Home » Forums

[MSE Lawrence]

Poll between 19-26 Jan 2009:

Should we nationalise the banks?

This week the government covered another £200 bn of banking assets and increased its share in RBS to 70%. Is it time for us to take the whole banking system into state ownership and control?

Which of these is closest to your view of what the Government should do?

A. Don’t bail banks out, let them fail, if that’s market forces. 26% (2139 votes)
B. Take stakes in banks if needed, but don’t take operational control (current situation). 18% (1511 votes)
C. Nationalise all the banks the govt is taking a share of. 29% (2437 votes)
D. Nationalise ALL banks. 9% (729 votes)
E. Nationalise ALL banks and building societies. 7% (548 votes)
F. Other. 1% (111 votes)
G. Don’t Know (don’t understand it). 10% (803 votes)
H. Don’t Care. 1% (71 votes)

This vote has now closed, but you can still click 'post reply' to discuss below. Thanks

Enter e-mail to get it:   View Past Emails, FAQ Privacy Policy

[bunking_off]

Unusual...hundreds of votes but not a single comment.

Nationalisation is an anathema to me, but I went Option C. Why?

Well the current scheme may work, but there's no guarantee that even with the toxic-loan underwriting scheme, the banks will start to lend : the proceeds could be squirrelled away, paid out in the form of bonuses to the very people who got us in this mess, or paid out to shareholders. The Government claim to be leaning on the banks to curtail the excesses of some of the bonus culture, but the very fact that bonuses are still being paid at all proves the message hasn't got through.

Nationalising all banks would be profoundly unfair..why should the minority of banks that have run good businesses be penalised?

I think letting the banks fail is a bad idea...there's a potential domino effect at play here that could run out of control.

It seems to me that if the aim is to get the banks lending again, the best way - although it goes against the grain for me - is for the Government to be doing so directly rather than using intermediaries where ultimately they don't seem to exercise control. What better way than using the banks that they've acquired via nationalisation?

This would probably break a series of EU rules about state intervention, but, well, needs must. In any case, the fines involved...if we choose to pay them...would be trifling next to the amount the Government's currently ploughing in to shore up private enterprises.

[tripled]

I believe in A, but have voted for B because we already have too much tax payers money tied up in the banking system now to let them fail, even before this week.

[benood]

Other - over the last 15 years I've lost count of the number of experts who sagely said that the problem with Japan was the toxic liabilites held in their banks and if only they'd written them all off sooner then Japan could recover - easier said than done....

Some banker is suggesting sale and leaseback of all these dodgy loans don't know how it might work... but it's an idea

[cymro]

Putting money into any failed business is very risky. Putting money into a failed business without making radical changes to e.g management, strategy etc is just plain foolish - if things don't change the outcome will probably be the same!

If we can bail out banks why can't we bail out businesses who perhaps failed for more legitimate reasons other than poor management?

I think the government bailing out banks last year will go down as the most expensive government blunder in our generation. It comes as absolutely no surprise that the same banks are already looking for more money.

[Sceptic001]

Other.

The problem is that these banks are too big to be allowed to fail. Break them up into smaller units, regulate them properly and in the unlikely event that one gets into trouble it can be allowed to go bust without destroying the entire economy.

[Sam_BMN]

B - The state (ie us) should get something in return for a bail out, but I can't bear the thought of the politicians trying to run a business.

[grumpynotoldman]

We don't nationalise we regulate.
First we take Manhattan, .................................................. ..........................

Then we take Berlin.
The reason it went wrong is that unregulated banks created unsupervised products that were indecipherable even to other bankers. Slater Walker started all this in asset stripping British manufacturing and pension fund raids. That's why they won't lend to each other now. They know they lied to each other and now don't trust them even if they are trying to tell the "truth". They don't even know how to count what they have got. Pathetic.
The fact that the govt. gave them £17k ( Robert Peston's blog) of my money , which is about equivalent to the shortfalls on my endowments makes me wince.
They seem to have just about remembered how to do old fashioned ( 80 % max LTV) which around here has stabilised the housing market, but it may just be Nationwide and Brittania, gobbling up the good risks as they can undercut everyone by 0.5% with understandable deals.
I wonder what line of work the newly unemployed Mortgage brokers went into.
Probably IVA advice and Insolvency practitioners.
Bitter, like honey, baby.
There's graffiti on all the bins in Brighton, with a slogan " I STOLE ALL YOUR MONEY!" and underneath the logos of all the banks.


Do you think it's Banksy

[worbikeman]

The problem with the banks and a lot of businesses (e.g.Royal Mail) is that huge bonuses are paid out as a 'reward' for failure. Bonuses should be just that - a reward for success only, if they are given at all. Ordinary mortals are expected to be content with just their salary. And the sack for failure.
As if those bloated fat cats needed more cash!

[fi1966blue]

If you nationalise the banks then all the shares are worthless.
Hundreds of thousands of people in the UK hold their savings in Bank shares and that would mean all their savings are lost.
Many people especially old Bank Staff have saved shares all their lives as a pension and also all of us with any share based savings plans would lose.
We may have lost at the moment but at least can see a light at the end of the tunnel if we hang on and wait for a change in the current climate.
NATIONALISATION means all the share money is LOST.!!!!!

[teddyco]

Don't nationalise the banks, regulate them!

Adam Smith, one of the greatest economists of all time and the author of 'An Inquiry Into the Nature and Causes of the Wealth of Nations', was a proponent of banking regulation. He knew the true nature of man and the need for strict regulation of an industry that was prone to cheating and embezzlement. How
ironic that after 250 years we still haven't learned anything from those wise men who came before us.

Letting banks fail to teach a few greedy bankers their lesson is foolish because we will all suffer. Criminal bankers should be punished with heavy fines, penalties, and lengthy prison sentences if they violate strict banking codes and regulations.

The leaders at Lehman Brothers and other banks who orchestrated our current financial catastrophe should be put in jail for 20 years minimum without parole to send a message lest other folks in the banking industry are tempted to steal.

[Mary_Hartnell]

We cannot nationalise the banks.
If we did all those dodgy liabilities hidden on their balance sheets would appear on our national accounts.
Then even more foreign investors would start questioning the UK's credit rating, and we would all have to pay higher interest rates or have our currency devalued even further.
I seem to remember that one of the major problems in rich Japan, was that the government did not have the guts to close down their most failed banks and companies involved in the "non performing" loans.
If we make our banks branches of the Bank of England, and then defaulted; the UK would be taking advice from Argentina.
We would then all join the "SKIing" pensioners in queer street.

[Guanajuato]

By nationalising the banks the taxpayer has an interest in, the decision-making will be (at least in part) taken away from those people who have proved they are incapable of making decisions for the good of their customers.

[TonghamYorky]

We can't let the banks or the banking system fail no matter how much some of us would like to see it happen. I would prefer to see the big guys who got us into this mess given a massive kick in the groin and forced to pay back their bonuses say for the last 5 years, repro their houses if need be!! If criminal activity is proved sling them in HMP Dartmoor for ten years with
no early get out clause.

I'd be ok with a limited nationalization i.e the banks the government has bailed out are nationalised for a set period of time, say five years max. If the situation improves then the time period could be reduced. Set up much tighter regulation and have the regulator inspect the banks much like Ofstead does for schools. Oh and make it mandatory that the chief reguator is not a former employee or connected in any way to the banks other than a pesonnal bank account.

Regarding pay for executives and ordinary staff. I would allow bonuses for ALL staff who reach or exceed their targets, however executives bonuses must be capped at £250k, worked out over each quarter and paid once yearly at the end of the last quarter, so if they for instance had a poor 2nd quarter they would not acheive the maximum bonus.

[mcgazz]

The Government's two main concerns with any bank it intervenes in should be:
(a) the money that the public have deposted in that bank
(b) the jobs of that bank's staff (for every City joker there are plenty of tellers, branch managers, etc, who aren't to blame for the dodgy goings-on)

As for shareholders - "the value of investments may go down as well as up". They were happy enough with this when they were making a killing, so the same rules should apply now.

(I voted C).

[dijit]

Originally Posted by Guanajuato

By nationalising the banks the taxpayer has an interest in, the decision-making will be (at least in part) taken away from those people who have proved they are incapable of making decisions for the good of their customers.

Knee jerk reaction almost made me agree with you.

Then I stopped to think, and the only people I can imagine being LESS competent than those greedy bankers, would be vote hungry politicians.

Experience leads me to conclude that the sure fire way to sink our banking institutions would be to have Gordon Brown lurching from crisis to disaster, which is after all what he is best at.

[PhiltheBear]

The problem is simply solved. And it's this - introduce legislation which stops the banks paying any dividend to shareholders for a year (renewable at the discretion of the Treasury). Make the banks use that dividend money available as loans. If they don't, nationalise without compensation. It's draconian - but it would concentrate the banks' minds to solving the problem.

Ignore Brown's stupid "I'm angry" at the RBS takeover of ABN. He wasn't angry when it happened because it meant that RBS would be paying more tax. He's only angry now because it's politically convenient. In the same way it was politically convenient to shore up Northern Rock - simply because they are headquartered in a Labour heartland and it would have been the kiss of death electorally to have had huge job losses. Most banks aren't headquartered in such places so Brown and Darling can rave on all they like about 'rich bankers'. The big problem is that London' s credibility as a Financial Centre is being threatened - not by the banks - but by political meddling from a Government whose only fiscal policy is to borrow.

[Rod Smith]

Yes!

The banks got us into this mess through a mixture of greed and incompetence. Far from helping us all get out of the mess they are actively hindering government attempts to revive the economy. If they won't cooperate then force them by taking them over.

Back in the 1970's Rolls Royce went bust. The Government bought the company for £1, then used taxpayers money to rebuild the company. When it was back on it's feet it was sold back to the private sector, so at least our money was put to good use rather than being paid out in bonuses. The Government which did this was a Tory government, and the Prime Minister at the time was Ted Heath.

I suggest this would be a good way of dealing with the banks.

[orcadian]

A PPP (formerly called PFI) is the way to go for infrastructure projects which undo the recession and create jobs (new schools, hospitals, Forth Road bridge, etc) but hugely expensive due to the banks' profits on it. So (1) nationalise the banks we're taking a stake in (2) set up PPPs through the nationalised banks (3) after nationalisation all profits from PPPs must be handed back to the Treasury. Outcome: new jobs, new infrastructure, all at fair prices.

[Bella85]

I voted A because i feel the government have used enough of tax payers money already and i feel this wont be the last time they put more of our money in. Its totally unfair as we have to struggle with very little help. If banks are struggling let them because more bail outs may not actually help.