Saturday, Jan 17, 2009
'Bad bank'? That's so yesterday!
Telegraph: Taxpayers face years of debt in bank salvage deal
Taxpayers are poised to take on the "toxic" debts of High Street lenders in a new bank rescue deal that could cost the Treasury billions of pounds.
Under the "pay as you go" plan, details of which were still being hammered out on Saturday, the Government will create a new insurance scheme that would see liabilities of up to £200 billion potentially kept on the public books for years.
The insurance scheme has won favour at the expense of alternative plans to create a "bad" bank under which the Government would have simply bought banks' existing toxic debts.
Posted by gardeniadotnet @ 10:43 PM (491 views) Add Comment
6 Comments
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1. gardeniadotnet said...
'Ministers hope their latest scheme will restore confidence in banks and increase lending levels.'
Hmmm... what do you think, readers?
2. gardeniadotnet said...
Q: What was wrong with the bad bank idea?
A: Gordon has been told that the toxic debt to be deposited therein is simply to great to comprehend.
3. Rimmer said...
£50000 per person in the UK at the end of 2009 - Cheques please to Mr G Brown or A Darling
5 years time you will wonder how it happened - taxes will be rocketing and the media saying its unavoidable due the past .
You heard it here now !!!!!!!!!!!!!!!!!!!!!!!!!
4. stillthinking said...
"Speaking at a Fabian Society conference, Lord Mandelson said...etc etc"
...?.... Does this sentence accurately represent UK reality? ...?... Looking at that makes me question my sanity. Could anybody imagine reading that 10 years ago? This is the land of make believe, Caligula style. Why on earth is Mandelson a Lord? What were his outstanding achievements?
I wonder what will happen on Monday.
5. inflation is eating my savings said...
>I wonder what will happen on Monday
Butterflies will flap their wings.
6. tyrellcorporation said...
The nice thing (for Gordon) about the new proposed idea is, (like all good things labour have done) the problems are kicked into the future. Defaults on these toxic assets, etc will be lagging and the tax-payer will become increasingly liable as time goes on and the recession deepens. For the meantime we might see a spike in confidence for the financial sector as all their steamy turds are shovelled onto the backs of the taxpayer. Gordon is betting all on a bounce in the sector to deliver a short term surge in his ratings. It won't work IMO and the banks will simply bask in the rebuilding of their balance sheets and remain cautious.