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back to article FSA acts as rumours send bank shares crashing

The Financial Services Authority is combing through share transactions today as it investigates whether anyone was manipulating the market on Wednesday when rumours about Halifax Bank of Scotland sent its shares crashing down. HBOS shares fell more than 17 per cent in early trading yesterday and took other bank shares down with …

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Guaranteeing Customers money

Would the bank of England jump in to save one of the bigger UK multinational banks like HSBC for example, or would it let the international arm sink while keeping the UK division afloat? I think this is the sort of question that no-one wants to ask.

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Pirate

Just enforces my opinion...

that the're <mostly> back-stabbing fucking parasites.

Revolution.

Wall.

Bullet.

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Rumors vs. factual tangible facts

Hmmm

"There has been a series of completely unfounded rumours about UK financial institutions in the London market ..."

As opposed to house prices that have been a true reflection of the inherent value of properties.

Hmmm again ...

"We will not tolerate market participants taking advantage of the current market conditions to commit abuse ..."

Because it was intolerable to sell mortgages at usurer rates to over stretched buyers???? or charge fees in the billions???

Looks like some are getting a taste of their own medicine. Perfectly sane to rip off the poor but please don't mess with our big names. Unless it is self inflicted to cover some other, yet unheard, cock-ups.

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The banks

We pay the goverment to Tax us and now we pay the goverment to pay for the banks to rip us off. Interesting approach, we give money to the banks for them to charge us high interest rates on mortgages and when they mess up they ask us to give them more money so they dont go broke and keep the interest rates even higher. So in the end the Bank of england lends more money but they still take the same money from us. Maybe, just maybe inst the bank of england increasing someones profits ?

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Anonymous Coward

Surprise!

Yeh, a 'rumour' caused it, and not the surprise 7 billion liability to US dollar mortgages they announced at the start of the month, followed by the plummeting dollar on Tuesday??? Yeh damn those rumours!

I blame alcohol fueled traders, perhaps if we increase the taxes on alcohol that will fix it?

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Coat

Traceability and accountability...

... should be paramount in all share trading and financial dealings. At least to the company from which it originated.

Any financial company that is found to have processed and acted on "rumour" should be barred from trading indefinitely, it's directors should face personal fines of minimum of £10m and have all assets and pensions etc. removed from them. That'd focus their attention.... and give the rest of us the satisfaction of seeing these "fat cats" suffer...

It is totally ridiculous that "gossip" and "rumours" could trigger such a drop is share price - perhaps the financial markets should be governed by objective logical machines - not a bunch of "scaredy cats". Get rid of all possible subjective and emotional and human based perceptions for the financial markets and they'd maybe be in a better state.

</rant>

The shrinking coat by the door ...

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Paris Hilton

Re guaranteeing customers money

I see your point but in that example it's the other way round - HSBC UK is an arm of the multinational although the parent is based in the UK.

Thinking of the size of their assets (hence the icon), and seeing as they lost 1/2 their profits to the sub-prime thing but still broke last year's total, there would be many more banks that would fail before it - and propping those others up would bankrupt the Treasury long before getting round to HSBC.

S'all down to dodgy traders and corporate greed, of course.

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Anonymous Coward

re. Guaranteeing Customers money

I think they'd look at the financial risk involved before guaranteeing anything; funding Northern Rock was expensive, but the loans are backed by a reasonable loan-book. NR aren't in as bad a position as some US sub-prime lenders as far as defaulters are concerned, so the people who've borrowed money are the government's security on the loan; as long as the Rock's borrowers repay their mortgages (and most will at some point) the government will get its money back, plus the interest that's being paid in the mean time. It's the shareholders who are getting a bad deal on NR, not the taxpayers and customers (which makes a change really).

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Black Helicopters

rumours

If the stock market needs protecting from "rumours" then we're in more trouble than I thought.

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Dead Vulture

Short!

"There is nothing wrong with selling shares you believe will fall, as long as you are not spreading false rumours to drive the price down."

That would of course be dumb, why would you want to spread false rumors to drive the price down, then sell?

What you actually want to do is sell shares that you don't own in the first place, then drive the price down, then buy the shares that you needed in the first place.

Which is what "short selling" is all about. If you are good at spreading rumors or knowing about someone who is good at taking down buildings with planes, this is a sort of money-generating time machine.

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So, El reg, where's my comment?

about these back-stabbing financial PARASITES!

As I said.

Revolution.

Wall.

Bullet.

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Silver badge
Coat

Rumors again

"...We will not tolerate market participants taking advantage of the current market conditions to commit abuse by spreading false rumours and dealing on the back of them."

Yes, false rumors... but what about *truemors*?

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Re: Short

[That would of course be dumb, why would you want to spread false rumors to drive the price down, then sell?]

Futures.

You contract with someone to sell them 1,000,000 shares in HBOS in 7 days time at a price below the market rate. They think they are getting a good deal (i.e. cheap shares). You spread rumours about HBOS being short on cash, wait until the day you need to sell your shares (which you don't actually own yet) then buy those 1,000,000 shares at a price that is lower than the one you contracted to sell them because of your nasty rumours. Quick money. Also illegal.

There are many variations used to get around those annoying financial regulations/confuse punters, but they all equate to the same thing. Betting.

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Anonymous Coward

HSBC != HBOS

Re: above comment. Not such a small liability, this is the Halifax Bank of Scotland we're talking about, not HSBC.

HSBC = Hong Kong Shanghai bank

HBOS = Halifax Bank of Scotland (profit last year about 7 billion before tax, and announce recently they had a 7 billion exposure to the US subprime problem).

Personally I hope they don't bail any more banks out. Many of them have exposure to the US, USA hands out it's fiscal stimulus cheques soon, up to $1200 each to encourage the economy.

http://www.msnbc.msn.com/id/23228023/

So the dollar gets diluted yet more, as USA prints yet more money and hands it out to yet more Americans.

The foreign debts get diluted, countries and banks stupid enough to lend to them find they'll get paid back in new 'devalued' dollars rather than the old dollar that was worth something.

So the longer the banks hold their dollars, the bigger the hit they'll take as el Presidente leaves his 'legacy' for others to scoop up from the pavement.

If HM.gov bails them out then there is no incentive to dump their risky dollar holdings and ultimately tax payers will be scooping a lot of legacy off the pavement.

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@James

there is absolutely nothing wrong with acting on rumours. As the article says, it is starting the rumours that is both morally repugnant and illegal.

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@dervheid

Already displayed, so now you have fame x 2... but the point of my post is to remind everyone about the exception, the Co-operative Bank - no shareholders, and great ethical policies...

http://www.co-operativebank.co.uk/

[I have no connection with the Bank other than being a fanboy... ;-) ]

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HSBC

HSBC only has ONE banking guarantee so if you have savings in benefical finance and savings in an HSBC atrm and the lot comes down, you get to choose which arm you want to claim against.

So go ask questions now :)

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Happy

Smile

...and remember smile.co.uk is part of the Co-operative bank. Take your pick amd have a clear conscience about what your money is doing.

-Another fanboy (sad that they weren't very good at mortgage customer service so they lost his custom to Yorkshire BS).

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Stop

@ Co-op Bank Fanboi

Let's get this straight. I have no problem with banks, persay.

<RANT>

However, I DO have a problem with all the Fucking Parasites trading in "commodities" that don't even exist, of worse, horse trading in money (I accept that most ACTUAL Horse Traders are probably as honest as the day is long, unlike these fuckers)

The only way they can make money is on the misfortune of someone else, and that's almost inevitably Mr J.Public, who'll be footing the bill one way or another.

That's what this is all about. It's not, as Ross postulates, "Betting", as placing a bet usually involves an element of chance. These c**ts don't give a flying fuck who or how many people lose out due to their immoral, illegal actions.

On a topical note, is it a strange coincidence of circumstances with all this shit happening around Easter. Moneylenders in the temple indeed!

</Rant>

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Anonymous Coward

Way too many speculators

You need speculators to buffer the real trades: the people who buy dollars so as to purchase goods from the USA, or the people who buy and sell shares for the dividends. You need people to be always buying and selling so that people are buying when you want to sell, and selling when you want to buy.

But it looks as though there are too many speculators, and too many things that have little or no real value behind them.

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Alien

As life imitates the Virtual World..... -again.

Cranky market activity in the economy of your favorite MMORPG? Watch as the traders Make a sneaky Fast Buck. Seen it all B4. The GM's and their AIGents will sort it out.

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Paris Hilton

Sadly , the market is a suckers game !

Sadly , the stock market is a suckers game , as it produces nothing , makes nothing and is worse than a vampire leech living of all living entities for it to survive !

Thus it is very like a playing a very bad poker game with Gordon Gecko at the head of the table with every other player holding the minimum of four aces and joker high , leaving you with lowest possible cards in the deck on a stacked table designed to clean you out of real cash very quickly indeed and replace it with very questionable company paper and a bunch of worthless chips for a bonus !

Remember the information the brokers supply is never intended to fill your wallet but is to fatten theirs with every possible commission they can think of , whilst they fleece you of every penny you have at the same time , for after all some one has to pay for their rich and famous life style !

Go ask an artist called Ken what the biggest bank in Oz did with all his money entrusted to their care to invest in the market , the more they lost the faster they depleted his capital at the rate of ten million dollars per year in a five year period, until he pulled the plug before they could steal the remainder ! Oh but they made a nice fortune in trading commissions whilst blowing it on every dodgy z grade junk bond the market could supply though !

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