Bank Lending Archives - Page 5 of 10 - Emile Woolf writes

Perplexing times for economists and accountants

The world of economics and business is riddled with anomalies. For example, the UK is enjoying buoyant GDP growth and low unemployment, yet the excess of government spending over income (the “deficit”) continues to grow. Despite so-called “cuts”, 46% of GDP still goes on public expenditure, of which 60% doggedly adheres to welfare, health and […]

Read More…

Financial rectitude: do the non-execs help?

Any columnist writing about financial misdeeds rarely lacks material. Buccaneering chief executives and ineffective auditors are invariably centre-stage – but what of the wise owls making up the panel of non-executive directors? How effective are they as a bulwark against executive opportunism or worse? I remember one prominent public company CEO, the darling of his […]

Read More…

Banks: prudence and sanity return?

Banks’ auditors have had to deal with the absurdity of accounts failing the ‘true & fair’ test for the very reason that they comply with a flawed standard. Auditors accused of rubber-stamping defective accounts of banks should now feel some relief. The International Accounting Standards Board appears at last to acknowledge the folly of its […]

Read More…

Capital allocation & infrastructure spending: let the markets decide

My summer riverboat cruise from Amsterdam to Budapest along the Rhine, Main and Danube proved to be fully as instructive as it was relaxing. The majestic hilltop fortresses, castles and palatial edifices, erected to keep out tribal hordes, also testify to indulgences pursued by monarchs, princes and bishops over hundreds of years of relentless self-aggrandisement […]

Read More…

Auditing the auditors: some improvement. But what of the economy?

The audit failures I have been highlighting so regularly are given full exposure in the Financial Reporting Council’s latest report on big-firm audit quality in the UK. Adverse findings relate to the usual suspects: goodwill impairment, revenue recognition, IT controls and loan loss provisions. Although quality (or lack of it) varies between the four top […]

Read More…

If management breaks the law, don’t penalise the shareholders

Most penalties for financial wrongdoing are levied on institutions rather than the inventive executives who master-mind these grubby manoeuvres. Regulatory authorities themselves do not benefit from the fines they collect, now amounting to serious money – over £500 million in this year alone. Apart from relatively modest retentions to cover regulators’ costs, the money is […]

Read More…

Loan book valuations – accounting standards’ greatest challenge

  The Parliamentary Commission on Banking Standards recommended that the “expected loss “ model should replace the existing  “incurred loss” model in IFRS – in other words, that the concept of “prudence” should be reinstated in the accounting framework. In support, the European Parliament has instructed the European Central Bank to undertake stress tests on […]

Read More…

Sloppy auditing has its consequences – just look around you

My repeated warnings to auditors that compliance with IFRS does not guarantee accounting truth and fairness appear to have struck a resounding chord in high places: the House of Lords, to be precise, where the Parliamentary Commission on Banking Standards debated the Bill on banking reform, now enacted by Royal Assent. In Hansard for 23 […]

Read More…

Correspondence with Patrick Baron on the role of money & wealth transfers

From Pat Baron: “Emile, Even Germany is not immune to the predations of the euro.  I keep pointing out that German exporters benefit from euro credit expansion, but at the expense of all other Germans.  This is one reason that Germany is reluctant to put an end to the euro mess…the exporters and their constituents, workers, […]

Read More…