Wednesday, February 20, 2008

Does the Government fears that other banks will go bust?

Alistair Darling accused of Northern Rock Freedom of Information cover-up

The Chancellor took the unusual move of introducing small print into emergency legislation yesterday to prevent public scrutiny of the bank, which has been nationalised, MPs were forced to vote on the nationalisation yesterday, despite being kept in the dark over what public ownership will entail. George Osborne, the shadow chancellor, said last night: "The public is now paying for this bank, so we are entitled to know what it is doing with our money. The legislation allows the Government to nationalise any financial institution - raising fears that ministers may know that other banks are in trouble. Just what are the government trying to cover up?

Posted by who stole my pension? @ 05:49 AM (795 views)
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3 thoughts on “Does the Government fears that other banks will go bust?

  • housing carbuncle says:

    What next – an Enabling Act to prevent future elections?

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  • I imagine most of the people in this country (who don’t dig any deeper for their news than the headlines in the mainstream media) must be reeling at how quickly the financial world has unwound since the run on NR (National Rock!) in September. Up to that point everything was hunky dory – house prices only ever go up, tons of cheap credit, inflation is low blah blah blah. In six months the whole financial world has been turned upside down and all the previous ‘truths’ (house prices only ever go up etc) are no longer reliable. That has to affect sentiment.

    If you ask me the government are going to further impact sentiment if they wrap financial institutes in a veil of secrecy. Two questions, how will a member of the public be able to judge whether Company X is worth putting their savings into or getting a mortgage with etc? Secondly, what happens when a rumour sweeps the high street that Company Y is the new NR and queues start forming? The government won’t be able to say much. Their own rules would prevent them from making a statement a la NR that all savers deposits are safe because that would only confirm that Company Y are in trouble.

    I wonder if the government have considered how this veil of secrecy might affect people’s attitude to financial institutions as a whole? I can imagine it further destabilising things.

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  • Might I suggest that such secrecy is needed to hide a few new mortgage offers.
    Now that dear Darling owns his own mortgage company, the self same one that provided his own mortgage – which may well be coming to the end of its fixed rate, what better place to go to for a new mortgage?

    I am not suggesting that this was the sole motivation behind the nationalisation, that would be silly, and we all know that UK governments never do silly things.

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