Bison

So basically they are spenging 10 grand from each tax payer to bail out the banks and it might not even work.

They are also lending to foreign banks because some of them own UK banks, so are these foreign banks getting help from their own governments, why are we covering foreign banks now?

All sounds like it could go horribly wrong to me, some tabloid quoted it as 'The storms getting worse, so we have to keep bailing out this sinking ship'

The UK let's face it is Fooked!

B

Meow

I see why the Government can't afford to have major banks going bust, but who is being held responsible for their mistakes?


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Bison

I heard it was them Fat Cats...

Meow

You been reading the tabloids again?

Seems to me (& I am not unaware of finance & business management) that many banks have been badly run. Now the UK taxpayer, not those managing them are facing the consequences.

I am sick of banks whinging about bed debtors when they lent imprudently. I am also heartily sick of individuals moanng about their debts when they were too stupid to realise that they would have to pay it back.

The losers are those who support the UK in taxes and savers who are receiving ridiculously low rates if interest for their troubles.

And don't even start me on how Governments waste money...


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GrecoRomano

Curiously so, according to an interview of Naomi Klein on WNYC the main difference between UK and US bailout is that Brown negotiated much better T&C for the banks to receive any money, e.g.:
1) A corresponding value in ownership of the bank is transferred to the Treasury
2) seat(s) on the BoD
3) Those funds go directly into lending, not for payrolls, not for M&A, not for aquisitions, ice creams, airplanes, nada, nothing but lending, at this moment.

If that was true, at least the UK as "the community of its citizens" got something in return. In the US nothing like that:
http://www.iht.com/articles/2009/01/...ank.php?page=1

Sky Blue

Hasnt this come about due to the Government's lax attitude to the banks and literally giving them too much rope to hang themeselves, I think there is an admission from the bank that they paid 15-20 billion quid too much for ABN Amro last year...
Plus as a quisi independant regulatory body the FSA is absolutely toothless...

Unfortunately banks cant be trusted to regualte themeselves and the people who are dont want to upset them

Charismatic

Well the obvious people to look to blame would be those with ultimate control over interest rates and money supply policy...of course the head of that organisation is now the self appointed president of the UK .

Scapegoat?

Meow

But the banks ought to be responsible. Just saying they aren't is not enough. Sure the Government has responsibility, but those running the banks were at the thick end of it on a daily basis. Blaming the government is the easy option and is not the answer going forward.

The FSA regulates what it wants to. They focus far too much on the little issues (I have read enouigh missives of theirs over the years to make a grown man weep), whilst not seeing the bigger picture.

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Meow

The buck may stop with Gordon, but he was not running the banks on a daily basis, not is it his role to do so.

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Charismatic

In most case those elected to the board of directors by shareholders ran those companies in the best interest of shareholders (we can only assume, or shareholders would have sold/revolted).

Yes, many big banks made mistakes on an asset bubble but it was cheap funding that fueled the fire. I didn't see anyone in government pointing fingers or trying to deflate the property bubble back then when the homeowning electorate where getting rich on paper.

Speaking personally I think that a low real rate of economic growth in most western countries was also a contributing factor, governments have been desperate to show segnificant economic growth even if it was only a house of cards. I really have little data on this though, feel free to research for yourself.

Maybe we should blame all those homeowners who bought houses on the assumption that they'd always go up in value regardless of how much the market was over supplied?

Meow

Blaming will get us nowhere, but I put much of it down to short-sightedness and a disregard for future consequences.

The boards of directors are responsible to shareholders, but also have a duty of care. Their shareholders did fine for several years, but now? Surely it is better to take a reasonable profit every year than follow a boom & bust pattern.

The Brtish, IMO, are very blinkered when it comes to their homes. I am always amused when people are very smug about having 'made money' on a house, when they have in fact done nothing and it is simply market forces. They take the credit when it goes up and blame anyone and everyone else when it goes down. Profit is an asset class like any other and goes up and own in value. Surely anyone over 40 remmeber the last time prices shot up and then fell, causing huge amounts of negative equity?

The Government tried to bask in the sunshine of increased house prices, but were foolish to do so. This lot aren't the first and they won't be the last.

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Charismatic

I agree, regardless the governments duty is to keep those unfortunate enough to be affected clothed, sheltered and fed. If things where being run propperly they shouldn't have to make any changes to funding projects etc.

Like a well run company I suppose, you don't want a company that cuts costs or scraps new projects only when things are tight. It should be run efficiently all the time regardless of other economic conditions and new projects should offer a return so good that it's going to be worth the investment tomorrow or in two to ten years time . UK plc.

Sky Blue

ha ha i like that UK PLC...
Always teh case tho, whether governments, banks or companies, generally they are only looking to the next pay packet and not to the future and investing that money.

I do belive the banks have to take a lot of reponsibility for this and the government, this and previous, are wagged by banks and big business, regulation is a token and does not impose proper and correct rules on these people.

You can mention shareholders, but they only make a small steer on policy in reality...

Homeowning, well Maggie opened up that for everyone and we all had a chance to own our own property, live the dream, be chained to debt for 25 years plus, going off topic slightly, BUT my point is that as long as things are going (seemingly) well and banks are irresponsibly lending to literally anyone, then they deserve a kick up the bottom by those nice Regulators at Canary Wharf...

NedKelly63

If only...

If you invest your tuppence
Wisely in the bank
Safe and sound
Soon that tuppence,
Safely invested in the bank,
Will compound
And you'll achieve that sense of conquest
As your affluence expands
In the hands of the directors
Who invest as propriety demands
You see, Michael, you'll be part of
Railways through Africa
Dams across the Nile
Fleets of ocean greyhounds
Majestic, self-amortizing canals
Plantations of ripening tea
All from tuppence, prudently
Fruitfully, frugally invested
In the, to be specific,
In the Dawes, Tomes
Mousely, Grubbs
Fidelity Fiduciary Bank!
Now, Michael,
When you deposit tuppence in a bank account
Soon you'll see
That it blooms into credit of a generous amount
Semiannually
And you'll achieve that sense of stature
As your influence expands
To the high financial strata
That established credit now commands
You can purchase first and second trust deeds
Think of the foreclosures!
Bonds! Chattels! Dividends! Shares!
Bankruptcies! Debtor sales!
Opportunities!
All manner of private enterprise!
Shipyards! The mercantile!
Collieries! Tanneries!
Incorporations! Amalgamations! Banks!
You see, Michael
Tuppence, patiently, cautiously trustingly invested
In the, to be specific,
In the Dawes, Tomes
Mousely, Grubbs
Fidelity Fiduciary Bank!

Eva

P.L Travers?

You big blouse!