BBC BLOGS - Peston's Picks
« Previous | Main | Next »

Will eurozone banks be rescued twice?

Robert Peston | 16:48 UK time, Friday, 16 July 2010

Stephanie Flanders and I have written four short essays on the eurozone's financial and economic woes for Radio 4's PM. Here's the second of mine.
____

There's a great deal of talk about whether eurozone taxpayers will have to bail out their banks, when we have the results on 23 July of tests by regulators to assess their respective weaknesses.

Euro symbolBut this is to ignore that only a few weeks ago there was an initial billion dollar bailout of European banks.

You may have missed it, because it wasn't called a bank rescue programme.

It was a financial support package for Greece worth 110bn euros - and 750bn euros of credit for other eurozone governments that may face difficulty keeping up the payments on their debts.

On the face of it therefore this was aid for eurozone states.

But in practice it was succour for German banks, Spanish banks, French banks and so on, because it is those banks that lent hundreds of billions of euros to the likes of Greece, Spain, Portugal and Ireland - and if those countries were unable to keep up the payments on their so-called sovereign debts, well the immediate pain would be felt by banks which had lent to them.

What is troubling, however, is that the creditors of Europe's big banks fear that the billion dollar rescue package wasn't enough - that some eurozone banks face substantial losses and that they have too little capital to absorb those losses.

It is not just that these banks are perceived to have lent too much to governments - like that of Greece - which have been living beyond their means.

They've also provided too much finance to property developers and home-owners in markets - such as those in Spain and Ireland - that have gone from boom to bust.

And there's a final cause for concern among those who provide vital credit to banks. What they see in the eurozone are arrogant lenders which characterised the banking crisis of 2008 as primarily the fault of American and British banks - and which therefore did not follow the lead of American and British banks in strengthening themselves by raising vast amounts of new capital.

The statistics that are available would tend to support these fears about the relative weakness of the eurozone's financial sector.

That said finance ministers and government heads insist that the anxieties are exaggerated.

They've asked regulators to examine 91 European banks and adjudicate on whether they have sufficient capital resources to insulate them from a possible return to recession and squalls in markets.

These so-called stress tests on banks must surely be a jolly good idea - if, that is, they reassure banks' creditors that the risk of lethal losses materialising in eurozone banks is minimal.

Except for one thing.

There is a widespread view that the simulated stresses imposed on the banks are too feeble - they're the equivalent of seeing whether an aeroplane is airworthy by flying it only in choppy weather, not a tornado.

If the eurozone's banks pass their stress tests only because the tests are unrealistically easy, then those banks will remain acutely vulnerable to the ebbs and flows of confidence and sentiment among those who lend to them.

Or to put it another way, stress tests that lack credibility could be the mother and father of a new banking crisis, with the fault-line running from Madrid, to Paris to Berlin - rather than - as happened last time - from New York to London.

Comments

Page 1 of 3

  • Comment number 1.

    I think we should again look at whether we are still in exactly the same ongoing crisis as before. We are still looking at too short a historical timescale. In the future this will all be rolled into one large crisis for academic discussion (if there is any formal academic institution still funded).

  • Comment number 2.

    think you mean trillion dollar bailout Robert (€750bn)

  • Comment number 3.

    There are 400 million people behind the Euro Zone banks but only 50 million behind ours . Other things being equal we should be far more vulnerable than them. All this talk of bailing-out other peoples banks looks far to much like trying (and failing!) to shift attention from our own!

    Furthermore any bail out of the Euro zone banks will necessitate a bigger bail-out of ours because of the way that the wholesale Euro market works. So what you are saying is that our banks will need bailing out even if only a few Euro zone banks need bailing out. I don't see that the British taxpayer can be expected to bail out the whole of the World, but that is what it amounts to (see RBS) - as we are a global banking hub and trouble anywhere causes immense pressure on our (wonderful!!!) banks and the only people who can bail them out are the British poor - the widows mite will yet again be stolen by the capitalist system. Enough is enough, we must tell our 'wonderful' banks to leave the country and find some other mugs to rescue them.

  • Comment number 4.

    Surely a weak test implies that all the banks to be tested are weak ?

    and thus achieve the opposite result to what you would think, they are trying to achieve?
    I cannot understand it

    If it was me I would test them until they broke, isn't that the point? especially if lots depend on them, until the weakest link actually goes it is all theory and guesswork. But everyone would know what was what, instead it all looks bad now

  • Comment number 5.

    To be perfectly frank Robert, what you should have written was that the ... the simulated stresses imposed on the banks are too feeble - they're the equivalent of seeing whether an aeroplane is airworthy by having wings - whether the airplane can fly is something entirely different as even a brick can fly if you give it enough power ...

    Whether the European Banks are able to withstand Greece (or for that matter any one of the PIIGS) defaulting on their sovereign debt has not been tested thoroughly and that should be the question being tasked by the Bank Stress Testing.

    The reason the European Bank Stress Tests were so feeble is simply because the Tests were conducted on behalf of EU and European Politicians who will do anything and say anything that protects the Euro (whatever the cost and financial risks to the European tax-payers!) simply because the failure of the Euro would signify the imminent failure of the European Union as a viable political project to create a Supersate instead of the European "Common Market" it should have always remained.

  • Comment number 6.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 7.

    To test the European Banks a randomized selection of citizens throughout the Eurozone should be taken to one side and have the nature of money explained to them.

    One week should then be allowed to elapse.

    If there are no riots or public disturbances during that time then it can be concluded that the populace are indeed stupid.

    And of course that the banks have passed their test. For now.

  • Comment number 8.

    7. At 6:57pm on 16 Jul 2010, prudeboy wrote:
    To test the European Banks a randomized selection of citizens throughout the Eurozone should be taken to one side and have the nature of money explained to them.
    One week should then be allowed to elapse.
    If there are no riots or public disturbances during that time then it can be concluded that the populace are indeed stupid.
    And of course that the banks have passed their test. For now.
    ----------------------------------------------------------------
    Don't be silly! Exposing the public to reality! Whatever next? Honest politicians? Socially responsible banking? Non exploitative markets?
    Never going to happen. Not on their watch.

  • Comment number 9.

    7. At 6:57pm on 16 Jul 2010, prudeboy wrote:
    ============================

    ha best post in ages!!

  • Comment number 10.

    The question might be if there will be revolutions when the taxpayers are asked to bailout the banks...again. Maybe a public finance stress test might be in order. Just how much can the wealthy take from the population and still maintain order? Based on the present and the recent past it may be time to consider the structure of banking and stop treating the current gangsters as if this was an apostolistic gathering.
    Seems a bit strange that basic economics is never considered when accumulating wealth. If people have no money because the taxes are too high, the economies die and revolutions follow...always has worked that way but apparently the bankers have somewhere else to live and the politicians will be left to deal with the mess created by their patrons.Fleas carrying a modern day plague on the backs of political rats..

  • Comment number 11.

    10. At 8:02pm on 16 Jul 2010, ghostofsichuan

    There should be a revolution! But too many folk are watching some daft reality TV show to give two hoots about anything else.

    When you read Kaufman's arctile in Harper's Magazine it really makes you wonder! I've a memory of the food riots and I've a memory of some reports about why they were happening. Kaufman lays out clearly exactly what happened to the price of wheat and why. For a planet so full of so many people who claim to 'have religion' it is beyond me to comprehend what manking is doing here. We don't need relgion to know this is wrong. We don't need to hear stories about Jesus going to the temple and telling the rich people to get out of the temple to know that what is going on is wrong. And I'm sure the multitude of other religions have their own, similar stories.

    This is a moral failure of every part of the establishment, of every part of government and every part of the market. Failures get no reward, no additional funding help, nothing, allegdly.

    If you don't have access to Harper's then the guy is doing the radio rounds - been on Democracy today, so you can listen/watch online too. His book is 'The Food Bubble: How Wall Street Starved Millions and Got Away With It' I don't think I could read it without having at at least one stroke and one heart attack!

    Bail them out! Don't make me laugh Robert. I wouldn't give them fungal drenched bread.

    A very disgusted CopperDolomite

  • Comment number 12.

    This is very bad news indeed for bankers. Their reputation was already in tatters, and the public is now inclined to lock them up for causing more trouble than Jack the Ripper.

    I'm almost sorry for the greedy beggars, but I'm afraid they are all for the chop, now. We must be glad that we could never again leave our money system in the hands of graspers – those days are well and truly over, thanks goodness.

    But we have to question whether prison is the best way to deal with them – or is there any way we can rehabilitate these people in the community?

  • Comment number 13.

    No wonder Santander is buying up British banks. Maybe the government should step in and stop Santander or better still make it pay a larger corporation tax just in case it needs financial help.

    There are too many continental businesses taking over British firms with money from Brussels. Time to leave the EU and let the whole thing implode, as it would without our billions.

  • Comment number 14.

    Excellent article Robert, just about sums up where we are.
    If you remember, when the EU loan package (with Fed Treasury help) was announced, the markets went shooting up. Then as people thought about it, the package didn't actually solve anything, Greece was still likely to default and bring the whole Eurozone down with it so the markets went back down again.
    The austerity measures anounced by Greece cannot work because they require repayments which are too high for the time available before debt is rolled over. Very similar to the Iclandic situation which Britain (to its shame) and the Netherlands tried to force on the people of Iceland.
    As a previous poster pointed out, this is all about France and Germany getting paid for the armaments that they have sold, and the banks getting their loans back. These loans were given because of the high interest which these countries had to promise to get their gilts bought.
    So it basically comes down to greed and risk by the banks who figure that Europe will have to bail these countries out so they will get their money.
    The stress tests performed in USA were fixed in the sense that they were set at a level to equal the amount of money available for TARP. If you remember only 19 banks were tested and 9 or 10 had to inject more capital which just equalled the TARP money.
    The TARP was very effective, it saved the Wall Street banks but did nothing for the smaller state banks which are closing in droves by the day. The TARP monies were repaid quickly by the big banks because of the interest rate penaly which I think doubles after a year.
    Despite all of the stimulus which was a large amount of dollars pumped into the American economy, the results for the man in the street seem to have been poor. However, the big banks are making huge profits once more so that's ok then (not).
    It will be interesting to see market reaction on July 27 when the aggregate results are published but we will have to wait a further two weeks for individual bank results (would you like to bet on UK results being published Robert, they wouldn't dare)?
    I think that by the end of this year, or maybe sooner, this whole rotten Ponzi bank scheme will have come crashing down around Europe's ears, and maybe then Germany, who are the only powerhouse left, will have the upper hand over all members of the EU.
    Parity for the Euro and the Dollar and the Pound, I think so.

  • Comment number 15.

    Can someone help? I am deeply puzzled about taxpayers bail out of the banks . Was this money 'spare change' not already allocated for spending on other projects so was free for use on the bailout ? Or did the other projects have to go without as their money has gone to the banks ? And if the coffers have been well and truly drained how would another bailout be possible if the money hasnt all been repaid. I havnt heard that the collosal amount of cash given to the banks has left the other taxpayers cash recipients short - so is it real money - I know when I pay tax in it is real money , so is it real money when it is paid out ?

  • Comment number 16.

    12. At 9:57pm on 16 Jul 2010, Jacques Cartier wrote:
    This is very bad news indeed for bankers. Their reputation was already in tatters, and the public is now inclined to lock them up for causing more trouble than Jack the Ripper.

    I'm almost sorry for the greedy beggars, but I'm afraid they are all for the chop, now. We must be glad that we could never again leave our money system in the hands of graspers – those days are well and truly over, thanks goodness.

    But we have to question whether prison is the best way to deal with them – or is there any way we can rehabilitate these people in the community?
    ------------------------------------------------------------------
    You haven't let on yet what socially worthwhile job you do. I hope it is teaching, or medicine, or farming .....

    The bankers were not exclusively responsible for the sub prime crisis,
    the banking crisis or the recession. You have been suckered into banker bashing by people who want to distract from the real problems in the UK economy and fiscal system and socio-economical set-up.

    Just talking about stringing up bankers is no help and adds little of value to sorting out the mess we are in. What did you do and say when the Canadian Government and people were in the mire in the 1980's and '90's? Who did you rail against then?

    Have you not got something more helpful to offer us, Jacques?

  • Comment number 17.

    Is it time to return the favour, as far as Wolfgang Schäuble is concerned, and get our chancellor to slag off Germany's lack of appropriate restraint in the sovereign debt markets.

    Pride cometh before a fall, and frankly, I hope Herr Schäuble gets a bloody nose as a consequence.

    We, the UK, may be inextricably tied to the EU and its fate. But it galls me when I think of all that smug moral superiority that exuded from our "partners" at the beginning of the crisis - nothing more than hubris, it would appear.

    When will those who control the levers of power explain, for the benefit of all, that our Anglo-Saxon system and that practised on the continent, are mutually incompatible. I have no xenophobic fear of Europe, but I do fear attempts to squeeze the differing economies and political systems of 27 countries into one homogeneous modge.

    The UK does not practise the sort of elitist politics prevalent in France and Germaqny, where everybody accepts that the power brokers get on and do their thing in smoke filled backrooms away from the gaze of the troublesome masses, and the plebs get on and do their own thing, and never the twain shall meet.

    The EU, and its unaccountable ECB, will try and muddle through this crisis, and hope that the one-size-fits-all bandage they intend to apply will, overall, not muck things up too badly for each of the constituent members of the Eurozone. Trouble, as is the way with the much vaunted system of compromise politics that is played out on the continent, a fudge, is a fudge, is a fudge. A middle of the road solution may just end up with the Eurozone caught in a pile-up of disasters comong at it from all directions.

    Thank God we are not in the Euro, and long may it stay that way.

  • Comment number 18.

    There is a lot of volatility being hidden from us I have no doubt. If we knew what was really going on I suspect we would freak out. It's all on a knife edge.

    Saw some figures yesterday suggesting currently 8% mortgage default in Ireland and rising (that would equate to about 10 billion euros bad loans hit on the Irish mortgage providers I believe). Spain must have a similar problem - big unemployment coupled with property crash there too, same as Ireland.

    As people use up their savings and redundancy payments after losing their job it all starts to go belly up. Irish unemployment is currently 13.4% and Spanish near 18% I think but we know those figures are massaged and you could add another 5% to each plus long term unemployment (over 12 months) is rising dramatically in both countries.

    Some bad times a coming in Europe but the banks are making sure they get all the taxpayers money before it does hit the fan. By the time they've finished, there will be nothing left for the populace.

  • Comment number 19.

    Forget Tax payers bailout of banks. How can banks subsidize borrowers at the expense of prudent savers? An average borrower is paying almost nothing towards interest payment (thanks to ultra low interest rates). Where as, savers are getting nothing for their deposits in banks. Height of Moral Hazards.

  • Comment number 20.

    I am afraid the system should have been allowed to implode. At the start when Northern Rock and even Barclay's needed a BoE cash injection they should have been refused by BoE.

    A capitalist system works on the business being viable or it goes bust. Now Barclay's could have made up the cash it needed through some other means.

    Northern Rock was, at the time, completely defunct. It should have been allowed to fail. The capitalist way, good businesses survive, bad businesses go bust.

    Letting Northern Rock and, even Greece go bust would have made those surviving financial institutions more wary and forced them into better practices, more self-control or suffer the consequences.

    Now the former government has said to RBS and all the other banks "You can not fail". The weak banks, the bad banks, will survive. The eurozone banks are now at the position of bailing out a small country, Greece, much like the bailout of Northern Rock by BoE.

    It would then seem plausible that a medium size eurozone country will begin to fail soon much like RBS in the UK. Any guesses which country? Take your pick!

    I was never a believer in the Euro and I thought it was a system that meant each country should act in co-ordination and maintain the correct financial status to allow the euro to work. There is the flaw, all it takes is one country to not meet that level of financial integrity and the basis for the euro is broken.

    Again, the eurozone is basically saying to Greece or other eurozone country "you can not be allowed to fail". So carry on. I wonder in the long-term will Greece learn it's lesson. I have my doubts, paying tax in Greece does not seem to be mandatory so the countries budget will never balance.

    Personally my holiday to Europe this year is likely to be much cheaper than last year as the euro will dip further as more woe is heaped on the eurozone.

  • Comment number 21.

    So the same, patently flawed tests will be applied to the banks as were applied to the economies of the latest tranche of EU member states prior to their membership, by the same corrupt and self seeking EU bureaucrats and politicians.
    What a surprise!
    Keep the big fat federalist gravy train uberstate rolling regardless of the continuing and deepening impoverishment of the people.
    And if it fails, again, as it will, they will just continue to extort taxation from us all to pay their banker chums, using their police, their courts, their prisons.
    Lie after lie after lie, and we swallow it all and get on with our bread and circuses lives. We appear to have neither the intelligence nor the collective will to fight these people, who are our enemies.
    We are simply lambs for the slaughter and we deserve it.

  • Comment number 22.

    There is a delightful irony in all this.The Bank for International Settlement (BIS)which shaped the Basel Norms (for capital adequacy etc of the banks world over)is situated right in the eye of the storm,geographically speaking.The so called stress tests could have been conducted by BIS rigorously and objectively right from the beginning of the global financial crisis to reassure the public at large about the soundness of the banking system.No such exercise appears to have been undertaken by BIS.
    Secondly,the bloated bureaucracy of the EU could have undertaken some sort of scenario planning to visualize the unfolding crisis and suggest coordinated policy responses by its member states.This would have prevented the discord between the smaller nations of EU on the one hand and Germany on the other.
    Thirdly,use of pejorative acronyms like PIGS must be eschewed as the creation of toxic assets is not the monopoly of any particular group of nations.

  • Comment number 23.

    12. At 9:57pm on 16 Jul 2010, Jacques Cartier wrote:
    This is very bad news indeed for bankers.
    ----------------------------------------------------
    There is a little message for you (currently giving the Mods a pain between the ears) on Stephanie Flanders's Blog, Jacques.

    Happy reading. Have a good day.

  • Comment number 24.

    @ 16. At 00:23am on 17 Jul 2010, Up2snuff wrote:

    >> 12. At 9:57pm on 16 Jul 2010, Jacques Cartier wrote:
    >> This is very bad news indeed for bankers.

    > You haven't let on yet what socially worthwhile job
    > you do. I hope it is teaching,

    yes

    > or medicine,

    yes

    > or farming .....

    Maybe later...

    > What did you do and say when the Canadian
    > Government and people were in the mire in the
    > 1980's and '90's? Who did you rail against then?

    Quebec!

    Look, we now know for sure that bankers are very stupid people. It's a lesson worth learning, because now we can pay them very low wages, comensurate with thier skills. The world has changed, and those days are over and done with. It's a relief, actually, to know that we have to dump those chumps.

  • Comment number 25.

    @ 16. At 00:23am on 17 Jul 2010, Up2snuff wrote:

    > What did you do and say when the Canadian
    > Government and people were in the mire in the
    > 1980's and '90's?

    I'll answer that more fully. You need to look at Canadian politics, because it was a very different problem there, which had little directly to do with banks. Canada has never been "one country". There has always been a great deal of mistrust between the west and east, and especially between Quebec and the rest of Canada. Quebec only stays in Canada because it gets lots of goodies from the federal government in Ottawa. If the goodies stopped coming, Quebec would be out before you could say Jack Robinson. So the whole Canadian system revolves around bribes to Quebec. All manner of irrational financial decisions resulted from that situation, and the Conservative party (under Mulroney) let it get totally out of control by trying to buy votes and delay the crunch.

    Luckily, Canada is (just about) the richest country in natural resources, and, no matter how big its deficit was, it looked small against their resources, so there was never any real reason to panic.

    Britain, of course, is overpopulated and has exhausted many of its paltry natural resources already. There is no point in comparing the historical Canadian deficit, and the current UK one. The measures they used won’t work here. We are in the mire because of the idiotic, greedy megalomanias we allowed to work in our banks. They wrecked the banking system, and passed their obligations to me and other taxpayers.

    It is no use for them to complain – we all agree that they must suffer a punishment commensurate with the wrong they have done. That’s the first step. The second step is to vet these people out of the system, and keep them out.

    They’ll all be better off for this, in the end, and they’ll thank us for helping them to find fulfilling roles in life away from any money.

  • Comment number 26.

    15. At 11:42pm on 16 Jul 2010, innov8tion wrote:
    Can someone help? ..... I know when I pay tax in it is real money , so is it real money when it is paid out ?
    --------------------------------------------
    Is it real money that you use to pay tax? Is there any real money?
    I think the answer to both is no.
    Read this blog, SF's blog and various other ones that are referred to by contributors. After a few weeks you will be able to form your own views having expanded your interest through more research.
    Good luck, don't believe all of what you read.

  • Comment number 27.

    The Ponzi Scheme Britain plc, as all such national schemes of exessive confidence to bamboozle the small shareholders who for the love of their respective countries fall for it time and time again, uses all the tricks it can muster, as indeed the others do. One of those tricks is of course to point the finger at the other's discomfort. The little shareholders do like that.

    Robert Peston with his offerings in this particular blog should not be judged too severely, he is at the end of the day, like it or not, part of that British outfit.

    Reading the often very good contributions in the last two blogs, I found the finger a couple of times (only?!) pointed at China.

    The BBC on their News section has a very revealing article reporting on a certain Angela Merkel visiting China this week with a big team of big wigs. It seems to say it all. I do have to take my hat off to the BBC though, it was 'also' mentioned that a certain William Hague had been there a few days earlier as well. Now here is modesty for once! Not unlike some recent score in one of the former 'outposts' of the Empire. Brazen Angela Merkel would of course do her bit with an appearance there. Her small shareholders are meant to like that sort of thing. After all it is all about their confidence.

    It seems to me that the match in China was lost by an even bigger margin.

    Robert Peston must point that finger the way he does, but will it be enough?

  • Comment number 28.

    @ 27 jablko

    Very good post and excellent observational skills and could not agree more with that - "It seems to me that the match in China was lost by an even bigger margin."

    The Empire is likely to choke on this particular chunky former 'outpost'.

    China, sadly, is likely eat itself out as they are developing their own housing bubble of mammoth proportions.

  • Comment number 29.

    Just a point of clarity: it's missleading to call the banking class "stupid".

    They are in fact very arogant and very, very clever. After all, they've managed to scam all of our money, still hold their jobs and still retain all their benefits. This is not the act of a stupid race of beings.

    Keep these thoughts in your heads, when you think of the banking class: it will provide better focus.

  • Comment number 30.

    "15. At 11:42pm on 16 Jul 2010, innov8tion wrote:

    Can someone help? I am deeply puzzled about taxpayers bail out of the banks . Was this money 'spare change' not already allocated for spending on other projects so was free for use on the bailout ? Or did the other projects have to go without as their money has gone to the banks ? And if the coffers have been well and truly drained how would another bailout be possible if the money hasnt all been repaid."

    It is simple. The government owns the Bank of England, which can print as much money as it wishes, subject only to any rules made by the Treasury, or give the government unlimited credit by a procedure euphemistically called "quantitative easing". The government does not even effectively have to pay interest.

    The only fly in the ointment is that doing this too much could cause the value of the pound to slide. It is not really the taxpayers that are paying the bill, it all those who have sterling savings accounts or a pension or anything else denominated in sterling. Those with debts actually gain.

    This can be regarded as fairer than many taxes,e.g. VAT, because it is the "haves" who lose and the "have nots" who gain.

  • Comment number 31.

    Jacques,
    Who were the guilty parties in:
    1a. The sub-prime loans market in the US
    1b. The sub-prime loans market in the UK
    2. The failure of Northern Rock
    3. The retail collapse
    4. The start of the recession
    5. The property collapse, and
    6. The banking crisis?

    Think about that list carefully and you will, hopefully, start to realise that it was not exclusively bankers in general, or even bankers in particular. Even some of the dodgy paper created in Wall Street and London was not really produced by bankers in the purest sense. It was created by very clever academics who knew there was a way of creating new financial 'churn' through existing and new markets and that money could be made from it.

    Here's a little joke to lighten your mood over bankers. What is the difference or 'who is the odd one out' between Alastair Darling (then Chancellor of the Exchequer), John McFall (then Chair, Treasury Select-Committee, HoC) Fred Goodwin (CEO, RBS), Hector Sants (then FSA Director) and Terry Wogan (radio presenter)?

    Answer: Terry Wogan - he has a banking qualification.

    As to whether guilty bankers are going to be brought to book, don't hold your breath. We've seen two through the courts in the UK. I haven't heard whether charges are likely to be brought against B&B Directors and senior management - they probably should be. Fred Goodwin - not a banker - has another job, I understand. But what was he guilty of? Paying too much for ABN Amro because he got suckered into a bidding war with Barclays? I very much doubt that any of the very few other bankers did anything that could go to trial.

    What about the regulators? They were alseep on the job but you do not call for them to be hung from lampposts. And where do you stop in your burning desire for 'justice' and for 'punishment'? Our Government might not have needed to to pour money into RBS and Lloyds if their shares were not being unloaded by shareholders. Are you going to string up the shareholders? That wasn't the fault of the bankers! Get real and give us all a break as we try to get by in the tough days ahead.

  • Comment number 32.

    Up2snuff

    I think most objective people can see your point ie that the mess that we find ourselves in is not solely the fault of the bankers. However, jacques and his supporters are (rightly) likely to be somewhat irked by the way the bankers behaved even after their reckless actions had been exposed. They effectively held the economy to ransom, made no attempt to show any remorse or curtail their excesses, made threats that they would relocate if the govt threatened to rein them in and have generally acted in an arrogant and obnoxious way.

    Jacques is entitled to his rant.

  • Comment number 33.

    @ 31. At 2:50pm on 17 Jul 2010, Up2snuff wrote:
    > Who were the guilty parties in:

    > 1a. The sub-prime loans market in the US

    Erm.. the operators of a strung out, over coupled and greedy money system?

    > 1b. The sub-prime loans market in the UK

    Erm.. the operators of a strung out, over coupled and greedy money system?

    > 2. The failure of Northern Rock

    Erm.. the operators of a strung out, over coupled and greedy money system?

    > 3. The retail collapse

    Erm.. the operators of a strung out, over coupled and greedy money system?

    > 4. The start of the recession

    Erm.. the operators of a strung out, over coupled and greedy money system?

    > 5. The property collapse, and

    Erm.. the operators of a strung out, over coupled and greedy money system?

    > 6. The banking crisis?

    Erm.. the operators of a strung out, over coupled and greedy money system?

    Bankers are the only ones too stupid to see the pattern!

    > give us all a break as we try to get by in the tough days ahead.

    If you make any more of your “tough days” for any of us, you’ll need a break, alright - a flippin’ jail break!

    If bankers start being humble, repentant and very poor, we might cut them just a little slack. Apart from that, they're all for it. They can decide.



  • Comment number 34.

    @ 32. At 4:18pm on 17 Jul 2010, bbontrager wrote:

    > Up2snuff - I think most objective people can
    > see your point ie that the mess that we
    > find ourselves in is not solely the fault
    > of the bankers.

    Bankers are too stupid to understand "reason"
    or "objectivity". They only respond to a
    bashing! That's all they know about.

    That's the language they understand. We've got to
    bash them where it really hurts them - in the
    pocket. They're getting the message now that we
    have started that. It's the only treatment that
    is known to always work against bankers.

  • Comment number 35.

    Everybody on the high street knows the same problem is still there, its not been solved by the bank bail out money its impact has just been delayed.
    Why should the taxpayer keep throwing money at what is after all private companies that have pushed there products on everybody and then found they have pushed people over the edge.
    To throw money at them is not the answer, whats needed is a criminal investigation in to this complete and utter mess. Some directors charged and thrown in jail and new blood put in to these businesses. People that put the customers & shareholders first and also get rid of the crazy commission culture.Let them fail the market will cleanse itself of the poorly managed banks let them fail.

  • Comment number 36.

    @ 35. At 7:01pm on 17 Jul 2010, KeithRodgers wrote:

    > Some directors charged and thrown in jail and
    > new blood put in to these businesses.

    We can't have money-slobs holding on to thier jobs
    like limpets. They've got to go now, and the
    trouble will stop.

  • Comment number 37.

    Leave Jacques alone Up2snuff.

    Banks are dysfunctional and need sorting. Some of us don't feel the Sir Greedies deserve to live in perpetual heaven on earth after what they've done. Some people are hurting from a lot worse than rhetoric.

    You're a great asset to the debate, but not this time. Sorry.

  • Comment number 38.

    31. At 2:50pm on 17 Jul 2010, Up2snuff wrote:
    And where do you stop in your burning desire for 'justice' and for 'punishment'?

    Desire is one thing, actual justice and punishment is something we still havent seen and are unlikely to see. Unless you call a fine 'justice'.

  • Comment number 39.

    31. At 2:50pm on 17 Jul 2010, Up2snuff wrote:

    Jacques,
    Who were the guilty parties in:
    1a. The sub-prime loans market in the US
    1b. The sub-prime loans market in the UK
    2. The failure of Northern Rock
    3. The retail collapse
    4. The start of the recession
    5. The property collapse, and
    6. The banking crisis?
    -----------------------------------------------------------------------

    Not questions for me, but I'll have a go:

    1a US lending institutions (aka BANKS)
    1b UK lending institutions (aka BANKS)
    2. The management of Northern Rock (a BANK)
    3. Collapse in consumer confidence, largely down to a BANKING crisis
    4. See 3 above
    5. Stupid lending decisions by the BANKS, creating a bubble which had to burst
    6. Failures of risk management by the BANKS

    Spot the link, folks!

    And by the way,just to deal with a point that really gets up my nose, if my loved ones get wiped out in a motorway accident caused by a drunk driver, I don't blame the "regulator" (in this case the traffic police). I blame the perpetrator (that's the drunk driver,for those who find logic a bit difficult). However, many on these blogs seem to think I should blame the police for not stopping it happening. Funny old world, isn't it? And some very strange people in it.

  • Comment number 40.

    Phew! My #6 , still in moderation queue after a day and a half. It was only a little leg pull about Robert's use of Billion that should have said Trillion but it is way too much for the moderators. Not to worry, found a new site for intellegent discussion without having to wait days for a post to clear censors.

  • Comment number 41.

    39. At 10:29pm on 17 Jul 2010, jeelypiece wrote:
    Not questions for me, but I'll have a go:
    --------------------------------------------------
    Whoops! 0 out of 7. Not good.

    Correct answers:
    1a. No, change of plan. I'll wait until Jacques has had a go and see if he can do better.

  • Comment number 42.

    37. At 9:13pm on 17 Jul 2010, PacketRat wrote:
    Leave Jacques alone Up2snuff.

    Banks are dysfunctional and need sorting. Some of us don't feel the Sir Greedies deserve to live in perpetual heaven on earth after what they've done. Some people are hurting from a lot worse than rhetoric.

    You're a great asset to the debate, but not this time. Sorry.
    --------------------------------------------------------------
    OK. Let's be practical. What can you do about it? Just keeping on moaning about bankers in general doesn't fix any problems. If anyone here has clear evidence of misfeasance they should make it available to the authorities.

    The reality is that it is quite possible that no actual laws were broken. Although, having written that, I can show up one of the weaknesses of the anti-banker club's position that I have kept in reserve thus far, in that - technically - one of the biggest fingers of suspicion and doubt points at auditors who signed off the accounts of B&B and HBOS.

    I have lost money in this financial collapse and continue to be disadvantaged by it. But yada-ering on about stringing up bankers, when they were only a small part of the problem, doesn't get my money back, doesn't advance understanding - instead it tends to limit it. And you are falling into a trap that I suspect some of the other 'guilty' parties want to put you in, because it means they will get away blame-free.

    It doesn't matter if you put the CEOs, FDs and Chief Accountants of all the banks and building societies in court, even if you can get convictions and spend even more taxpayers' money keeping them locked up, one of the bigger culprits - the computer - will be getting off scot-free and probably taking us helter skelter into the next crisis.

    Do you understand now how stupid it is to keep blaming the bankers?

  • Comment number 43.

    42. At 11:26pm on 17 Jul 2010, Up2snuff wrote:
    OK. Let's be practical. What can you do about it? Just keeping on moaning about bankers in general doesn't fix any problems. If anyone here has clear evidence of misfeasance they should make it available to the authorities.

    Don't you understand this is crime scene ? Someone must pay/be held accountable(excuse the pun) and so far its not just you but all of us that are losing out. Maybe if you were to made homeless never mind losing some dosh, yer angle on the greatest theft in history would be a bit more aggressive.

    The bankers having been lining their own pockets at the expense of everyone, they have no loyalty except to profit. And as most peeps here know that a 2 year old could make profit borrowing money at 0.5% and then lending it out at what 4% for a mortgage, 8% for and over 5K loan or 22% for a credit card.

    You need to open your eyes and see whats going on in front of your face.

    The current capitalist system is unsustainable..... Anyone who wrecks lives for the sake of profit needs to understand that what they are doing is as bad as murder, and in the end they may have to pay the ultimate price for that....

  • Comment number 44.

    You fail to mention that we are also fast approaching the end of significant numbers of discounted mortgage rates in which quite a few will enevitably have to find an extra £300.00 to £400.00 a month of which many just will not have.

    There is also the small problem of UK banks fast approaching the end of the year when they are due to pay back £billions in loans etc to government and which the banks were expected to raise significant amounts via bond etc issues but which they have MASSIVELY failed to hit their targets. Hence where are these £billions going to come from.

    If the loans are extended by UK government it means UK taxpayers will be forced to fund it yet again and basically our nation needs and wants its money back or at least whats due now, NOW.

    On top of this we are facing possibly 1.2 million job loses. How many of these have mortgages and credit/loans.

    Most of Europe will be implementing and stating austerity measures a bit later in the year, as well as this July date October/November will ALSO be a very crutial time.

    Maybe, there may be something in this Tory/Lib Dem coalition seeking the "CRUNCH" numbers of cuts of upto 40% from public expenditure budgets, I personally think such a reality is MUCH more likely than not.

    As in another comment I made, we have suffered a financial/economic earthquake. In natures terms, very often an earthquakes aftershock creates much more damage than the initial shock because so much has already been damaged and weakened.

    From my point of view/opinion, it looks more to me like Europe especially has made serious preparations to help withstand such a shock.

    We will only know whether these preparations are adequate when the shock hits.

    Often, we hear and talk of UK and Europe and even sometimes the USA, VERY LITTLE is mentioned about Asia or Japan and the wider world which are also facing very substantial difficultys.

    It is supposed that the next financial tremor may be in Europe but it is just as likely to start in Japan or elsewhere.

    I think that if anyone hasBMX knee pads and arm pads, now is the time to put them on, because in my opinion it is going to be an extremely bumpy ride.

  • Comment number 45.

    42. At 11:26pm on 17 Jul 2010, Up2snuff wrote:
    Do you understand now how stupid it is to keep blaming the bankers?


    Stupid as in pointless (a), or stupid as in bankers are innocent (b)?

    a) I express anger by talking about "Sir Greedie". It's my small contribution to what's called public opinion. It's not pointless, it's not perfect; it's part of the way things happen in a democracy.


    b) Well put by jeelypiece - blame the driver for the crash. You say you lost money. In fact you lost *all* your money in terms of what we are discussing. The money that's sitting in your TSB account is not the money you put there. That was wasted. The bank went bust. Kaput. Money gone. The money in your TSB account today is *fresh money* put there by courtesy of the *taxpayer*, who, rich and poor alike, will be paying for decades. Some of your loss has been transferred to poor folk. It should heighten your outrage at those responsible, not reduce it.

    While you're taking the computers to court and trying to get Terry Wogan put in charge of the banks, the rest of us are for giving Sir Greedie a good kicking. We'll just have to wait and see what works best.

    Good posts, pnatters and mrwonderfulreality.

  • Comment number 46.

    The word 'greedy' gets used a lot in the financial blogs' comments. So does 'banker' and even 'the banking class'.

    Does anybody seriously believe that bankers are different people from the rest of us, or that greed is something exclusive to a certain type of human being ?

    These are people who behaved much as other people would given their situation. That situation involved, over time, generating profits for their companies and then handling a crisis when it came up.

    Of course there is a spectrum of behaviour among all people. It ranges from doing something bad and lying about it to killing people. Goldman Sachs just admitted doing something bad and lying about it with their hedge-fund-designed derivatives. They got fined one bag of peanuts - but that's in the class of the worst behaviour we have had from 'bankers'. That's all this is, bad behaviour which could have come from any of us.

    And don't squawk about the huge sums of money involved. That is what banks deal with, huge sums of money. It's their bricks and cement so when their house falls down, that's what its innards will look like.

    It's interesting that the housing bubble prompted all this. Has anyone here among those authoring these comments 'exaggerated' or 'not told the whole truth' when selling a house ? Are you, then, of the banking class ?

    Another distressing human characteristic is finger pointing. It comforts the finger pointers that they implicitly belong to the group doing the pointing, not the naughty group at which the pointing is directed.

    There are systemic failures all over the place in this saga of credit crunch and recession. They are corporate and political and of course there have been some human failings too.

    But don't paint this as though some evil set of humans set out to dupe all of the rest of humanity. I believe that misses the point about the system and its failings.

    That needs fixing. Certainly to defend itself against bad behaviour by its members but mostly because it is out of date. It is a system for small boats in a pond which could not handle ocean going liners in a gale.

    This is not capitalism which is suspect. Capitalism - like democracy - is the product of endemic human failings. We are stuck with it. In the end, any group of humans will default to it. We just have to make it work in an interconnected world of 7 billion humans.

  • Comment number 47.

    Will the Banks need to be bailed out (again)?

    Only if the 'holders' of the $600 trillion dollars worth of 'unaccountable' OTC (over the counter derivatives) the Regulators, world wide, are desperately trying to pressure the Banks to 'dispose of' fail to pay-off!

    Let's hope that those that made the bets didn't bet against the UK and Sterling and let's really hope that a sizeable chunk wasn't held by those working at and for Barclays and Barcap.

  • Comment number 48.

    @ 46. At 06:47am on 18 Jul 2010, Clive Hill wrote:
    > The word 'greedy' gets used a lot in the
    > financial blogs' comments.

    That's because any talk of “money” attracts greedy people – that is their prime motivation.

    > Does anybody seriously believe that bankers
    > are different people from the rest of us

    You could have got away with the “soft soap” a couple of years back, but now all the information is out in the open. The bankers are truly for it if they expect more bail out dough.

    > And don't squawk about the huge sums of money involved.

    It's the bankers who have been squawking, chum. They said they'd leave if they didn't get the huge bonuses. We're just saying “so long and shut the door when you go”. We all mean it, so they should get lost, quickish like.

    > Another distressing human characteristic is
    > finger pointing.

    Then why are you pointing a finger now? If you object so much, keep you fingers to yourself, thanks!

    > of course there have been some human failings too.

    We're all obviously cock-a-hoop when Sir Greedies fail personally, but they'll never pull us into it again. That was their mistake - involving me, and gouging money out of me.

    > It is a system for small boats in a pond which could not handle ocean going liners in a gale.

    Too right, and the Sir Greedies in charge couldn't see an iceberg until they were sitting on top of it. What a bunch of idiots we allowed to run our banks, eh? And what about the chumps who worked for them? Why were they asleep on duty?

    > Capitalism … is the product of endemic
    > human failings.

    Is a £500,000 pa pension really such a "failure" for any "Sir Greedier"? You're right, though; we need bankers to feel the full heat of their failures. They need to suffer.


  • Comment number 49.

    @ 42. At 11:26pm on 17 Jul 2010, Up2snuff wrote:

    > OK. Let's be practical. What can you do about it?

    Mortal hazard first - bankers and other Sir Greedies will both suffer and be seen to suffer.

    Second, de-coupling. The system was way too coupled up and unreliable. Any system that is strung out and tightly coupled would break. And it did. So de-couple, componentize and increase resilience, robustness and independence. We need many, many competitive, small low-cost operations that are coupled to the least extent possible and which can stand alone without our help – the exact opposite of the situation in “The City”.

    Third, more distribution, which is inevitable. The Internet seeps the business out of “The City”, and there is no reason or point in consolidating anything there anymore – London is a lame place to live anyway.

    So, that’s how we put a stop to this nonsense. I expect a few bankers might squawk, but nobody listens to them now. Basically, lock ‘em up, break ‘em up, spread them out and break their cliques.


  • Comment number 50.

    @ 39. At 10:29pm on 17 Jul 2010, jeelypiece wrote:

    >> Uphios:
    >> Who were the guilty parties in:
    >> GREED GREED GREED GREED GREED GREED GREED

    > Not questions for me, but I'll have a go:
    > BANKERS BANKERS BANKERS BANKERS BANKERS
    > BANKERS BANKERS
    You'd have to be a banker-dunce to fail to spot the pattern, eh?

  • Comment number 51.

    @ 49. At 11:20am on 18 Jul 2010, Jacques wrote:

    > Mortal hazard first

    Mortal hazard! I meant moral harard, not "Mortal hazard". On the other hand, maybe Mortal Hazard would work better!

    Look, these bankers are not stupid by thier own standards. But they are stupid due to thier social norms. In fact, they have forgotten proper "social norms" out of greed.

    It comes from "The City" way of life. They are just stupid, energetic and troublesome "jostling atoms".

    They will submit or go. It doesn't matter which.

  • Comment number 52.




    I blame Thatcher



  • Comment number 53.

    This is a political fix so there's nothing to worry about.
    Stress tests will find that the banks are ok.
    The governments have to bail them out again.
    Where does the bail out money come from? Easy, it's created and it doesn't need to appear in the balance sheet as it's offset by the value of preserving the banks.
    Simple.
    As no more money has to be borrowed for the bail out it doesn't increase sovereign debt, and as the bail out is the result of lack of money supply for credit which is then injected into the system, that also balances out.
    All that happens is that the governments print more dosh. That may give rise to inflation (good for mortgages as the values then become realistic) and devaluing of the currency (more of a worry for the Chinese who've got all our loot.)
    Where's the problem?

  • Comment number 54.

    #48 Jacques Cartier
    Well, er, thank you for that.

    You remark that I am finger-pointing - at whom exactly ? I thought I was saying all people are pretty much alike. If you mean that I'm pointing my finger at everyone, including me, well ok but I'm afraid I'm not hurt by the 'barb'.

    Curiously, the bit of my comment you did not reply to was ...Does anybody seriously believe that bankers are different people from the rest of us, or that greed is something exclusive to a certain type of human being ?

    These are people who behaved much as other people would given their situation...


    You did refer to it obliquely with the remark That's because any talk of “money” attracts greedy people – that is their prime motivation.
    .. but you did not say what the 'greed' entailed.

    Do you mean just making more and more money ? All sorts of people have done that. It seems to give them joy in the skill of making the money of itself. I don't believe they are all of the 'Loadsamoney' frame of mind popularised by Harry Enfield.

    Do you believe someone selling a house or a car and trying to get the top price for it is 'greedy' ? Do you believe supermarkets are 'greedy' when they charge enough to make 100% profit or more ?

    In the west, we have a standard of living which is probably in the top 10% in the world. Your average Somali or Bangladeshi rural peasant might well regard us as 'greedy'. Are we all greedy ? Or do we just work in a system which entails this lifestyle without thinking about it.

    ..and if you can do it, why shouldn't everyone else ? including the Somali farmer if he happens to own a rather more superior bit of land than his neighbours.

    It's just what human beings are.

  • Comment number 55.

    #24. Jacques Cartier wrote:

    "Look, we now know for sure that bankers are very stupid people. It's a lesson worth learning, because now we can pay them very low wages, comensurate with thier skills..."

    You clearly have not the slightest idea what "bankers" (by which you seem to mean anyone and everyone who works in the financial services industry) actually do. There is no doubt that there was a small number of traders who took unjustified risks and as a result threw the entire world into economic panic. However, the vast majority of bank employees have worthwhile, productive, skillful jobs that help keep the country's financial system moving and are paid comparatively little for their efforts.

    How would you manage, Jacques, if there were no "bankers"? How would you receive your salary? How would you withdraw cash from an ATM whenever and wherever you needed it? Pay for your shopping with a debit card? Make an online purchase? Pay your council tax or electricity bill? Obtain foreign currency for your overseas trips? How would you ever buy a house? Do you think all these things just happen by magic?

    You clearly have some sort of issue with people who work in banks, but by constantly venting your anger on this blog you are merely highlighting your own ignorance.

  • Comment number 56.

    Up2snuff
    My post got modded. Probably took something literally that I meant figuratively.

    Anyway - complaining is part of forming public opinion. We can chip in our own opinions as part of the process.

    As jeelypiece points out, we are blaming the driver for the crash. While you campaign to for the computers to be taken to court and for Terry Wogan to be put in charge, I'll be sticking to ridicule of bankers. Meaningful reforms don't take place without the pressure of public opinion. It's how our democracy works, imperfect as it may be.

    Bear in mind that you lost *all* the money in your TSB account, or whatever in the current context. The bank crashed. The money is gone. All of it. Forever. No bank. Kaput. What you have in your TSB account today is *fresh money* put there by the *taxpayer*. Rich and poor alike will be paying for this for decades, many of them with real jobs like changing catheters or dry cleaning suits. Yet you think you can defend the bankers. Have a consideration for the people who actually suffer to give you the money to replace that which you lost. We saved the banks, we saved your money. Inadvertently we saved the perpetrators. There lies the injustice.

    #46 Clive Hill - most people of my acquaintance have a notion of incompetence, greed and morality that fits in with the present line of argument. Dyson, say amongst many others, is a lot richer than most bankers but few people consider him immoral, greedy and incompetent. We're entitled to come to conclusions and express them. Have you formed an opinion? Do you think it was unfair to pressurise Sir Freddie into handing back some of his payoff? Were you opposed to the bonus tax? You sound like you support the status quo - leave the banks to carry on as before. Nothing comes of waffling about human nature. Forming a conclusion and expressing it does achieve, at the same time, both little and everything in our society.

  • Comment number 57.

    How did we get in this mess?, really its all come about by a few key actions which were all based on short term profit and line manager bonuses in a number of sectors.
    1) Industrial line managers have systematically moved all the manufacturing to Asia wiping out millions of well paid jobs(hence consumers)in the west.This was driven by bonus culture that drove them to reduce costs by transferring production.
    2) Excessive retail mark ups on every commodity we buy, anything from 200-300% to basically keep us all in hock to the bank and keep us locked in as debt slaves.
    3) House prices that are insane driven up by market speculation and private landlords that are nothing more than house pimps.The banks went along with this because it drove up there commission based earnings.
    4)The whole system is rotten to the core and is ready for a big fall, it would have happened sooner but the various governments bailing them out.
    5) Most western based manufacturing businesses are pulling out of the mature western markets and focusing on China. Ford are just about to build another big car plant in China,so whats going to happen to the US, European and Canadian based jobs hmmm?
    6)Europe and America will see more declines in house prices/retail sales as the penny drops with consumers e.g. they know whats happening so they stop spending, there jobs will all go to Asia.Cars are starting to pile up on western forecourts again as consumers continue there spending strike.
    7)Banks are still making money by pressurizing consumers to pay more and more fees, of worst still foreclose on the mortgage and make money out of the house sale via the forced auction sell offs.Revenue on new mortgages will drop and hit them hard, so making money out of peoples misery will be the norm. But they will figure out a way to claw cash from us in other ways as they always do.
    This slump is not over its only just starting the next problem will be the deterioration in peoples solvency levels as house prices drop.

  • Comment number 58.

    · 55. At 3:23pm on 18 Jul 2010, rbs_temp wrote:
    #24. Jacques Cartier wrote:

    #########################


    I am sure that we can all differentiate between the salary of the lady behind the glass at my local Barclays and the £4.5bn for this year’s bonus.

    I think it’s the 4.5 Billion that is the problem



  • Comment number 59.

    To blame banks for this mess is really over simplifying the situation.
    We have all brought about this mess too by buying imported products, basically we have cut our own throats with this action.
    Multinationals continued to make money in the west in the short term at least by switching production to Asia but they too have killed the goose that laid the golden egg with there actions.

  • Comment number 60.

    @ 58. At 3:41pm on 18 Jul 2010, Its all Thatchers Fault wrote:

    >> I am sure that we can all differentiate
    >> between the salary of the lady behind the
    >> glass at my local Barclays and the £4.5bn
    >> for this year’s bonus.

    That's typical of a banker. He conflates the Sir Greedies with humble tellers, and thinks he's stumbled on something revelatory that he has to tell _us_ about!

    And we are people who can actually do something for a living, over and above button pushing and money counting. The world has gone topsy-turvey.

    As for the idea of getting by without banking - now there's our goal!

  • Comment number 61.

    55. At 3:23pm on 18 Jul 2010, rbs_temp wrote:

    Its all Thatchers Fault is correct. "Bankers" does not mean clerks and tellers.

    My local bank manager didn't destroy the global financial system and condemn us and our children to half a lifetime of penury trying to put humpty together again. The policymakers did. They are the "bankers" in the full sense and those who thoroughly deserve our odium.

    We're reading an article about the possibility of yet another round of bank bailouts, yet more pain and suffering for masses of people.

    "It just fell apart in me 'ands, guv" just doesn't cut the mustard.

  • Comment number 62.

    Global multinational corporations are repositioning themselves, moving there business operations to Asia, China has just announced 11% GDP growth figures.
    The west is lucky to get 2% at best, thats in itself tells you whats happening, corporations are pleading for financial aid to western governments on one hand. Yet on the other hand are building new factories in China! And the western taxpayer is funding the new factories by handing bail out cash to the banks!A global transfer of production and also financial services is taking place.

  • Comment number 63.

    46. At 06:47am on 18 Jul 2010, Clive Hill

    I don't tell lies, misrepresnt etc (and that gets me into trouble but so what?). I was brought up, not 'dragged up' and my job and reputation depend on it - anyone in my field who is let's say a bit of a fantasist is viewed as dangerous, to be avoided eve in the pub. The banking class couldn't do what they do if they were entirely honest. And no, I wouldn't sell a car without telling the potential buyer about the 'noise' it makes. I could make more money on the car if I said nothing, but what is a few pounds compared to a good night's sleep? I live by the golden rule and I can sleep at night.

    Selling a dodging car is simply not in the same league as selling sub-prime mortgages with explosion clauses. The Detroit Free Press, a broadsheet published 127 pages listing the little one inch notices of foreclosures in Wayne County. Creating an economic system that means when someone in Florida can't pay their mortgage means a different country, like Iceland goes down the tubes is not the same as not mentioning the dodgy flooboard in the backroom of the house you are selling.

    Ask yourself this. Why don't the Latin American banks, the Indian banks, where their economies are doing very well thank you, use these fancy (dodgy) financial products and what we've come to see as dodgy bank gambling? The answer is because they can and could see them for what they are. They can see the poison, they can see through the veil of marketing and ideology to see the idiocy of it all. So they saved themselves the bother from the very beginning.

    What you could read is this news article by the BBC Journalist, Palasthttps://www.gregpalast.com/elliot-spitzer-gets-nailed/, and then 'The Hubris Syndrome: Bush, Blair and the Intoxication of Power' by Dr D Owen may prove useful to you.

    I have no doubt the banking class are approaching the same self-induced delusions as are the political classes if they aren't already there.
    Few here are deluded this is a learned behaviour found only in bankers, those with power abuse it (money equals power in this world). There are many other industries. Here is a clue.

    The risk managers were hounded out and replaced with more pliable, agreeable risk manager bosses who didn't know what they were doing, remember? This nonsense goes on in most if not all big industries because people who want to do things properly cost money. The oil industry in the US is likely to be no different. The same pattern of arrogance, delusion, hubris, greed for short-term gain, lobbying, policy production for sign of by lawmakers.

    We have a financial mess. We have an environmental mess. Different industries, same attitude. We have more problems, huge problems than most of us dare to look at.

  • Comment number 64.

    57. At 3:40pm on 18 Jul 2010, KeithRodgers wrote: How did we get in this mess?
    ---
    Agree with much of what you write. There's a multifaceted mire to extricate ourselves from. Manufacturing and other "real" business has gone down the pan. We've lost our commercial infrastructure.

    That is the reason why I don't buy the argument that our financial sector is successful in directing capital in a socially useful way. If that happened we would expect to have a vibrant industry. All it achieves is the increasing accumulation of money amongst a few privileged people and the impoverishment of the majority.

  • Comment number 65.

    #58. Its all Thatchers Fault wrote:

    "I am sure that we can all differentiate between the salary of the lady behind the glass at my local Barclays and the £4.5bn for this year’s bonus."

    Some of us can, but many on this blog clearly cannot (or choose not to).


    #60. Jacques Cartier wrote:

    "And we are people who can actually do something for a living, over and above button pushing and money counting."

    And how would you live your life without those who push buttons and count money?

  • Comment number 66.

    · 60. At 3:51pm on 18 Jul 2010, Jacques Cartier wrote:
    @ 58. At 3:41pm on 18 Jul 2010, Its all Thatchers Fault wrote:

    >> I am sure that we can all differentiate
    >> between the salary of the lady behind the
    >> glass at my local Barclays and the £4.5bn
    >> for this year’s bonus.

    That's typical of a banker. He conflates the Sir Greedies with humble tellers, and thinks he's stumbled on something revelatory that he has to tell _us_ about!

    And we are people who can actually do something for a living, over and above button pushing and money counting. The world has gone topsy-turvey.

    As for the idea of getting by without banking - now there's our goal!


    #######################################

    I think you may have the wrong end of the stick

  • Comment number 67.

    #61. PacketRat wrote:

    "'Bankers' does not mean clerks and tellers."

    Then perhaps you - or Jacques - could tell us exactly what you do mean by "bankers". Anyone in a position of authority in a bank? Anyone who works in the headquarters of a bank? Anyone who works on the trading floor? Just those who receive bonuses over a certain amount?

    I think it would be helpful for us to know exactly who your venom is directed at.

  • Comment number 68.

    62. At 4:19pm on 18 Jul 2010, KeithRodgers wrote:

    Global multinational corporations are repositioning themselves, moving there business operations to Asia...


    Andy Grove, Intel co-founder, lamented recently "Five years ago, a friend joined a large VC firm as a partner. His responsibility was to make sure that all the startups they funded had a "China strategy," meaning a plan to move what jobs they could to China. VCs should have a partner in charge of every startup’s "U.S. strategy.""

    I see decaying commercial properties all around, empty for years because the owners are rich enough they don't need to rent them out at market rates. Capital is not serving us, it is holding us to ransom.

    We've got big problems.

  • Comment number 69.

    Robert, Robert - please

    THIS IS NOT ABOUT THE EUROZONE !

    THIS IS NOT ABOUT THE EUROZONE BANKS !

    THIS IS ABOUT ACHIEVING AN ECONOMIC AND MONETARY UNION.

    Sorry to shout.

    Quote: "In Maastricht, we set in motion an Economic and Monetary Union. We have now achieved the monetary union, and we possess a single market, but we remain far from having shaped an economic union, the pressing need for which, nevertheless, has been highlighted by the present crisis.

    In fact, we need to intensify coordination in order to stimulate economic reactivation, and also lay the foundations for sustainable growth. Sustainable from the economic standpoint, which means more competitive, more grounded upon education, on training and on R&D&I; ....."

    From the joint statement made by José Zapatero, President of the Spanish Government and Herman Van Rompuy, President of the European Council. Made when Spain assumed the rotating Presidency in January 2010.

    As far as the tests are concerned, if one wishes to become a member of a tennis club showing the ability to play at the level of the club is required, not that one can qualify at international level.

    Mike, Barcelona, Spain

  • Comment number 70.

    The main problem facing the Euro banks and all international banks is that the global fiscal system developed before the regulation was in place and since 'big bang' the technology has made it easier to transfer big sums of money, virtually instantaneously, around the world and bounce it off a few satellites for good measure.

    Our paper monetary systems cannot handle the banks and our banks find it too easy to manipulate the paper money within their own 'skimming practices' as coupled with weak international, non-transparent accountancy practice.

    The Euro banks are a mess and only a lack of transparency prevents some of them from collapsing immediately. Pursuit of 'growth' by national governments is popular amongst politicians but many of us know that this is unsustainable.

    The vested interests keep the universality of money and set the banking, accountancy and Basel and other systems in place.

    This all feeds into the hands of the tax havenists, those with existing massive capital and reserves, the multi nationals as drooled over by feeble politicians.

    Blaming Braoness Thatcher for all of this is moronic - Britain had been in terminal decline as global leader since around 1900.

    So what is the point of this rant ... the point is that the lessons have not been learned, the vested interests have got stronger, the paper money is still there unrestricted as a massive systemmic risk to each country and financial system in the world and we are over-reliant on multi nationals and big corporates.

    Each country needs to find a balance of imports and exports so that it has a sustainable economy ... global trade is not and never will be fair as some countries have massive economically valuable resources and some countries have none.

    Britain is trapped in the European Union and even with our own currency ... it will be the fortunes of the Eurozone and the Euro currency that will determine the success or failure of the UK in the coming years.

    In the absence of radical, national bottom up business policies being created and implemented by our UK government ... all we can do is try and live within our means, in the UK, and hope for the best ... our success or failure of the UK is out of our hands due to the way that the UK has been mismanaged and sold out in the past... this includes all previous British governments going back to before the First World War. Baroness Thatcher has been a small player in the decline of the UK ... as by 1980 business investors were divesting in mainstream UK manufacturing and other business interests. By 1980 ... it was too late ... 'Wimbledonisation' i.e. the 'rot' had already set in to home grown and owned British business and manufacturing ... and things have not changed much in the last 30 years.

    The result is that 'growth' leaves many behind in a global trade world with many countries having weak domestic economies ... and our rotten paper money will become worthless over time ... as the banks exploit the universality of various currencies ... if not all of them ... to our eventual and complete fiscal ruination.

    Speculation will eventually ruin our paper money whereby every note in existence is given a different value and a bet placed against its value being different to that written on the note ... that can only do one thing ... undermine confidence in our entire paper money systems.

    The European banks are just the tip of the iceberg in terms of what is coming ... that no one is sure of anything fiscally ... no bank or no paper money is worth anything that is reliable ... we are and I think we will reach the stage whereby no one can trust anything to do with 'money'.

    In other words we have to devise 'new money or systems of money' ... but no one knows how to do this without causing a bigger set of problems than we already have.

  • Comment number 71.

    · 67. At 4:52pm on 18 Jul 2010, rbs_temp wrote:
    #61. PacketRat wrote:

    "'Bankers' does not mean clerks and tellers."

    Then perhaps you - or Jacques - could tell us exactly what you do mean by "bankers". Anyone in a position of authority in a bank? Anyone who works in the headquarters of a bank? Anyone who works on the trading floor? Just those who receive bonuses over a certain amount?

    I think it would be helpful for us to know exactly who your venom is directed at.


    ############################


    I would define “Bankers” in this context as anyone who uses other people’s money to make money for himself or herself at the risk of the customer i.e. you and me and the rest of us


  • Comment number 72.

    Those who support the EU and the Euro are in my viewpoint collaborating with the bankers and are in my opinion enemies of the people (apart from being enemies of democracy, which in my opinion all those who support the EU, are).

    The Euro was designed to screw the people and help the bankers.

  • Comment number 73.

    67. At 4:52pm on 18 Jul 2010, rbs_temp wrote:
    #61. PacketRat wrote:
    I think it would be helpful for us to know exactly who your venom is directed at.

    The Sir Greedies. Come on, work it out. Are you being deliberately obtuse?

  • Comment number 74.

    65. At 4:44pm on 18 Jul 2010, rbs_temp wrote:

    > And how would you live your life without
    > those who push buttons and count money?

    We'd keep stock of our own money on our PCs and do away with bankers. It's not rocket engineering - I know that because I was a rocket engineer.

    Look, banking is just an old, low-tech, information industry like newspapers that is about to get blown away by the Internet. It's just an application that we can do ourselves without some moribund and incompent "professional" helper, thanks for the offer.

    The only way banking could survive in the modern era is for governments to try to run it. And look - that's what has happened.

    Bankers need to find something socially useful to do instead of grumbling about the way things used to be. Get a life, while you are still young enough.

  • Comment number 75.

    71. At 5:22pm on 18 Jul 2010, Its all Thatchers Fault

    > I would define “Bankers” ...as anyone who uses
    > other people’s money to make money for
    > himself or herself at the risk of the
    > customer

    That's right - the cheeky, socially useless boneheads who ripped us off, couldn't give a toss and thought they could keep thier noses in the trough.

    That's the definition I'm using anyway.

  • Comment number 76.

    #74. Jacques Cartier wrote:

    "We'd keep stock of our own money on our PCs and do away with bankers."

    OK... but where would the money actually be? In a bank account, perhaps? How would you transfer it, pay bills, buy things?

    You haven't really thought this through, have you?

  • Comment number 77.

    #74. Jacques Cartier wrote:

    "Bankers need to find something socially useful to do instead of grumbling about the way things used to be."

    I don't think bankers are grumbling, though, are they? Why would they? They're earning huge bonuses again.

    It's the regular contributors to this and many other blogs who spend their days grumbling, about the way they think things are.

  • Comment number 78.

    Oh you're such a tease, rbs_temp.
    Topic reminder: "Will eurozone banks be rescued twice?"

  • Comment number 79.

    75. At 6:05pm on 18 Jul 2010, Jacques Cartier wrote:
    71. At 5:22pm on 18 Jul 2010, Its all Thatchers Fault


    This is a fine example of what a banker is: Pritzker
    https://en.wikipedia.org/wiki/Penny_Pritzker
    See the section on Superior Bank involvement

    And here is another, though this guy is an ex-IMF Banker: Nobel Prize winning Joseph Stiglitz.
    https://en.wikipedia.org/wiki/Joseph_Stiglitz
    Pay attention to the sections on 'Globalization and Its Discontents' and 'Freefall: America, Free Markets, and the Sinking of the World Economy'
    The BBC journalist, Greg Palast spent some time talking to him and he has an article on his meeting with Stiglitz here https://www.gregpalast.com/the-globalizer-who-came-in-from-the-cold/

    Remember what Stiglitz said to the BBC? "We are not seeing a recovery of sustained consumption," Mr Stiglitz said.
    He highlighted the fact that any recovery would be the result of government stimulus packages, which could not continue indefinitely.
    "The withdrawal of stimulus packages in 2011 will be a negative shock to the economy," he said. https://news.bbc.co.uk/1/hi/business/8243019.stm Or how about https://news.bbc.co.uk/1/hi/business/8496770.stm

    The information is out there. All people have to do is take a walk down to the library and find some books, read some decent newspapers, listen to some decent news on TV or radio and pay attention.

    Jacques, you are aiming at the target.

    I remember watching the Greek demonstrators take to the street as the bankers, fund managers etc demanded their money. I distinctly remember thinking these people were doing a far better job at destroying nations than Hitler had, than Osama could.... The bankers will have us living like medieval peasants because they can make a few quid, and then wonder why we won't buy their fuel, their bleach, the cold and flu remedies, their ready-made-meals their clothes, their movies, their electricity, their bottled water, use their credit cards, take their loans etc, because they cant figure out that a peasant can not afford such things. Doh!

    What we have here is banks imploding countries. If it were all by accident, then the bankers really must be so dumb I wonder if they are smart enough to pass a driving test! It is all greed by those who can't see beyond on the end of their next set of profit-loaded accounts.

  • Comment number 80.

    @ 76. At 6:50pm on 18 Jul 2010, rbs_temp wrote:

    > You haven't really thought this through

    As if banks actually "hold" the money in "safes", down below! Were you trained in the 19th century? I shouldn't have to tell this to you, but it's all in computers already, nowadays, my man... it's just a matter of distribution. Are you sure you know about technolgy and finance? A bank is just a computer room.

    BTW: Bankers didn't really think through the credit crunch, did they :)

  • Comment number 81.

    @ 77. At 6:52pm on 18 Jul 2010, rbs_temp wrote:

    > They're earning huge bonuses again.

    They would be if we hadn't started the ball rolling with super tax, delayed bonuses and the start of the Tobin tax.

    Even the tories a bashing bankers. They've got no friends, a bust business model and no cash. What a bunch of chumps bankers are, eh?

  • Comment number 82.

    The majority of banks are bust if you use the current banking model to assess them.

    This week I've been to two repossessions.
    Neither of which are to be sold, because the loss, if crystallised, would cause potential problems with their balance sheets.

    The people of this, and for that matter other countries, are being disenfranchised of the wealth they create by a banking system which is both corrupt and unaccountable.

    And the chance of them waking up to that fact is as remote as it ever was.

  • Comment number 83.

    79. At 7:48pm on 18 Jul 2010, copperDolomite wrote:
    75. At 6:05pm on 18 Jul 2010, Jacques Cartier wrote:
    71. At 5:22pm on 18 Jul 2010, Its all Thatchers Fault


    Great research thanks - I read all the articles.

    We won't be building any fair and sustainable society without dumping the bloodsuckers first, will we. I hope the politicians remember who put them in power and why. Fingers crossed.

  • Comment number 84.

    I'll give everyone a real life example of why we are/need deflation.
    I'm just about bang on a the average income at just under 24K a year.
    I bought my house 13 years ago for 32K and remortgaged it 29K a few years later. At the height of the boom it was worth 180-200K. Now they are selling for 90K. Now you think thats OK but I could not afford to buy my own house now at that price today.
    Yes its at the low end of the market, being a terrace house in a deprived area, but as I said I'm on the average income.
    House prices need to come down at least 50% more than they are now, so the likes of me (Mr average) can afford to better themselves and start money moving around the system. Unfortunately that means a serious write down on the bank's balance sheets that will ruin them (or bail out 2, or bail out 3)
    I seen a few peeps say it here before, we need the average house price to come down to about 70K. I can take the hit going into maybe 12K negative equity but can everyone else in their legoland house take a 60-100K hit on their equity ?

    We need to burst the housing bubble and burst it quick, its the only way we can start to get out of this.....find the bottom, then we can rise again...sensibly. It will mean that banks will go, but that inevitable.

  • Comment number 85.

    83. At 10:00pm on 18 Jul 2010, PacketRat

    We won't be building any fair and sustainable society without dumping the bloodsuckers first, will we. I hope the politicians remember who put them in power and why. Fingers crossed.


    I hope you read what Palast has to say about Elliot Spitzer. There are quite a few podcasts around on the net too.

    I don't think fair has anything to do with it. And sustainable doesn't seem to be a word they've heard of.

    On the whole they don't forget about voters. They remember when it suits them. Who promised jobs in return for a place in Parliament? Didn't they used to do that?


    If voters mattered then what was that lovely little bit of news on Newsnight a few years ago about how Bush won the election? You've more research to do - take a look at voting in Ohio, Florida, Nevada, Detroit. Oh, and now we can add New Orleans to the pile - the only State to have gone from Democrat to Republican, not on the basis of policies but on the basis of a change in demographics brought about by some really bad weather and some really bad government failures.

    Ask yourself this. How many right of centre votes were cast in the last UK election?

    Now how hard will the Tory strongholds be hit in the drive towards austerity? We're having yet more deregulation! Do turkeys really vote for Christmas? Vote or not, Christmas is coming and it isn't the Christmas we all know.

    The banks will continue to receive handouts until
    a) There isn't as much as a bean left in EU (then they'll move else where to begin the process all over again) and we are all back to shoeless subsistance farmers, starving beggars living in tents just as so many Americans are now doing, etc.
    b) The people run amok on the streets and throw them all out, remebering to close the doors as the last one leaves to ensure the IMF guys can't come in!

  • Comment number 86.

    84. At 00:10am on 19 Jul 2010, Pnatters wrote:
    ... We need to burst the housing bubble ...


    Agreed. Good to hear you've done well. Nowadays you'd be buying the house for someone else, and what does that do for peoples' incentive to study and graft? Greedy banks and greedy selfish small time landlords are crippling the country. More hard evidence of the damage they do. Good post.

  • Comment number 87.

    85. At 00:22am on 19 Jul 2010, copperDolomite wrote:
    83. At 10:00pm on 18 Jul 2010, PacketRat
    I hope you read what Palast has to say about Elliot Spitzer.


    Sure did. Plus Stiglitz on how wages don't go down enough in a recession, and how "shirking" - not working as hard on reduced wages - means they have to go down even more. And how businesses are too slow to cut wages in response to unemployment. All seems a bit wild and hairy. On the one hand he's saving the third world from the evil US Treasury, next moment he's treating us like the lumpenproletariat. Seems schizophrenia comes as standard with every Harvard degree. Interesting comment from Palast that 79% of predatory sub-prime selling was with Hispanics and blacks, and the implication was they could repeatedly remortgage to get the introductory rate. Bit like "credit card tarts" - swap cards repeatedly for interest free money. Hahaha suckers.

    Ho hum. Bonus taxes, capped salaries in the civil service, black president in the US, BP trashed, 200 new MPs, pariah bankers, wind turbines everywhere. Change. I like it. Go Pesto. More, more.

  • Comment number 88.

    87. At 02:47am on 19 Jul 2010, PacketRat

    Run this search (site:democracynow.org democracy now ****) where **** is the name of a well-known training shoe manufacturer beginning with N and ending with e on Google and look into the future Stiglitz et al are selling us all. The world of Charles Dickens didn't die, it just left our world temporarily.

    Smile and get out the bunting if you are a banker!

  • Comment number 89.

    @ 67. At 4:52pm on 18 Jul 2010, rbs_temp wrote:

    > Anyone in a position of authority in a bank?

    None of the failed Sir Greedies enjoy authority over the public anymore. On the contrary, many of the them belong to the public, and the rest are about to pay the price for mucking the public around around.

    You are going to be "restructured", my boys - Vince: "When we talk about restructuring the banks, what’s going to come out of this is a more competitive system where the customers are not ripped off". He forgot to mention that taxpayers are to be reimbursed as well.

    I expect the bankers-dunces to start droning on about how they'll move the Swaziland or some far flung place. Good riddance to bad rubbish, as we say up north.


  • Comment number 90.

    76. At 6:50pm on 18 Jul 2010, rbs_temp wrote:
    #74. Jacques Cartier wrote:

    "We'd keep stock of our own money on our PCs and do away with bankers."

    OK... but where would the money actually be? In a bank account, perhaps? How would you transfer it, pay bills, buy things?

    You haven't really thought this through, have you?

    ------------------------------------------------------------------------

    'Fraid he, and others, have had their blood lust stoked by some politicos and meejah types, and thoughtful understanding went out the window a long time ago ...

    Hey! Let's be careful out there, today.

  • Comment number 91.

    56. At 3:32pm on 18 Jul 2010, PacketRat wrote:
    Up2snuff
    My post got modded. Probably took something literally that I meant figuratively.

    Anyway - complaining is part of forming public opinion. We can chip in our own opinions as part of the process.

    --------------------------------------------------------------------
    I endorse complaining! Something we Brits do not do enough of and in the right way!!

    Instead of baying for bankers blood on this site, may I suggest that you watch Panorama tonight and then, tomorrow, write to Stephen Hester at RBS and point out your disatisfaction with RBS's charges and the way they are currently dealing with loan and mortgage applications. Point out your standing, along with all of us, as a major shareholder in RBS.

    Be polite, brief (one side of A4 is good) and request a reply. Send the letter by post (not e-mail), marked Personal and Private & Confidential and ask for a reply.

    When it comes, if his response is weak or arguments poor, take him up on them.

    Come on folks, let's do something worthwhile!

  • Comment number 92.

    56. At 3:32pm on 18 Jul 2010, PacketRat wrote:

    As jeelypiece points out, we are blaming the driver for the crash. While you campaign to for the computers to be taken to court and for Terry Wogan to be put in charge, I'll be sticking to ridicule of bankers. Meaningful reforms don't take place without the pressure of public opinion. It's how our democracy works, imperfect as it may be.
    -------------------------------------------------------------------
    Computers to court? No Chuckle of the Day for that one. I'd much rather some clever bod was working out a way of attaching a value to a loan so that when it is bundled and sold on with thousands of others, perhaps many times over, that value is both obvious and correct. Then, at audit time, for it to be all transparent and checkable by auditors and for them to able to assess it and express a view.

  • Comment number 93.

    @ # 90. At 09:36am on 19 Jul 2010, Up2snuff wrote:

    > thoughtful understanding went out the window a long time ago ...

    Yes, when we let bankers run our banks...

    Look, rbs_temp actually thought that banks kept our money "safe" when we pay it in, in a vault or something!?! Can you bring him up to date, Up2snuff?

    One thing is certain - if you want to be a banker, you're not the right type. And if you are the right type to be a banker, you don't want to be one!

    But we have to replace the current crop of Sir Greedies and their band of bone-headed sycophants, with properly trained, serious people that can understand that the imperative is to serve customers and taxpayers, not rip them off. If that means public ownership, who cares? It's a simple, low-tech old-fashioned industry that anyone could run, even the government.

  • Comment number 94.

    56. At 3:32pm on 18 Jul 2010, PacketRat wrote: We saved the banks, we saved your money. Inadvertently we saved the perpetrators. There lies the injustice.
    -----------------------------------------------------------------------
    But there were loads of 'perps'. Thatcher and Brown have gone but there are plenty of politicos who want to do 'more of the same'. Don't let the blinkers blind you to that.

    Then there are grass roots 'bankers' (mortgage salesmen and women) who are on low salaries and are exploited by 'bankers' (their 'sales' managers) who push loans and credit at people (or did) in exchange for a (tiny) bonus to enhance those low salaries. Don't let the blinkers blind you to that.

    We have a new Chancellor but there is a danger he will do what his predecessors have done - looking too much at 'macro' figures but not going below, way below those to the 'sub-micro' and 'sub-sub-micro'. Don't let the blinkers blind you to that.

    As the governments and financial regulators discuss, there is a danger that Basel II (or are we up to III?) will be 1) a fudge, 2) as ineffective as Basel I, or 3) will disadvantage London and Britain so much that the mire we are in now is deepened many times over! Don't let the blinkers blind you to that.

    I could add a few more to that list but other duties call.

    Basically, don't let the blinkers blind you.



  • Comment number 95.

    #43 wrote "And as most peeps here know that a 2 year old could make profit borrowing money at 0.5% and then lending it out at what 4% for a mortgage, 8% for and over 5K loan or 22% for a credit card"

    =================================

    Actually a 2 year could not but that is because a 2 year old could not make a proper assessment of risk (not that the banks managed that either)

    Lets take a simple example.

    Your 2 year old lends £100 to 100 people. That is £10,000 of loans.

    After 1 year cost of lending is £50 and total interest received will be £200.

    So if 3 people default on repaying their loans your 2 year old has lost money. The defaulters could be dishonest or just fallen on hard times through no fault of their own.

  • Comment number 96.

    @ 90. At 09:36am on 19 Jul 2010, Up2snuff wrote:

    > 76. At 6:50pm on 18 Jul 2010, rbs_temp wrote:

    > You haven't really thought this through, have you?

    When you have post-grad quals in software development, please feel free to comment. Until then, amateurs like yourself should listen and learn.

    If bankers weren't so feeble minded, they would see their impending fate for themselves. Money is nothing more than a digital certificate issued by the money provider ( BOE). I can keep the file wherever I like and transfer it by delegation whenever I like and to whoever I like by the Internet. It's my choice, and there's no room for banks in the transaction chain. Their business model is a dead as newsprint.

    Banker-dunces are still stuck in the groove created by the Gutenberg press, for goodness sake! Why have we got such narrow minded people in our money system? It's intolerable; they have to go.

  • Comment number 97.

    The answer is yes and in fact is already under way in a number of countries. Ireland being a prime example where they have just in the last week or so pumped funds into at least one if not two of their banks. They have also taken off book all their toxic assets held in NAMA. The original book value of these loans is €77 billion which comprised €68bn for the original loans and €9bn rolled up interest and the original asset values to which the loans related was €88bn with there being an average Loan To Value of 77%. However the current market value is estimated at less than €47 billion. So the state is left holding a book with a net deficit of more than €30 billion. This short fall will be made up by the financial institutions according to the Irish goverment that is the same institutions that are needing further bailouts. There is also the question of how much is it going to cost to furnish this money. NAMA claim that it in total will cost €240 million per year. I would appreciate if anyone can tell me haw how they can do this so cheaply as this figure is not only supposed to be for running cost, such as buildings, salaries Etc but also the interest on the loans and covering short falls. I calculate that interest alone on €77 billion is just over €2 billion per year. And even the lower figure of €47 billion would cost €1.4 billion per year and this is over the life of NAMA which is said to be ten years. No wounder they are in trouble......

  • Comment number 98.


    88. At 03:08am on 19 Jul 2010, copperDolomite wrote:
    87. At 02:47am on 19 Jul 2010, PacketRat
    Run this search (site:democracynow.org democracy now ****)

    I guess the N**e workers were "shirking" a la Stiglitz. Smells bad.

    92. At 09:54am on 19 Jul 2010, Up2snuff wrote:
    56. At 3:32pm on 18 Jul 2010, PacketRat wrote:
    Chuckle of the Day for that one.

    Bit rude of me. Thanks for not taking offence :-)

    96. At 10:33am on 19 Jul 2010, Jacques Cartier wrote:
    @ 90. At 09:36am on 19 Jul 2010, Up2snuff wrote:
    > 76. At 6:50pm on 18 Jul 2010, rbs_temp wrote:
    > You haven't really thought this through, have you?
    When you have post-grad quals in software development...

    Me, me, I've got one of those. Without getting a degree first!
    BoE digital certificates. Never heard the idea before. Now it seems bl**dy obvious.
    Why not?

  • Comment number 99.

    @ 46. At 06:47am on 18 Jul 2010, Clive Hill wrote:

    > Does anybody seriously believe that bankers are different people
    > from the rest of us, or that greed is something exclusive to a
    > certain type of human being ?

    This serves as an example to us all of how detached from reality these
    people are. Does anybody seriously believe that banks don't attract an
    obnoxious, base, greedy and despicable bunch of socially useless cretins?

    Who amongst us doesn't recognize what is obvious when it is dangled in our
    faces? Only bankers ...

  • Comment number 100.

    98. At 11:25am on 19 Jul 2010, PacketRat wrote:

    >> When you have post-grad quals in software development...

    > Me, me, I've got one of those. Without getting a degree first!
    > BoE digital certificates. Never heard the idea before. Now it
    > seems bl**dy obvious. Why not?

    Why not? Because bankers are living in the wrong century, that's why not. I've never known such a dim-witted crowd. It took them decades to figure out instant electronic transfers! They are as slow as God's horses.

 

Page 1 of 3

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.