Top 10 at 10: Angry ING investors; Broadband debacle rolls on; Just Too Big to Fail; Obama kills a fly; Dilbert

Here's my Top 10 links from around the Internet at 10 am. Here was last night's Top 10 at 10 pm. I welcome your additions in the comments below. I'm glad I'm not having to use online dating sites... 1. ING fronted up to a meeting of 400 angry investors in Auckland yesterday, Tamsyn Parker at the NZHerald reported.

ING chief executive Helen Troup said there had been a lot of anger and emotion expressed over the way ING had handled the situation. But Troup's attempt to make a connection with investors incited some to mock her speech calling it "a load of rubbish", others said they felt "deceived" and accused ING of using their money to invest in risky assets. Mediator Brian Edwards had to step in. "We can run this in a civilised way or in an unruly way," he said. He called on investors to be patient and promised they would have a chance to have their say.

2. The Commerce Commission has ruled Telecom's competitors must pay the equivalent of NZ$184 per customer per month to the former (?) monopoly to get access to the fancy new roadside cabinets they're installing to bypass the exchanges it just unbundled, Helen Twose reported. This is a debacle that proves the only way to fix this is for someone to buy the network off Telecom and open it up to competitors. It's not going to happen with regulation and being nice to Telecom. How on earth is New Zealand going to reap the productivity benefits of proper competition and a decent broadband network with this sort of nonsense? 3. Stephen Bartholomeuz at BusinessSpectator analyses the Reserve Bank of Australia's comments about Australian bank margins.

The Reserve Bank's detailed analysis of the impact of the global financial crisis on bank funding costs ought to be required reading for all bank-bashing politicians and shock jocks. The big banks may not be selfless, but the analysis provides no evidence of selfishness. The RBA, after a detailed review of the various components of the banks' funding bases and margins, concluded that the banks have actually cut their home loan rates by more than the reduction in their cost of funds and that, while the reduction in business loan rates was less than that for housing loans, their net interest margins had, overall, risen only slightly.

4. The International Accounting Standards Board (IASB) is looking at changing rules that currently allow banks to revalue their liabilities in a mark-to-market way, which has the effect of allowing banks to book big profits when their prices of their own bonds fall, the FT.com reported.

The plunge in bank debt prices in the past two years means many banks have reported large gains from reporting market prices, although the recent rally will take the gloss off those gains and will mean potentially booking losses. Accounting has come under fire during the global financial crisis for the way its focus on using prices has led to companies, particularly banks, being more exposed to market volatility by reflecting this in the books whether or not managers have any intention of selling assets at those prices.

5. The debate about how to deal with banks that are Too Big to Fail (TBTF) is on in earnest. A speech by Bank of England Governor Mervyn King on Thursday (our time) has kicked it off. Here's his summary of the problem.

As far as individual banks are concerned, we face some uncomfortable choices about the structure and regulation of our banking sector. If some banks are thought to be too big to fail, then, in the words of a distinguished American economist, they are too big. It is not sensible to allow large banks to combine high street retail banking with risky investment banking or funding strategies, and then provide an implicit state guarantee against failure. Something must give. Either those guarantees to retail depositors should be limited to banks that make a narrower range of investments, or banks which pose greater risks to taxpayers and the economy in the event of failure should face higher capital requirements, or we must develop resolution powers such that large and complex financial institutions can be wound down in an orderly manner. Or, perhaps, an element of all three. Privately owned and managed institutions that are too big to fail sit oddly with a market economy.

6. The Swiss National Bank threatened overnight to break up banks that were Too Big to Fail, Reuters reported.

Regulators should address the "too-big-to-fail" problem of important banks quickly once the crisis was over, the SNB said. "One should examine the extent to which, in a crisis, those big bank units that are economically important for the Swiss economy can be split off and possibly transferred to other banks within the country and the rest wound down," it said. Rules for an orderly wind-down should be created on an international level but if no progress was in sight, Switzerland may have to adopt rules on a domestic level, the SNB said.

7. The Swiss National Bank is feeling nervous generally. Its vice chairman Philipp Hildebrand said overnight that the Swiss and international financial systems remained vulnerable, Reuters reported. 8. Here is an interesting instant message exchange between Felix Salmon from Reuters and Reuters Banking Commentator (ex FT banking editor) Peter Thal Larsen about this issue of how to deal to (with) Too Big To Fail banks.

FS: So let's say I'm a TBTF bank, and I'm feeling chastened by King's speech. What can/should I do? Unilaterally break myself up for the Greater Good? PTL: I doubt it will get to come that. But the TBTF banks do need to come up with a way of persuading the authorities that they can fail without costing the taxpayer a fortune. King described this as banks making a will. It may be complex, but it's the least bad option. The alternative is that regulators will come up with more draconian solutions, as the Swiss did today. FS: What's the probability that the Swiss draconian solution is going to make its way into reality? And is it basically a combination of higher capital adequacy standards with a promise that if a bank gets into trouble, its retail-facing components would be saved while the rest of the bank would be allowed to fail? FS: And isn't there a basic credibility problem with all such promises? Aren't they a bit like the US government saying that Fannie Mae and Freddie Mac debt didn't have a US government guarantee? PTL: Credibility is certainly a big issue. Though the Swiss seem to have made more progress on this than the rest of us. They've already pushed through higher capital requirements for UBS and Credit Suisse, and are now talking about having the power to rescue only the utility-like parts of those banks if there is a future problem. But the really explosive stuff is what they're threatening to do if they can't get agreement on new rules. They are talking about capping balance sheet size or asset-to-GDP ratios. So UBS and CS (Credit Suisse) have a big incentive to co-operate.

9. The US Government has announced it will borrow US$104 billion next week, Zero Hedge pointed out. It should be no suprise that US bond yields are rising. US mortgage rates are also rising, raising the spectre of a double-dip recession. Our long term mortgage rates are rising as well because US interest rates set the base for everyone and our own government is going to have to borrow NZ$200 million a week. 10. The Chinese are getting grumpy again about having to buy all these US bonds, AFP reported. The Chinese academics speaking for the Chinese government (usually) are saying America should pull its head in and stop borrowing and spending so much. Chinese holdings of US Treasuries fell in June for the first time in a year.

A decision by China to reduce its US Treasury holdings suggests concern about the US attitude towards its economic woes, Chinese economists were quoted as saying in state media Wednesday. The remarks, coming after US data showed a modest decline in Chinese investments in US government bonds, were in contrast to an earlier statement in Beijing which had said the recent sell-off was a routine transaction. "China is implying to the US, more or less, that it should adopt a more pragmatic and responsible attitude to maintain the stability of the dollar," He Maochun, a political scientist at Tsinghua University, told the Global Times. According to US Treasury data issued Monday, Beijing owned 763.5 billion dollars in US securities in April, down from 767.9 billion dollars in March. It was the first month since June 2008 that Beijing failed to purchase more US T-bills.

This is fun. Obama kills a fly on national television. Jon Stewart points this out in an amusing fashion on The Daily Show.