Andrew Bailey, a director of the Bank of England who will soon become the City's top regulator, has said that free banking is dangerous and needs to be reformed by the government. Bailey says that free banking both misleads customers about how they are really paying for banking services, and also means that banks themselves may not properly understand the costs of the products and services they supply. This...

In recent months, investors have been lending tens of billions of pounds of interest-free money to the British government: only when the Exchequer wants to borrow for more than ten years has it been forced to pay a rate of interest that is likely to exceed the inflation rate (see here for more on this). So the real interest rate on George Osborne's debt is less than zero; that's what we would have called jammy, a few years back....

Only one of the Bank of England's three reviews into how it has conducted itself since the crisis of 2008 is being carried out by a commercial banker. In this case it is Bill Winters, rather than a former central banker (by the way, I should warn you that this is a blog BOGOF: reflections on JP Morgan and on the Bank of England's self-examination). Whether that will make his probe more or less impartial, you can decide. But Mr Winters has a reputation -...

The National Audit Office's estimate, that the government will ultimately lose £2bn on the privatisation of part of Northern Rock and the winding down of the rest, may sound painful for taxpayers. But actually it could have been a lot worse. The government is expected to get back all the cash it put into the bank - some £37bn - and quite a lot more. What it won't get back,...

Although the influence of ratings agencies can be overstated, the timing of Moody's decision to reduce the rating of 16 banks and the UK subsidiary of Santander could hardly have been worse because it comes at a time when investors and creditors confidence in Spanish banks has been eroded. The downgrades are due in part to the difficulties Spain is having in cutting its deficit and concerns that it lacks the resources to support struggling banks in a...

Creating the currency union was not a random act of collective economic suicide, but was in some senses a rational or even noble project that was either premature or too late. The tragedy was that a succession of post-war leaders, whose intentions would be seen by many as honourable, made a series of disastrously ill-timed decisions. Here is a great paradox: the big decision to press the button on creating the euro...

Regulators could not be happier about JP Morgan's loss of at least $2bn that was generated by its Chief Investment Office. On the one hand, it didn't sink JP Morgan: the bank has enough equity and is generating sufficient profit to absorb the loss. On the other hand, the bank's chairman and chief executive, Jamie Dimon, is utterly mortified that he allowed the loss to grow and grow, under his nose, and in spite of...

Nobody I speak to outside Greece can come up with any route for Greece that is painless for its people. Stay in the euro: belt-tightening, more impoverishment; more reduction in living standards. Go out: the same kind of impact on living standards. Maybe - and this is what some people believe - if they dropped the euro for a new drachma, and were able to retain some access to credit, perhaps from the IMF, the transition for Greece wouldn't be quite as...

Nobody I speak to outside Greece can come up with any route for Greece that is painless for its people. Stay in the euro: belt-tightening, more impoverishment; more reduction in living standards. Go out: the same kind of impact on living standards. Maybe - and this is what some people believe - if they dropped the euro for a new drachma, and were able to retain some access to credit, perhaps from the IMF, the transition for Greece wouldn't be quite as...

I am mildly bemused that central bank governors seem to be talking with some equanimity about Greece leaving the euro: the Belgian central bank governor describes an "amicable divorce" as "possible"; his Irish counterpart says a Greek exit is "not necessarily fatal" though plainly not attractive. The point, as I am sure you know by now, is that the eurozone crisis is a sovereign debt crisis and an inextricably connected...