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MSE News: Chancellor confirms bank plans to ring-fence savings
Former_MSE_Guy
Posts: 1,650 Forumite
This is the discussion thread for the following MSE News Story:
"Banks are to be required to split their retail operations from risk-taking arms to prevent a repeat of the 2008 crash ..."
"Banks are to be required to split their retail operations from risk-taking arms to prevent a repeat of the 2008 crash ..."
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Comments
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No doubt there is a reason for the delay until 2015.
Does anyone know why it couldn't be done gradually, say, starting today.0 -
If it's done then good, but I'll believe it only when I see it.
The money the banks have thrown at lobbying to water down and put off this legislation has been massive.
I suspect the timeline is purely so that they can build up reserves and get bad debts off the books. Who knows how many banks are technically broke already and being kept afloat by low interest rates/QE.0 -
They are keeping the 'good stuff' til last? Delay could also be used to bind the LibDems to any policy they want to see implemented and so forestall any earlier exit on their part?No doubt there is a reason for the delay until 2015.
Does anyone know why it couldn't be done gradually, say, starting today......under construction.... COVID is a [discontinued] scam0 -
So they are starting to realise that the old fashioned building society model wasn't so terrible after all? e.g. only lending money that they've actually got and checking up much more vigorously on potential mortgage borrowers?0
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If inflation is high, then the banks charge borrowers more for their debt.
If the banks are in trouble, then the government charges them......errrrr 1/2%!
Inflation is good for the debts of governments and the masters of the universe....everybody else is stiffed. That explains the time scale till 2015.
As the government has prioritised the banks above you prolls, I suggest you get rid of your debts as quick as possible, you will not have the luxury of watching them eaten away by inflation.
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Paulgonnabedebtfree wrote: »So they are starting to realise that the old fashioned building society model wasn't so terrible after all? e.g. only lending money that they've actually got and checking up much more vigorously on potential mortgage borrowers?
There's a lot to be said for that approach, IMO.Everyone needs something to believe in.
I believe I need another beer.0 -
Paulgonnabedebtfree wrote: »So they are starting to realise that the old fashioned building society model wasn't so terrible after all? e.g. only lending money that they've actually got and checking up much more vigorously on potential mortgage borrowers?
And the FSA present it in the news stories as if it's rocket science that's just been invented. They really must think "the prolls" are stupid. not to know what is going on0 -
Well the reforms Roosevelt put in place in the US in the 30s gave 40 years of pretty much stable growth with increasing living standards. The de-regulation started in the 80s amd so called "trickle down" from the new ultra rich have led us here. Go figure.0
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Does anyone know if this is good or bad (are we about to kill the goose that laid the golden egg)? Does anyone what the best banking model might be and when did it ever exist? What was banking like in the 1700's, 1800's, and was the economy any better than it is today? Should we go back to the gold standard?
Does anyone really know?
One of the reasons for massive growth in the banking sector (and our economy) is allowing the banks to have a low reserve requirement (zero to be exact), and allowing investment banks to have extremely high leverage ratios.
These are great when the economy is on the up. But when asset prices stop increasing, people start default, or a bank run occurs, this combination can easily topple the whole system.
Personally, I believe this a step in the right direction - to stop the obscene growth we have seen in the past (along with the inevitable crashing) is a good thing.
http://www.positivemoney.org.uk/ has some good easy to understand videos on how the banks create money.0 -
I'm not entirely comfortable with the delay factor. What's to stop the greedy wide-boys from doing the same thing all over again meanwhile ? I suppose it will be said that a new regulatory regime will prevent that, instead of the Blair/Brown "light touch" fiasco. But if regulation can be guaranteed to work, why is the split necessary anyway ? Belt and braces I suppose. The delay is probably in large part due to scaremongering by the banks and the eternal "city friendliness" of the civil service.
The proposed new mortgage rules are largely unofficially in place now anyway -- eg try getting a mortgage which would take you beyond retirement age. But they are just taking us back to where things were thirty or forty years ago, when banks were not run by greedy, irresponsible wide-boys, and did not go bust.
The disastrous de-mutualisation of most of the former building societies was essentially part of Thatcher's privatisation obsession. In pretty much every case of privatisation of natural monopolies and essential services the plutocrats have got rich whilst the public has suffered higher prices and poorer service.No-one would remember the Good Samaritan if he'd only had good intentions. He had money as well.
The problem with socialism is that eventually you run out of other people's money.
Margaret Thatcher0
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