This is going to hit RBS hard as their trading business is one of their top earning businesses. Mr Kingman, the outgoing chief executive of UKFI, said “We cannot afford to be in a position where the banks lose so many people that we start to lose serious value.”

Although Gordon Brown stated that he will help the banks with ‘every last penny of taxpayer support .’ he also said. “I’m sure you share my anger with some of the banks, it is only fair that those who have contributed to the recession and have now benefited from taxpayers’ support give something to society in return.”

I believe a lot of the public are more inclined to the second statement. As the Times reported in December 2009 ‘MORE than 1,000 investment bankers have quit Royal Bank of Scotland to join rival firms for guaranteed cash bonuses and big salary increases, according to banking sources. ‘

This looks like a trend and as more top execs look for other opportunities and higher bonuses RBS is going to suffer. Also with more budget tightening on its way, which bank will be the next to see their top execs leave?

Source Telegraph & TimesOnline

Bonus cuts force two RBS bankers to resign

The first restriction is that US banks will have to limit activities and cannot enter any market they choose. Banks that have access to emergency funds from the central bank must not invest in private equity or hedge funds. They would also not be allowed to take part in proprietary trading for themselves this will only be allowed for their clients.

The second part focuses on their size. This would involve an increase in pressure on the cap for national market share. Banks already have a 10% cap. This would also include liabilities with the aim being to limit concentration.

Some US banks will be untouched by this as they only have a small amount of market share in one of the areas and can easily pick their market, for others it will not be that easy. Investment banks that have diversified during the crisis would be faced with a choice of which area to stay trading in.

The plan does not seem to help in the way it is hoped, these banks will still be huge. The proposal is not aimed to decrease the banks size as officials have said this proposal is to limit growth not decrease the banks size.

The plan still needs to make it through Congress until it will affect US banks.

Do you think the banks deserve these restrictions? Do you think they will help?

Obama proposes restrictions for US banks

The fact that they need to repay the US government’s $45bn preferred stock just makes it worse. B. Moynihan also stated that he is encouraged by signs the economy is improving, and that they have seen a stabilisation of their credit costs.

As BofA is in this position, Morgan Stanley reported fourth-quarter net income of $413m and Wells Fargo reported a profit in the fourth-quarter from growth in its mortgage banking business. They must be going wrong somewhere They are the largest US lender at the moment but will they hold this position if they continue to lose money?

The majority of these losses were from credit although this has shown improvement and was better than the third quarter. The hit was softened by their non-interest income and its investment in BlackRock. Also BlackRock buying

Barclays’ asset management business helped make this a ‘disappointment’ rather than a full blown problem. BofA may be able to stay the leading US lender or will it continue to have problems as it tries to recover from a year of big losses?

What do you think of BofA’s performance? Do you think they can pull themselves out of this hole? If $45bn cannot do it what can?

$194m fourth-quarter loss ‘disappointing’ for BofA