Monday, September 2, 2013

The problem

UK lenders pay £1bn for Iceland banks’ collapse

The problem with these guarantees is that they don't come out of a safety fund, but are only transfers. So "For Icesave alone the payouts cost the government £3.5bn, and protected 230,000 savers" means that each of the 30 million workers in the UK paid 100 pounds each to the 230,000 savers. So its not really a guarantee for most of the public, more of a liability. In fact as everybody knows, the payout are worse and more than this. Stop somebody who works in the street, and the government guarantee is a forced liability with no return i.e. not great at all.

Posted by stillthinking @ 04:31 AM (7382 views)
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One thought on “The problem

  • So, those prudent enough to steer clear of Icelandic banks failed to receive higher interest rates and bailed these guys out. Under no circumstances should the British government be insuring accounts held in foreign banks not regulated by the British financial services, it is insanity!!

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