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The Bank Bailout - Looking back.
I have had a severe change of heart over the last few months about whether the bank bailout was the right thing to do. I have always been a staunch supporter of the decision yet now looking back and from the perspective of where the banks stand now I am convinced the banks should have been left to their fate.
We spent billions and yet have nothing to show for it. All we have done is prop up a broken system and allow the people who caused the problem to go on and prosper.
The Billions could have been better used to protect the people who would have been effected by the collapse such as savers than protecting the banks themselves.
I feel with hindsight we were conned by the finacial institutions and the government.
Anyone any views on this?
We spent billions and yet have nothing to show for it. All we have done is prop up a broken system and allow the people who caused the problem to go on and prosper.
The Billions could have been better used to protect the people who would have been effected by the collapse such as savers than protecting the banks themselves.
I feel with hindsight we were conned by the finacial institutions and the government.
Anyone any views on this?
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Comments
However, I think the government was in a no win situation as letting the banks collapse would also have improverished ordinary people who saved with them.
It is not specifically the bailout that was wrong it is the fact that sanctions were not imposed on the banks. The majority of the bailout went to pay bankers bonuses.
theyre still doing it with QE4EVER
Iceland is the example
Part of the problem in America was when one of the banks went bust Obama reimbursed all the banks creditors at 100 cents on the dollar - madness. It sent the message loud and clear to what you want you won't face the consequence
Even if it was not possible to leave the banks to totally fend for themselves there was no justification to support them to the extent they did. Some of the private investors, speculators and large depositors should have paid a price too IMO
Any banker who worked in a team that directly contributed to their banks failure, without whistleblowing before the crash Should be made personally liable for the cost of the bailout, with a percentage of their salary being garnished until the bailout is repayed, Even if they transfer job and if they leave the country they should be hunted by international debt collection agencies and their remaining UK assets seized under proceeds of crime legislation.
For instance RBS came within 2 hours of ceasing to trade. Millions of business and personal customers unable to access their accounts. Millions more panicking wonder if their bank would still be open the next morning.
Remember the panic when Northern Rock ran into difficulty.
But isn't NR where3 it all started to go wrong. It was covered by government guarantee to the tune of somethinh like £45,000 per depositor. If the Government had come out immediately and said the £45,000 was guaranteed but anything above that was lost it would have stopped the queues in the street and made people reevaluate what they had in other banks too
It's a tricky one, I'm not sure of what could have been done at such short notice for the benefit of the customers, but now the message has been given, they are too big to fail, in some cases they are too big to prosecute. I was against the bailouts at the time as I don't like the idea of private profit, public debt at least one of the banks should have gone to the wall to send out the message "this is what happens, if you don't behave".
The alternatives were out there, and it would have been easier than what actually took place.
In reality what happened was that private debt was exchanged for public debt. That need not (and should not) have taken place, although the reality is actually not so extreme. The problem was allowed to get severe, when this should never have got to happen. There was dreadful mismanagement on both sides, both from banks and the government side.
RBS and HBOS should have been allowed to collapse, whilst those creditors with provable resources with them should have been allowed transferable accounts with a government backed guarantee to other more solvent institutions of which there were a number. This would have involved a far smaller commitment on behalf of government and over a much shorter term, but would have been a more complex and slower solution. As has already happened, new banks would have taken their place as with any commercial environment. I said this at the time, and still hold with the principle of it now.
there'd have been a revolution if millions of people had lost all their money overnight..................:eek:
That was simply a scare story put about by the banks and Gordon Brown, it would never have happened
This ^^^^
http://www.youtube.com/watch?v=dxhyUAWPmGw
The moment when Warren asks if any banks have gone to trial is devastating; the regulators are silent.
Too big to Fail, too big to Jail...
http://dissenter.firedoglake.com/2012/12/16/hsbc-executives-get-no-jail-time-for-terrorist-financing-while-somali-sentenced-for-giving/
Whats basically happened is someone stick a lump of wood in the gears of the machine to stop the "bust". The problem is that piece of wood cracks and breaks but is then replaced with another because Capitalism is still trying to go in reverse and will continue to do so until the system resets with a proper bust.
The problem lies in the fact that the Government, Labour and Tory, cut all of our lifeboats free.
They could have protected the "small man" in the street whilst letting the banks go bust,why not we have a deposit protection scheme.
Different senario but iceland allowed all the banks to go bust and instead gave people money to spend to revive the economy.
Pretty much the whole truth here.
Very true.
That "someone" was the European Union. Unlike in Britain and the US, where banks are largely private, banks in France and Germany are largely state owned and controlled by the political class. If banks in Britain had been allowed to go bust, these state-controlled banks in Europe would have gone bust as well.
Once that happened, Northern Europeans would find out that all the money they thought they had been saving over the last 30 years - ie national pension funds - has been, effectively, blown on the Southern European roulette wheel.
Down to their governments to sort out that mess then rather then our taxpayers rescuing dodgy banks.