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Fishman

Latest Bank Bail Out

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So, whilst all trade insurers and underwriters are reducing or removing cover against co. default, the Gov't steps up as

underwriter of last resort ! Unbelievable !

This will lead to widespread abuse by the banks.

Imagine that Bank A has been supplying bank facilities to Company B, may be a loan or overdraft that's secured

against company assets.

Company B has been struggling of late, it's eroding balance sheet being of some concern to the bank.

As from next week, the bank can purchase insurance from the Gov't in case of default. Once this is in place

the bank will pull the plug on Company B - by that I meanwithdraw the overdraft or call in the loan.

Of course, the sale of assets (probably buildings/factories & machinery/land, etc) on the balance sheet will not cover the debt in today's market - tax payer foots the difference.

It's gonna happen.

Bank's will evaluate risk and compare the likelihood of companies repaying debt against making a claim on their

Gov't indemnity scheme.

It's gonna be a disaster for small businesses.

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So, whilst all trade insurers and underwriters are reducing or removing cover against co. default, the Gov't steps up as

underwriter of last resort ! Unbelievable !

This will lead to widespread abuse by the banks.

Imagine that Bank A has been supplying bank facilities to Company B, may be a loan or overdraft that's secured

against company assets.

Company B has been struggling of late, it's eroding balance sheet being of some concern to the bank.

As from next week, the bank can purchase insurance from the Gov't in case of default. Once this is in place

the bank will pull the plug on Company B - by that I meanwithdraw the overdraft or call in the loan.

Of course, the sale of assets (probably buildings/factories & machinery/land, etc) on the balance sheet will not cover the debt in today's market - tax payer foots the difference.

It's gonna happen.

Bank's will evaluate risk and compare the likelihood of companies repaying debt against making a claim on their

Gov't indemnity scheme.

It's gonna be a disaster for small businesses.

Looks likely.

An unintended consequence. :lol:

But then again many people will lose their jobs because of Gordon's inability to think logically, and that's no laughing matter.

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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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