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UK Bank RBS Has '£100 Billion Black Hole' & In 'Danger Of Failing' - Bail-Ins Cometh

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Today’s AM fix was USD 1,255.00, EUR 920.70 and GBP 746.67 per ounce.

Friday’s AM fix was USD 1,254.00, EUR 919.96 and GBP 745.90 per ounce.

Gold fell $0.20 or 0.02% Friday to $1,252.90/oz. Silver was unchanged at $19.03/oz. Gold and silver were both up on the week at 0.17% and 1.17% respectively.




Gold bullion traded near the highest price in a weektoday as the dollar fell against major currencies.

Senior international bankers have told The Financial Times that Russian companies are preparing to switch from dollar to renminbi contracts and other Asian currencies amid fears that western sanctions may freeze them out of the U.S. dollar market.


Palladium reached a 34-month high to over $843/oz.Palladium has surged 18% this year as mine workers have downed tools since January in South Africa, the second-largest producer and on concerns about Russian supply, the world’s largest producer.

 

Mineworkers have been on strike since January in South Africa, the largest platinum producer. Minister of Mineral Resources Ngoako Ramatlhodi said June 7 that today would be the last government-led meeting to resolve the impasse. Palladium ETPs rose to a record on June 6 and platinum assets reached an all-time high last month.



Gold in U.S. Dollars - 5 Days - (Thomson Reuters)

British taxpayers risk losing their entire £45 billion stake in Royal Bank of Scotland (RBS), the parent company of Ulster Bank, which is in grave danger of failing within 10 years, according to an explosive new book.


According to The Independent on Sunday, a new study of the bank, which brought the UK to the brink of financial ruin, reveals RBS still has a £100 billion “black hole” in its finances due to “five broad areas of alleged criminality and wrongdoing”.


Financial journalist Ian Fraser, who wrote Shredded: Inside RBS, The Bank That Broke Britain, said: "The result has been that, at the time of writing, RBS is probably a worse bank than it was under Fred Goodwin.”


They include the mis-selling of financial products such as payment protection insurance, the alleged duping of investors who were persuaded to plough more than £12 billion into RBS shares just before the banking crash in 2008, further fallout from the Libor scandal, and current criminal investigations into the manipulation of the £3 trillion-a-day foreign exchange markets.


Shredded: Inside RBS, The Bank That Broke Britain, by the financial journalist Ian Fraser, concludes that the governments led by Gordon Brown and David Cameron have “let the people of Britain down” by failing to reform RBS after it received its mammoth bailout under the stewardship of former chief executive Fred “The Shred” Goodwin.


“Whatever happens, it now seems impossible that British taxpayers will ever see a return on their £45.5 billion investment in the bank,” he writes in the book.


RBS is under the spotlight again Fraser analyses the bank’s extraordinary largesse under Goodwin, whom, he claims, squandered billions of pounds on overpriced acquisitions, fleets of Mercedes and extravagant buildings and decor.


Fraser claims the “true villains of the piece” are the “politicians, central bankers, regulators and the Basel Committee on Banking Supervision” who allowed people like Goodwin believe they could “get away with virtually anything, whilst defying financial gravity and existing above the law”.




Fraser writes: “Morality and ethics were thrown out the window and we saw the mis-selling of rip-off products on an epic scale – including the scandals of payment protection insurance and interest-rate swap agreements sold to small and medium sized enterprises.

The Treasury, the FSA [Financial Services Authority] and the Bank of England all turned a deaf ear to the complaints from the banks’ millions of ‘victims’ and paid scant heed to the overall balance-sheet strength – capital, liquidity and asset quality – of British banks.

And, at various stages between 1988 and 2008, British politicians also outsourced critical aspects of banking regulation and supervision to the private sector body, the Basel Committee on Banking Supervision, which enabled the bankers to write their own rules. That, in itself, was an error easily as bad as any committed by Goodwin. So he is right. We can’t just blame it all on him.”


RBS and Ulster Bank At Risk Of Bail-In?
Bail-ins are likely to happen at banks that are close to failure in countries that have adopted the BIS bail-in conventions and or do not have financial resources to bail-out their banks. Thus, deposits in failing banks in G20 nations may be subject to bail-ins.

The total debt to GDP ratios, household, corporate, financial and sovereign debt, in Japan, the UK and the U.S. are all at very high levels. All three countries have banks whose outlook is far from positive.

Many analysts warn that many Wall Street and City of London banks are bigger now than they were prior to the collapse of Lehman.

The Eurozone debt crisis has abated in recent months but many analysts and economists are concerned that it is only a matter of time before the debt crisis returns with Greece, Spain, Portugal, Italy and Ireland all remaining vulnerable.

European banks have been recapitalised but should the sovereign debt crisis return or a new global systemic crisis happen, à la Lehman Brothers, individual banks would likely again face capital shortages.

Greece, Cyprus, Spain, Italy, Portugal and Ireland all remain vulnerable. However, other countries in the EU also have risks, including the UK.

The Bank of England is to test whether UK banks and building societies would go bust if house prices crash again. A ‘stress test’ will examine whether banks will need bailing out, or bailing in as seems more likely now, if house prices materially correct again.

The test is being drawn up by the Bank’s Financial Policy Committee, whose members include Governor Mark Carney.


London house prices have all the symptoms of a classic bubble. Many UK banks are already over extended and the real risk is that many banks would not be able to withstand house price falls. This heightens the risk of bail-ins.

Bail-ins can now be used in the UK, EU, U.S. and G20 countries. Banks internationally and especially in Europe remain vulnerable. After Cyprus, which country will be the next to suffer bail-ins? Will RBS and by extension Ulster Bank, be the first UK and Irish banks to be subject to bail-ins?

>>> See our guide to Bail-ins here -

 

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Tue, 06/10/2014 - 09:00 | 4840075 DonutBoy
DonutBoy's picture

None of this will ever be solved by regulators or regulations.  If it is to be solved, it will only be when men are held personally accountable for the wealth of others they claim to have secured.  When they are, regulations and regulators will be entirely superfluous.  

Tue, 06/10/2014 - 08:39 | 4839986 AdvancingTime
AdvancingTime's picture

A bad haircut, in this case means you have been robbed. That may be the case if the government reaches in over a long weekend and steals money from your bank account.

This is a horrible precedent to set, and the worst part may be how some people are letting it slip out that it would be fair, or in some way justifiable if it is only on the larger accounts. It is fine if it only impacts the savings of someone else, the savings of what they see as "the wealthy", the problem is someday they may come for you. I shudder to think what kind of world our children will live in. More in the article below.

http://brucewilds.blogspot.com/2013/03/a-bad-haircut-seizing-bank-accoun...


Tue, 06/10/2014 - 08:33 | 4839969 AdvancingTime
AdvancingTime's picture

the old debt fueled consumption led growth model is dead, countries have borrowed money from the banks that they can never repay. This is what makes the Euro crisis a bank crisis, very specifically a City of London crisis.

UK, German, and French banks lent massively to Greece. The banks secured their loans with CDS's written over London. Greece defaulted last year but the banks declared it hadn't defaulted, so they didn't need to pay up on the CDS's. Now if Greece formally defaults the City of London has a big problem as they cannot pay out on the insurance they sold. More details on this mess that will not go away in the article below.

http://brucewilds.blogspot.com/2013/03/a-run-on-banks-and-euro.html

Wed, 06/11/2014 - 13:07 | 4845245 MeelionDollerBogus
MeelionDollerBogus's picture

The sun'll come out, POMOrrow,
bet your bottom dollar that POMOrrow,
the sun will shine (somewhere but not necessarily here)

to-borrow,
to-borrow,
I luv ya
to-borrow,
you're only a loan away

Tue, 06/10/2014 - 08:08 | 4839927 falak pema
falak pema's picture

Well that beats Paribas by a factor of 10 ! 

Now if you say the same about JPM or Deutsche then we are in hot water.

Tue, 06/10/2014 - 07:14 | 4839873 shovelhead
shovelhead's picture

$45 biliion seems a bit steep for those nifty RBS tote bags.

The Scots have a long memory.

They're avenging William Wallace.

Tue, 06/10/2014 - 03:44 | 4839762 bunnyswanson
bunnyswanson's picture

The People of the World vs The Banking Cartel et al

 

Is there a lawyer in this joint who wants to BECOME A MILLIONAIRE?  show me a judge who would rulel against 6 billion people and I will show you his grave stone on a google map one day shortly thereafter.  The Majority Rules (including all the fringe).  Unite Middle Class.  Freeze assts.  Put a restraining order/halt money movement.  It's the only way to survive a collapse that may be unable to end for any but those who designed it.  Sue them.  What the fuck are ya waiting for is more like it. 

Mon, 06/09/2014 - 23:53 | 4839540 jeff montanye
jeff montanye's picture

speaking of reggie, haven't heard from him in some time.  miss him.  always interesting and insightful imo.

Mon, 06/09/2014 - 23:52 | 4839538 junction
junction's picture

That £100 billion “black hole” is the pot of gold that has enabled banksters to buy up all those 7 and 8 figure apartments in London and Manhattan, using Cayman Island shell corporation "cutouts." Four years from now, those apartments get sold for all cash at a loss and the banksters move somewhere less crowded with their now sanitized cash assets.

Mon, 06/09/2014 - 21:56 | 4839309 Ban KKiller
Ban KKiller's picture

I predict the banks all pass their stress tests. Fixed!

Mon, 06/09/2014 - 21:46 | 4839291 RMolineaux
RMolineaux's picture

I believe it was Reggie Middleton who told us about the situation at RBS and Ulster bank some time back.

Has the furniture industry begun offering mattresses with secret pockets yet?

 

Wed, 06/11/2014 - 13:23 | 4845309 MeelionDollerBogus
Mon, 06/09/2014 - 23:10 | 4839457 fukidontknow
fukidontknow's picture

 

 

"Has the furniture industry begun offering mattresses with secret pockets yet?"

 

http://www.cajamicolchon.com/

Mon, 06/09/2014 - 19:55 | 4839030 medium giraffe
medium giraffe's picture

Please can we just let it die already?

Mon, 06/09/2014 - 19:33 | 4838953 kaiserhoff
kaiserhoff's picture

Bail In =  Bank Runs

I'm not sure what they can do about this that they are not already doing, but I'm sure RBS won't be lonely in its deadbeat status.

 

Wed, 06/11/2014 - 13:27 | 4845335 MeelionDollerBogus
MeelionDollerBogus's picture

bank runs where banks are closed = bank riots

Mon, 06/09/2014 - 19:09 | 4838892 Quaderratic Probing
Quaderratic Probing's picture

"Morality and ethics were thrown out the window and we saw the mis-selling of rip-off products on an epic scale "

Bullish.. This is how banks win

Wed, 06/11/2014 - 13:30 | 4845343 MeelionDollerBogus
Mon, 06/09/2014 - 18:29 | 4838771 Duc888
Duc888's picture

 

 

 

I hear the banksterz have been paying some ungodly prices for Tungsten of late.  Can't confirm that though...just a rumour.

Mon, 06/09/2014 - 18:17 | 4838734 Joebloinvestor
Joebloinvestor's picture

BFD the regulators at their fucking best couldn't tie their own shoes.

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