Jump to content
House Price Crash Forum

Recommended Posts

If when I jab something in my eye it hurts I stop.

If when regulation distorts a market causing it to collapse, I want less regulation.

The market was completely distorted, abstracted by perverse incentives all by itself.. regulation was inadequate and ineffectual.

In the end we need a better planned, simpler/more transparent finanical system which delivers key services to citizens. Time for more central controls to make that happen.

Link to post
Share on other sites
We simply need to get rid of all support mechanisms to the banking system.

No central bank. Ne deposit guarantees. Nothing.

Then people might actually think before they lent their hard earned money to the banks and take some responsibility.

Nationwide building society seem to be ok, just complaining about paying increased cash to the bailout fund.

No RMBS problems in america, massive cash buffer .

LONDON, March 17 (Reuters) - Graham Beale, chief executive of customer-owned British lender Nationwide, on Tuesday said nationalised banks are distorting the market for retail deposits because consumers perceive them to be safer.

"What's become clear in the last several months is that consumers have looked through the level of compensation afforded by (the Financial Services Compensation Scheme) and attached a greater level of comfort to organisations that are partly or fully state-owned," he told the House of Lords' Banking Supervision and Regulation Committee.

"It's effectively sucking retail receipts out of the building society sector."

Five British banks -- Northern Rock, Bradford & Bingley, Lloyds (LLOY.L), HBOS and Royal Bank of Scotland (RBS.L) -- have been wholly or partly nationalised since the global banking crisis began eighteen months ago.

Nationwide's Beale also called for changes to the way Britain's Financial Services Compensation Scheme, used to compensate deposit holders in the event of a banking collapse, is funded.

He said Nationwide had contributed 250 million pounds ($351.5 million) towards the FSCS to cover the cost of the failure last year of Bradford & Bingley and Icelandic banks with operations in Britain.

Edited by Nicholas Cage
Link to post
Share on other sites
The market was completely distorted, abstracted by perverse incentives all by itself.. regulation was inadequate and ineffectual.

In the end we need a better planned, simpler/more transparent finanical system which delivers key services to citizens. Time for more central controls to make that happen.

Before we had more central controls we did not have collapsing banks.

Its the government interfering that is causing the problems in the first place. You want to put out a fire by throwing petrol on it.

Link to post
Share on other sites
Guest sillybear2

Remember that up until very recently the high street banks didn't much care for mortgage lending, they left that to the mutuals, both B&B and Northern Rock date from the 1850's, they managed to survive for a century and a half as mutual institutions until some twunts changed all that for short term gain, they then managed to completely destroy them in less than 8 short years, and that's being generous. They trashed trusted 150 year old institutions with 3 years of loony lending.

Link to post
Share on other sites
Before we had more central controls we did not have collapsing banks.

Its the government interfering that is causing the problems in the first place. You want to put out a fire by throwing petrol on it.

What? the neo-con Bush government interfered with the free market and caused financial system failure in the US? and it wasnt perverse market incentives on risk/reward. First time Ive heard that one.

The financial system ate itself, because it became too abstract and peverse, with too many noses in the trough, lets be honest.

Link to post
Share on other sites
Free Market capitalism has basically eaten itself-- it has become so abstract and peverse that people cant even define the problem never mind the solution in its terms. It can no longer be trusted to deliver some of the essentials citizens want and need (a stable financial system, a planned response to climate change, a planned response to energy and transport).

:blink: not sure why you'd expect a free market to produce Soviet-style central planning?

PS. central planning doesn't work. see collapse of USSR for details.

Link to post
Share on other sites
I think Taleb has the best idea.

Two banking systems.

One regulated the crap out of, with government backing.

One less regulated with a clear understanding that under no circumstances will a penny of taxpayer money ever be put in.

And the two are kept very, very seperate.

Could perhaps work if only the very heavily regulated banks issued money.

At least it would be better than the laissez faire we have now.

The strict separation of money-issuing, service-providing high street/internet banks from risk-taking investment banks is a good policy but sadly it maybe just another invitation for clever bankers to circumvent regulations.

Link to post
Share on other sites
Guest sillybear2

Central banking is just about as central and planned as you can get, they have a monopoly on the issue of money, and now we have nothing to back up that money or keep it honest, that's the problem. If the banks had no nanny to fall back upon they'd soon grow up and start acting in the interests of their shareholders and their customer base, rather than caring for a bunch of bonus chasing knob jockies chasing after Greenspan's fresh ink.

Edited by sillybear2
Link to post
Share on other sites
What? the neo-con Bush government interfered with the free market and caused financial system failure in the US? and it wasnt perverse market incentives on risk/reward. First time Ive heard that one.

The financial system ate itself, because it became too abstract and peverse, with too many noses in the trough, lets be honest.

Guess you better read up more then.

The Fed caused the biggest bubble in money ever.

Link to post
Share on other sites
:blink: not sure why you'd expect a free market to produce Soviet-style central planning?

PS. central planning doesn't work. see collapse of USSR for details.

NO. i think we have seen the USSR economic system didnt work and this instance of free market capitalism isnt working too well either. It isnt one or the other is it? I would hope with a few million years ahead of us we may develop a new econmic system or two ;)

For me there is a need for more central planning around key industries/sectors to underpin a mixed economy and deliver better, more transparent and efficient core services to citizens and we can all retire at 35 as well :P

Link to post
Share on other sites
At least it would be better than the laissez faire we have now.

laissez faire?

not sure what planet you're living on, tbh.

http://business.timesonline.co.uk/tol/busi...icle5581225.ece

‘Soviet’ Britain swells amid the recession

The study of “Soviet Britain” has found the government’s share of output and expenditure has now surged to more than 60% in some areas of England and over 70% elsewhere.

Link to post
Share on other sites

not sure what 'instance of free market capitalism' you are refering to. see my previous post.

NO. i think we have seen the USSR economic system didnt work and this instance of free market capitalism isnt working too well either. It isnt one or the other is it? I would hope with a few million years ahead of us we may develop a new econmic system or two ;)
Link to post
Share on other sites

Of course, if we had free market cpitalism, we have the problem of what should be done if the failure of a sector (banking for example) threatens the entire stability of a country or continent.

Do we simply let it fail (as we should under free market capitalism) and deal with the social/economic fallout afterwards?

Is it a 'price worth paying'? Many think so. I do not.

Link to post
Share on other sites
Of course, if we had free market cpitalism, we have the problem of what should be done if the failure of a sector (banking for example) threatens the entire stability of a country or continent.

Do we simply let it fail (as we should under free market capitalism) and deal with the social/economic fallout afterwards?

Is it a 'price worth paying'? Many think so. I do not.

If we had truly free markets, real estate wouldn't form into a massive pyramid scheme and people wouldn't be able to make money simply by occupying positions in that pyramid. From the moment land was enclosed, buyers were not entirely free to replace what they purchased from another with their own efforts.

Link to post
Share on other sites
If we had truly free markets, real estate wouldn't form into a massive pyramid scheme and people wouldn't be able to make money simply by occupying positions in that pyramid. From the moment land was enclosed, buyers were not entirely free to replace what they purchased from another with their own efforts.

Also, you didn't explain what should be done if the failure of a sector (banking for example) threatens the entire stability of a country or continent? (Note: it doesn't have to be banking - that's only an example).

Link to post
Share on other sites
Also, you didn't explain what should be done if the failure of a sector (banking for example) threatens the entire stability of a country or continent? (Note: it doesn't have to be banking - that's only an example).

This is the problem of why we cannot have truly free markets, or we could, but it would take us all down with it.

Many people seem to assume that financial regulations have just been torn up over the last few decades. Far from it.

Since Thatcher's much-needed reforms, we have had more and more financial regulation piled upon us. Does anyone ever really think that Gordon Brown would tear up regulations? Regulation has actually become tighter and more complex every year. However, he was never regulating the right things in the right way and nor were our partners.

Think about it - if a huge mass of people (this includes banks and customers) all act in the wrong way at the same time, all under the impression that they are right, because their politicians, regulator and central bank tell them they are, is the fault of the many or the few or the politicians?

The regulation that was required was not put in place - the new forms of financing were ignored when they needed investigating and regulating. Would the same be done for new chemical or medicines? Of course not, they are examined in depth before release to check for safety.

In this case the government kept on re-regulating the things it knew about and ignored the things it did not. One of the jobs of government is to regulate properly and in proportion. It failed.

Link to post
Share on other sites
We seem to have two camps. One that want lots of regulation and protection for when things go wrong, and one that wants no regulation and no protection when things go wrong.

I would like an answer as to what exactly is "free market" about a central bank.

There is nothing free market about a central bank, countries' borders, immigration control, local and central governments, and regulation of any type whatsoever.

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    No registered users viewing this page.

  • 433 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.