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Eastern promise lures HSBC boss abroad

HSBC boss Hong Kong bound

HSBC boss Hong Kong bound

Shunting the operating base of HSBC chief executive Michael Geoghegan from London to Hong Kong tells us two things. Firstly, it represents another signal of the increasing shift in economic power from the west to the east. Where a traditional G7 power base of US and European interests once held sway, now it is rapidly being overtaken by a wider group of nations in the G20, reflecting the expansion in emerging markets such as China and India. Banking markets are less mature in Asia than they are here and thus the opportunities to grow and increase profits are greatest.

But there is a second and more reassuring point. It demonstrates that western banks are returning to their stuffy savings and loans knitting, a pattern that once produced solid streams of profits that allowed large chunks of cash to be handed back to shareholders on a bi-annual basis through dividends.

In their desperate dash for growth far too many banks have developed a devil may care attitude in regards to growth, expanding into all sorts of highly leveraged, high risk products and markets. That shift has led us to the events of the past few years and the near collapse of the western banking system, so a return of grey suits and reassuringly dullness is a welcome breakthrough.

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Banking goes bonkers – a year on: figures from the financial fallout

The bank's building boom became a busted flush

The bank's building boom became a busted flush

Exactly one year ago, at 5:38 am London time, the world’s biggest ever bankruptcy was confirmed. The $646 billion collapse of Wall Street banking giant Lehman Brothers – roughly 10-times bigger than the failure of US energy group Enron – followed a frantic weekend of last gasp talks between the bank, the US Federal Reserve and British bank Barclays, yet those last desperate hours of talks failed.

Stock markets around the world were thrown into a panic not seen since the Great Depression of 1929 and the reverberations have been felt in every corner of the global economy since.

The bailout cash, in facts and figures:

212.5 one-day slump of FTSE 100 after Lehman collapse unveiled

£30,000 spent for every man, woman and child bailing out Britain’s banks, or

94% of UK GDP

10 years worth of banking sector profits wiped out by asset write-offs

2.3% of projected decline of world economy this year, or

$1 trillion in monetary value

133% predicted rise in UK government debt over next five years from roughly $600 billion to $1.4 trillion

£815bn lost in national UK wealth between end of 2007 and 2008

15% estimated drop in the value of people’s homes between end 2007 and 2008

361 points fall of FTSE 100 since Lehman collapse to date

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