Osborne unveils £140bn scheme to kick-start stagnant economy
Discussion
"The Bank of England is to offer money to high-street banks to kick-start mortgage and small business lending to prevent loans being rationed for many families and entrepreneurs, the Chancellor announced.
It comes after sharp rises in the costs of mortgages and other loans in recent months as banks struggle to raise money in the midst of the single currency crisis.
Sir Mervyn King, the Bank of England Governor, said that the “industrialised world have thrown everything bar the kitchen sink” at the global economic meltdown but that even “bolder action” was now required."
http://www.telegraph.co.uk/finance/financialcrisis...
So a good idea?
There wasn't much support for growth earlier
It comes after sharp rises in the costs of mortgages and other loans in recent months as banks struggle to raise money in the midst of the single currency crisis.
Sir Mervyn King, the Bank of England Governor, said that the “industrialised world have thrown everything bar the kitchen sink” at the global economic meltdown but that even “bolder action” was now required."
http://www.telegraph.co.uk/finance/financialcrisis...
So a good idea?
There wasn't much support for growth earlier
So the Bank of England is creating more money to give to the banks, haven't they already been doing this through QE without lending increasing? Isn't excessive lending/borrowing one of the causes of the problems we are currently facing?
Sounds great until we have to pay back the £140 billion.
Sounds great until we have to pay back the £140 billion.
t really hits the fans. Quite depressing reallyThey've done this before, haven't they?
Last time the banks just held onto the cash to offset all the toxic debt they'd bought. Why will it be different this time?
This scheme is a good idea, but only if they bypass the banks and lend direct.
Otherwise, it's just another way for the toffs to dish out free money to their banker friends, who will stuff it into their bonus pools.
Last time the banks just held onto the cash to offset all the toxic debt they'd bought. Why will it be different this time?
This scheme is a good idea, but only if they bypass the banks and lend direct.
Otherwise, it's just another way for the toffs to dish out free money to their banker friends, who will stuff it into their bonus pools.
JagLover said:
WhoseGeneration said:
Gotta love the academic economists.
We've, in the West, lost the understanding of how economic growth occurs.
Or rather, those in charge have.
We've, in the West, lost the understanding of how economic growth occurs.
Or rather, those in charge have.
Just keep kicking that can down the street and ignore the fundamental problem of competitiveness in the UK.
What we are seeing is the fundamental problem with democracy.
greygoose said:
So the Bank of England is creating more money to give to the banks, haven't they already been doing this through QE without lending increasing? Isn't excessive lending/borrowing one of the causes of the problems we are currently facing?
Sounds great until we have to pay back the £140 billion.
I think the trouble before was the banks were bailed out with no conditions on lending. This time someone has had the novel idea to give them money with some conditions attached. Sounds great until we have to pay back the £140 billion.
turbobloke said:
Are they 'creating money'? This doesn't look like QE. It seems to be BoE loans to banks at low rates to encourage lending to mortgage and business customers, so hopefully yes with strings attached.
So, the BoE has £140 Billion just sat there waiting to be loaned in an emergency?Liokault said:
turbobloke said:
Are they 'creating money'? This doesn't look like QE. It seems to be BoE loans to banks at low rates to encourage lending to mortgage and business customers, so hopefully yes with strings attached.
So, the BoE has £140 Billion just sat there waiting to be loaned in an emergency?DT Article said:
It is the latest attempt – following the cut in interest rates to record lows and the £325bn quantitative easing scheme – to kick-start the British economy following the start of the financial crisis four years ago.
That alone was the basis for my comment.I still don't think it looks like QE. Apparently there are two elements one of £60bn the other £80bn.
The first (scheme) worth at least £5billion a month involves the Bank giving banks money from its own resources in return for assets. It could run for more than a year. The mechanism is already in place but Sir Mervyn announced he would activate it in the coming weeks.
The second is a “funding for lending” scheme worth up to £80billion a year, depending on demand, in which banks will be able to swap assets that are not useful to them because of market conditions for top quality packages like Treasury gilts – as good as cash.
The first (scheme) worth at least £5billion a month involves the Bank giving banks money from its own resources in return for assets. It could run for more than a year. The mechanism is already in place but Sir Mervyn announced he would activate it in the coming weeks.
The second is a “funding for lending” scheme worth up to £80billion a year, depending on demand, in which banks will be able to swap assets that are not useful to them because of market conditions for top quality packages like Treasury gilts – as good as cash.
Havent we done all this before??? They give to the banks - banks either keep it, pay bonuses, restore balance sheets etc. Makes no difference to the man or woman in the street.
why not just do this in reverse? Give it to the people in terms of a voucher that expires so you have to use it to pay off loans/Finance or buy something - ultimately this goes back to the banks anyway and hey presto people have more money to spend again...
Everyones a winner yes??!
why not just do this in reverse? Give it to the people in terms of a voucher that expires so you have to use it to pay off loans/Finance or buy something - ultimately this goes back to the banks anyway and hey presto people have more money to spend again...
Everyones a winner yes??!
Four Litre said:
Havent we done all this before??? They give to the banks - banks either keep it, pay bonuses, restore balance sheets etc. Makes no difference to the man or woman in the street.
why not just do this in reverse? Give it to the people in terms of a voucher that expires so you have to use it to pay off loans/Finance or buy something - ultimately this goes back to the banks anyway and hey presto people have more money to spend again...
Everyones a winner yes??!
Too bleedin obvious!why not just do this in reverse? Give it to the people in terms of a voucher that expires so you have to use it to pay off loans/Finance or buy something - ultimately this goes back to the banks anyway and hey presto people have more money to spend again...
Everyones a winner yes??!
mondeoman said:
Four Litre said:
Havent we done all this before??? They give to the banks - banks either keep it, pay bonuses, restore balance sheets etc. Makes no difference to the man or woman in the street.
why not just do this in reverse? Give it to the people in terms of a voucher that expires so you have to use it to pay off loans/Finance or buy something - ultimately this goes back to the banks anyway and hey presto people have more money to spend again...
Everyones a winner yes??!
Too bleedin obvious!why not just do this in reverse? Give it to the people in terms of a voucher that expires so you have to use it to pay off loans/Finance or buy something - ultimately this goes back to the banks anyway and hey presto people have more money to spend again...
Everyones a winner yes??!
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