IMPORTANT: Why the banks MUST be allowed to fail!

OracleXe

Let the banks go bust and all our debts are cancelled. What absolute nonsense this is.

What needs to change banks lending money to people who can't afford to pay it back (and in many cases have no intention of paying it back).

When the unemployed / lazy / workshy can get loans to buy things they can't afford then you know something is seriously wrong with the country.

1694

rjm2k1 wrote: »

What a load of tosh, bank goes bust so you don't pay your mortgage off!, cloud cuckoo land!!!

What is interesting however is that ALL of the money owed to the lender will be sold on and collected including the interest, yet only 35k or now 50k of your money is safe and any interest due will be lost! So basically banks have a license to over-lend, swallow up anything over 50k of your savings, go bust and still collect the debts!

Banks have lending way bigger than there borrowing, so if the bank goes bust and liquidators are called in like you have kind of said, all the borrowers still have to repay, so if the bank is owed more than it owes, by a significant margin, upto 9 times, won't savers be pretty sure of getting there money?

Liquidators manage the shell banks, collect repayments of borrower pass it to savers and other creditors.

Even if the liquidators get less back than was borrowed as borrowers sell below what they paid, the price of those goods has therefore come down for the savers whos savings have reduced.

webdigga

Pssst wrote: »

Shall i tell you what would happen if the banks were allowed to fail? I have worked all my life and never been dependant on the state. I'm like many others. I have savings and investments. If the banks failed and i lost all that i had worked for, I wouldnt go out to work anymore. I'd become feral and live by my wits and I'd be looking for revenge and recompense. I guess many others would too. The result would be as close to civil war on our streets,far worse than anything that the race and poll tax riots gave us. That price is too high a price to pay.

Couldn't have put it better myself!

1694

webdigga wrote: »

Couldn't have put it better myself!

Haha, I don't blame the bankers for this mess...I blame the public for encouraging them.

JohnnyW_3

Where on earth did they get those figures? Go back to theorising about crop circles and ufos.

Look what even a small amount of this sort of thinking did for America during the depression:
http://news.bbc.co.uk/1/hi/business/7656949.stm

1694

Head in the sand. Would you borrow more than you could repay? No. The Government has done this...what is the only logical conclusion.

earlgrey_3

wazaaap123 wrote: »

This information must be gravely considered before taking action...

Hardly. Written by a clueless twelve year old I assume who should pay more attention in class.

1694

Exactly, it was a big concept that shouldn't have been undertaken if it was wrong so it was offered for public scritiny and consent....just like the bank bailout was.....oh my.

Pssst

1694 wrote: »

Haha, I don't blame the bankers for this mess...I blame the public for encouraging them.

Hmmm..well i dont know about that. I didnt encourage anyone. I'm probably like most people. Intelligent enough to get by ,earn a living,take an interest in current affairs,converse on many levels BUT i am no expert in the intricacies of the economy and finance. I live in quite a conservative house and drive quite an old car. I like to keep things simple. I have been responsible enough to save and invest some money to cover future plans and needs. I have entrusted it to the financial institutions. I fully expct to be able to access it as and when i need. If that doesnt happen or it is stolen from me, i dont care who is to blame but as i have said,if that scenario is repeated across the country,civil war and anarchy will rain. Those who have taken a responsible approach (like me) will never repeat the mistake. I dont believe that will happen. What we now need is that our financial institutions are overseen and regulated with an iron fist and not just mealy mouthed words,to ensure that we survive this storm and dont repeat the same mistakes.

1694

Your money hasn't been stolen from you. You agreed to lend it to an instituoin without understanding what that instition does or how it does it.

There was risk involved hence the reward of % interest.

What was accepted as the "sensible and safe option" was far from it. Who would invest in a company which had 9 times as much money lent as it had in in it?