We overpaid for the banks and we will never make a profit

Graham_Devon

Says the regulator (And Sir Lord Merv)

The warning came as regulators admitted that the government had overpaid when rescuing the banks in 2008 and that the taxpayer would never make as large a profit from the bail-outs as the US, if at all.

Asked whether returns for the UK taxpayer might match the 15pc made in the US, Mr Cohrs said: “I don’t think the UK taxpayer will get those returns.” Pressed on whether the taxpayer would make a profit at all, he added: “I don’t know.”

Sir Mervyn King, the Bank’s Governor, said: “The sad truth is, in 2008, the idea of focusing efforts on recapitalising the banking system was a UK idea. We got there first but, like many UK ideas, the Americans developed it faster and better.”

The US forced all major banks to take state money, buying the stakes at about half their book value, and is already out of most of its positions. The UK paid roughly twice the rate, taking positions in just the three worst-affected banks – RBS, Lloyds and HBOS. Shares in RBS and Lloyds, which acquired HBOS, remain below the taxpayer’s in-price.

They also need billions more capital...


http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9804354/Lloyds-and-RBS-need-billions-more-capital-BoE-says.html

GeorgeHowell

Should be encompassed in https://forums.moneysavingexpert.com/discussion/4393067

sheffield_lad

Not sure anyone can say we won't see a return on our investments its far to early to say. The issue is with the French and Germans who wont agree to banks lending at a ratio of 10-1 against their capital (surprise surprise being as the french banks are toast).

Our banks are far too big for our GDP and any one of 4 could wipe us out should it go bad. Best route is burn all Basil rules which made issues worse and get the ration of lending to capital down from the ridiculous 33-1 our European friends think is wise.

Generali

Graham_Devon wrote: »

We overpaid for the banks

100% correct. A solvent bank doesn't need state injections of cash. Insolvent banks are worthless and, if they are to be bailed out, should be bailed out at a price which means a return to holders of equity and bonds of precisely £0.00.

The biggest part of the problem in Ireland is the continued insistence that the Irish taxpayer via the Irish Government continues to pay out to risk taking investors in Irish banks. This is a mind blowingly stupid concept that is the sort of thing that gives capitalism a bad name.

and we will never make a profit

Time will tell.