LONDON (Reuters) - British banks may not have enough capital set aside as a defense against future financial market dangers due to their over-optimistic assessment of the risks facing them, the Bank of England said on Thursday.
The BoE's Financial Policy Committee, which from next year will take charge of British bank regulation, urged the current regulator to reassess whether banks' capital properly reflects the risk of loans going sour and future fines for misconduct.
Banks' true capital position was probably worse than relatively healthy official numbers imply, and that this is hurting investor confidence, the BoE said.
"Progress by banks in raising capital has slowed and investor confidence remains low," the BoE said in its half-yearly Financial Stability Report. "Market concerns are likely to reflect in part uncertainty about bank capital adequacy."
The FPC has repeatedly urged British banks to raise capital levels, and November's report marks a stepping up of these recommendations, despite a slight reduction in the risks facing the financial system due to an easing in euro zone tensions.
"UK banks' capital buffers, available to cushion losses and maintain the supply of credit following realization of a stress scenario, are not as great as headline regulatory capital ratios imply," it said.
Information from supervisors suggested some British banks would suffer bigger losses on loans than they had made provision for, it said.
Banks had also persistently underestimated the scale of fines they would face for past misconduct.
"In 2012, the number of identified conduct issues has grown and it seems likely banks could face additional sizeable costs," it said, adding that external analysts had suggested further costs of 4-10 billion pounds for mis-sold payment protection insurance and the LIBOR rate-rigging scandal.
The system of risk weighting that banks use to judge how likely they were to face losses was also "complex and opaque" and probably undermined investor confidence, the BoE added.
The BoE is also concerned that banks continue to lend to British businesses and households at a time when it blames a lack of bank credit as part of the reason for the country's very sluggish growth.
Inadequate capital buffers are not an excuse for reining back on lending, the central bank said.
"The Financial Services Authority should ensure that firms either raise capital or take steps to restructure their business and balance sheets in ways that do not hinder lending to the real economy," it said.
(Reporting by David Milliken and Alessandra Prentice)
Registration on or use of this site constitutes acceptance of our User Agreement and Privacy Policy (Revised November 1, 2011)
? 2012 New Orleans Net LLC. All rights reserved (About Us). The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of New Orleans Net LLC.
Community Rules apply to all content you upload or otherwise submit to this site. Contact interactivity management.
The Welsh Labour government has presided over a failing cancer service that dictates the speed of treatment by where a person lives, according to the leader of the Welsh Liberal Democrats Kirsty Williams.
The Welsh government's target is for 95% of urgent suspected cancer patients to be seen by a cancer specialist by 62 days. Statistics have shown that the target was missed by nearly 10%, with just 86% of patients being seen within the target time. Only one Local Health Board, Aneurin Bevan, met the 95% target.
Kirsty Williams AM commented:
"Today's statistics highlight that there is a huge variation in waiting times with regards to where a person lives. It is not right that Abertawe Bro Morgannwg LHB has only 75% of patients starting treatment with 62 days, compared to 97% of patients being seen by Aneurin Bevan. The Welsh Labour Government has presided of a failing cancer service that dictates the speed of treatment by where a person lives.
"The figures released also show that the type of cancer a person has will likely determine the speed within which they will be seen by a specialist. For example, only 52% of patients thought to be suffering from head or neck cancer were seen within 62 days. That, quite frankly, is disgraceful.
"62 days is already a incredibly long time for a person to have to wait to be seen by a cancer specialist, but being forced to wait even longer than that is completely unacceptable. It is imperative that all urgent suspected cancer patients receive treatment promptly, otherwise there is a chance that their health can seriously deteriorate in the meantime.
"It can come to no surprise to any of us that people are having to wait much longer than the target time to be seen by a cancer specialist. The Welsh Labour Government has had years of opportunity to make significant improvements to Wales' cancer services, but it has categorically failed in doing so."
There are more than 140,000 miles of train track in the U.S., many of them laid across lonely stretches of land with nary a power line in sight. Thankfully, there?s a new gadget to harvest energy from vibrations generated in the track by passing trains to power signal lights and other track-side devices.
The energy harvester could save more than $10 million in trackside power costs in New York state alone, according to its inventor, Stony Brook University professor of mechanical engineering Lei Zuo. It would also reduce carbon dioxide emissions there by about 3,000 tons, he added.
The device converts the irregular up-and-down vibration of a train track to a unidirectional rotation of a generator. The concept is similar to other energy-harvesting devices such as the energy-generating backpack, kneebrace, speed bump?and pavers.?
The global market for energy harvesters hit $700 million in 2011 and could pass $4 billion by 2021, according to market research firm IDTechEx. Zuo and colleagues have licensed their Mechanical Motion Rectifier-based Railroad Energy Harvester to Electric Truck/Harvest NRG for commercialization.
? via Gizmag, Newsday, and SUNY?
John Roach is a contributing writer for NBC News Digital. To learn more about him, check out his website. For more of our Future of Technology series, watch the featured video below.
NEW YORK (AP) ? Lock up your ears ? Mike Tyson's coming to a theater near you.
The former champion boxer and convicted rapist will take his one-man show "Mike Tyson: Undisputed Truth" on a three-month tour to more than a dozen cities, including Chicago, San Francisco, Los Angeles, Detroit and Washington, D.C.
The two-hour show, directed by Spike Lee and written by Tyson's wife, Kiki, debuted in Las Vegas and had a limited run on Broadway this summer. The tour starts in Indianapolis in February.
The show traces Iron Mike's rise from violent street hood in Brooklyn to a fearsome athlete. Then comes the fall ? prison inmate, tabloid target, cocaine and Evander Holyfield's delicious ear. There are stories about first wife Robin Givens, promoter Don King and Brad Pitt.
DEAR ABBY: My wife and I have been married for five years. I recently discovered that she made between 10 and 20 porn videos when she was 19. We got married when she was 27. We have four kids from two previous marriages.I am devastated. When I confronted her about it, she cried harder than I had ever seen. She said she was lost, and it's the biggest regret of her entire life.I understand how hard it can be to tell someone you have done something like this. I haven't led a perfect life either, and I have my own skeletons and things that I would never mention. But still, I can't get over this. ...
When good service means bad behaviorPublic release date: 29-Nov-2012 [ | E-mail | Share ]
Contact: Amy Blumenthal amyblume@marshall.usc.edu 213-740-5552 USC Marshall School of Business
Competition in smog-test industry can lead to corruption, USC Marshall study finds
Economists and professionals praise the merits of competition, as it leads to lower prices and improvements in quality. But in the automobile smog-testing industry, competition can lead to corruption and even public health problems, according to research by USC Marshall School of Business Assistant Professor of Management Victor Bennett.
Bennett, along with colleagues Lamar Pierce of Washington University's Olin School of Business, Jason Snyder at the UCLA Anderson School of Management and Michael W. Toffel of Harvard Business School, found that the structure of the smog-testing industry can lead some firms to cheat on their customers' smog-check results And this cheating takes place because it can actually lead to better customer relationships. The findings are outlined in "Customer-driven Misconduct: How Competition Corrupts Business Practices," which will appear in a forthcoming issue of Management Science. The study found that:
Smog check firms that were clustered among other competing smog-check firms were more likely to be lenient, ensuring that customer cars passed when they should have failed.
Firms that were new to the business also were more likely to pass cars that likely should have failed.
In New York State alone, these practices could have passed 39,000 cars that should have failed.
"There's a strong sentiment that competition is a positive thing," Bennett said. "It makes firms more efficient, makes service quality and products better, and drives down prices. But it works through giving customers what they want, and sometimes doing so is bad for others."
The research looked at 28 million emissions tests from 11,000 smog check facilities in New York. Smog check firms that faced more local competitors gave cars a passing grade at higher rates than firms that enjoyed less competition. The researchers' findings suggest that competing firms passed more cars because they were afraid if they failed a customer's car, that customer would get it tested somewhere else.
One problem leading to potentially illicit competition is the way the smog-check industry is regulated, the study shows. In New York State, smog-testing facilities must charge $27 for tests in the New York City area, and $11 in the rest of the state. Since these prices are fixed for all firms, "facilities must compete on quality," the researchers wrote. "In emissions testing, the critical dimension of quality is the test outcome." By passing customers illegally, the emissions testing firm provides what the customer perceives as quality service. If they don't pass the customer's car, the customer goes to a firm that will, researchers wrote.
Falsely passing cars has consequences beyond economic corruption. Carbon monoxide, a common tailpipe emission, can ultimately block the healthy transport of oxygen into our cells and tissues, while emitted carbon compounds and nitrogen oxides produce ozone, which can accelerate respiratory problems. Smog testing has been a major weapon against this type of air pollution produced by motor vehicles.
"In New York, our results suggest that 1 of every 100 cars tested that should fail, pass instead," said Bennett. "We can't specify exactly how many cases are due to manipulated passing, but the study ties competition to illicit quality. This brings front and center the trade-off between the benefits of competition and the costs."
Bennett is now hoping to look at the effects of crackdowns on facilities by government regulators, and whether such action yields any real results in the industry.
###
[ | E-mail | Share ]
?
AAAS and EurekAlert! are not responsible for the accuracy of news releases posted to EurekAlert! by contributing institutions or for the use of any information through the EurekAlert! system.
When good service means bad behaviorPublic release date: 29-Nov-2012 [ | E-mail | Share ]
Contact: Amy Blumenthal amyblume@marshall.usc.edu 213-740-5552 USC Marshall School of Business
Competition in smog-test industry can lead to corruption, USC Marshall study finds
Economists and professionals praise the merits of competition, as it leads to lower prices and improvements in quality. But in the automobile smog-testing industry, competition can lead to corruption and even public health problems, according to research by USC Marshall School of Business Assistant Professor of Management Victor Bennett.
Bennett, along with colleagues Lamar Pierce of Washington University's Olin School of Business, Jason Snyder at the UCLA Anderson School of Management and Michael W. Toffel of Harvard Business School, found that the structure of the smog-testing industry can lead some firms to cheat on their customers' smog-check results And this cheating takes place because it can actually lead to better customer relationships. The findings are outlined in "Customer-driven Misconduct: How Competition Corrupts Business Practices," which will appear in a forthcoming issue of Management Science. The study found that:
Smog check firms that were clustered among other competing smog-check firms were more likely to be lenient, ensuring that customer cars passed when they should have failed.
Firms that were new to the business also were more likely to pass cars that likely should have failed.
In New York State alone, these practices could have passed 39,000 cars that should have failed.
"There's a strong sentiment that competition is a positive thing," Bennett said. "It makes firms more efficient, makes service quality and products better, and drives down prices. But it works through giving customers what they want, and sometimes doing so is bad for others."
The research looked at 28 million emissions tests from 11,000 smog check facilities in New York. Smog check firms that faced more local competitors gave cars a passing grade at higher rates than firms that enjoyed less competition. The researchers' findings suggest that competing firms passed more cars because they were afraid if they failed a customer's car, that customer would get it tested somewhere else.
One problem leading to potentially illicit competition is the way the smog-check industry is regulated, the study shows. In New York State, smog-testing facilities must charge $27 for tests in the New York City area, and $11 in the rest of the state. Since these prices are fixed for all firms, "facilities must compete on quality," the researchers wrote. "In emissions testing, the critical dimension of quality is the test outcome." By passing customers illegally, the emissions testing firm provides what the customer perceives as quality service. If they don't pass the customer's car, the customer goes to a firm that will, researchers wrote.
Falsely passing cars has consequences beyond economic corruption. Carbon monoxide, a common tailpipe emission, can ultimately block the healthy transport of oxygen into our cells and tissues, while emitted carbon compounds and nitrogen oxides produce ozone, which can accelerate respiratory problems. Smog testing has been a major weapon against this type of air pollution produced by motor vehicles.
"In New York, our results suggest that 1 of every 100 cars tested that should fail, pass instead," said Bennett. "We can't specify exactly how many cases are due to manipulated passing, but the study ties competition to illicit quality. This brings front and center the trade-off between the benefits of competition and the costs."
Bennett is now hoping to look at the effects of crackdowns on facilities by government regulators, and whether such action yields any real results in the industry.
###
[ | E-mail | Share ]
?
AAAS and EurekAlert! are not responsible for the accuracy of news releases posted to EurekAlert! by contributing institutions or for the use of any information through the EurekAlert! system.
Ad Choices
![[ Back to EurekAlert! ]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_vZHIR4M4TO7xfweCKb830lwajAST2Q6X7yKWkfyamtBklV_XwoyHIlQkEo742Th_FpIYGyrAEmf9GBadh5LLxCHRNs2bQkQhXaRO362_U=s0-d){kind=small}
Public release date: 29-Nov-2012
Share ]