Reckless lending got us into this and more will get us out?

Wookster

Royal Bank of Scotland and Lloyds Banking Group are expected to sign legally binding agreements to lend at least £20bn each more to small businesses and households as the price for insuring at least £500bn of their most troublesome assets with the taxpayer. The banks would also agree to a code of conduct on pay policies and could issue up to £20bn of a newly created class of share to the government to pay for the much-anticipated asset protection scheme.

http://www.guardian.co.uk/business/2009/feb/24/banks-toxic-assets-insurance

Does Crash ever learn? I'll wager that ultimately the taxpayer ends up carrying the can for this.

chucky

it's about liquidity and helping companies,employees and homeowners... tell me another solution?

would you prefer businesses to stop trading due to finance/liquidity problems, even higher unemployment and even more repossessions??

ad44downey

Wookster wrote: »

http://www.guardian.co.uk/business/2009/feb/24/banks-toxic-assets-insurance

Does Crash ever learn? I'll wager that ultimately the taxpayer ends up carrying the can for this.

It's absolute nonsense. Clown will bankrupt our once great nation and let future generations pick up the tab for it.

Pobby

My worry is that perfectly good businesses will go to the wall due to the banks refusal to lend for day to day running.

A number of my customers are being told by suppliers that they will be with drawing credit facilities. This is due to the insurance companies they use, to insure against customer default, clamping down and with drawing cover.

Rochdale_Pioneers

Wookster seems unable to tell the difference between (a) reckless lending and (b) any lending.

Anyone got the inclination to explain to him how business works?

thriftybabe

chucky wrote: »

it's about liquidity and helping companies,employees and homeowners... tell me another solution?

would you prefer businesses to stop trading due to finance/liquidity problems, even higher unemployment and even more repossessions??

I agree. As much as I hate to say it I think the Government are doing the best they can in a very, very difficult situation. The country would literally stop without this. It has to be done whether we like it or not.

Wookster

Rochdale_Pioneers wrote: »

Wookster seems unable to tell the difference between (a) reckless lending and (b) any lending.

Anyone got the inclination to explain to him how business works?

I wandered how long it would take for you to come and rant and rave.

Do you think Crash will be allowing the banks to lend to whoever they choose to at whatever rate they see as being appropriate to the risks involved?

If the answer is no then it is reckless lending.

(hint: this should give you a clue http://thescotsman.scotsman.com/latestnews/Brown-tells-the-lenders-.4671144.jp)

Who is going to pay for it? The taxpayer! Again! Perhaps we should just nationalise the banks and turn them into social lending vehicles.

BenL

and according the the times website article Lloyds are trying to get out of not paying the 1st installment of what they owe us from th previous bailout in addition to not wanting to stump up for the 1st losses on this new insurance package.

"There was also irritation in the Treasury yesterday that Lloyds had let it be known that it was trying to forgo the £480 million payment it agreed last year as the price of its original bailout by the Government."

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5799390.ece

1echidna

Interesting to think how Margaret Thatcher would have dealt with this crisis. She would probably have preserved the public public finances better but the carnage in the country with bankruptcies and unemployment would be terrible.

Rochdale_Pioneers

Wookster wrote: »

I wandered how long it would take for you to come and rant and rave.

You have a funny definition of "rant and rave". But hang on, here comes yours:

Wookster wrote: »

Do you think Crash will be allowing the banks to lend to whoever they choose to at whatever rate they see as being appropriate to the risks involved?

If the answer is no then it is reckless lending.

(hint: this should give you a clue http://thescotsman.scotsman.com/latestnews/Brown-tells-the-lenders-.4671144.jp)

Who is going to pay for it? The taxpayer! Again! Perhaps we should just nationalise the banks and turn them into social lending vehicles.

So essentially, you're arguing that no banks should be lending money to anyone because in the crisis we're in its an unforseen risk.

You keep frothing about how broken Britain is. Ban all lending and just you see what broken really looks like. If of course this ISN'T what you're saying then why not spell it out in black and white - how much lending is OK to the Wookster?

Arcaine

This is why I was against bailouts of the banks from moment one, the banking system was and still is bankrupt. If the Government really wants to start lending to small businesses is should of created a new bank where it is 100% in control of the lending requirements (and the bonus payouts). The banks are hoarding the cash, which means none is getting passed on the people who have profitable businesses but do have cashflow requirements. While I agree that risky lending got us into this we cannot completely turn the credit off to small businesses, of course we have to let the bad businesses fail and there will be plenty, but profitable small businesses keep many people employed.