Strange in a time of financial and economic difficulty to have the Government and the governor of the Bank of England at loggerheads, yet perhaps not. Just as the prime minister and the chancellor breathe easier as they see the ‘market’ gradually lifting the value of the banks they have bailed out, along comes the governor to declare they need breaking up.
The opposition pretends the governor is singing their song. But then when you read the fine print, you find that George Osborne only supports Mervyn King’s call, if the international regulators make the same call. Indeed it is the very same international regulators that Gordon Brown relies upon to keep the mega banks exactly as they are.
Truth to tell, the UK has now anyway almost certainly passed beyond the point at which it could save one of the UK mega banks if it failed. Having splurged £175bn on flushing capital into the financial system with ‘quantitative easing’ – there’s nothing left to draw upon.
Yet two of these mega banks are owned by the UK tax payer already. Neither is yet behaving in any particularly different way from any other bank – at one level (politically) an unfortunate situation, at another (economically) something for which we can grateful – they may recover to a point at which we the taxpayers make a profit out of them!
Mervyn King is really signalling that he fears another failure and asking then what? No answer from either Government or opposition.
In the meantime, have you noticed the pound? As the poor old dollar slides, the pound strengthens, $1.66 as of yesterday and even against the strengthening Euro, it is itself stronger with £1 currently worth €0.90. We are in jumbly times, but there is a detectable thread of recovery which may put next year’s UK general election into a slightly different light, so long as the Governor’s worries are wrong. That’s a bit of a gamble in and of itself.
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The thing about blogging is that we dont have to remember names and facts like yourselves at C4 News.
Listening to last night’s interview, that chap who was an ex employee of leehman’s was discussing regulation etc
Both of those interviewed agreed that the banks need downsizing , because of the kingpin domino effect. But none actually gave an opinion about what is too big or too small. Is there strength in smaller at all or will it mean that many have less strength and many fail?
When you take a look a the whole picture, you’ll see that this Bank bailout was the biggest con in human history. They should never have been ’saved’. Just as any business is affected by the market, the Banks should have been left to fall. The true reason the billions were put in were, to save the face of the most devasting systems in the world…Unrestrained Capitalism. Oh and, next years Election.
Anthony Martin: the banks aren’t just another business. They’re the cornerstone of our economy/society etc.
Maybe they should all be out-and-out nationalised. The banks that have hit-the-wall started off as well-meaning building societies.
Our current strife happened to begin in America with equally well-meaning/confused mortgages-for-everyone(George Bailey meets Gekko).We and the US complicated an essentially simple idea.
Now that Obama is planning to cut senior execs’ pay by up to 90% in those corporates bailed out by the US Government, we may anticipate a rush of them heading over here to grab big-pay jobs at UK companies. But, if they don’t, then the sole argument for allowing UK bailed-out corporates (RBS, Lloyds etc.) to continue paying outrageous bonuses fails, and we can then start to rein in these con-merchants and bring some sanity to the whole subject of appropriate rewards. If the shareholders won’t do it, then someone else must.
Is there going to be a Nick Griffin web block today?
i am surprised that jon has not commented in a snow blog on nick griffiths to give us the chance to comment or does he fear the consequences??
Margaret: I was surprised as well; the problem maybe that Griffin isn’t as laughable as we want him to be (or he wasn’t until Question Time). We could laugh at the ideological rage of Mosley, and the twisted heartache of Alf Garnett (most BNP supporters have a tragic longing for a grim, class-based past). But Griffin’s borderline-shrewd; that makes him dangerous.
It’s something C4News may have spotted, but the increasingly-compromised Beeb didn’t.
strange tweet from Krishnan.. is he OK?
if a bank is private and owned by the share holders , who also profit in good times,then it is up to them what they pay ,but if they fail they should not expect to be bailed out by the tax payer.
In the current case where governments panicked and picked up the cost of certain banks which were failing those banks should be subject to stringent regulation , which incudes trading and salaries.The argument that they will lose top men doesnt stand up as there are only so many available jobs
Hi Im Alex Burd , I am a futures trader i have traded on the CME- lIFFE – nyse – and now trade Nasdaq- this is the fact the real rate of return is the old school of leading so the average wage is about £27000 a year the old leading was 3x the man and 1-1/2 the woman, the problem is everyone has tried to keep up with the Jones, borrowing blind more then they can pay back GREED simple , so thats why the banks sold of and wrote off because they new that 60% of people out there (you know who you are ,going into a leader hes told you that you can borrow 350k when your only earning 37k a year and you have gone” oooo reeeaalllyy ok then ” please do your own home work before you jump into bed!!! you would never be able to pay it back blaming everybody but themselves how many of you have borrowed more then the real rate of return on your wage ie these people who have a morgage 4+ times there wage get real,
[...] of England, Mervyn King, last week demanded the break up of the mega banks. His call represented a lone warning by a Central Banker. The banking system that got us into this mess has not changed. We are [...]
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