Category Archives: Britain

Banking, Britain, Economic, European Union, Financial Markets, Government

Lloyd’s Banking Group: A return to profit but there are still too many unresolved issues…

UK BANKING MARKET

Lloyds reported last Wednesday a return to profit in the first half of 2013. There has been an air of quiet satisfaction both in the City and in Whitehall following the banking calamity of 2008.

The Government is now preparing for a sale of its 39 per cent stake in the lender. For the first time since 2008, the bank’s chief executive, Antonio Horta Osorio, is considering paying shareholders a dividend. Expectations of a dividend payment sent the share price up to 74p following the disclosure of the bank’s half-yearly profits.

But the market shouldn’t be so optimistic. A swathe of unresolved issues surrounds Lloyds Banking Group, not to mention the structure and impending reforms of the wider UK banking system.

Ministers in Whitehall have spoken about getting the best possible value for taxpayers from the sale of its stake in Lloyds, but suspicions remain that they will offload the bank at a price that effectively short-changes the public.

Selling above 61p will mean the national debt falling, below that price it rises. The attractiveness of a quick sale at the current market price for a Chancellor who has been embarrassed by his inability to bring down the national debt on his promised timetable should be obvious.

The price the previous government paid for its £20bn in shares was 74p a share. That amounts to being the true ‘break-even’ price, and sales below that should not be countenanced. Even at that price it is meaningless to suggest a ‘profit’ because one should only think what returns the state could have received for that £20bn investment elsewhere. The accounting is important to understand.

Then there is the matter of Lloyds’ lending to the real economy. The bank says it increased its net supply of credit to small firms by 5 per cent in the first half of the year. Financial analysts will hope that is accurate because the most recent figures from the Bank of England (which only go to March) tell a strikingly different story. They suggest Lloyds has contracted its lending to households and firms by some £6.6bn since last August, while availing itself of £3bn of cheap funding from the Bank of England.

And what about the size issue? Following the disastrous merger with HBOS in 2009, Lloyds is enormous. Lloyd’s Bank now accounts for twice as much of the loan stock to home and businesses as the next biggest bank, the Royal Bank of Scotland. The size of Lloyd’s balance sheet will fall next year when 630 branches are floated off following an EU directive, but the bank will still be excessively large. UK firms and borrowers need a broad range of credit providers, not a market dominated by a few such as RBS, Lloyds and Barclays.

Lloyds has increased its provision for the mis-selling of payment protection insurance. This is a reminder of how just egregious the bank (and other high street banks) behaved towards its customers in the boom years. Leaving this cartel untouched would risk this kind of abuse happening again.

A return to profit by Lloyd’s is good news. But we need a bank – and a wider banking system – that is able to sustainably serve the needs of the real economy.

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Britain, Consumer Affairs, European Union, Government, Research, Society, Technology

Research reveals the most commonly used PIN numbers…

10 per cent of PINs can be guessed in just one attempt

Research has revealed that one in ten PINs can be correctly guessed first time. The most commonly used numbers have been revealed, with 10% of the population still using 1234.

Researchers found 17 per cent of people in Europe have suffered identity fraud. Credit card fraud cost the UK more than £388 million in 2012.

Despite a rise in credit card fraud, the most commonly-used PIN is still 1234, with 1111 and 0000 coming in second and third.

Studies have shown that one in ten codes is so obvious that it would take criminals just one attempt to guess it correctly, while more than a quarter of the codes are used so often they can be guessed in fewer than 20 attempts.

Researchers from DataGenetics, a technology consultancy, analysed 3.4 million four-digit codes and found that many people use birth years as PINs, making it even easier for hackers to guess a code simply by finding out a person’s age from online accounts.

Additional research carried out by security experts McAfee found that 17 per cent of people in Europe have been victims of credit card fraud, at a cost of £1,076 per person.

The total cost of credit card fraud in the UK last year from criminals hacking and cloning cards was £42.1 million and the total amount of fraud committed through all credit card-related crimes was £388 million.

There are 10,000 possible combinations for four-digit PIN codes using 0 to 9.

The majority of PINs in the DataGenetics list began with the number one, which may be due to the popularity of using birth years. Zero and two were also popular. The higher the number, the lower its frequency.

The majority of PINs in the DataGenetics list began with the number one, which may be due to the popularity of using birth years. Zero and two were also popular. The higher the number, the lower its frequency.

DataGenetics unlocks data held in large databases. In producing its findings it used data from previously released password tables and security breaches. By combining the password databases, researchers filtered the results to show just four-digit numbers and were able to analyse 3.4 million four-digit passwords.

They discovered that all of the possible 10,000 combinations – from 0000 to 9999 – were found in the data list.

The most popular password was 1234, but the amount of times this number occurred ‘staggered’ the researchers – almost 11 per cent of the 3.4 million passwords were 1234.

This PIN was also more popular than the 4,200 codes at the bottom of the list combined.

The next most popular 4-digit PIN was 1111, used more than 6 per cent of times.

Data Genetics compiled a list of the top 20 passwords and found that 26.83 per cent of all the passwords in the list could be guessed by attempting these 20 combinations.

The researchers said:

… Statistically, with 10,000 possible combinations, if passwords were uniformly randomly distributed, we would expect these twenty passwords to account for just 0.2 per cent of the total, not the 26.83 per cent encountered.

The more popular password selections dominate the frequency tables and the study found that 10 per cent of PINs could be guessed correctly first time.

More than 20 per cent could be guessed by using just five attempts and statistically, one third of all codes could be guessed by trying just 61 distinct combinations.

The data found that the least-used code was 8068 with just 25 appearances in 3.4 million – far fewer than random distribution would predict.

The researchers also noted that many of the high-frequency PINs could be interpreted as years because many began with 19, for example, 1984, 1967 and so on.

This could be a birth year or anniversary and if a hacker can guess someone’s age, or even obtain it through birth records or online accounts, for example, they could make an educated guess at the PIN.

The majority of PINs in the DataGenetics list began with the number one, which may be due to the popularity of using birth years.

The numbers zero and two were also popular.

The research found that the higher the number from 0-9, the lower its frequency at the start of the code.

Another study by Google Apps found that a pet’s name is the most common online password.

As many as one in six people use their pet’s name as a password.

One is six Britons admitted accessing someone else’s account by guessing the password, with partners the most common target.

TOP 10 POPULAR PINS

  1. 1234
  2. 1111
  3. 0000
  4. 1212
  5. 7777
  6. 1004
  7. 2000
  8. 4444
  9. 2222
  10. 6969
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Britain, Intelligence, National Security, United States

US bankrolling of GCHQ in return for influence…

INTELLIGENCE GATHERING

It has been claimed that Washington gave Britain’s spying and intelligence gathering centre at GCHQ more than £100 million over the last three years, raising questions over how much the U.S. has been influencing the work of British intelligence.

According to documents released into the public domain by whistleblower Edward Snowden, the British eavesdropping agency was expected to ‘pull its weight’.

One document states that weaker regulation for British spies than American agents is one of the intelligence services’ ‘selling points’ for the U.S.

Such leaks will raise yet more questions for GCHQ and government ministers who oversee it operationally, particularly in relation to the extent to which the United States makes pressing demands of Britain in its intelligence-gathering activities.

In a document from 2010, GCHQ said the US National Security Agency had ‘raised a number of issues with regards to meeting (its) minimum expectations’, and GCHQ ‘remains short of the full NSA ask’.

A classified cache leaked to The Guardian reveals the UK’s biggest fear is that… ‘US perceptions of the […] partnership diminish, leading to loss of access, and/or reduction in investment to the UK’.

A copy of a temporary document to allow US fugitive and whistleblower Edward Snowden to cross the border into Russia.

A copy of a temporary document to allow US fugitive and whistleblower Edward Snowden to cross the border into Russia.

These latest revelations leaked by Mr Snowden, a former NSA contractor, and who has been charged with espionage in the U.S., left Moscow’s Sheremetyevo Airport yesterday were he has been since June after exposing PRISM, a U.S. intelligence gathering project that snoops on private individuals accounts, emails and telephone calls. Snowden has now been granted refugee status in Russia amid Western concerns he is now in the embrace of Moscow’s secret services. The granting of refugee status pending his application for temporary political asylum is certain to spark fury in Washington which had urged President Putin to deport him to the US to face espionage charges.

Previously, GCHQ was criticised after Mr Snowden claimed British intelligence agents used the PRISM system to bypass UK laws.

Last week Parliament’s spy watchdog called for an investigation into the laws on intelligence eavesdropping, saying they ‘may not be fit for purpose’.

The latest documents reveal the NSA gave GCHQ £22.9million in 2009, £39.9million in 2010, and at least another £34.7m in 2011-12.

The 2010 payment included £4million to support GCHQ’s work for NATO forces in Afghanistan, and £17.2million to fund the agency’s Mastering the Internet project, which gathers and stores vast amounts of ‘raw’ information ready for analysis.

Also funded by the NSA was redevelopment of GCHQ’s sister site in Bude, Cornwall, to the tune of £15.5million. The site intercepts transatlantic cables that carry internet traffic.

In return, the documents suggest GCHQ has to take the American view into account when deciding what to prioritise.

The money has been an important source of income for the British agency as it has been forced to cut costs and has shed more than 300 of its 6,000 staff.

Documents show GCHQ is heavily investing in harvesting personal information from mobile phones and apps, and wants to be able to ‘exploit any phone, anywhere, anytime’.

Some GCHQ staff have expressed concern about ‘the morality and ethics of their operational work, particularly given the level of deception involved’.

Shadow foreign secretary Douglas Alexander MP said…

… The vital work of the intelligence agencies requires effective and thorough oversight by the Intelligence and Security Committee on behalf of Parliament, and by ministers, and in the case of GCHQ, by the Foreign Secretary.

… The latest reports in the Guardian only underline the importance of the Foreign Secretary and the Intelligence and Security Committee being able to assure the public that the legal framework within which our intelligence agencies operate is both being adhered to and is fit for purpose.

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