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Seven years since the start of the financial crisis, just how strong are the banks that caused such mayhem and misery?
That was the question European banking regulators wanted to find out when they devised what were called “stress tests” to see how they’d cope with another financial crisis. The results out yesterday showed that 25 banks did not have enough cash on hand to cope with a major crisis.
However, despite having been, along with Wall Street, the epicentre of the crisis, our banks here in London all passed.
Some passed with flying colours, others less so. Lloyds, which owns Bank of Scotland and Halifax as well as Lloyds, fared worse. And its shares today fell more than 2% by lunchtime, followed closely by RBS, which came in second from worst.
A lot of that’s to do with the fact that landlords have been whacking up rents so much in London that businesses just can’t afford them. The insolvency firm Begbies Traynor has been researching this trend and found that, amid wobbling confidence, the number of London firms suffering what they term “significant financial distress” is up 17%.
Finally, the gem miner Petra Diamonds today said it had pulled out more diamonds than ever before in the past three months, but diamond prices had fallen rather sharply. The company says it expects prices will be back on the rise from now, heading up to the busy Christmas season.