Why banks repackage assets, and what it means for us

It's all about de risking the bank's balance sheet. It's so difficult to decide when bankers really make money because the financial instruments they use are so complex. And look how many dodgy securities they are sitting on at the moment.

So what's a poor banker to do to improve matters? How about selling some of these securities to a brand new offshore company, and lending the company the money to buy them? It gets over the following problem: you have to write down your securities if you don't think you're going to collect on them, and that makes a hit on profits, and worries people. But if you have lent money on a house for example, as long as the repayments are still being made, even if the house is in negative equity, you don't have to write it down on your balance sheet. so if I were a banker, I would be delighted to sell a dodgy asset and get a loan in exchange which I don't have to write down. Is

And this is what has just happened. Barclays had just sold $12 billion worth of securities to a brand new company and lent it just about all the money to buy them. It's bought itself some time. Banks need all the time they can get at the moment.

What does it mean to us? Well, the bank gets a bit safer. That's good. But if the bank has lent its money to this company, it can't lend it to us. So credit has just got a little bit more difficult, and a little bit more expensive all round. and that means that the value of assets you buy with this credit is likely to fall to prop up the price of the assets that Barclays now don't think they will collect on. this deal was done under very, very favourable terms to the lender. Not the actions of a bank that thinks that its assets are worth what it paid for them.

Anyone think that the recession is over?

6 killer facts in micro enterprise learning and support.

A|ll from the UK Sector Skills Body for Enterprise

Fact:

Over 95% of enterprises (4.5 million) in the UK are micro enterprises with fewer than ten employees. A fair share of government skills and support funding to start ups, self employed and micro enterprises will provide the best returns for the economy, employment and society of any UK sector.

Yet 95% of government funding for business skills and support goes to the 5% with 10 or more employees

Fact:

Over three quarters of these businesses have no employees beyond the people running them and only just over a quarter of these businesses are based away fom the owner’s home. They may be hard to reach but SFEDI Advisory Board Members do and can help them. It is vital that we do, for the UK employment rate.

Not having employees or conventional business premises seems to make them invisible to government enterprise skills and support policy. Yet if they were not in business on their own there would be nearly 3.3 million more unemployed. Our unemployment rate is only at the current level because there are over one million more self employed people than in the last recession.

Fact:

Enterprise owners and the self-employed account for one in seven of the people in work. Self employability and enterprise skills are as important as employability and sector specific skills and lead to most net new jobs growth.

Enterprise owners will account for one in five people in work by 2020 and one in three by 2050. Nearly all the net new jobs growth in the private sector comes out of the growth in self employment and micro enterprises.

Fact:

There are almost half a million new enterprises starting each year. Providing effective start-up support can halve the rate of early business failure. We believe that government should fund a minimum level of start up training and support to everyone at pre-start for their new enterprise. Running your own enterprise requires specific skills and know how – just like any other career.

In England there is no government policy to ensure all those starting up get the skills coaching and business support to ensure they have the best chance of surviving and thriving in their new career. With the right support over 85% will still be trading in 3 years time and 6% of them will become substantial businesses. (Inbiz)

Fact:

Almost two-thirds of people running small businesses have no prior business/ management experience and less than a third of these have any formal business training. 12% have no qualifications and 55% have a highest qualification below Level 3. At least 200,000 adults and their enterprises could benefit each year from achieving an enterprise qualification which would be of value for all their working life.

Assisting prospective micro enterprise owners with the skills coaching and business support they need would mean a minimum of 100,000 new level 2 business enterprise qualifications, 30,000 new level 3 qualifications and 5,000 new level 4 qualifications per annum.

Fact:

Almost all these people say they develop their business abilities by learning from their own experiences and half learn from other enterprise owners. Enterprise learning and support needs to be experiential, active and integrated into the everyday practicalities and problems to be solved in starting or running your own enterprise.

We have researched, defined and proven the skills and know how needed to start up, survive and thrive. We know how to engage with prospective and existing micro enterprise owners. We know how to quality assure and recognise the appropriate enterprise learning and support. We have private and social enterprise sector backing and we’d like government to meet us half way.