English finance has no peace. After the swirl of scandals of the last few weeks, it's time to put your hand on your wallet. And in a heavy way. Her Majesty's top five banks have set aside assets of at least 11,34 billion euros (£ 9 billion) to reimburse customers to whom they had sold insurance policies to cover mortgages and loans. Policies that no one had requested or which, in any case, could not be used. According to a Financial Times investigation, around £4,8 billion had already been paid out by the end of last May.
Positive effects for the real economy are now expected from this inglorious story. The paradox is only apparent: if the possible repayments actually arrive, the result will be equivalent to an unexpected and unexpected injection of liquidity into the system.
According to the director of the National Institute for Economic and Social Research, Jonathan Portes, the refunds would be so large as to have the same effect as a tax cut. It is estimated that the refunds could increase the British GDP by at least half a point, on which the Central Bank just today cut its estimates for 2012.
But dodgy policies aren't the only trouble for the City giants. In recent weeks the leaders of Barclays they had been beheaded following the Libor scandal, linked to the manipulation of the main interbank rates. Hsbc instead it has been caught doing business with Mexican drug cartels, banks close to Al Qaeda and even the Iranian regime.
The last ugly mess, however, is that of Standard Chartered, which yesterday lost about 17 billion dollars on the stock exchange after the New York banking authority threatened to withdraw the banking license in the state. The accusation is of having hidden transactions with Iran for about 250 billion.
According to the New York State Department of Financial Services (DFS), the London-based bank, whose business is mainly carried out in Asia, allegedly concealed about 60.000 transactions with Iran, subject to US sanctions for its nuclear program. which have generated hundreds of millions of dollars in commissions over three years.
However, Standard Chartered counterattacked, arguing that "only" $14 million of transactions would not have been carried out according to law. "We intend to respond to the allegations," Standard Chartered chairman Sir John Peace told the Financial Times. "If the bank were permanently damaged it would be very serious." Result: the stock rebounds by almost 6% today.
