Possible repeat of 2007/8 banking crisis
Discussion
Today it is going to rain....
I'm going to be right eventually.
The banks have had to make a lot of changes like insulating some activities from others and passing a series of stress tests.
So while ideal conditions may not prevail, we are better prepared (maybe)
Sometimes irresponsible policies by the executive part of Government can cause banking problems that may not materialise for five years or so.
I've never heard a President or Prime Minister say "Sorry chaps we fked up big time". We should never have loosened up lending to the extent that we made possible. We never envisioned it would cause an increase in asset values.
They just tax all the paper gains and blame the foreclosures on the banks who had to compete with each other for business in the marketplace that they created.
Individual banks do not make policy.
I'm going to be right eventually.
The banks have had to make a lot of changes like insulating some activities from others and passing a series of stress tests.
So while ideal conditions may not prevail, we are better prepared (maybe)
Sometimes irresponsible policies by the executive part of Government can cause banking problems that may not materialise for five years or so.
I've never heard a President or Prime Minister say "Sorry chaps we fked up big time". We should never have loosened up lending to the extent that we made possible. We never envisioned it would cause an increase in asset values.
They just tax all the paper gains and blame the foreclosures on the banks who had to compete with each other for business in the marketplace that they created.
Individual banks do not make policy.
Aquarius909 said:
There is no question in my mind that we are building up to another (possibly bigger) crisis. The only question is when - but, yeah, I get it, that's the important bit.
My sense though is it's sooner than people would like to admit.
What are you basing this on? My sense though is it's sooner than people would like to admit.
I agree with you but would be interested in your thinking.
red_slr said:
Silly question: with the added focus now on the US economy and it not looking as rosey as some thought it to be say even 6 months ago would it help the GBP to USD exchange rate go back to what it used to be or closer back to 1.5 etcI say that on the basis that of course GBP took a pounding (no pun intended) due to issues in our country but a lack of issues highlighted in the USA (showing it to be more stable) - with attention now on the US economy and its holes in it will it help move it back?
After the US election is over the dollar may strengthen regardless of who wins and the Fed is widely expected to increase rates in December. IMO this means an even worse £:$ exchange rate because BoE doesn't seem to have any scope to increase rates. St Theresa wants them to keep printing money anyway. Add a bit of inflation for good measure... Despite the current euphoria UK may well find stormy weather ahead.
Bloomberg is saying banks are in a pretty good position right now. They should be. They've "rebuilt their balance sheets" at taxpayer expense.
Bloomberg is saying banks are in a pretty good position right now. They should be. They've "rebuilt their balance sheets" at taxpayer expense.
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