QROPS Advice: Finance News: Obama Bashes The Banks

President Obama appears to have developed a grim determination to bash the banks. During this month he has announced two major schemes that will hit them hard - a $90bn (£56bn) levy over the next decade to grab back the government cash used to prop-up US lenders, and a plan to cut risk by stopping US banks from undertaking both consumer banking and riskier investment banking business. And the fall-out has already affected UK banks.
Share prices in all UK banks have fallen since the levy was announced in mid-January, with Barclays amongst the hardest hit - its shares are down 14 per cent since 18 January. That's because it's Barclays that could have the most to lose after buying Lehman's north American investment banking operations. Indeed, some analysts think Barclays could yet be forced to hive off its Barclays Capital investment banking arm altogether, meaning the loss of a major growth centre. Meanwhile, Royal Bank of Scotland’s (RBS) plan to sell its US commodities trading arm, Sempra, to JP Morgan for about £2.5bn could now run into difficulties.
And while none of the UK's lenders received any direct state support from the US banking bail-out, they must also contribute to Obama’s levy - as much as $10bn in total over the next decade according to broker Execution Ltd. The broker reckons that Barclays could face a $5.6bn bill, HSBC co uld be hit for $3.8bn and RBS could have to pay-up to $1bn.
But while Obama's plan to split retail and investment banking has received support from Bank of England Governor, Mervyn King, the government here remains lukewarm. The UK government prefers tougher capital requirements and 'living wills', setting out how banks can be broken up in a crisis without state help. City minister Lord Myners reportedly said: "I don't see anything in the Obama proposals which makes us want to change our line of travel." And rather than a US style levy, the government continues to favour an internationally-coordinated tax on financial transactions.
by John Adams