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

peopleFrankie Boyle responds to referendum result in characteristically offensive style
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Gabriel Agbonlahor, Alexis Sanchez, Alan Pardew and Graziano Pelle
footballAfter QPR draw, follow Villa vs Arsenal, Newcastle vs Hull and Swansea vs Southampton
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
New Articles
i100... with this review
Holly's review of Peterborough's Pizza Express quickly went viral on social media
New Articles
Arts and Entertainment
musicHow female vocalists are now writing their own hits
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam