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New £200bn Bailout For Uk Banks

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http://www.thisismoney.co.uk/news/article....mp;in_page_id=2

Taxpayers will be left exposed to £200bn in potential losses under the biggest Government bailout yet for Britain's banks - due to be announced tomorrow.

Chancellor Alistair Darling will underwrite 'toxic' assets built up by the banks during the credit boom which are now seen as high risk. If companies and individuals default on these debts, the taxpayer will be left to foot the bill.

The latest lifeline for the City - put to bank bosses late yesterday - came as Gordon Brown vented his fury with the banks for lending vast sums to foreign investors who are now unable to pay the money back.

Treasury officials checking the books of the Royal Bank of Scotland now controlled by the Government, were shocked to discover that £2.5bn had been loaned to Russian oligarch Leonid Blavatnik in his attempt to build a massive business empire.

The RBS has had to write off the entire debt because one of Mr Blavatnik's foreign companies faces going bust - with British taxpayers left to pay the price.

Mr Brown believes some banks have deliberately concealed the scale of their bad assets.

He said: 'We have to be clear that where we have got clearly bad assets, I expect them to be dealt with.'

Details of the rescue package will not include the widely expected 'bad bank', which would buy up toxic loans from banks.

Other elements of the bailout would include an indefinite extension of the Special Liquidity Scheme (SLS), which allows banks to swap their loans for Government bonds, guaranteeing mortgages in an effort to kick-start the housing market, and possible protection for the finance arms of leading car-makers who provide loans to customers to buy their cars.

Ministers believe this is more effective than providing a multi-billion-pound bailout for individual car firms.

Bank bosses have been asked to give the measures their consideration, but Ministers are so angry with the banks that it is thought they will have little choice but to rubber-stamp them.

The Treasury had also prepared plans for a 'bad bank' to use Government money to buy the toxic assets from the banks, freeing them to increase lending to companies and homebuyers.

However, while the measure has not been ruled out for ever, the difficulties in valuing the assets to be bought and what assets could qualify mean the scheme has been put on hold. A senior banking source involved in the new rescue package said: 'You should look more to the American solutions seen last week.'

The comment was a reference to a huge bailout of US banks, including a massive asset guarantee plan. The US authorities injected £14bn into Bank of America on Friday. Crucially, it also agreed to guarantee £81bn of toxic assets on its books - exactly the kind of step anticipated in the UK. The rescue comes after UK banks were gripped by a second round of panic selling.

Shares slumped on Friday, with £6.6bn wiped from the value of top banks.

Barclays was forced to issue an emergency statement to reassure investors after its shares fell 25% in the last hour of trading. Last year, as leading banks were forced to issue new shares to raise cash, the Treasury acted as underwriter.

When existing investors shunned the shares, the Treasury was left to buy them, injecting £37bn into leading banks and ending up as a leading shareholder in the UK banking industry.

As a result of that scheme, the Government now owns 58% of Royal Bank of Scotland and almost 44% of Lloyds Banking Group - the new giant created by Lloyds TSB's takeover of HBOS.

Raising these stakes has not been ruled out as another way of injecting cash into the banks. Nationalisation is available as a last option - although, for now, is regarded as unlikely.

Mr Brown's latest initiative follows Business Secretary Lord Mandelson's announcement last week of a £20billion scheme to guarantee loans made by banks to small and medium-sized companies.

That was intended to reassure banks they would not face the full impact if a small company went bust, and so encourage them to lend more cash to such businesses.

The plan to guarantee existing toxic assets held by the banks is based on a similar theory, but with hundreds of billions at stake, it dwarfs the small business guarantee scheme. The new bailout will need approval from the European Union as it is likely to be classed as state aid to industry.

The 'bad bank' idea was put on the back burner after Treasury officials concluded that deciding which assets could qualify to be bought by the 'bad bank' could take months. It was also hampered by opposition from some banks. A crucial element would be deciding the price at which the toxic assets were to be bought.

Too high a price would amount to an over-generous bailout for the bank; too low and the deal could end up doing banks more harm than good because it would force them to put a market value on these bad loans.

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Poor old Crash, he's like a child amongst the bankers.

I imagine them sitting wherever they sit in groups, raising toasts to the dimmest f*cker ever to be PM and praising God that they have someone willing to give them all the peoples money.

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They should let Barclays go to the wall. They turned help down the first time, now they're on their own. A vile company, despised by me ever since their apartheid sanction busting days, and the worst customer service of any company I have ever dealt with (my better half's a/c, I wouldn't touch them with a barge pole).

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Other elements of the bailout would include an indefinite extension of the Special Liquidity Scheme (SLS), which allows banks to swap their loans for Government bonds, guaranteeing mortgages in an effort to kick-start the housing market, and possible protection for the finance arms of leading car-makers who provide loans to customers to buy their cars.

Like trying to kick-start a vehicle which has no petrol.

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They should let Barclays go to the wall. They turned help down the first time, now they're on their own. A vile company, despised by me ever since their apartheid sanction busting days, and the worst customer service of any company I have ever dealt with (my better half's a/c, I wouldn't touch them with a barge pole).

That takes me back! In the early 80's, I knew a lot of people (mostly students) who closed their accounts and refused to use them because of this. I doubt it had much effect but as with most non-violent action, it had a 'feel-good' factor.

They also bank-roll Mugabe

http://www.timesonline.co.uk/tol/news/uk/article2848046.ece (Nov. 2007)

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That takes me back! In the early 80's, I knew a lot of people (mostly students) who closed their accounts and refused to use them because of this. I doubt it had much effect but as with most non-violent action, it had a 'feel-good' factor.

They also bank-roll Mugabe

http://www.timesonline.co.uk/tol/news/uk/article2848046.ece (Nov. 2007)

Me too, though I was a bit naieve back then to fully understand it at the time. It was 1984 and I had just started college at 16 and I remember a load of students chanting 'Barclays bank is a racist bank!'.

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I'd love it if Gordon was all "Right, declare your bad investments and toxic debts and I'll back 'em with taxpayers money" then the banks were all "Yeah, we invested in the Palestinian driedel industry, can we have money now." and Gordon was all "FINGERS CROSSED!"

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I'd love it if Gordon was all "Right, declare your bad investments and toxic debts and I'll back 'em with taxpayers money" then the banks were all "Yeah, we invested in the Palestinian driedel industry, can we have money now." and Gordon was all "FINGERS CROSSED!"

:lol::lol::lol:

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Good God. What were they thinking (for me).

There is a slight problem with Bailout II - A New Hope.

It goes very roughly like this: Banks identify the potential defaults on their books (They know these anyway - they're about to announce more losses). They pay a fee to Govt. to insure away these losses. Then lend all the lovely money they would otherwise have had to write off x 20 (or whatever they can get away with). Now, since they have identified that this money is unlikely to be repaid, the fee they outght to pay to insure these write-offs should be close to 100%. i.e. the insurance fee isn't like paying £20 a month in case you die when the odds are 500:1. They know this stuff is shite. They know it will have to be written off. You can't insure against a loss after it's already happened! If it was only potential losses then there's probably not much point going through all of this.

Won't work. It's a political feint to attempt to avoid ponying up another £50billion and getting kicked out of govt. in one go. Give the impression the banks are paying a fee - then blame them if they claim on their insurance. They'll still have the losses and are gambling they can lend enough profitably in a short enough timeframe to cover them up.

Imho.

As for Goodwin - I agree, he should be publicly stripped of his knighthood, his pension rights, and hung upside down from Blackfriars bridge as is the custom for errant Banksters.

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Taxpayers to Insure against sub prime lending ?

Is UKPLC just becoming AIG. :lol:

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So another bailout ? What a surprise. How long until the next one, weeks, a couple of months ?

Gordon cannot refloat a bubble that is bursting all around the world. He can loose us a fortune trying. Why should anyone work and pay tax to bailout these scum ? They should be allowed to go bust. Only depositors should be saved, not the clowns running the asylum.

Before this crash the city types would sell their own grandmother. Now they want her pension and savings to bail them out !

BRITAIN IS GOING BUST UNDER LABOUR

Edited by sikejsudjek

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If companies and individuals default on these debts, the taxpayer will be left to foot the bill.

'When', not 'if'.

Edited by refusnik

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Treasury officials checking the books of the Royal Bank of Scotland now controlled by the Government, were shocked to discover that £2.5bn had been loaned to Russian oligarch Leonid Blavatnik in his attempt to build a massive business empire.

The RBS has had to write off the entire debt because one of Mr Blavatnik's foreign companies faces going bust - with British taxpayers left to pay the price.

F**king hell!

Just... f**king hell! :blink:

Of all the things I've heard during this bailout lunacy, this beats them all.

Seriously, what is our government smoking? They didn't even bother to check that the £2.5bn wasn't just going to go straight into the pocket of a Russian billionaire before blindly giving it away?

£2.5bn billion would have paid for the windfarm project they recently scrapped that would have provided 2% of all UK power.

F**king pillocks, if they wanted to reinflate house prices, they'd have been better off directly buying up a whackload of housing at 2007 prices.

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F**king hell!

Just... f**king hell! :blink:

Of all the things I've heard during this bailout lunacy, this beats them all.

+1

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http://www.thisismoney.co.uk/news/article....mp;in_page_id=2

Taxpayers will be left exposed to £200bn in potential losses under the biggest Government bailout yet for Britain's banks - due to be announced tomorrow.

Chancellor Alistair Darling will underwrite 'toxic' assets built up by the banks during the credit boom which are now seen as high risk. If companies and individuals default on these debts, the taxpayer will be left to foot the bill.

£200bn!? That's enough to host 20 overpriced Olympics. Just one was enough to help derail Greece's economy. We are so screwed

Best,

L

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F**king hell!

F**king pillocks, if they wanted to reinflate house prices, they'd have been better off directly buying up a whackload of housing at 2007 prices.

Yeah bail out the poor BTL investors, that would go down a bomb on here no doubt :blink: . The thing is, if banks are allowed to just fail, even if the depositors are protected, the credit (what little exissit at the moment) would just evaporate, not overdrafts for normal people, no business loans,nada, zilch. Realistically its all screwed, the equity has all but gone from most UK banks, the tax payers owns them, so all our private pensions are screwed (thye invest heavily in bank stocks). Oh dear I cant string a coherant argument together, its just all so sh*t.

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They should let Barclays go to the wall. They turned help down the first time, now they're on their own. A vile company, despised by me ever since their apartheid sanction busting days, and the worst customer service of any company I have ever dealt with (my better half's a/c, I wouldn't touch them with a barge pole).

Yeah, Barclays refused to take the "King's shilling" and preferred to take Arab money, which is never going to go down well with those who bankroll this government. And even worse, Barclays might do better than the government-run RBS/Lloyds and make Gord look stupid, so they have to be brought to heel - and lo and behold their share price plummets during the last hour of Friday's trading. Anyway, must rush, I'm off to buy some Barclays shares.

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How can Gordon Brown--in the same weekend--tell banks to come clean about their assets, then set up an insurance scheme that means they don't have to??

Does he really think the entire British public is that stupid?

Maybe they are.

:D:D:D

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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