Top British banks 'would fail safety tests'

Four British banks and 17 in total from the EuroZone would not pass a 'too-big-to-fail' test.

The Financial Stability Board identified 29 banks,including Royal Bank of Scotland, HSBC, Lloyds and Barclays, so important to the world's financial system that they require more capital and closer surveillance than rivals, plus a detailed plan to allow them to be wound up without taxpayer help if they hit trouble.

One of the things agreed at the G20 summit in Cannes was a core capital requirement surcharge starting at 1 percent of risk-weighted assets and rising to 2.5 percent for the biggest banks,which would be phased in over three years from 2016.

Banks likely to need a 2.5 percent capital surcharge are Citigroup, HSBC , JPMorgan, BNP Paribas and Royal Bank of Scotland , according to a preliminary assessment according to a bank industry source,whilst Bank of America , Barclays and Deutsche Bank will be in the 2 percent category.

The implications for the banks named are that they must carry out far-reaching changes to prove that they will not have to be supported by the state if they do near collapse.

Are Barclay's profits moral

Barclays are proud of being one of the banks that didn't go running to the government to borrow back in autumn of 2008.

Instead they went to Middle Eastern backers.Today they have announced massive increases in profits up 92 per cent at £11.6b

As with last year its top people have rejected bonus payments but nevertheless it will pay £1.5bn in bonuses for 2009 and a further £1.2bn are to be paid over three years.

Critics argue though that these profits are only the result of the government's general guarantees to the banking sector.If other banks had collapsed then Barclay's would have gone as well.

How moral are these profits and bonuses?

Vince Cable has already been on air making the very point and with this morning's news that the banking sector is still not lending at appropriate rates to the commercial sector,he called for the bank to be broken up into separate investment and commercial banks, and to pay a fee for the government guarantee it has enjoyed since the start of the financial crisis.

Varley thinks we are only halfway into a recession

The start of the week and more dire economic news.

This time it is Barclay's chief John Varley who claims that we are only at the halfway point in the recession.

He believes that property prices are only half way down to their low point with 2009 set to see another 15 per cent drop.

Unemployment is set to rise to 7.5 per cent of the current population with an additional 700,000 set for the dole queue.

This is hardly the news that the government wants to hear as is his comments on the previous lending poloicy of the banks which he describes as madness and that the banks were partly to blame for the mess that we were in