Banks!

jambutty · 08-10-2008, 12:02

For years in times aplenty the shareholders have enjoyed dividends beyond their wildest dreams and the fat cat bosses scooped huge bonuses.

Now when the banks are going through severe times, times of their own making I might add, shouldn’t the shareholders and fat cats prop them up and not we tax payers?

Only this morning I received a letter from Barclays (I have never had an account with Barclays) offering me an unsecured loan of up to £10,000 and of course a credit card.

Has Barclays learned nothing?

WillowTheWhisp · 08-10-2008, 12:11

I don't think it's as simple as that. This isn't just a UK problem. It's international and it's when banks DON'T loan money that we have problems. As long as they lend to people who can afford to pay it back they shouldn't have problems.

Boeing Guy · 08-10-2008, 12:19

Here's an idea, why doesn't the government guarantee all deposits and current account holders money. Then refuse to help the banks out with public money. If the bank goes under then all debts go with it, so all those sub-prime loans die with the banks.

WillowTheWhisp · 08-10-2008, 12:25

That wouldn't work because it would deter banks from loaning money and we need banks to start having the confidence to loan again.

jambutty · 08-10-2008, 12:38

Quote:

Originally Posted by WillowTheWhisp

I don't think it's as simple as that. This isn't just a UK problem. It's international and it's when banks DON'T loan money that we have problems. As long as they lend to people who can afford to pay it back they shouldn't have problems.

I agree that the banking situation isn’t just a UK problem but what happens in Iceland, the Far East etc doesn’t directly affect the UK citizens unless any of them have an account in those foreign banks. Although foreign banks have shareholders and fat cat bosses too.

Greed was the banking downfall. They made loans willy nilly without having the assets to cover them. So they borrowed from each other. Now how stupid is that?

Lending money means making a profit on the loan. The more you lend the more profit you will make, but only if the loans are repaid. It all looked nice in the ‘books’ but the reality is that figures in a ‘book’ are meaningless and circumstances have eventually caught up with them and we are in the current mess that is not of the people’s making.

One other outcome of this banking debacle is that the European Union has been shown to be nothing of the sort, as individual countries take steps to underwrite their own citizens’ accounts in their own banks.

There is surely a good case for getting out of the EU.

jambutty · 08-10-2008, 12:40

Quote:

Originally Posted by Boeing Guy

Here's an idea, why doesn't the government guarantee all deposits and current account holders money. Then refuse to help the banks out with public money. If the bank goes under then all debts go with it, so all those sub-prime loans die with the banks.

Great idea. It’s got my vote.

jambutty · 08-10-2008, 12:41

Quote:

Originally Posted by WillowTheWhisp

That wouldn't work because it would deter banks from loaning money and we need banks to start having the confidence to loan again.

We need banks to loan money that they have.

SPUGGIE J · 08-10-2008, 13:24

Quote:

Originally Posted by jambutty

We need banks to loan money that they have.

True but they have to lend our money wether its in accounts or Darlings bail out. Sadly though they will never learn and will go cap in hands to the govenment of the day. 1929-1935 should have served as a warning but no arrogance at the highest level scuppered it.

Morecambe Ex Pat · 08-10-2008, 13:48

Regarding the banks which have been nationalised.
Will they have to repay the rescue capitol before they are sold back to the private sector or will they be sold back to the fat cats, at a knock down price 'to save the tax payer money'?

MargaretR · 08-10-2008, 13:54

If you are wondering where the money went watch this
BBC iPlayer - Super Rich: The Greed Game

WillowTheWhisp · 08-10-2008, 14:13

Quote:

Originally Posted by jambutty

I agree that the banking situation isn’t just a UK problem but what happens in Iceland, the Far East etc doesn’t directly affect the UK citizens unless any of them have an account in those foreign banks. Although foreign banks have shareholders and fat cat bosses too.

But it does, and not only the people with the foreign bank accounts. Banks trade with each other and that is how the whole thing snowballs. Economics is a very funny subject. How do you think banks make the money they pay us in interest on our deposit and savings accounts?

jambutty · 08-10-2008, 15:31

Quote:

Originally Posted by WillowTheWhisp

But it does, and not only the people with the foreign bank accounts. Banks trade with each other and that is how the whole thing snowballs. Economics is a very funny subject. How do you think banks make the money they pay us in interest on our deposit and savings accounts?

Having just watched “The Greed Game” the whole way through (thanks for the link MargaretR) I am appalled at the ease some individuals have made a fortune way beyond the realms of avarice and safe in the knowledge that if their dealings go wrong, they don’t pick up the tab.

Would the interest that they charge us for loans and gambling on the stock exchange be a clue?

Bonnyboy · 08-10-2008, 21:27

I see 20 or more of our Councils have cash stashed in Icelandic bank accounts, pity the link doesn’t list them - Councils’ Iceland deposit fears

Eric · 08-10-2008, 21:53

Quote:

Originally Posted by WillowTheWhisp

I don't think it's as simple as that. This isn't just a UK problem. It's international and it's when banks DON'T loan money that we have problems. As long as they lend to people who can afford to pay it back they shouldn't have problems.

True indeed. Canada has so far done well in this recession. The main reason is that Canada's banks are governed by a strong Bank Act. And, in general, banks here have been very conservative with loans and mortgages. Banks usually require a 10% deposit before lending money to buy a house. It is the ninja loans that got the banks in trouble.

Problem for our economy is that our biggest trading partner is the US

Royboy39 · 08-10-2008, 22:12

Quote:

Originally Posted by WillowTheWhisp

That wouldn't work because it would deter banks from loaning money and we need banks to start having the confidence to loan again.

Banks have had the upper hand for a long time, you as a small businessman approached the bank for a loan to promote a new idea or product, they would ask you to sign your house over as colateral....but if you wanted a morgage and had no money to cover your debt they would sell your house from under your feet.
The mortgage market has gone tits up and houses are being sold for peanuts.
I once had a bank manager (Now extinct) say to me 'If you can prove to me that you don't need the money, I will lend it to you'
The, I am not allowed to say ' The stuff has hit the fan....but it has.