How Jonathan Ross saved UK banks

I worked in the finance sector service business unit at KPMG doing security and regulatory work - and I think I know a bit. And I think the establishment are all passing the buck.
So how did the USA screw us
Well only because we weren't being attentive - We have lots of highly paid members of the establishment of our own to blame before we go over seas. And We should really hang'em out to dry
FACT1 - Since 2000 everybody has been living the highlife buying homes they cant afford. It is in the interest of every borrower to ensure they can pay their debts - but it is an act of actionable negligence if you work for a Public Company to lend money to someone who can't pay it back. It just aint your money.
FACT2 - Securitization is the process of bucketing up a bunch of loans and selling them off as a bond. This way a mortgage house can exchange a small, regular stream of income over a long period for a big lump now. This is usually done by a specialist - I know about this because I used to share a desk with a bloke at KPMG who did this. The trick is to hide some crappy high-risk-of-default loans in with the good stuff so you don't get left with them. You have to balance the risk.
FACT3 - a bank has a capital adequacy requirement. Before it can lend money, it has to hold a percentage of its loans in cash, stocks and Bonds. These must be "safe" - and serve the purpose of preventing the banks over inflating the economy. And ensuring that bank cant over extend.
So what went wrong
Well simply - Some of the UK banks sold too many mortgages to people who could not afford to pay them back.
These were backed by NINJa Bonds ( No Income No Job) which were a derivative of the same type of high risk loans in the UK or US. Thats like having your debt insurance with the same company that has borrowed money from you.
The investment houses or the banks themselves who did the bundling did not spread the risk so they were poorly constructed - not at all risk adverse.
The ratings agencies like Standard-n-Poors rated these bonds as AAA which was obviously wrong
When news of the BONDS being bad started to emerge in 2005 or 2006, the risk managers did not restrict their lending into the domestic market so when the property market started to fail, Mortgages defaulted reducing income whilst the reserves value fell simultaneously - because the derived investment of the NINJA bond fell in value.

In Sep 2007, the first UK big bank failed - Northern Rock. It could not raise cash for day-to-day business. But very little was done. The banks, the government and the regulators were given a clear warning - they ignored it.
Nearly a year later, on 15 Sep 2008 Lehman Brothers filed for bankruptcy for similar reasons.
This caused all the banks shares to tumble. This meant that the banks stopped lending. HBOS runs into trouble. Personally, I saw that people were getting panicky so I made a gesture of buying 1000 pounds worth of HBOS shares - Within an hour, I had lost £800. What an Arse.
Robert Preston, BBCs economic doom-sayer - a modern day Lord Haw-Haw insured that the UK markets crashed more than ever. With no proper news he was given full remit to run the economy down. Surprise Surprise, the markets collapse further. When the major banks started to hold the line and the markets stabilised, I remember seeing a full 15 minute package on the decline of a Chinese Cardboard box company during peak time - are you telling me that this would ever get coverage if the BBC weren't pursuing a sensationalist policy. Do not underestimate the effect of this coverage on the markets - check out expectational inflation
31 Oct 2008 The BBC suspended Jonathan Ross. Russell Brand and Jonathan Ross were vilified for making Prank Calls to Andrew Sax, the old Fawlty Towers actor. God bless them - that got bloody Preston off the screens and Saved Our Economy.

So who do we punish
Lets face it things are bad - but the UK economy has an 8 year cycle and at the moment, the FTSE 100 is higher than it was after the DOTCOM crash that wasnt even a recession - let alone a depression. But who to blame.
First we have to blame mortgage companies for selling mortgages to people that they cant afford - their banking licenses should be reviewed.
Next we have to blame organisations that issued these TOXIC bonds. A slap on the wrist is not enough. It is a very difficult job with very advanced maths - but they got it wrong.
Likewise someone should hold the rating agencies to account. These bonds were not worthy of an AAA rating
Next we need to blame the “Middle office ” or operational risk departments at the banks for not hearing the warnings written loud and clear like the fall of Northern Rock. These people earn good money and the banks now struggling are suffering from the same faults that broke Northern Rock - they had a clear year to act and a clear example of what could happen if they didn't act - THE BANK WILL FAIL a note worthy message in any banking report. We should make great efforts to make sure that any audit departments or risk managers or Whistle-blowers that warned of problems are recognised - and given reparations where necessary. And we need to severely punish any manager that marginalised them - I can imagine how they feel from personal experience. And by severely punish I mean jail time.
The directors of the banks should do more than apologise they should be investigated, especially if any audit reports exist that show they were pre-warned.
But the tax payer pays for an extensive regulatory system and watch dogs. I have done many FSA and FED audits - they are extensive, and their representative underline their own importance. I recently saw the head of the FSA on TV wanting more powers - this is toss, he has all the power necessary to warn and punish these banks. These include the Banking Act, the old Capital Adequacy directive and BaselII systems of operational risk management. When Northern Rock collapsed, they should have been reviewing how the banks held their reserves. He and his team need to go!!!
Likewise the Bank of England fixated on Inflation, forced interest rates up,up an away - and helped drive the credit crunch. What were they doing - they made things worse. At a time we needed to increase the money supply, they were restricting it.

SO LETS NOT HAVE ANY MORE OF THIS APOLOGISING NONSENSE - THE GOOD OLD BOYS FROM ENRON WENT DOWN FOR THERE SINS -SO SHOULD THESE GUYS.
NOT because I am vengeful
NOT because it will limit the suffering of the people who lose their jobs
BUT BECAUSE THEY WERE PAID TO DO A JOB BUT CHOSE THEIR CARREAR!!!
we need to outline that if you are paid to check, to audit and to report - you must do it
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