The banks rescue plan - what's in it for you?
Congratulations you will soon be part owners of some of Britain's high street banks. Hold your breath, cross you fingers, say a prayer - that this 50 billion pound rescue package to restore confidence in the markets actually works. That's 1, 610 pounds per british taxpayer.
So what do you think about your money being used to buy shares in British banks? It seems to be the only plan in town - you'll have heard the Tories and Lib Dems agree with the package; will the banks change their ways - what will we get in return for this money? Is the survival of the British banking system enough..that's assuming the plan works.
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I think the govt (and the public) is missing the point with one aspect of all this chaos.
Clamping down on "executive" pay and bonuses is one thing. However, all banks have a large number of very high earners who are way below this executive level e.g. traders, marketers, salesmen, advisors, dealmakers. Often these people earn much more than more workers and managers who may out-rank them in the organisation hierarchy. For example, I imagine that both Barclays Capital and RBS Global Markets have a large number of people earning six and seven figure sums that are never disclosed in the annual reports because they are not main Board members or Directors.
What is to be done to guarantee that these guys don't continue to generate these huge earnings at the taxpayers expense?
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Hi Victoria,
Regarding the financial crisis.
I refer readers to my previous post on this blog:
http://www.bbc.co.uk/blogs/victoriaderbyshire/2008/08/a_year_ago_financial_hell_brok.html
In Summary:
1) People will have a moan about taxpayers money being used but ultimately they can and will do nothing about it.
2) If there was a realistic 'upside' to this bailout (which is what it is, IT IS) private money would be putting to use.
3) The banking system cannot be saved by the measures being put in place.
4) People have seen this coming for years but are ignored.
5) As I said August 6th: What will happen.
· A brief rally in the markets. (Done, and another will follow)
· MANY bank failures. (still happening)
· The Dollar will probably fail. (It will)
· Oil will trade in Euros, like the proposed Iranian Oil Bourse. (It will trade in the new reserve currency, after the dollars demise)
· An inflationary depression.
· Civil unrest in the US (and maybe here).
This is only just beginning.
Please See:
http://www.truthin2008.org/
http://video.google.com/videoplay?docid=7065205277695921912
http://www.iousathemovie.com/
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Posts by 'steaknkidneypie' on http://www.bbc.co.uk/blogs/victoriaderbyshire/2008/08/a_year_ago_financial_hell_brok.html were made by me. I lost my login details.
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Unfortunately, I am one who has savings in icesave, part of LANDSBANKI, REYKJAVIC, ICELAND, although I transacted negotiations through their office in Wallsend, Northumberland. NE28 5AL.
As their Website states that withdrawals are suspended and it has been reported that the Landsbanki Bank is insolvent, what should be my next step?
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The fall in the share price regarding the banks are due to the credit rating of them and due to the fall in future profits.
This Government along with many other people have tried to hide their borrowings, off balance sheet via PFI, SPV etc, so as to enable them to borrow more.
The banks have over lent and when people started to fail to repay their borrowings people started to look properly at the financial statements of companies and found that the underlying assets and cashflows were not realistic. It is the same with the Government's borrowing and spending.
The real problem is that until everyone can be honest about their finances this problem will continue.
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Should ICESAVE finally throw in the towel what are the UK government going to do for those of us who have ISA holdings with that bank. Will we be able to transfer into an ISA with another bank? If not we lose our tax free haven for that money!
Can someone put this question to the treasury and get an answer?
As regards FRANKHOSUN's post the next step is to wait for the FSCS to contact you but this will only happen if/when ICESAVE is finally declared insolvent. At the moment they are technically in receivership and the FSCS will not step in until it goes "toes up". See http://www.fscs.org.uk/consumer/ for info.
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Totally agree with recent phone call that yet again the rich get bailed out by the poorest - who get poorer still. We DESPERATELY NEED an election ASAP to get this floundering USELESS government out of office - or at least a voted in prime minister.
How can a bank chief get 21 MILLION pounds for a years pay, and then also get bailed out to save his job !!!!!!!!!!
Where is the bank when WE NEED HELP
This country is an absolute JOKE
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Granted, things looks bad, but i think there could be some upsides to this bailout. I have had to restructure my life hugely since a change of circumstances a couple of years ago. I went through my expenditure like a forensic scientist and found i could make significant cuts in my outgoings, which enabled me to carry on paying for the things i felt were important.
Hopefully, this might force the Government to take a very hard look at its own budget. I suspect the potential savings on waste and extravagance could be huge, which would enable them to pay back the increased national debt much more quickly than anticipated. It might even change the perceived mindset of The Government and The Civil Service in the way that they have previously taken our money for granted, rather than treating it with respect.
There is going to be some pain for a while for some of us. I suspect a lot of people won't really notice much difference. Personally, i have found the more frugal life that i live now much less stressful. If my clothes are not at the cutiing edge, it is not a disaster and is probably better for the planet as well. Not buying the DVD or CD on the day of release at full price, but waiting until it is a fiver or my birthday, is not the end of the world.
We have the chance to look back on this time of chaos as the catalyst to a simpler and less stressful life. Perhaps Gordon Geko was wrong, and greed isn't so good after all.
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What I don't understand is this:
The banks wouldn't lend to each other because of the "toxic" loans that were "hidden".
The Government isn't taking out the "toxicity" - so why should the banks lend to each other - however much of my money they get? The toxic loans are still there - a bit like a virus on a computer.
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Clearly the system does not work and this is because most of the money is bank leveraged - ie it appears not to exist. We lend them our cash, they give us hardly any interest and then lend many multiples of what they have deposited at far higher rates. When the system comes crashing down that level of lent cash was only paper money and essentially is an illusion - if people are allowed to go around defaulting. Which brings us back to the banks..........
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Further to previous post: Why not force the banks to lend at an appropriate (ie level with the base rate as opposed to the soaring LIBOR) rate?
I see no reason why the government cannot make that a condition of a bank operating - especially as we now own several of them!
If they won't play ball, revoke their operating licences.
While we're on - maybe the time has come to take back the railways into public ownership as well. We were told it was impossible, it would cost too much - but look what we have shelled out on the banks!
Don't believe a word they tell you.
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