Why didnt we just let RBS go?

[s2art]

The yanks let Lehmans go to the wall, so why not RBS? The 'assets' such as the high street banking side would have been bought up for a small amount by the other big banks, the british mortgages could have been transferred to NR (nationalised) and the rest parcelled out to the highest bidder (probably at something like 10P in the pound, if that).
On the plus side we reduce the public liability by hundreds of billions, on the negative side we lose some international confidence in British banking. But we have lost some of that anyway, and changes to the regulatory structure can win some back.

Thoughts?

[BigLepton]

The same reason we didn't let any of the banks go - the Labour party is in debt to them to the tune of £14m and if the banks call in their credit, the Labour party will be made bankrupt.

[Hedders]

BigLepton said:

The same reason we didn't let any of the banks go - the Labour party is in debt to them to the tune of £14m and if the banks call in their credit, the Labour party will be made bankrupt.

They should ask Fred to pay it for them out of his settlement.

[ShadownINja]

BigLepton said:

The same reason we didn't let any of the banks go - the Labour party is in debt to them to the tune of £14m and if the banks call in their credit, the Labour party will be made bankrupt.

So the tax payer are paying for Labour's own irresponsible borrowing?

[Fittster]

How many ex-politicians end up with will paid directorships of banks?

[Hedders]

Fittster said:

How many ex-politicians end up with will paid directorships of banks?

Either banks or weapons companies..

Funny that.

[BigLepton]

ShadownINja said:

BigLepton said:

The same reason we didn't let any of the banks go - the Labour party is in debt to them to the tune of £14m and if the banks call in their credit, the Labour party will be made bankrupt.

So the tax payer are paying for Labour's own irresponsible borrowing?

Indeed and because of the way the Labour party is structured, the people at the top will be personally liable for the bankruptcy including old cyclops himself. . . . . . . . .

[Hedders]

BigLepton said:

Indeed and because of the way the Labour party is structured, the people at the top will be personally liable for the bankruptcy including old cyclops himself. . . . . . . . .

So, TB has walked away from being personally responsible for over £10million in debt, and has gone onto earn millions for his great work for the country. Sweet.

[Scuffers]

s2art said:

The yanks let Lehmans go to the wall, so why not RBS? The 'assets' such as the high street banking side would have been bought up for a small amount by the other big banks, the british mortgages could have been transferred to NR (nationalised) and the rest parcelled out to the highest bidder (probably at something like 10P in the pound, if that).
On the plus side we reduce the public liability by hundreds of billions, on the negative side we lose some international confidence in British banking. But we have lost some of that anyway, and changes to the regulatory structure can win some back.

Thoughts?

Lehmans are not a retail bank.

if a retail bank goes down the size of RBS, then the fallout would be financial armagedon for this country.

only viable option other than to prop it up is to nationalise it like NR

Edited by Scuffers on Sunday 1st March 15:09

[D-Angle]

It might have done some good to let one of the banks fail. As it is, they are seeing no consequences for their actions, and there is no sign of that changing. The Government must share some of the blame but the arrogance of the banks in this whole situation is disgraceful, and letting one of their ilk go to the wall might be the slap they need to start putting their houses in order.

[fido]

Scuffers said:

s2art said:

The yanks let Lehmans go to the wall, so why not RBS? The 'assets' such as the high street banking side would have been bought up for a small amount by the other big banks, the british mortgages could have been transferred to NR (nationalised) and the rest parcelled out to the highest bidder (probably at something like 10P in the pound, if that).
On the plus side we reduce the public liability by hundreds of billions, on the negative side we lose some international confidence in British banking. But we have lost some of that anyway, and changes to the regulatory structure can win some back.

Thoughts?

Lehmans are not a retail bank.

if a retail bank goes down the size of RBS, then the fallout would be financial armagedon for this country.

only viable option other than to prop it up is to nationalise it like NR

Haven't got the figures to hand, but Lehmans total assets/liabilities was probably a tenth of what RBS has on its books - looking at it another way, RBS managed to move the value of £ sterling when it had to be propped up by UK plc. You simply cannot let a bank of that size fail without it affecting the credit rating of the UK financial system. Reputation is everything - just ask the Russians .. or even HSBC who bailed out one of their US subsidiaries to the tune of £17bn .. they could have let it go under but they didn't.

Edited by fido on Sunday 1st March 15:22

[Fittster]

Scuffers said:

if a retail bank goes down the size of RBS, then the fallout would be financial armagedon for this country.

Why? This threat of financial meltdown is waved around by banks everytime they want more taxpayers money.

[fido]

Fittster said:

Scuffers said:

if a retail bank goes down the size of RBS, then the fallout would be financial armagedon for this country.

Why? This threat of financial meltdown is waved around by banks everytime they want more taxpayers money.

Not true, Barclays or HSBC have avoided asking for government money - because they had alternative sources of funding.

[EDLT]

Hedders said:

BigLepton said:

Indeed and because of the way the Labour party is structured, the people at the top will be personally liable for the bankruptcy including old cyclops himself. . . . . . . . .

So, TB has walked away from being personally responsible for over £10million in debt, and has gone onto earn millions for his great work for the country. Sweet.

Whether you like him or not, you have to admit his timing was spot on.

[Fittster]

fido said:

Fittster said:

Scuffers said:

if a retail bank goes down the size of RBS, then the fallout would be financial armagedon for this country.

Why? This threat of financial meltdown is waved around by banks everytime they want more taxpayers money.

Not true, Barclays or HSBC have avoided asking for government money - because they had alternative sources of funding.

So far: http://www.telegraph.co.uk/finance/financetopics/f...

[Hedders]

EDLT said:

Hedders said:

BigLepton said:

Indeed and because of the way the Labour party is structured, the people at the top will be personally liable for the bankruptcy including old cyclops himself. . . . . . . . .

So, TB has walked away from being personally responsible for over £10million in debt, and has gone onto earn millions for his great work for the country. Sweet.

Whether you like him or not, you have to admit his timing was spot on.

Much as i hate to admit it, the man really did know what he was doing. He feathered his nest very well indeed, and that is what being a politician is all about.

Screw the people.

[Scuffers]

Fittster said:

Scuffers said:

if a retail bank goes down the size of RBS, then the fallout would be financial armagedon for this country.

Why? This threat of financial meltdown is waved around by banks everytime they want more taxpayers money.

well, on a simplistic level, how many people have deposits with RBS/Natwest/etc?
then how many have mortgages?

then add in the number of commercial accounts/loans/mortgages

now consider how you would deal with the bank suddenly not being there any more...

it would take an army of administrators months (and more likely years) to close it down in an orderly way, realistically, nationalising it would be simpler and cheaper...

[s3fella]

Letting one of the banks go would have been a good thing and many economists think so too.

Of course the two UK banks that were in the toilet in Spetember have one thing in common, and I refer you to the "S" in RBS for the answer.

There is no way a "Scottish" Prime Minister will see RBS or HBOS fail, no matter how stupid it is to bail them out. NR was different, it hapened well before many knew what was going to happen, but come September 08, the writing was well and trully on the wall for the banking sector. With Scotland as one of Nu Labia's potential bastions, RBS and HBOS were never going to be let go. If it had been Lloyds on the other hand looking dodgy then, IMO it would have been "let go".

There is no other explanation for saving these failing busineses other than political ones, especially at the price it has cost. If both those banks were missing the "S" in their names, it would be very very different indeed..

[s2art]

fido said:

Scuffers said:

s2art said:

The yanks let Lehmans go to the wall, so why not RBS? The 'assets' such as the high street banking side would have been bought up for a small amount by the other big banks, the british mortgages could have been transferred to NR (nationalised) and the rest parcelled out to the highest bidder (probably at something like 10P in the pound, if that).
On the plus side we reduce the public liability by hundreds of billions, on the negative side we lose some international confidence in British banking. But we have lost some of that anyway, and changes to the regulatory structure can win some back.

Thoughts?

Lehmans are not a retail bank.

if a retail bank goes down the size of RBS, then the fallout would be financial armagedon for this country.

only viable option other than to prop it up is to nationalise it like NR

Haven't got the figures to hand, but Lehmans total assets/liabilities was probably a tenth of what RBS has on its books - looking at it another way, RBS managed to move the value of £ sterling when it had to be propped up by UK plc. You simply cannot let a bank of that size fail without it affecting the credit rating of the UK financial system. Reputation is everything - just ask the Russians .. or even HSBC who bailed out one of their US subsidiaries to the tune of £17bn .. they could have let it go under but they didn't.

Edited by fido on Sunday 1st March 15:22

I think Lehmans liabilities were approx $120 billion.
As for the reputation argument, that is what I am challenging. Damage has already been done. Putting a better regulatory system in place will have a bigger effect on confidence, because its doubtful Britain could handle another crash of this magnitude for a decade or more. The credit rating of the UK has been damaged more by taking on huge liabilities than by letting RBS go into administration.

[Fittster]

Scuffers said:

Fittster said:

Scuffers said:

if a retail bank goes down the size of RBS, then the fallout would be financial armagedon for this country.

Why? This threat of financial meltdown is waved around by banks everytime they want more taxpayers money.

well, on a simplistic level, how many people have deposits with RBS/Natwest/etc?
then how many have mortgages?

then add in the number of commercial accounts/loans/mortgages

now consider how you would deal with the bank suddenly not being there any more...

it would take an army of administrators months (and more likely years) to close it down in an orderly way, realistically, nationalising it would be simpler and cheaper...

Surely there comes a point where the government is better off protecting the deposits than the banks.

Some of the commercial accounts/loans/mortgages are assets and could be sold off.

I'm sure if RBS didn't exist the world could continue to turn and capitalism would continue. We appear to be in a situtaion where banks can never be allowed to fail and therefore face no risks.