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cashinmattress

Bank Bailout Costs Taxpayers £5 Billion A Year

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A National Audit Office (NAO) review of Britain’s bailed out banks show they cost the taxpayer £5 billion a year in interest.

The Treasury pays out £5 billion a year to cover the interest on the loans it took to prop up the banks, and although this is largely covered by fees for state insurance schemes this is expected to decrease and taxpayers will continue to pay.

Taxpayer support for the banks now stands at £512 billion even though the government’s maximum exposure almost halved over the past year.

The NAO warned of the risks of the government selling stakes in the banks and stopping state guarantees for the banking sector. The report states the government had made a paper loss of £12.5 billion as of 1 December on its RBS and Lloyds holdings, assuming the shares could be sold at market price and in one go.

The total amount of taxpayer money used to support banks through shares and loans is £124 billion but a further £387 billion under guarantee could be made available.

The report concludes: ‘The scale of the maximum exposures are so large, still £512 billion, that even risks with small probabilities occurring require careful management.’

Iceland is apparently doing well. Why didn't our government just close up the banks and let the taxpayers take the hit? Oh yeah, that's why.

Bow to your god.

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I'm mellowing towards the bank bailouts to be honest.

As they say, we're reducing our exposure to the various insurance schemes - by 50% alone this year.

I wish it was all structured so that private investors absorbed losses, but given that it wasn't, hindsight is slowly showing that the government stepping in wasn't perhaps as insane as it sounded at the time.

A banking collapse was not and still is not in the countries interest.

Edited by Kyoto

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  • 312 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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