Spot the flaw.

iamesbo · 18 October 2008 at 7:29AM

Just seen a guy on the BBC explaining the bankinig crisis.
"Oh the banks are a wash with money, they have money from Chinese and Asian investors, they just won't lend it to each other."
Well if they are awash with money why do they want to borrow more?

dag_2 · 18 October 2008 at 9:55AM

Well indeed; if they're awash with currency, then why do they bother trying to borrow money from the great unwashed Joe Public by operating these weird arcane instruments known as "savings accounts" and "cash ISAs"?

If the banks don't trust each other with their money, then it's hardly surprising if little doddery granny pensioner doesn't trust the bank with her money either, and pulls it all out and stuffs it under the mattress instead.

If there isn't a continuous run happening on absolutely all banks all over the world at the same time, then that proves that there must be someone out there somewhere who still trusts at least one bank. And if that's the case, I think it should be possible to build on that trust to enable banks to start lending to each other again.

iamesbo · 18 October 2008 at 7:01PM

dag wrote: »

Well indeed; if they're awash with currency, then why do they bother trying to borrow money from the great unwashed Joe Public by operating these weird arcane instruments known as "savings accounts" and "cash ISAs"?

If the banks don't trust each other with their money, then it's hardly surprising if little doddery granny pensioner doesn't trust the bank with her money either, and pulls it all out and stuffs it under the mattress instead.

If there isn't a continuous run happening on absolutely all banks all over the world at the same time, then that proves that there must be someone out there somewhere who still trusts at least one bank. And if that's the case, I think it should be possible to build on that trust to enable banks to start lending to each other again.

" start lending to each other again" there you go again, that well worn phrase, who in thier right mind borrows cash when they are "awash with money".

I got a letter from my bank telling me to start using my credit card or they would cacncel it. They should have realised that as I was awash with money (which they can see it in my accounts) then I don't need a credit card.