Waiting For A Bail-out

[doh]

http://www.telegraph.co.uk/money/main.jhtm...6/bcnboe116.xml

Gordon Brown will today meet banks on Wall Street a day after he welcomed proposals made by UK banks to help ease the credit crunch and confirmed that the Government remains in contact with the Bank of England to find a way through the crisis.

The BoE added £15bn of three-month money at an auction yesterday

Mr Brown, who has seen his rating in opinion polls tumble as the credit crisis spreads to the wider economy in the UK, will also meet Federal Reserve chairman Ben Bernanke as part of his visit.

About 25 executives from Britain's high street lenders, investment banks, hedge funds and insurance companies yesterday attended a meeting with Mr Brown to offer suggestions on how to reopen the money markets. Their principle request was that the Bank widen the collateral it will accept to include lesser quality mortgages and to make more longer-term funding available.

The lenders hope such measures will help the inter-bank market, where the three-month London inter-bank offered rate (Libor) remained unchanged at 5.93pc yesterday - almost a whole percentage point above base of 5pc. Mortgage costs are rising despite recent interest rate cuts because wholesale markets are dislocated and funding remains near record highs.

In a statement released after the talks, the Prime Minister's spokesman said there would be further discussions in coming days, including a meeting between Chancellor Alistair Darling and mortgage lenders next week.

Mr Brown said in an interview on Sky: "[We must] make sure that we can give people the confidence that mortgages will be safe and that we are in a position to steer the economy through difficult circumstances. We are doing everything in our power to make sure that we can underpin the housing market and the economy with greater confidence."

It is believed the Prime Minister would like assurances that any state help would be reciprocated by industry efforts to assist first time buyers. He also urged the banks to reveal the full extent of their sub-prime writedowns to remove counterparty concerns.

Separately, the Bank carried out a planned £15bn auction of three-month money to help improve liquidity yesterday - at rates ranging from 4.91pc to 5.835pc. The auction was not oversubscribed, despite the shortage of three month funding, causing confusion among analysts.

Simon Ward, New Star economist, said the relatively low subscription rate reflected the fact that banks did not have enough securitised AAA mortgage paper and that they were unwilling to put up better quality assets in anticipation of a widening of the collateral allowed.

Looks like Gordon the moron is going to cave in and take toxic collateral in return for taxpayers money. Time to leave the country?

[OnlyMe]

did not have enough securitised AAA mortgage paper and that they were unwilling to put up better quality assets

They should do what everybody else has to do under the circumstances. If you can't pay the bills, don't do the business.

If the BOE bail out the banks and buy up their shit they are basically sticking two fingers up at every commercial and business enterprise in the country and saying ****** you, we will bankroll these shysters and still give them a remit to scrape interest from YOU when YOU need to borrow the money from them to invest.

A two tier situation like this is doomed. It will annihilate investment in productive enterprise and is utterly skewing the financial system.

[Guest KingCharles1st]

I was just about to highlight the same phrase- O-M-G- was the one thing that was formulating in my tiny little mind- O-M-G- he thinks even the banks are that ******ing stupid he can swap them out shit to get his dosh back.

[ParticleMan]

A two tier situation like this is doomed. It will has annihilated investment in productive enterprise and is has utterly skewing skewed the financial system.

There you go. Slight problem with your tenses, but all fixed now.

[redgenieuk]

There you go. Slight problem with your tenses, but all fixed now.