Ask the Chancellor a question on the banking crisis

isofa

jkd wrote: »

Isofa mentioned that savings should be zero-risk.

So where do you think the bank/BS gets the money to pay you interest ?
They have to invest in order to provide each one of us a return....
Some of the savings interest comes from the mortgage interest, so in theory, if someone defaults on their mortgage (thus no income to the bank), the bank still finds the money to pay you interest, or should they default in paying the savers ?

There is nothing in life that is risk-free !!

I'm well aware where banks and BS make their money

Banks have wide spreads of investments, if someone defaults on their mortgage, of course a saver shouldn't suffer. The bank owns the property, so can sell it to recoup their loss as much as possible.

Savings should in theory be risk free, it's widely accepted to be the case - it's only in the light of recent events that people have started to question the safety of savings, asked this question 10 years ago, and no one would have expected high street banking names like NR and B+B to effectively fold and be nationalised.

Someone works hard, and deposits money, without risking in stocks, shares, bonds, or other investment vehicles, should have 100% protections. Banks make much more out of deposits than they pay in interest. Look at many of their enormous posted profits, the massive salaries of high staff, the huge numbers of staff and branches...

Obviously the government agrees with this sentiment, otherwise they wouldn't have wholesale bailed out NR, B+B, and even accounts in Icesave and Kaupthing Edge, to effectively no limit, not the notional £50K limit. I mentioned Ireland and the US in my previous posts who also believe savers should be 100% safe, or to a much higher "limit".

Imagine if there was no protection and the government hadn't stepped in, I wonder how many of our banks now would exist from mass runs on all the banks from savers. If savings can't be protected, the banking system will collapse.

I still disagree with Jimmy on the 50K limit, but can also see your point too :beer:

JimmyTheWig

isofa wrote: »

but can also see your point too

Likewise..

peedy-wessex

consider yourself corrected: 7,200 in total it is!

nomoneytoday

Rocket32 wrote: »

It's very simple, Never owe more than can afford to repay.The greedy financial institutions are to blame for this mess, by encouraging borrowing beyond what can be repaid. The Government now need to step in and control our excesses, because self-regulation doesn't work and never will do.

I half agree with you. Never owe more than you can afford to repay.
However, it's not solely the banks' fault some people are greedy and selfish...

Milarky

These TSC enquiries are unlikely to produce any new answers - or reveal fresh facts. The Chancellor never comes along intending to help reveal information - it's an execise in ping-pong whereby the mere 'appearance' of the man is considered sufficient to answer his critics. (That's what not investing in your democracy 'while the Sun shone' produces)

In fact, now I think of it - how far has public life actually progressed since the time of Louis XIV?

Personally I would stick a needle in Darling's arm on live TV just to show that he bleeds - this would be far more enlightening than the TSC-crats' efforts.

home_alone

For as long as I can remember everyone has been encouraged to save for retirement which then allows free flow of money through the banking world, it is now obvious that the only enticement would be 100% protection of the individuals wealth, any other figure put forward would not encourage anyone to save. Anyone pushing the £50K should think ahead of the possibility that they might require more protection in the future. Many say put it in different banks spread the chance of not losing some of your money, I would rather have £200K in one safe bank than £50K in each of four not so safe banks. The clever bit is finding one safe bank.

gary

Nomad25

The total is 7200 but that can be split into cash and/or stocks and shares.

Thanks for clarifying that.

Nomad25

How about this as suggestion?

Once everyone has put their 2p worth into this thread, Martin submits it as a whole, it would have a good cross section of questions and people's views [powers that be might listen] and individuals could still submit their own questions via the proposed channel.

Have to agree with Milarky though, I too think this is, as usual, an exercise in futility. Another cosmetic/PR stunt.

Bojangles_3

I agree with the points made in this thread by Deryk, Rocket32 & Milarky. Excellent!

I would love to hear your views on these films, which go some way to simplifying a system that has never really changed.

Easy guide:
http://video.google.co.uk/videoplay?docid=-4001834874264918973
(Robert Peston for BBC - now witch hunted for causing the crisis - oh, please!)

More in depth explanation:
http://video.google.com/videoplay?docid=-515319560256183936
(A bit dense, but very informative. Please don't make silly comments about the pencil pointing economist!)

Another:
http://video.google.com/videoplay?docid=7065205277695921912

I think Abraham Lincoln had the right idea with Green backs - debt free currency.

Things have not changed - just become more sophisticated to act as a smokescreen & increase diversion away from where the real problem lies.

Help me formulate a question after watching these for the TSC.

Thank you

AMUK786

well i have posted my questions, waiting in anticipation for my replies!

:rolleyes:


taxpayers work for their money

taxpayers invest their money in banks

government taxes taxpayers

banks invest taxpayers money in shares

banks lose taxpayers money

government uses taxpayers money to invest in banks

banks are getting money from taxpayer and from government and have still lost taxpayers money

if banks are borrowing money how can they have money to pay bonuses?

banks shouldn't be giving bonus to staff with borrowed money instead they should use that money to pay back taxpayers that has been borrowed by the bank!

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interest rates are dropped by bank of england by 0.5%

government is borrowing taxpayers money to banks

banks are being supported left right and centre

however,

mortgages are still being withdrawn

interest rates on lending to taxpayers are still too high

repossions are at their highest and increasing

where is the help for the taxpayer who has bailed out the banks

government needs to enforce law of no repossions replacing it with shared ownership schemes

banks repossessing means that families will fall onto government social housing increasing the costs for government in the long term which means less money for the government to borrow to banks

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if all goes well as expected, Chancellor to promise that we get income tax cuts funded by the return made from the investment in banks?

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where was the FSA to stop this happening?

How is the FSA going to stop this happening in future...detailing actual plan e.g. they will have an FSA employee in banks HQ that will be authorisor to new mortgages...not just top level nonsense such as they will oversee banks.