Pass around the hat - BoE needs more cash for bailouts.

WTF?_2

Or more likely, spin those printing presses up....

http://www.telegraph.co.uk/finance/financetopics/recession/3793721/Bank-of-England-warns-more-need-to-rescue-UK-economy-as-bail-out-falters.html

Bank of England's Governor Mervyn King has warned that more will be needed to rescue the UK economy as the Government's £500bn financial bail-out fails to get battered banks lending again.

In a letter to Chancellor Alistair Darling, Mr King said that "additional measures, building on the Government's package to support the banking system announced in October, will probably be required to underpin lending to households and companies."
..
Mr King did not elaborate on what extra measures the Bank may consider, but they will almost certainly include cutting interest rates to below 2pc for the first time in UK history, and possibly a move by the Bank to pump cash directly into the economy.
..
He warned that the recent falls in sterling will continue to push up the cost of imported goods and services. The hope is that it will also boost exports as it improves the UK's competitive position, although economists have warned that this could be limited because of depressed demand from the UK's biggest export markets of Europe and the US.

ad9898_3

You'd think that of all people, Merv would get it. The banks are lending, but compared to the ridiculous, unsustainable amounts they were lending up until last year, it seems like they aren't.

When are these people going to understand that money is debt, and therefore there is/was way too much of it out there already.

Renovatio

!!!!!!? wrote: »

Or more likely, spin those printing presses up....

Yep, how long before the government starts paying public servants in cash:rolleyes:

if we were in the good ol' days of people receiving a weekly pay envelope; it would buy Brown another 6 months before people realised what was going on.

ad44downey

ad9898 wrote: »

You'd think that of all people, Merv would get it. The banks are lending, but compared to the ridiculous, unsustainable amounts they were lending up until last year, it seems like they aren't.

When are these people going to understand that money is debt, and therefore there is/was way too much of it out there already.

How are banks supposed to borrow money off the government at 12% and then lend it out at 4%? It's totally mad.

Old_Slaphead

ad44downey wrote: »

How are banks supposed to borrow money off the government at 12% and then lend it out at 4%? It's totally mad.

Borrow some off Govt at 12% and average down by getting rest off [strike]suckers[/strike] erm savers at 0.1%

Generali

ad44downey wrote: »

How are banks supposed to borrow money off the government at 12% and then lend it out at 4%? It's totally mad.

Through the magic of fractional reserve banking the same money is lent out several times. The problem is that the banks aren't lending out the money being lent to them by the Government, they are using it to bolster their reserves.

tomstickland

I visited a fractional reserve the other week. I spotted a few rare vulgar fractions at feeding time.