Quote:
The government will take another step today towards nationalising the entire banking industry by offering to buy shares in those institutions which sign up to a scheme offering potentially unlimited insurance against losses on their assets.
In a second, and desperate attempt, to get credit flowing through the economy, ministers will try to put tougher conditions on the banks being bailed out to force them to lend more money to businesses and households.
The insurance scheme is part of a multi-layered package from the Treasury forced on the government by a deepening recession, frozen credit and the evaporation of the mortgage market.
In return for the insurance, the Treasury will demand formal contractual agreements from individual banks that they will lend more than they are currently. It will insist that the banks lend to British firms and individuals.
Officials refused to put a figure on the potential liability from the insurance scheme saying it would depend on how many banks took up the offer.
But if the scheme is to fill the void, ministers will have to expose taxpayers to billions of pounds of risk.
http://www.guardian.co.uk/business/2009/jan/19/bail-out-banks
They want to force banks to loan to those people the government wants them to.
Quote:
The Royal Bank of Scotland was on the brink last night after the biggest loss in British corporate history sparked a collapse in its shares.
Billions of pounds were wiped from its stock market value despite the Government’s pledge to keep it afloat with more money from the taxpayer.
As Gordon Brown set out plans to increase public ownership to 70 per cent of what was once one of the world’s biggest financial conglomerates, City investors dumped the shares in a selling frenzy.
RBS, worth £75 billion only two years ago, is now valued at £4.5 billion, even though it received £32 billion from taxpayers and shareholders less than three months ago.
The bank’s plight prompted calls for the outright nationalisation of RBS, with some MPs urging the Treasury to take over its day-to-day running.
Lloyds Banking Group, another bank bailed out by the taxpayer, saw its shares plunge 34 per cent yesterday. Barclays and HSBC also fell.
The turmoil suggested that the Government’s second massive rescue package had failed to restore confidence to the financial sector. It was a graphic illustration of continued banking uncertainty that prompted calls on the Government from Labour MPs to nationalise the whole system, an idea resisted firmly by Alistair Darling, the Chancellor, last night.
The scale of losses at RBS is breathtaking. The bank, which also owns NatWest, estimated that bad debts and writedowns on past acquisitions could leave it as much as £28 billion in the red for 2008, nearly double Vodafone’s record £15 billion loss in 2006.
Quote:
George Osborne, the Shadow Chancellor, said that the taxpayer had already lost £17 billion on the Government’s investments in the banks last October. He said that in taking a stake in RBS ministers had not understood what they were buying and had not attempted to find out. “They didn’t appear to know that RBS was preparing to post the largest loss in corporate history,” Mr Osborne said.
Yesterday’s slump in bank shares overshadowed the second rescue package, which has exposed the taxpayer further to the tune of hundreds of billions of pounds in the hope of getting banks lending to big business and individuals. The Chancellor announced plans to underwrite for a fee “toxic” debt held by the banks to encourage them to be more ambitious about future lending. The terms of the Northern Rock rescue will be altered to stop it running down its mortgage lending. The Government will also increase its share in RBS from 58 per cent to 70 per cent and kick-start home loans by guaranteeing £50 billion of mortgage-backed securities.
Mr Darling announced a £50 billion scheme for the Bank of England to buy high quality private sector assets to increase funding to big companies at lower cost. He admitted that this facility could be used by the Bank’s Monetary Policy Committee as a way of meeting its inflation target. Mr Darling was effectively paving the way for “quantitative easing”, the modern day equivalent of printing money.
The overall package was given a general welcome by business and politicians, but Mr Brown and Mr Darling were criticised for failing to estimate the potential liabilities for the taxpayer from the toxic debt insurance scheme. “We need to be absolutely sure that the threat of insolvent banks does not turn into the threat of an insolvent country,” Mr Osborne said.
http://business.timesonline.co.uk/tol/bu...icle5549589.ece
This is just nuts. The survival of England is questionable.
We are nationalizing our banks more and more everyday as well.
Plus, they are using the guaranties as pseudo money in the HOPES that they won't need it. This is gambling with the future of their country and the same thing is happening here!
The entire global system is in big time trouble.
The government will take another step today towards nationalising the entire banking industry by offering to buy shares in those institutions which sign up to a scheme offering potentially unlimited insurance against losses on their assets.
In a second, and desperate attempt, to get credit flowing through the economy, ministers will try to put tougher conditions on the banks being bailed out to force them to lend more money to businesses and households.
The insurance scheme is part of a multi-layered package from the Treasury forced on the government by a deepening recession, frozen credit and the evaporation of the mortgage market.
In return for the insurance, the Treasury will demand formal contractual agreements from individual banks that they will lend more than they are currently. It will insist that the banks lend to British firms and individuals.
Officials refused to put a figure on the potential liability from the insurance scheme saying it would depend on how many banks took up the offer.
But if the scheme is to fill the void, ministers will have to expose taxpayers to billions of pounds of risk.
http://www.guardian.co.uk/business/2009/jan/19/bail-out-banks
They want to force banks to loan to those people the government wants them to.
Quote:
The Royal Bank of Scotland was on the brink last night after the biggest loss in British corporate history sparked a collapse in its shares.
Billions of pounds were wiped from its stock market value despite the Government’s pledge to keep it afloat with more money from the taxpayer.
As Gordon Brown set out plans to increase public ownership to 70 per cent of what was once one of the world’s biggest financial conglomerates, City investors dumped the shares in a selling frenzy.
RBS, worth £75 billion only two years ago, is now valued at £4.5 billion, even though it received £32 billion from taxpayers and shareholders less than three months ago.
The bank’s plight prompted calls for the outright nationalisation of RBS, with some MPs urging the Treasury to take over its day-to-day running.
Lloyds Banking Group, another bank bailed out by the taxpayer, saw its shares plunge 34 per cent yesterday. Barclays and HSBC also fell.
The turmoil suggested that the Government’s second massive rescue package had failed to restore confidence to the financial sector. It was a graphic illustration of continued banking uncertainty that prompted calls on the Government from Labour MPs to nationalise the whole system, an idea resisted firmly by Alistair Darling, the Chancellor, last night.
The scale of losses at RBS is breathtaking. The bank, which also owns NatWest, estimated that bad debts and writedowns on past acquisitions could leave it as much as £28 billion in the red for 2008, nearly double Vodafone’s record £15 billion loss in 2006.
Quote:
George Osborne, the Shadow Chancellor, said that the taxpayer had already lost £17 billion on the Government’s investments in the banks last October. He said that in taking a stake in RBS ministers had not understood what they were buying and had not attempted to find out. “They didn’t appear to know that RBS was preparing to post the largest loss in corporate history,” Mr Osborne said.
Yesterday’s slump in bank shares overshadowed the second rescue package, which has exposed the taxpayer further to the tune of hundreds of billions of pounds in the hope of getting banks lending to big business and individuals. The Chancellor announced plans to underwrite for a fee “toxic” debt held by the banks to encourage them to be more ambitious about future lending. The terms of the Northern Rock rescue will be altered to stop it running down its mortgage lending. The Government will also increase its share in RBS from 58 per cent to 70 per cent and kick-start home loans by guaranteeing £50 billion of mortgage-backed securities.
Mr Darling announced a £50 billion scheme for the Bank of England to buy high quality private sector assets to increase funding to big companies at lower cost. He admitted that this facility could be used by the Bank’s Monetary Policy Committee as a way of meeting its inflation target. Mr Darling was effectively paving the way for “quantitative easing”, the modern day equivalent of printing money.
The overall package was given a general welcome by business and politicians, but Mr Brown and Mr Darling were criticised for failing to estimate the potential liabilities for the taxpayer from the toxic debt insurance scheme. “We need to be absolutely sure that the threat of insolvent banks does not turn into the threat of an insolvent country,” Mr Osborne said.
http://business.timesonline.co.uk/tol/bu...icle5549589.ece
This is just nuts. The survival of England is questionable.
We are nationalizing our banks more and more everyday as well.
Plus, they are using the guaranties as pseudo money in the HOPES that they won't need it. This is gambling with the future of their country and the same thing is happening here!
The entire global system is in big time trouble.
