Second banking bailout announced
Monday 19th January 2009, 8:18AM GMT.
The government has announced a second bailout of Britain’s major banks, four months after it injected £37 billion into the sector.
The new plans, to be confirmed by Gordon Brown and Alistair Darling at Downing St at 09:00 GMT, are aimed at freeing up blocked credit and encouraging the banks to start lending again.
Further protection for banks against toxic assets in the form of a new insurance scheme is also part of the bailout, as is a £50 billion purchase of the worst debt.
Mr Brown and Mr Darling are also expected to confirm an increase in the government’s stake in Royal Bank of Scotland as £5 billion worth of preferred shares are converted to ordinary stock.
And Northern Rock, nationalised last year, will be repaying a government loan at a slower rate.
The Treasury insisted the impact of the bailout on the public purse would be “mostly temporary”.
“Investments will be held for no longer than is necessary to ensure stability and protect taxpayer interests; liabilities will be backed by assets; and fees will be charged for relevant schemes,” a statement said.
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Talk about a world gone mad!
So Mr Brown has decided to throw more of our money at the banks! Helping them out with their fat cat salaries and business errors.
Meenwhile, on planet earth, the banks still charge tax payers up to £45 for a letter and then refuse to help when times are tough with it’s customers while paying £10 a week for a call center employee in India to take the flack of its bad business.
Any other business which was ran like this would be closed down and its Directors bought in front of a judge – not the banks, no, they get even more of our hard earned money thrown at them!
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Fletch, I have to agree with every word you said. This government presided over a period of stupid lending and was more than happy to watch Joe public getting up to his eyeballs in debt because it created a “feel good factor” and brought in billions of pounds in revenue for the government which in turn spent it all on their pet projects without too much controls of the budgets.
Dont like the conservatives but again they will be eventually asked to clear up the Labour mess. History repeating itself.
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For years the banks have made enormous profits and paid huge bonuses to their staff and shareholders.
Now they appeal to the Government/tax payer for assistance due to bad management and greed. Saying that the economy will collapse if they are not bailed out.
The Government has intervened for a second time, so now is the time for the banks to start lending money/mortgages but in a sensible manner, to get the economy moving forward.
However, during this time, bearing in mind it is tax payers money that has helped them, bank charges should only be charged in extreme cases. All bonuses and shareholder premiums should be cancelled until the bank becomes profitable, with transparent audits for the foreseeable future.
ONLY THEN will the public gain confidence in these so-called financial institutions.
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why should we pay for the banks and building society mistakes and sheer greed?. nationalise them i say and make sure they are properly regulated within a strict operating staight jacket and while we are at it replace credit cards with debit cards.as my granny used to say if you cant afford it save til you can.
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I am continually being encouraged by my bank to take out a loan, I have had a pre-approved loan for £25,000 in my online account for two years or more, available in my account for spending within 3 hours if I take it up. I am a pensioner and would love to have it but the thought of paying it back over the next ten years is a bit of a dampner.
It was this sort of lending and borrowing that got us where we are, all encouraged by the Government who said that ” over regulation would harm the economy”, well, under regulation has done more than that, we are on the verge of bankruptcy and they are about to do exactly the same again. One couldn’t, make it up, how many other pensioners are like me, still having money thrown at them, this bank seems to be doing what Brown is telling them to do.
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The banks are more than willing to lend money to ‘safe debtors’ who will borrow responsibly, I am also constantly being offered loans. The problem is, safe debtors are not wanting to borrow money, particularly in the current economic climate.
You would have to be crazy to saddle yourself with loads of debt at the moment. And there we have the problem. The government want the banks to lend money to the idiots again, who will recklessly borrow, and spend spend spend. In this way the government hopes everything will be alright again, the economy will boom on the back of non existent cash, just as it did before. THE BUBBLE HAS BURST MR BROWN, WAKE UP !
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TO BE FAIR THERES NO OTHER OPTION FOR US IS THERE
WHAT DO YOU PROPOSE WE DO INSTEAD??? lET THEM GO BUST??? I THINK THATS WORSE
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its a fair point, we have to act to save the banks, they are in the national intrerest, as such in my opinion they should be nationalised
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David,
I think there are many ‘safe debtors’ both privately and as businesses who are not being extended credit at present due to cuation within the banks.
Whilst I wouldn’t be keen on long-term public ownership of the banks, we need to do what is being done. After all, banks, in the medium to long-term, are a licence to print money. I would hope to see the banks put, and kept, in public control until all of these liabilities have been paid off plus a substantial bonus for the public purse, before they are returned to private ownership, under a hopefully less greedy more prudent control.
The days of ‘the market ruling all’ and Monetarism are now thoroughly discredited. Perhaps nationalisation is just what we need. Let’s do the same to greedy energy companies while we’re at it!
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clown brown and his socialist do gooding mates should butt out of the economy, the market forces will take care of this, clown brown has failed, time for a change, yes we can get him out, yes we can, come on people lets get rid of the brown and his banking nationalisations and get market forces back to solve this
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i think we should nationalise energy next and make it free to the eldery and sick
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Should we do this carte blanche Mike? Some ‘elderly’ have far more money than most younger working people, having lived their working lives during the long boom period when share prices soared and endowments and pensions paid out well. Why should hard pressed younger citizens be subsidising further a generation that had it far better than they ever will now?
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