Thursday, Mar 05, 2009
Are you prepared for the worst?
FT Columnists: Big risks for the insurer of last resort
The UK government looks increasingly like a python that has swallowed a hippopotamus. In acting as insurer of last resort to the British-based banking system, it is taking on huge risks on behalf of taxpayers. If this turned out to be a global depression, with huge losses for British-based banks, fiscal solvency might even come into question. Can this make sense? I doubt it.
Posted by quiet guy @ 11:40 PM (461 views) Add Comment
3 Comments
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1. alan said...
Just Posting Mervyn's response. Obviously he thinks this will sort all the problems out. The summary is quite nice:
" The UK government has to make a decision. If it believes that costly bail-out must be piled upon ever more costly bail-out, then the banking system can never be treated as a commercial activity again: it is a regulated utility – end of story. If the government does want it to be a commercial activity, then defaults are necessary, as some now argue. Take your pick. But do not believe you can have both. The UK cannot afford it".
2. hpwatcher said...
UK plc isn't far off collapse....simply put.
Only a matter of time.
3. mountain goat said...
Great sensible article by Martin Wolf thanks for posting