Northern Rock Even More Bust Than Before!

Generali

In July 2008, the FSA allowed Northern Rock to include lower quality assets in it's reserves (so called Tier 2 assets). This has given the bank an unfair advantage and is skirting with the laws about illegal Government subsidies IMO.

Unfortunately, it has just lost a load more money - £500,000,000 - so has once again to call on you guys for money (again structured in such a way that means the Government can get around the rules). LINK

Why do you think an insolvent bank with it's headquarters in the centre of Labour's heartlands (Newcastle) is being kept afloat against any logic or common sense? The longer it's kept alive, the more money the taxpayer loses.

ad9898_3

No surprise here, the government is corrupt and bankrupt of ideas. I thought Blair was bad but this lot take the biscuit.

vivatifosi

Over the past day or so Gen the gossip here has been that NR may be sold to Tesco. Of course we taxpayers would get to keep the 'toxic' part.

http://www.reuters.com/article/marketsNews/idUSL150053020090701

andygb

ad9898 wrote: »

No surprise here, the government is corrupt and bankrupt of ideas. I thought Blair was bad but this lot take the biscuit.

I agree, but would the Tories be any better? You just have to look at the connections between people like Mandelson and Osborne, to realise that the people in the cabinet/shadow cabinet are from the same mould. They have the same backgrounds, same contacts in the City, and frequent the same social cliques. They are only interested in maintaining their personal wealth, and building up a nice future for themselves outside of politics.

Graham_Devon

Generali wrote: »

Why do you think an insolvent bank with it's headquarters in the centre of Labour's heartlands (Newcastle) is being kept afloat against any logic or common sense? The longer it's kept alive, the more money the taxpayer loses.

I don't reckon it's even anything to do with labours heartland.

Brown is having to do U-Turns on pretty much everything at the moment.

One of the success's in his turning round of the economy is to talk about saving Northern Rock. He talks about it everytime a question is posed about his handling so far.

So it's probably more of an exercise to stop embarrasment at any cost.

Generali

vivatifosi wrote: »

Over the past day or so Gen the gossip here has been that NR may be sold to Tesco. Of course we taxpayers would get to keep the 'toxic' part.

http://www.reuters.com/article/marketsNews/idUSL150053020090701

I heard about that. Perhaps this is what is known as 'kitchen sinking' - shoving all the losses you can into a single quarter so that you can then announce an amazing rebound.

vivatifosi

Generali wrote: »

I heard about that. Perhaps this is what is known as 'kitchen sinking' - shoving all the losses you can into a single quarter so that you can then announce an amazing rebound.

Thanks Gen, I've never heard of that.

Spin Doctors and Kitchen Sinking - what a glorious partnership that's going to be...

kennyboy66_2

Generali wrote: »

In July 2008, the FSA allowed Northern Rock to include lower quality assets in it's reserves (so called Tier 2 assets). This has given the bank an unfair advantage and is skirting with the laws about illegal Government subsidies IMO.

Unfortunately, it has just lost a load more money - £500,000,000 - so has once again to call on you guys for money (again structured in such a way that means the Government can get around the rules). LINK

Why do you think an insolvent bank with it's headquarters in the centre of Labour's heartlands (Newcastle) is being kept afloat against any logic or common sense? The longer it's kept alive, the more money the taxpayer loses.

I'm guessing you probably know that had it been wound down that those losses would have crystallised anyway.

I'm also assuming from previous posts that you would have liked to see those banks and building societies that were in trouble simply be allowed to fail with no recompense to either depositers or wholesale lenders.

Do you think this would really have been the best solution ?

Generali

kennyboy66 wrote: »

Do you think this would really have been the best solution ?

Probably not.

chucky

Generali wrote: »

In July 2008, the FSA allowed Northern Rock to include lower quality assets in it's reserves (so called Tier 2 assets). This has given the bank an unfair advantage and is skirting with the laws about illegal Government subsidies IMO.

Unfortunately, it has just lost a load more money - £500,000,000 - so has once again to call on you guys for money (again structured in such a way that means the Government can get around the rules). LINK

they won't be the last financial institution to write down losses or even request a further bail out in this economic crisis.

we've seen the devastation Lehmans caused - i'm sure that's not what we want all over again...

Generali wrote: »

Why do you think an insolvent bank with it's headquarters in the centre of Labour's heartlands (Newcastle) is being kept afloat against any logic or common sense? The longer it's kept alive, the more money the taxpayer loses.

what has this got to do with Labour?

Generali

chucky wrote: »

what has this got to do with Labour?

I was under the impression that the Labour Government took the decision to keep NRK going rather than winding them up. Was that not the case? I distinctly remember them announcing it.