David Buik: Despite the bile and hatred, bank shares are rising

Midweek View: It is essential... Osborne does not surrender one inch of sovereignty over bank regulation to the EU

When the subject of banks is brought up in conversation it generates unprecedented and understandable waves of bile and hatred from a consumer's perspective, contempt from politicians and irritation and concern from regulators.

This is hardly surprising. On top of the taxpayers' liabilities in Northern Rock, HBOS, Lloyds and Royal Bank of Scotland (RBS) of £100bn, crystallised courtesy of the credit crisis in 2008, there are payment protection insurance liabilities, which may cost £16bn.

Then there are the Libor transgressions which will also cost billions of dollars by way of fines from US regulators, not forgetting the mis-selling of interest-rate swaps.

As the year draws to a close it is worth scrutinising the performance of UK banks.

Barclays' share price, despite the Bob Diamond syndrome, the unpleasant spat with the Treasury Select Committee and the change in management, has risen 37.5 per cent this year. Lloyds Banking Group has added a whopping 72 per cent in the same period, RBS 42.8 per cent, HSBC 28 per cent and Standard Chartered 2.5 per cent.

Had most investors been asked to invest in UK banks in January, two men in white coats may have been forgiven for taking these analysts away to be sectioned.

There was also the threat of Draconian bank regulation, recommended by the Vickers Independent Commission for Banking and the Bank for International Settlements to take into account.

There is a school of thought, which ventures to suggest that banks may require so much fresh capital, they are not a viable investment proposition. It has also become clear that Sir Mervyn King, Governor of the Bank of England, and Andy Haldane, its executive director for financial stability, believe that there is a very strong case for splitting retail and investment banking. This would, of course, mean vastly increased bank running costs.

However, despite all of these imponderables, the value of these shares has been disproportionate to the adverse publicity that the banks have received.

Even the vilification of HSBC and Standard Chartered by the New York State department of financial services, and the subsequent implementation of fines of $1.9bn (£1.2bn) and $327m respectively, have failed to damage their share prices.

HSBC pleaded guilty as charged and stepped up to the plate, full of abject apologies.

Its compliance director has gone, but one does wonders where that leaves Stephen, Lord Green and Michael Geoghegan, the bank's former chairman and chief executive, apart, that is, from being hugely embarrassed.

In the case of Standard Chartered, Peter Sands, the chief executive, vigorously defended the bank's position and only owned up to a $15m worth of transgressions.

Though the bank is well within its rights to do so, I wonder if its move was strategically smart or sensible. Not that Standard Chartered is involved in Libor transgressions, but this may well give the US authorities the excuse to vent their spleen on UK-based banks, rather than bring all banks – including US banks, which also have allegedly transgressed – to book at the same time.

Consequently, it is essential that Chancellor George Osborne does not surrender one inch of sovereignty over bank regulation to the EU.

Just 10 days ago, Christian Noyer, of La Banque de France, made an astonishing statement that London should be stripped of its status as Europe's main financial hub and sidelined to allow the eurozone to "control" transactions within the 17-nation bloc.

Let me remind M Noyer that France was within an ace of becoming a Communist country in 1946. It is still a socialist state with a bloated public sector, wholly unqualified to strip London of its raiment.

London is still poised to rise like the phoenix from the current financial ashes as the No. 1 financial centre of the world. Paris, Frankfurt, Milan, Madrid and Milan are all Mickey Mouse centres by comparison.

London is the centre of the global time zone. English is the universally accepted trading language – and London produces the best bankers.

David Buik is the chief market strategist of Cantor Index

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Pricing Analyst

£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

Guru Careers: C# Project Team Lead

£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

Day In a Page

Fifa corruption: The 161-page dossier that exposes the organisation's dark heart

The 161-page dossier that exposes Fifa's dark heart

How did a group of corrupt officials turn football’s governing body into what was, in essence, a criminal enterprise? Chris Green and David Connett reveal all
Mediterranean migrant crisis: 'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves,' says Tripoli PM

Exclusive interview with Tripoli PM Khalifa al-Ghweil

'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves'
Raymond Chandler's Los Angeles: How the author foretold the Californian water crisis

Raymond Chandler's Los Angeles

How the author foretold the Californian water crisis
Chinese artist who posted funny image of President Xi Jinping facing five years in prison as authorities crackdown on dissent in the arts

Art attack

Chinese artist who posted funny image of President Xi Jinping facing five years in prison
Marc Jacobs is putting Cher in the limelight as the face of his latest campaign

Cher is the new face of Marc Jacobs

Alexander Fury explains why designers are turning to august stars to front their lines
Parents of six-year-old who beat leukaemia plan to climb Ben Nevis for cancer charity

'I'm climbing Ben Nevis for my daughter'

Karen Attwood's young daughter Yasmin beat cancer. Now her family is about to take on a new challenge - scaling Ben Nevis to help other children
10 best wedding gift ideas

It's that time of year again... 10 best wedding gift ideas

Forget that fancy toaster, we've gone off-list to find memorable gifts that will last a lifetime
Paul Scholes column: With the Premier League over for another year, here are my end of season awards

Paul Scholes column

With the Premier League over for another year, here are my end of season awards
Heysel disaster 30th anniversary: Liverpool have seen too much tragedy to forget fateful day in Belgium

Liverpool have seen too much tragedy to forget Heysel

Thirty years ago, 39 fans waiting to watch a European Cup final died as a result of a fatal cocktail of circumstances. Ian Herbert looks at how a club dealt with this tragedy
Amir Khan vs Chris Algieri: Khan’s audition for Floyd Mayweather may turn into a no-win situation, says Frank Warren

Khan’s audition for Mayweather may turn into a no-win situation

The Bolton fighter could be damned if he dazzles and damned if he doesn’t against Algieri, the man last seen being decked six times by Pacquiao, says Frank Warren
Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

Blundering Blair quits as Middle East peace envoy – only Israel will miss him

For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
Fifa corruption arrests: All hail the Feds for riding to football's rescue

Fifa corruption arrests

All hail the Feds for riding to football's rescue, says Ian Herbert
Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

The Kurdish enclave still resisting the tyranny of Assad and Isis

In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

How I survived Cambodia's Killing Fields

Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

How Stephen Mangan got his range

Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor