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turbobloke
55,494 posts
129 months
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loafer123 said: The point of the £140bn is to be lent to businesses to help growth and spending, but that it will be repaid. It is not simply giving away money. That's how it looked to me. Also, as the schemes are voluntary and nobody is forcing banks to go to the BoE over this, what indications are there of likely take-up? The impression is that UK banks aren't bullet proof but remain comparatively well capitalised compared to shakier EZ banks, yet are nevertheless reluctant to free up loans and mortgages. Regardless of theory, if the move is largely ignored then it won't do much at all.
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loafer123
2,699 posts
84 months
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turbobloke said: loafer123 said: The point of the £140bn is to be lent to businesses to help growth and spending, but that it will be repaid. It is not simply giving away money. That's how it looked to me. Also, as the schemes are voluntary and nobody is forcing banks to go to the BoE over this, what indications are there of likely take-up? The impression is that UK banks aren't bullet proof but remain comparatively well capitalised compared to shakier EZ banks, but are nevertheless reluctant to free up loans and mortgages. Regardless of theory, if the move is largely ignored then it won't do much at all. The banks won't turn down a safe long term source of funding in this market. I hope it is used for capital investment by SMEs, widget machines and so on.
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turbobloke
55,494 posts
129 months
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loafer123 said: turbobloke said: loafer123 said: The point of the £140bn is to be lent to businesses to help growth and spending, but that it will be repaid. It is not simply giving away money. That's how it looked to me. Also, as the schemes are voluntary and nobody is forcing banks to go to the BoE over this, what indications are there of likely take-up? The impression is that UK banks aren't bullet proof but remain comparatively well capitalised compared to shakier EZ banks, but are nevertheless reluctant to free up loans and mortgages. Regardless of theory, if the move is largely ignored then it won't do much at all. The banks won't turn down a safe long term source of funding in this market. Understood about market conditions, but regarding the terms - are there not strings attached this time which resemble rope more than string such that lending must increase if the loans are taken up? Or is the rhetoric on this aspect meaningless? My point being that if banks are ideologically wedded to the idea that they have reached their limit on risk and don't want to lend more, then those strings might have made this less appealing, but obviously not.
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Mark Benson
2,541 posts
138 months
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Steffan said: Rapacious lending by Banks to dodgy foreign governments, benefits fraudsters, Ponzi schemes galore and every for of Credit Card and high rate loan to inadequate individuals has been achieved with spectacular success. Sod all has been lent to small UK businesses despite initiative after initiative and grandstanding after grandstanding by the Governor of the Bank of England and Politicians.
Nor will it be. This brave new lending initiative will go the way of all the others, previously rolled out, started by the Wilson government in the 1960's and continued in different forms ever since. Not going to work because the Banks do not want that business. They will not be interested.
The government needs to change the while Ethos of Banking. I believe that the roll on of Banking collapses which will follow the Sovereign debt crisis approaching just around the corner, in Europe, will offer just that opportunity to politicians.
They will fail to act effectively. They always do. Fiddling expenses is so much more gainful. Banks won't lend to SMEs because to do so profitably, they'd have to understand the businesses of those they are lending to. When an SME goes pop, the illiterate lender won't necessarily get their capital back, never mind make a profit unless they take time to fully understand the business they're buying a stake in, and the competence of the borrower they're putting their faith in. Back in dim and distant days, my father was a Nat West bank manager in a small North Yorkshire market town, he knew all the farmers and businessmen that banked with him and they knew him. When one of them needed some capital to invest in new equipment or expand the business, not only did dad have the authority to lend (up to a point, anyway), but he laso had the means to assess the risk he was taking on for his employers. Try getting your 'Small Business Adviser' to understand your business these days (that's assuming you get to see the same one more than once). If by some amazing happenstance they do manage to grasp the rationale behind your needing capital, listen as they effectively tell you "Computer says no" anyway. No bank will lend effectively to SMEs until they understand what they threw away in the 1980s. I suspect they don't care anyway.
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turbobloke
55,494 posts
129 months
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Mark Benson said: Banks won't lend to SMEs because to do so profitably, they'd have to understand the businesses of those they are lending to. Understand clients' businesses? Heresy! 
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Mermaid
12,497 posts
40 months
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So we are almost there - anyone care to speculate what the state of the following will be on Monday morning.
FTSE - currently 5502
S & P currently 1345
Dax currently 6265
Euro/£ currently 0.806
Euro/$ currently 1.266
Gold currently $1626
Edited for figures at close - big bazookas this week-end.
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loafer123
2,699 posts
84 months
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turbobloke said: loafer123 said: turbobloke said: loafer123 said: The point of the £140bn is to be lent to businesses to help growth and spending, but that it will be repaid. It is not simply giving away money. That's how it looked to me. Also, as the schemes are voluntary and nobody is forcing banks to go to the BoE over this, what indications are there of likely take-up? The impression is that UK banks aren't bullet proof but remain comparatively well capitalised compared to shakier EZ banks, but are nevertheless reluctant to free up loans and mortgages. Regardless of theory, if the move is largely ignored then it won't do much at all. The banks won't turn down a safe long term source of funding in this market. Understood about market conditions, but regarding the terms - are there not strings attached this time which resemble rope more than string such that lending must increase if the loans are taken up? Or is the rhetoric on this aspect meaningless? My point being that if banks are ideologically wedded to the idea that they have reached their limit on risk and don't want to lend more, then those strings might have made this less appealing, but obviously not. Banks make money by lending, so as long as the strings aren't too stupid, it should help.
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Apache
38,248 posts
153 months
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davepoth said: Gordon Brown has weighed into the debate, BBC news channel reporting. Nothing on the internets yet though. Thank f  k for that! we're all saved, let's go down the pub
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WhoseGeneration
4,090 posts
76 months
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uk.reuters.com/article/2012/06/15/uk-ireland-imf-idUKBRE85E0Y220120615
It just keeps on and on.
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turbobloke
55,494 posts
129 months
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loafer123 said: Banks make money by lending... As you know some seem to have lost the knack, at least in terms of small business lending which is why the strings matter in my view.  Not that UK banks aren't making money, that habit remains. http://www.telegraph.co.uk/finance/newsbysector/ba...
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Steffan
6,190 posts
97 months
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loafer123 said: Gargamel said: Indeed Steffan and I have been thinking about the various solutions and new theories that this thread has from time to time dabbled in. Clearly in relation to the £140bn to the banks – it is akin to a dealer providing free heroin to an addict trying to go clean. A stupid stupid decision, if the Government were honest they would say we are trying to re capitalise the banks and “solve” a liquidity crunch. That would spook the markets and possible cause a downgrade on credit ratings. So we have a fiction, the fiction of new business loans. What a pile of crap, if this was supposed to be economic stimulus then $140bn is a f k of a lot of tax cutting – indeed we could go to £20,000 tax free band and probably a £50,000 threshold for 40% personal tax allowance with that kind of money – then we’d see some economic stimulus. Lying through their teeth. However, moving on from that – I was considering a small town. Let us consider that an honest broker establishes a coffee shop and small stock exchange inside. We will deal with an informal currency, let’s say Shire town coupons. These have a notional value of £1. The citizens and workers of Shire town elect to receive 10% of their wages in Shire town coupons, and the local stores and service providers agree to accept them where possible. Thus an informal trade is created in the town, which pays no tax, is a formal exchange and – for instance the Honest Broker can likely establish an exchange whereby people who wish to buy a service in the town can exchange Sterling for Coupons, and vice versa Shoot the model down, why wouldn’t it work, and more importantly what would be the reaction of the Tax Authorities ? The point of the £140bn is to be lent to businesses to help growth and spending, but that it will be repaid. It is not simply giving away money. It is also worth opting that the banks will likely to be made to pass on the cost of cash savings to the borrowers, so whilst it makes them safer (lower liquidity risk) it is less likely to increase profits as such. Gargamel is right here. The politicians are lying through their back teeth. This money will not be spent on loans to businesses it will be spent on easing the liquidity of Banks. It will not be repaod by small businesses because it will NEVER be given to them in the first place. In British politics we are well past the point where we need to adopt the attitude of Talleyrand who, on hearing that a Foreign Minister in a rival government, had died suddenly, said, on hearing the news: "I wonder why he did that?" Our politicians are that bent, to a man, or woman. The dishonestly of the modern politicians is boundless. We need to understand that. This is a poorly disguised attempt to ease the impending liquidity crisis in British Banking. We are approaching another major Banking crisis within four years of the last one. The government and BoE are desperate to avoid this. They cannot admit the truth and face the problem. Therefore they tell complex lies to mislead the public. Do not be misled. None of this money will be used to stimulate business growth in the UK. It will ALL be used to reduce the impending liquidity crisis in UK Banking. None of it will be repaid. The Taxpayer is the patsy of another 140 Billion, having not yet been repaid for the last lot. Nor will the taxpayer be repaid. We are just patsy's and easy money for failed politicians to squander. As Gargamel says, such an amount could massively stimulate business is applied in the right way, in general tax reduction. What better way to stimulate the workers desire to work? That would cause business growth. This is not about growth. It is about saving insolvent and illiquid Banks. Worst of all it is an inadequate sum to achieve even that. We are staring straight into the eyes of another massive banking crisis. The coalition are losing control and stumbling over simple policies. This will not last politically or economically. Bertie Cameron and Boy George are spent forces already. Look at the Budget U turns on Taxation, the mess with BskyB the mess with NoW the mess with Jeremy Hunt, the mess with Liam Fox etc etc. These are unforced errors, They are simply not up to the job. And it shows.
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Globs
11,749 posts
100 months
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Steffan said: The Taxpayer is the patsy of another 140 Billion, having not yet been repaid for the last lot. Nor will the taxpayer be repaid. We are just patsy's and easy money for failed politicians to squander. The taxpayer is simply collateral, a resource to borrow against. Steffan said: Bertie Cameron and Boy George are spent forces already. Look at the Budget U turns on Taxation, the mess with BskyB the mess with NoW the mess with Jeremy Hunt, the mess with Liam Fox etc etc. These are unforced errors, They are simply not up to the job. And it shows. And people tell us that UKIP have no experience .. under no circumstance could I see them doing any worse than the Tory/EU fanboy party, in fact just leaving the EU and not bailing out the EU banks would pay huge dividends. We'd be up about £50bn already - or £2500 per household.
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1point7bar
1,091 posts
17 months
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turbobloke said: Understand clients' businesses? Heresy! The banks have a derivatives exposure that they need a balance sheet cash position to reduce value at risk ratios.
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Mermaid
12,497 posts
40 months
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Steffan, any predictions for what this week-end will bring?
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davepoth
19,927 posts
68 months
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1point7bar said: The banks have a derivatives exposure that they need a balance sheet cash position to reduce value at risk ratios. And that's why they're all f ked. What the hell does that even mean to the man on the street? I have a fairly good idea but then I spend all day reading about how ruined the world economy is. 
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WhoseGeneration
4,090 posts
76 months
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1point7bar said: The banks have a derivatives exposure that they need a balance sheet cash position to reduce value at risk ratios. You cynic, although a plausible way to effect help, dressed up as promoting "growth".
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AndrewW-G
11,968 posts
86 months
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Apache said: davepoth said: Gordon Brown has weighed into the debate, BBC news channel reporting. Nothing on the internets yet though. Thank f k for that! we're all saved, let's go down the pub Gordon winky Brown said: France and Italy may need a bail-out What a complete and utter dribbling mong! . . . . Shirley this will win Winky the "no s t Sherlock" award of 2012! http://www.telegraph.co.uk/finance/financialcrisis...Please don't forget, if Winky had been able to carry out his "master" plan, we would also be stuck in the euro
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Welshbeef
13,049 posts
67 months
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Forget £20k for 20% and £50k for 40%
Why not scrap the 45% and scrap the 20% instead have a rate of 30% starting from say £30k.
The vast majority of workers would be totally out of the income tax system. a sudden overnight big effective payrise. For plenty it will move them from the edge to being safe for others who were safe they have genuine extra cash to spend spend spend on consumer goods then you have those who are saving
One tax rate % one tax free element.
Imagine all the pensioners pretty much 99% of pensioners would not be paying tax again.
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WhoseGeneration
4,090 posts
76 months
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AndrewW-G said: What a complete and utter dribbling mong! . . . . Shirley this will win Winky the "no s t Sherlock" award of 2012! http://www.telegraph.co.uk/finance/financialcrisis...Please don't forget, if Winky had been able to carry out his "master" plan, we would also be stuck in the euro Perhaps he googled "end of the €" and found this thread? More seriously, there'll be a career based reason why he has made this intervention.
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davepoth
19,927 posts
68 months
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AndrewW-G said: Please don't forget, if Winky had been able to carry out his "master" plan, we would also be stuck in the euro He was very against the Euro. www.bbc.co.uk/news/uk-politics-11947831http://www.economonitor.com/dolanecon/2011/10/02/h...As it turns out "The Five Rules" were designed so they could never be met while he was chancellor or PM. Possibly his only good decision, but a very good one indeed. If he'd let Tony Blair have his way we'd be about as bust as Greece right now, and would probably have taken the whole world with us.
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