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Bank Of England's Mervyn King Says Hbos And Rbs Came Within Hours Of Collapse

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http://www.telegraph.co.uk/finance/newsbys...f-collapse.html

Mervyn King, Governor of the Bank of England, said British banks HBOS and Royal Bank of Scotland got within hours of running out of money in October last year.

Mr King said in the latest episode of the BBC Two's Love of Money series that the banks "had had difficulty in obtaining funding could raise money only for one week then only for one day.

"And then on that Monday [October 6] and Tuesday it was not possible even for those two banks really to be confident they could get to the end of the day.â€

Their liquidity problems, which brought the UK financial system close to collapse, resulted in a £50bn bank bailout by the British taxpayer.

Tonight's episode, Back from the Brink?, will be broadcast on BBC Two at 9pm. It hears from key players who found themselves in the thick of the crisis, including Gordon Brown, Brazil's President Lula, finance ministers including the United States' Tim Geithner, Alistair Darling, Germany's Peer Steinbruck, France's Christine Lagarde, and Brian Lenihan from Ireland.

Mr King describes the consequences of letting the banks fail.

“Individuals would not have had access to the money in that bank. Their deposits would have been frozen. The accounts would have not been there for salaries to be paid in to, so many people would not have been paid their salary.

‘‘In turn, they wouldn’t have been able to pay bills to businesses so the businesses would have found that their flow of payments would have come to an end.’’

Baroness Shriti Vadera, the Business Minister who called a meeting of bankers on October 7 last year to advise the government on a bailout, told the programme: "It does make my blood run cold to think of how close the whole global system was to collapse."

David Soanes, managing director of UBS Bank, who was part of the group brought together by Baroness Vadera, describes the desperate struggle on to keep banks from going bankrupt on Tuesday, October 7, 2008.

“We only really knew by probably about seven o’clock at night, that we, that everyone was going to get through to the next dayâ€, he said.

Ed Lazear, chairman of President Bush's council of economic advisers, says in the programme: “We literally thought that we were on the verge of the great depression and I, looking back I think we probably wereâ€.

The programme also reveals the strains that the crisis put on relations between different European governments.

Should be interesting.

Thank god we have such experts in charge that they saved the day and no one is asking the question of how we could have allowed the banks to get into such a position. Just how they saved the situation.

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http://www.telegraph.co.uk/finance/newsbys...f-collapse.html

Should be interesting.

Thank god we have such experts in charge that they saved the day and no one is asking the question of how we could have allowed the banks to get into such a position. Just how they saved the situation.

Not only that, they actually created the situation on purpose. They knew exactly it would end up like that, because that's what they intended to happen.

Just follow the money, you will find it's all flowing in the same direction... as it always has.

Edited by wise_eagle

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It's stories like this that make me want to buy any assets to dump potentially worthless cash.

Economics is dead and it's all becoming unpredictable (and volatile) like the death throws of GM. House prices and the stock market all depend on the government. I didn't think they had the power but QE and dumping fair-accounting rules to keep the banks running is just widescale fraud IMO. When I took money in exchange for my work, I expected it to mean something. That meaning is going fast.

The sooner I can get a decent house for cash at the right price, the better and I can avoid financial services for the rest of my life.

When the taxman comes in April, maybe I should just give him a piece of paper that says "I promise to pay the bearer on demand, £xxx". Then when he comes to collect, I just swap it for another piece of paper with the same writing. That's all money has become.

VMR.

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It's stories like this that make me want to buy any assets to dump potentially worthless cash.

Economics is dead and it's all becoming unpredictable (and volatile) like the death throws of GM. House prices and the stock market all depend on the government. I didn't think they had the power but QE and dumping fair-accounting rules to keep the banks running is just widescale fraud IMO. When I took money in exchange for my work, I expected it to mean something. That meaning is going fast.

The sooner I can get a decent house for cash at the right price, the better and I can avoid financial services for the rest of my life.

When the taxman comes in April, maybe I should just give him a piece of paper that says "I promise to pay the bearer on demand, £xxx". Then when he comes to collect, I just swap it for another piece of paper with the same writing. That's all money has become.

VMR.

do it now before it's too late VMR. get some silver & gold........

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do it now before it's too late VMR. get some silver & gold........

<<Siren goes off in the moderators lounge>>

<<Siren goes off in the moderators lounge>>

<<Siren goes off in the moderators lounge>>

<<Siren goes off in the moderators lounge>>

<<Siren goes off in the moderators lounge>>

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Thank god we have such experts in charge that they saved the day and no one is asking the question of how we could have allowed the banks to get into such a position.
Not only that, they actually created the situation on purpose. They knew exactly it would end up like that, because that's what they intended to happen.

Just follow the money, you will find it's all flowing in the same direction... as it always has.

Personally, I am always far more inclined to believe that it is stupidly, not conspiracy

As far as I can see, the leaders of the big banks and governments are in the most precarious position they have been in for 80 years, and certainly wouldn't be there by choice.

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Merv talks about it as if he is proud he saved the day instead of being such a numpty for allowing it to happen. When he keeps trashing sterling he's not worried, as he has a fat inflation linked pension to look forward to.

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Personally, I am always far more inclined to believe that it is stupidly, not conspiracy

As far as I can see, the leaders of the big banks and governments are in the most precarious position they have been in for 80 years, and certainly wouldn't be there by choice.

£300K salaries and bonuses and pensions and perks and tax breaks might persuade them to stay.

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I will never, ever forget that day. I saw the price of RBS collapsing, whilst I was at work, with my entire life savings in Natwest! I went to the toilet, came back and the share price had tanked even more in that time. I absolutely bricked it and I thought "Oh crap, this is it, it's really happening!" I've never, ever been so scared. It was about 11am and I just walked out of work, didn't even bother telling my boss, just left and then ran to my car, literally ran and drove the 52 miles to home, calling my brother on the way and screaming "The banks are collapsing! It's happening! Get my bank book from my house, just go to my house and meet me there". He did and he had everything ready for me and we raced to Natwest and CHAPPED my funds to two extra accts. It took all afternoon.

I was surprised at how calm Natwest was, everyone absolutely oblivious to what was going on around them. Only in Abbey did I see one other person panicking. I got a call at the end of the day from Natwest as I requested, who confirmed my money had been succesfuly transfered.

That day changed my life forever. I now own a lot of gold and have a basket of other commoditites!

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£300K salaries and bonuses and pensions and perks and tax breaks might persuade them to stay.

I'm sure it would persuade most people to stay especially when you've moved the pension fund to be an inflation hedge.

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I will never, ever forget that day. I saw the price of RBS collapsing, whilst I was at work, with my entire life savings in Natwest! I went to the toilet, came back and the share price had tanked even more in that time. I absolutely bricked it and I thought "Oh crap, this is it, it's really happening!" I've never, ever been so scared. It was about 11am and I just walked out of work, didn't even bother telling my boss, just left and then ran to my car, literally ran and drove the 52 miles to home, calling my brother on the way and screaming "The banks are collapsing! It's happening! Get my bank book from my house, just go to my house and meet me there". He did and he had everything ready for me and we raced to Natwest and CHAPPED my funds to two extra accts. It took all afternoon.

I was surprised at how calm Natwest was, everyone absolutely oblivious to what was going on around them. Only in Abbey did I see one other person panicking. I got a call at the end of the day from Natwest as I requested, who confirmed my money had been succesfuly transfered.

That day changed my life forever. I now own a lot of gold and have a basket of other commoditites!

Thanks for sharing that with us, Mr. Darling.

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why does pm's have this effect on people ?

if I said buy 2 new bmw cars & some shares'n'stuff, that would be fine no doubt. :rolleyes:

people always mock then fear what they don't understand I find.

I'm not intentionally mocking, but I chose to shun both gold and silver - neither has any value whatsoever to myself, and neither constitutes currency any more. If you can find things you want that you can afford, buying them is not a bad idea at all.

I don't consider precious metals an investment - because there is no yield. In my opinion, these have become inflated massively in price on the back of monetary expansion... and they reflect a mere ponsi today. Tangible goods (for which you've a use... be that implicitly or explicitly generating revenue) and shares in solvent profitable companies are both valuable investments. Of course, establishing the right price is spectacularly difficult... but that, as they say, is a different story.

You're welcome to all the gold - just don't try to use it to pay me... I've no use for the stuff. I think it hugely over-valued as an investment - though, of course, that doesn't rule out speculative gains for a lucky few.

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Just who the ****** does he think he's kidding here?

The UK economy has collapsed, the twit is printing money, QE. Symbolic of a nation in peril

He, and the BOE, UK Government have NO credibility left.

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Jumped up little twit.

http://www.dailymail.co.uk/news/article-50...-years-ago.html

Concern: Gillian Shephard forecast trouble

Mervyn King

Mervyn King was alerted to Northern Rock's possible collapse two years ago

Bank of England governor Mervyn King was warned two years ago that Northern Rock was in danger of collapse ? but he brushed the concern aside dismissively.

Former Tory Cabinet Minister Gillian Shephard told Mr King she feared a 'day of reckoning' because Northern Rock was consistently offering cut-price home loans.

Mr King responded by telling her she did not understand banking and insisted there was nothing to worry about. The confrontation took place in 2005 when Mr King went to the House of Lords to address Conservative peers.

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Jumped up little twit.

http://www.dailymail.co.uk/news/article-50...-years-ago.html

Concern: Gillian Shephard forecast trouble

Mervyn King

Mervyn King was alerted to Northern Rock's possible collapse two years ago

Bank of England governor Mervyn King was warned two years ago that Northern Rock was in danger of collapse ? but he brushed the concern aside dismissively.

Former Tory Cabinet Minister Gillian Shephard told Mr King she feared a 'day of reckoning' because Northern Rock was consistently offering cut-price home loans.

Mr King responded by telling her she did not understand banking and insisted there was nothing to worry about. The confrontation took place in 2005 when Mr King went to the House of Lords to address Conservative peers.

i predicted they would be the first to go from 2003/04 onwards just by having knowledege of their loan criteria but i dont have any banking qualifications so i obviously dont know what im talking about

time for a long march

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I was surprised at how calm Natwest was, everyone absolutely oblivious to what was going on around them.

+1

i got to the bank when it opened and withdrew all my cash (plus took my overdraft up to the max as well on the basis that if they went tits up they could do it with me owing them money rather than visa versa) i said to the guy behind the counter "you must be expecting to see a lot of this today" and he had no idea what i meant.

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+1

i got to the bank when it opened and withdrew all my cash (plus took my overdraft up to the max as well on the basis that if they went tits up they could do it with me owing them money rather than visa versa) i said to the guy behind the counter "you must be expecting to see a lot of this today" and he had no idea what i meant.

what a member of the banking staff clueless about the economy

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Why is this being painted as some historic economic point of interest rather than an ongoing crisis?

exactly.

Rather puzzling.

I wonder if they will give any indication at the end of the show, that it is still ongoing?

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Why is this being painted as some historic economic point of interest rather than an ongoing crisis?

Coz the "bankers bonuses" are back in 'town'!

YeeeHaaaa!

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