who Don't Know that they
Don't Know;"
. Martin Wolf, Associate Editor & Chief Economics Commentator, Financial
Times, London, UK, for "To Cut or Not to
Cut: Federal Reserve must Prolong the Party;"
. The Hon Al McDonald, Chairman and CEO, Avenir Group, from Michigan, USA,
for "Balancing The Role of Management in Extreme
Financial Turbulence."
. The ATCA Editorial Team based in Canary Wharf, London, UK, for "Subprime
Crisis Spreads Across Regions and Financial Sectors;"
* Hervé de Carmoy, European Vice-Chairman, Trilateral Commission,
based in Paris, France, for "Role of Large
Financial Institutions in Fuelling Crisis;"
* Dr Jim Walker, Chief Economist, CLSA, based in Hong Kong for "China
Chaos and Subprime Butterfly;"
. Ashutosh Sheshabalaya, CEO, India-Advisory, based in Brussels, EU, and
Bassilly, Belgium, for "India turns History
Upside Down;"
. John Elkington, Chief Entrepreneur, SustainAbility, based in London, UK,
and returning from India, for "Mother Convulsion
- India's Third Liberation;"
. Stephen Lendman, based in Chicago, Illinois, USA, for "Slow
Motion Train Wreck" via Ashok Khosla, Chairman, Development
Alternatives, New Delhi, India;
. The ATCA Editorial Team based in Canary Wharf, London, UK, for "Market
Convulsions;"
. Dr Harald Malmgren, CEO, Malmgren Global, based in Washington, DC, USA
for "Federal Reserve's Changed Focus;"
. Bill Emmott, Director, UK-Japan 21st Century Group, based in London and
Somerset, UK, for "Japan's Strong Yen;"
* Dr Harald Malmgren, CEO, Malmgren Global, based in Washington, DC, USA
for "The Asymmetric Loss of Trust and Chain
Reaction;"
. The ATCA Editorial Team, based in Canary Wharf, London, UK, for "Public
Inquisition of Credit Rating Agencies may Accelerate Downturn;"
. Dr George Feiger, President and CEO, Contango Capital Advisors, based
in Berkeley, California, USA, for "Watch
out for Dramatic Winners;"
* The ATCA Editorial Team, based in Canary Wharf, London, UK, for "Systemic
Risk & Sectoral Meltdown: Heightened Correlation and Deleveraging;"
. Rudi Bogni, Chairman, Medinvest, and Director, Old Mutual, from Basel,
Switzerland, for, "Non-Stop Central Banks'
Intervention;"
. Dr Ravi Batra, Professor of Economics, Southern Methodist University,
Dallas, Texas, USA, for, "Towards a Global
Economic Crisis?;"
. Aurora Carlson, Founder, Open One Center, based on the West Coast, Sweden,
for "The Coming Storm of Change;"
. The ATCA Editorial Team, based in Canary Wharf, London, UK, for "Large
Quake hits Quants as Computer-Driven Quantitative Hedge Funds Short-Circuit;"
* Dr Harald Malmgren, CEO, Malmgren Global, based in Washington, DC, USA
for "Prolonged Credit Market Correction Ahead;"
. Prof Dr Norbert Walter, Chief Economist, Deutsche Bank Group, based in
Frankfurt, Germany, for "Economic Consequences
of The Sub-Prime Crisis;"
. Anthony Whitehouse, Founder, Bittiner Whitehouse (now Maitland), Geneva,
Switzerland, for "Regulators, Hedge Fund Lending
and Cross-Selling;"
. The ATCA Editorial Team, based in Canary Wharf, London, UK, for "Perfect
Storm: Credit Freeze and Distress Selling by Hedge Funds;"
. Dr George Feiger, based in Berkeley, California, USA, for "Two
Faces of the Same Coin;"
* The ATCA Editorial Team, based in Canary Wharf, London, for "Contagion
and Systemic Risk? ECB Injects Record Euro 95bn post Major Disturbance;"
. The ATCA Editorial Team, for "Flight to Quality
as Markets finally Appreciate Risk;"
. Robert McNally, Chairman, London Chamber of Commerce Property and Construction
Group, for "Erosion of Commercial Real Estate
as a Solid Asset Class;"
. Alexander Hoare, CEO, C Hoare and Co, Private Bankers, based in the City
of London, for "Destructive
Creativity, Leverage and The Derivatives Market;" and
. Dr Harald Malmgren, CEO, Malmgren Global, based in Washington, DC, for
"The Fear of Central Bankers -- Flight from
Illiquidity, Derivatives and Heightened Risk of Contagion;"
in response to, "Are the Currency Markets Warning
that there is Trouble Ahead? The Precipitous Decline of the US Dollar and
its Impact on the World."
+ Denotes ATCA QUERY: The Question of Trust +
* Denotes ATCA QUERY: Role of Credit Rating Agencies *
We look forward to your further thoughts, observations and views. Thank
you.
Best wishes
For and on behalf of DK Matai, Chairman, Asymmetric Threats Contingency
Alliance (ATCA)
ATCA: The Asymmetric Threats Contingency
Alliance is a philanthropic expert initiative founded in 2001
to resolve complex global challenges through collective Socratic
dialogue and joint executive action to build a wisdom based global
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asymmetric threats and social opportunities arising from climate
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as well as 250 Editors-in-Chief of major media.
The views presented by individual contributors are not necessarily
representative of the views of ATCA, which is neutral. Please
do not forward or use the material circulated without permission
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