Time To End "too Big To Fail" Banks: Nicholas Clegg

[Realistbear]

http://uk.finance.yahoo.com/news/UK-wants-end-big-fail-banks-reuters_molt-530330207.html?x=0

UK wants end to too-big-to-fail banks - deputy PM

Tim Castle, 1:18, Saturday 26 March 2011

LONDON (Reuters) - Britain will accept proposed reforms from a special banking commission panel if they offer taxpayers protection from the danger of banks being too big to fail, Deputy Prime Minister Nick Clegg said on Friday.

Britain spent billions of pounds bailing out ailing banks including Royal Bank of Scotland (LSE: RBS.L - news) and Lloyds TSB (LSE: LLOY.L - news) and is seeking ways to restructure the industry.

"It is wholly unsustainable and unacceptable to have found ourselves in a position where we allowed one sector, the banking system, to become so big, so overleveraged, so riddled with irresponsible risk-taking that all the rest of us have now had to pick up the tab," Clegg told Reuters in an interview.

Thieves falling out among themselves?

[Fishbone Glover]

If the words turn into action, then I'll be impressed. However, if they remain just words, as I suspect they will, then it's just more political posturing.

[porca misèria]

If the words turn into action, then I'll be impressed. However, if they remain just words, as I suspect they will, then it's just more political posturing.

Agreed.

When did banks become "too big to fail"? Sometime between 1995 (Barings) and 2008.

Or was it politics rather than banks that changed? Would the 1995 government have let NR, HBoS, etc fail? Would the 2008 government have bailed out Barings, BCCI, et al?

Anyway, the moment for change was the aftermath of 2008, and change should have been firmly underway by sometime in 2009. By now it's harder, and only gets worse the longer they leave it.

[billybong]

It sounds like another of Nick (We're all tories now") Clegg's "no student fees" moments.

Another sheet of waste paper blowing along the Embankment.

Edited March 26, 2011 by billybong

[24gray24]

He's probably just being a mouthpiece for the tories in some discussions they're having with the banks on the future of regulation. Threatening to break them up is probably good for rustling up donations.

He has no integrity, that's the given.

[The Knimbies who say No]

Is Nick Clegg too big to fail?

[alexw]

Agreed.

When did banks become "too big to fail"? Sometime between 1995 (Barings) and 2008.

Or was it politics rather than banks that changed? Would the 1995 government have let NR, HBoS, etc fail? Would the 2008 government have bailed out Barings, BCCI, et al?

Anyway, the moment for change was the aftermath of 2008, and change should have been firmly underway by sometime in 2009. By now it's harder, and only gets worse the longer they leave it.

That was the first good point for reform, there is an even better second one coming. Namely when we get our stagflation induced housing bust, and the banks come begging for a 2nd bailout.

[Fishbone Glover]

Or was it politics rather than banks that changed? Would the 1995 government have let NR, HBoS, etc fail? Would the 2008 government have bailed out Barings, BCCI, et al?

The difference with Barings and BCCI was that they were individual banks, I guess. If one went down, it was unlikely to take any other with it. Fast forward to 2008 and virtually all financial institutions are inextricably linked to each other thanks to all the financial innovation, if one goes it takes a lot of others with it. I think that the collapse of Lehmann Brothers put the wind up a lot of people when it became clear what the implications were.

When did securitisation start? I guess that was when banks started to become TBTF.

[BobBobson]

Agreed.

When did banks become "too big to fail"? Sometime between 1995 (Barings) and 2008.

Or was it politics rather than banks that changed? Would the 1995 government have let NR, HBoS, etc fail? Would the 2008 government have bailed out Barings, BCCI, et al?

Anyway, the moment for change was the aftermath of 2008, and change should have been firmly underway by sometime in 2009. By now it's harder, and only gets worse the longer they leave it.

The banks became too big too fail when governments across the world, were persuaded to heavily deregulate from the late 90's onwards. In addition to the well known derivative nasties that exploded at this time, investment banking practices and high street banking were able to merge and dance in the same barn so to speak, whereas previoulsy they had been kept distinctly seperate, for reasons which have been made obvious once again. Therefore, the banking system serving the general public became intertwined with the casino gambling of of the investment banks and thier billionaire patrons.

[live in hope]

Agreed.

When did banks become "too big to fail"? Sometime between 1995 (Barings) and 2008.

Or was it politics rather than banks that changed? Would the 1995 government have let NR, HBoS, etc fail? Would the 2008 government have bailed out Barings, BCCI, et al?

Anyway, the moment for change was the aftermath of 2008, and change should have been firmly underway by sometime in 2009. By now it's harder, and only gets worse the longer they leave it.

Assuming we allowed banks to fail, how would ordinary punters be able to protect their deposits in advance of a bank not being bailed out .Its not like we can all withdraw our money and put it in an institution where it is protected. Even building societies have to use banks. We cannot all withdraw the cash in notes in advance, so how can we not bail them out if we are all not to be ruined of any savings. Any bright ideas?

[wonderpup]

Assuming we allowed banks to fail, how would ordinary punters be able to protect their deposits in advance of a bank not being bailed out .Its not like we can all withdraw our money and put it in an institution where it is protected. Even building societies have to use banks. We cannot all withdraw the cash in notes in advance, so how can we not bail them out if we are all not to be ruined of any savings. Any bright ideas?

Most people don't have much savings to lose- the reality of the bailouts was not to save the deposits of savers- that would have been relatively cheap to do. The bailouts were not to protect ordinary punters- these were the people paying for the bailouts- the bailouts were to protect the various groups of 'investors' who could not be allowed to suffer the risk they agreed to take on in return for the profits they took.

[Realistbear]

Who is Nick Clegg?

Its "Nicholas" now--a sign of wanting to be taken more seriously. "Nick" is too, er, well, chummy.

[Charlie The Tramp Returns]

Its "Nicholas" now--a sign of wanting to be taken more seriously. "Nick" is too, er, well, chummy.

Nick was beginning to be known as Nick the P***k, Nicholas puts that out of the window but I still know him by his abbreviated and add on name.

[frenchy]

Its "Nicholas" now--a sign of wanting to be taken more seriously. "Nick" is too, er, well, chummy.

you can call him Dave but you can't call me Nick...

[South Lorne]

http://uk.finance.yahoo.com/news/UK-wants-end-big-fail-banks-reuters_molt-530330207.html?x=0

UK wants end to too-big-to-fail banks - deputy PM

Tim Castle, 1:18, Saturday 26 March 2011

LONDON (Reuters) - Britain will accept proposed reforms from a special banking commission panel if they offer taxpayers protection from the danger of banks being too big to fail, Deputy Prime Minister Nick Clegg said on Friday.

Britain spent billions of pounds bailing out ailing banks including Royal Bank of Scotland (LSE: RBS.L - news) and Lloyds TSB (LSE: LLOY.L - news) and is seeking ways to restructure the industry.

"It is wholly unsustainable and unacceptable to have found ourselves in a position where we allowed one sector, the banking system, to become so big, so overleveraged, so riddled with irresponsible risk-taking that all the rest of us have now had to pick up the tab," Clegg told Reuters in an interview.

Thieves falling out among themselves?

...two faced illiterate twit ...what do they teach at these Oxbridge teach ins...financial ignorance...?...they have just turned a blind eye to Northern Rock recommencing securitisation of loans.....

Edited March 26, 2011 by South Lorne

[Lambie]

http://uk.finance.ya...330207.html?x=0

UK wants end to too-big-to-fail banks - deputy PM

Tim Castle, 1:18, Saturday 26 March 2011

LONDON (Reuters) - Britain will accept proposed reforms from a special banking commission panel if they offer taxpayers protection from the danger of banks being too big to fail, Deputy Prime Minister Nick Clegg said on Friday.

Britain spent billions of pounds bailing out ailing banks including Royal Bank of Scotland (LSE: RBS.L - news) and Lloyds TSB (LSE: LLOY.L - news) and is seeking ways to restructure the industry.

"It is wholly unsustainable and unacceptable to have found ourselves in a position where we allowed one sector, the banking system, to become so big, so overleveraged, so riddled with irresponsible risk-taking that all the rest of us have now had to pick up the tab," Clegg told Reuters in an interview.

Thieves falling out among themselves?

Nick Clegg is like that alien leader at the end of Babylon 5

Occasionally he breaks free to say something sensible, but the aliens in his brain soon regain control and he is back on message, while being silently tortured for his transgression

Although maybe that's just wishful thinking on my part

[OnlyMe]

...two faced illiterate twit ...what do they teach at these Oxbridge teach ins...financial ignorance...?...they have just turned a blind eye to Northern Rock recommencing securitisation of loans.....

+1

[U235]

Nick Clegg is like that alien leader at the end of Babylon 5

Occasionally he breaks free to say something sensible, but the aliens in his brain soon regain control and he is back on message, while being silently tortured for his transgression

-- only talks sense when he's drunk, strangled by his political partner.

[porca misèria]

Assuming we allowed banks to fail, how would ordinary punters be able to protect their deposits in advance of a bank not being bailed out .Its not like we can all withdraw our money and put it in an institution where it is protected. Even building societies have to use banks. We cannot all withdraw the cash in notes in advance, so how can we not bail them out if we are all not to be ruined of any savings. Any bright ideas?

Depositor protection scheme.

Cheaper than bailing out not only depositors but also bondholders. And clears the field for those who weren't bust.

[live in hope]

Depositor protection scheme.

Cheaper than bailing out not only depositors but also bondholders. And clears the field for those who weren't bust.

If the banks had all failed totally, and all investers deposits had gone with them, how could the deposit scheme have reimbursed everyone. We are talking a lot of money, and a lot of people. There must be a huge amount of money around, owned by 20 or 30 million people. If the banks had all collapsed, taking virtually every other institution that had its money with them, i dont see how the protection scheme could have possibly worked. Surely everyone except those with pound notes in abundance, would have lost everything. How could the government have reimbursed anyone without the banking system in place. What good would gold have been in these circumstances, if everyone lost everything. Who could buy gold. I think they had to be saved. We are all worse off , but i wonder how we would be if the banks had all gone bust.

[Compukit UK101]

sign seen at the demo yesterday.

There's two things I don't like about Nick Clegg; his face.

[porca misèria]

If the banks had all failed totally, and [semi-coherent stream of words]

You've clearly fallen for the "end of the world" spin. That fear is what gives leaders power to do Bad Things by sleight of hand.

[porca misèria]

duplicate post due apparently to lost connection

Edited March 27, 2011 by porca misèria

[billybong]

If the banks had all failed totally, and all investers deposits had gone with them, how could the deposit scheme have reimbursed everyone. We are talking a lot of money, and a lot of people. There must be a huge amount of money around, owned by 20 or 30 million people. If the banks had all collapsed, taking virtually every other institution that had its money with them, i dont see how the protection scheme could have possibly worked. Surely everyone except those with pound notes in abundance, would have lost everything. How could the government have reimbursed anyone without the banking system in place. What good would gold have been in these circumstances, if everyone lost everything. Who could buy gold. I think they had to be saved. We are all worse off , but i wonder how we would be if the banks had all gone bust.

Amazing that the lunatics running things allowed it all to get to that stage of risk.

Amazing that the lunatics running things hadn't an inkling of the risks they were running.

Edited March 27, 2011 by billybong

[Blod]

It's beginning to dawn on our politicians that the banking sector is in reality not too big to fail but rather too big to save now. The more that the full liabilities in the sector come into focus the clearly it is that any future collapse will be unpreventable. All that Nick is doing is trying to cover is ass.