Why we should have let the banks go bust

StevieJ

Degenerate wrote: »

Getting back to the original article, although this is Moneyweek, and therefore not really fit to wipe my a**e

Couldn't agree with you more :T what is their agenda? are they some sort of ramping/deramping outfit?

Thrugelmir

Degenerate wrote: »

You talk of the banks and the economy as if the two are somehow independent, when clearly the health of the banking sector and economy are inextricably linked.

Lending is indeed still restricted compared to where it was, but it's been steadily improving, since the big write-downs. Thanks to adequate state support, we do not have zombie banks here.

The issue with the toxic debt is that its "international" in nature and it will take some number of years for the position to unwind and the actual loss to be determined. At the moment the UK is running a current account budget deficit so any further realised losses will only result in further problems.

Barclays, HSBC and Standard Chartered have managed to whether the storm without state support. Lloyds independently was profitable. The real issue lies with RBS who overpaid for ABN Amro and HBOS who took excessive risks in the UK mortgage market, and depended on wholesale funding.

In reality lending has returned to the pre Building Society demutalisation era. There is money to borrow. But to buy assets at more realistic prices.

More and more companies are now returning to the traditional route of raising capital by issuing shares. In the process deleveraging and becoming sounder financially.

Degenerate

StevieJ wrote: »

Couldn't agree with you more :T what is their agenda? are they some sort of ramping/deramping outfit?

Well they're not competent economists, that's for sure. I'm only an interested amateur, but I've spotted mistakes about basic concepts in some of their previous articles.