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Moodys downgrades 12 British Financial Institutions
Comments
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Putting my Hamish hat on for a moment - if house prices fall the banks are insolvent and the UK govt can not afford to bail them out - I don't see the UK govt dong anything other than (try) to support the housing market in the short term.
And therefore encouraging the UK economy to be ever more a slave to it's property market.
Houses should be places where the population live. The working population go out to work to run the economy. The property market will always be a significant part of the economy, but how significant do we want it to be ? It seems that some people see it as the driving force behind the economy. I don't think that is sensible or desireable.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
I think Moody's are reckoning that it would be a political calculation. The government would gauge the likely political consequences of allowing a failure, as against those of a bailout.Don't understand this - surely those most likely to receive govt support are the safest?"It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0 -
I think Moody's are reckoning that it would be a political calculation. The government would gauge the likely political consequences of allowing a failure, as against those of a bailout.
Merely adds to the pressure to strengthen balance sheets and improve underlying profitability. As this will impact cost of borrowing in wholesale markets. The huge consumer debt balloon has to be deflated or at the very least held in check.0 -
And the reason anyone should have any confidence in Moody's et al, is...?0
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And the reason anyone should have any confidence in Moody's et al, is...?
It's not a question of us having confidence in Moody's et al, so much as the fact certain important institutional investors are barred from investing in credit that is either unrated, or lowly rated.
Or, in other words, this matters even if the credit rating agency is wrong: it will be harder for these banks to solve their problems as a result of this decision.“The ideas of debtor and creditor as to what constitutes a good time never coincide.”
― P.G. Wodehouse, Love Among the Chickens0 -
It's not a question of us having confidence in Moody's et al, so much as the fact certain important institutional investors are barred from investing in credit that is either unrated, or lowly rated.
Or, in other words, this matters even if the credit rating agency is wrong: it will be harder for these banks to solve their problems as a result of this decision.
You are right. But it doesn't alter the point I was making.0 -
quite shocked Skipton is mentioned£48515 interest £181 (2009)debt/mortgage-MFIT/T2/T3
debt/mortgage free 28/11/14
vanguard shares index isa £1000
credit union £400
emergency fund£500
#81 save 2018£42000 -
black_taxi wrote: »quite shocked Skipton is mentioned
It seems to me that Skipton is big enough to be reviewed in this crowd, but not 'too big to fail'. Savers needn't be too worried IMO, because if they are not too big to fail, the flip side is that they are small enough for savers to be bailed out by the FSCS.
I'm not surprised at the slight downrating. It's no worse than the others, and you have to remember that Skipton has already ridden to the rescue of failing societies such as Scarborough, which will have weakened it a bit.0 -
Surely no comment is being made as to any change in the underlying status of the institutions but merely the likelihood that the govt will bail them out should they fail.I think....0
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A number of posters are notable by their absence on this particular thread.0
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