Oliver Sutton Posted March 27, 2011 Share Posted March 27, 2011 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. Not all the banks would have failed. As things stands they've bailed out the deposit holders (in full) and the bond holders. It would have costs less just to bail out the depositors up to the limit. Banks would have been sold off as well. They'd have been worth a lot just for their infracstructure. Quote Link to comment Share on other sites More sharing options...
Blod Posted March 27, 2011 Share Posted March 27, 2011 Amazing that the lunatics running things allowed it all to get to that stage. Amazing that the lunatics running things hadn't an inkling of the risks they were running. The banks didn't want to have a full knowledge of their liabilities. Being "unaware" meant that they could run with almost non-existing levels of collateral and so increase their profitable. When NR and then Lehmans failed they began to try to get a full idea of where they stood, suddenly the whole sector realized that they were insolvent. The rest is history. Quote Link to comment Share on other sites More sharing options...
billybong Posted March 27, 2011 Share Posted March 27, 2011 The banks didn't want to have a full knowledge of their liabilities. Being "unaware" meant that they could run with almost non-existing levels of collateral and so increase their profitable. When NR and then Lehmans failed they began to try to get a full idea of where they stood, suddenly the whole sector realized that they were insolvent. The rest is history. Yes indeed it's amazing. Quote Link to comment Share on other sites More sharing options...
Fishbone Glover Posted March 27, 2011 Share Posted March 27, 2011 And because the CB's & regulators dont understand these innovations they watch over, its still possible to crash the financial system! Oh definitely, and I think it'll happen in the next year or two. I wouldn't like to say what would happen though, I think there won't be the appetite for another bail out, if in fact it was possible. Quote Link to comment Share on other sites More sharing options...
Guest sillybear2 Posted March 27, 2011 Share Posted March 27, 2011 Propping up bankrupt socially useless banking entities is distorting the economy and destroying society in more ways than one, it's diverting scarce resources and minds away from more pressing matters :- http://techcrunch.com/2011/03/26/friends-don%E2%80%99t-let-friends-get-into-finance/ If HSBC believes the Chinese government will put up with their parasitic and tax dodging ways then let them leave for those "greener pastures"; it's not like they ever discovered the cure for cancer. Quote Link to comment Share on other sites More sharing options...
wonderpup Posted March 28, 2011 Share Posted March 28, 2011 Nick Clegg is like that alien leader at the end of Babylon 5Occasionally 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 The real trick is to exit office with enough political capital to land that well paid job in a bank or the EU - Clegg peaked too soon so now oscillates between trying to demonstrate his credentials as a reliable mouthpiece for the establishment and the occasional grab for more popularity amongst the plebs. Quote Link to comment Share on other sites More sharing options...
eightiesgirly Posted March 28, 2011 Share Posted March 28, 2011 The real trick is to exit office with enough political capital to land that well paid job in a bank or the EU - Clegg peaked too soon so now oscillates between trying to demonstrate his credentials as a reliable mouthpiece for the establishment and the occasional grab for more popularity amongst the plebs. We just call 'em a gob$hite round here. Quote Link to comment Share on other sites More sharing options...
live in hope Posted March 28, 2011 Share Posted March 28, 2011 Not all the banks would have failed. As things stands they've bailed out the deposit holders (in full) and the bond holders. It would have costs less just to bail out the depositors up to the limit. Banks would have been sold off as well. They'd have been worth a lot just for their infracstructure. If there had been a major bankrupting of a couple of the big ones, as practically happened before they were saved, it was highly likely that the panic would have spread to most of the others, including foreign. Their loans would have made them all insolvant when the population lost all its money, and its collateral was worthless. Imagine building societies loosing all the depositers money with the banks, and most of the mortages not being repayed. Its shit, but if there had been a total financial collapse we probably would not be on here now. Quote Link to comment Share on other sites More sharing options...
live in hope Posted March 28, 2011 Share Posted March 28, 2011 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 I dont like clegg the man. I dont think he is up to it to be in government. He was ok sprouting idealistic crap when he was a nobody, but now he is on the inside and seeing things for what they are, he knows what he has to help the tories to do. Trouble is, most of his party think they still have money to spend on their old policies. Quote Link to comment Share on other sites More sharing options...
fluffy666 Posted March 28, 2011 Share Posted March 28, 2011 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. He will be allowed to introduce his own bill to comprehensively reform and break up banks, introducing a Tobin Tax and strong restrictions on the size and timing of bonuses. Right after the next election. Quote Link to comment Share on other sites More sharing options...
THE BALD MAN Posted March 28, 2011 Share Posted March 28, 2011 If there had been a major bankrupting of a couple of the big ones, as practically happened before they were saved, it was highly likely that the panic would have spread to most of the others, including foreign. Their loans would have made them all insolvant when the population lost all its money, and its collateral was worthless. Imagine building societies loosing all the depositers money with the banks, and most of the mortages not being repayed. Its shit, but if there had been a total financial collapse we probably would not be on here now. agree but the bailout should have been made with conditions: Salaries and bonus cap Spin off of risky investment banking business and ring fenced from day to day business. All senior management should have been sacked with reduced pay offs and pension entitlement Quote Link to comment Share on other sites More sharing options...
R K Posted March 28, 2011 Share Posted March 28, 2011 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. Spot on. Good cop/bad cop. Dead in a ditch (politically) by Xmas. Quote Link to comment Share on other sites More sharing options...
live in hope Posted March 28, 2011 Share Posted March 28, 2011 agree but the bailout should have been made with conditions: Salaries and bonus cap Spin off of risky investment banking business and ring fenced from day to day business. All senior management should have been sacked with reduced pay offs and pension entitlement agreed, should have been a lot more punishment upfront. Quote Link to comment Share on other sites More sharing options...
erat_forte Posted October 4, 2012 Share Posted October 4, 2012 Well spotted and good fun to churn this thread and remind ourselves what politicians say and how it compares with what they do. Though it strikes me that "too big to fail" is a kind of newspeak and should be called out as BS whenever it appears. The banks were not "too big to fail" and still aren't. In fact they are quite able to fail if we let them. What is really meant by saying "too big to fail" is something like "Me and my peers have too many vested interests in this thing so we will use other people's money to try and stave off its failure". Quote Link to comment Share on other sites More sharing options...
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