Government backs off banks
Discussion
crankedup said:
otolith said:
don4l said:
Crankedup, what would you like the government to do in relation to the banks?
Make sure nobody is better off than he is.You seem to think that the "failure" to clamp down on the bankers will lead to a defeat for the coalition at the next election. In fact, the opposite is true. The finance sector is a very important part of our economy. "Clamping down" on it would simply drive it abroad - and that would probably result in a defeat for any party that had been stupid enough to kill the goose that laid the golden egg.
Parts of the industry have already left London, at a cost to us of £500 million per annum.
http://www.bloomberg.com/news/2010-10-02/hedge-fun...
Don
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Beardy10 said:
The fact is the Govt had the banks where they wanted them when they bailed them out....at that stage they could have changed the way the industry was paid as they literally had all the power. Except they didn't...they wrote a cheque to the industry with no strings attached.....Brown did it here and Bush did it in the US.
And yet it would do one of two things... 1) bailed out banks would suffer those that were not bailed out would not (underwriting is not a bail out) and the tax payer would lose when the bailed out banks start making losses or very little money.
2) The non bailed out banks would think 'f
k this' and then move their money making operations off shore and then UK really is in the st... Which flavour do you prefer?
crankedup said:
otolith said:
don4l said:
Crankedup, what would you like the government to do in relation to the banks?
Make sure nobody is better off than he is.Unfortunately the Government played the only card it had. Some time back the Government had the chance to stand back and let a few of the big banks collapse, or wade in with money that wasn't theirs to spend.
IMHO Northern rock should not have been propped up by the British taxpayer, It should have gone to the wall. Neither should the other bank have had an expensive copper bottomed guarantee from the taxpayer either.
The financial implications of letting the banks go to the wall would have been huge. The voters would have slayed the Government in power. A large number of people would have lost their life savings, and the few notable Britsh owned banks would probably have ceased to be so.
However better lessons would have been learnt by the banks. A natural division of probity between savers money investments and the more risky ventures would emerge, as savers demanded to know more about security than the interest rate.
Its not healthy that currently the banks seem cheered by the fact that whatever they do the taxpayer will always be there to undersign the mistakes. I've already moved my money once based on publicised bonus payments in one bank. If everyone did the same maybe something would happen, beyond the daft comments on paying more tax if they have bigger bonuses.
IMHO Northern rock should not have been propped up by the British taxpayer, It should have gone to the wall. Neither should the other bank have had an expensive copper bottomed guarantee from the taxpayer either.
The financial implications of letting the banks go to the wall would have been huge. The voters would have slayed the Government in power. A large number of people would have lost their life savings, and the few notable Britsh owned banks would probably have ceased to be so.
However better lessons would have been learnt by the banks. A natural division of probity between savers money investments and the more risky ventures would emerge, as savers demanded to know more about security than the interest rate.
Its not healthy that currently the banks seem cheered by the fact that whatever they do the taxpayer will always be there to undersign the mistakes. I've already moved my money once based on publicised bonus payments in one bank. If everyone did the same maybe something would happen, beyond the daft comments on paying more tax if they have bigger bonuses.
julian64 said:
Unfortunately the Government played the only card it had. Some time back the Government had the chance to stand back and let a few of the big banks collapse, or wade in with money that wasn't theirs to spend.
IMHO Northern rock should not have been propped up by the British taxpayer, It should have gone to the wall. Neither should the other bank have had an expensive copper bottomed guarantee from the taxpayer either.
The financial implications of letting the banks go to the wall would have been huge. The voters would have slayed the Government in power. A large number of people would have lost their life savings, and the few notable Britsh owned banks would probably have ceased to be so.
However better lessons would have been learnt by the banks. A natural division of probity between savers money investments and the more risky ventures would emerge, as savers demanded to know more about security than the interest rate.
Its not healthy that currently the banks seem cheered by the fact that whatever they do the taxpayer will always be there to undersign the mistakes. I've already moved my money once based on publicised bonus payments in one bank. If everyone did the same maybe something would happen, beyond the daft comments on paying more tax if they have bigger bonuses.
Why is it a daft comment about more bonus = more tax = every one happy?IMHO Northern rock should not have been propped up by the British taxpayer, It should have gone to the wall. Neither should the other bank have had an expensive copper bottomed guarantee from the taxpayer either.
The financial implications of letting the banks go to the wall would have been huge. The voters would have slayed the Government in power. A large number of people would have lost their life savings, and the few notable Britsh owned banks would probably have ceased to be so.
However better lessons would have been learnt by the banks. A natural division of probity between savers money investments and the more risky ventures would emerge, as savers demanded to know more about security than the interest rate.
Its not healthy that currently the banks seem cheered by the fact that whatever they do the taxpayer will always be there to undersign the mistakes. I've already moved my money once based on publicised bonus payments in one bank. If everyone did the same maybe something would happen, beyond the daft comments on paying more tax if they have bigger bonuses.
What happens if no bonus??? 2 billion or so lost in tax to the taxpayer?
don4l said:
crankedup said:
otolith said:
don4l said:
Crankedup, what would you like the government to do in relation to the banks?
Make sure nobody is better off than he is.You seem to think that the "failure" to clamp down on the bankers will lead to a defeat for the coalition at the next election. In fact, the opposite is true. The finance sector is a very important part of our economy. "Clamping down" on it would simply drive it abroad - and that would probably result in a defeat for any party that had been stupid enough to kill the goose that laid the golden egg.
Parts of the industry have already left London, at a cost to us of £500 million per annum.
http://www.bloomberg.com/news/2010-10-02/hedge-fun...
Don
--
1A said:
crankedup said:
otolith said:
don4l said:
Crankedup, what would you like the government to do in relation to the banks?
Make sure nobody is better off than he is.Are you saying that people should not be permitted to earn and share? There is nothing wrong in wealth re-distribution and I do not become over concerned about those issues. Having said that the last Government took that re-distribution way to far and it was / still is out of hand. Its my left leanings on the social issues that concern me with the current Coalition Government but to early to praise or criticise.
Du1point8 said:
Why is it a daft comment about more bonus = more tax = every one happy?
What happens if no bonus??? 2 billion or so lost in tax to the taxpayer?
Perhaps those of us not in the banking sector could suggest to our employer the argument that a huge bonus is good for the taxpayer and start a thread with the replies. Might have to censor a lot of the language.What happens if no bonus??? 2 billion or so lost in tax to the taxpayer?
Why is it assumed that costs don't come out of profit, and thereby affect returns for shareholders and investors? A lot of people, and LAs, will be looking at the loss they've had to accept in their investments and consider it's being spent on champagne.
Will the coalition be ousted? Yes imo, if the opposition is up to it, just as Callaghan was in 79 for being held similarly to ransom and failing to realise the national dislike of what it perceives as unfairness.
crankedup said:
Its a discussion forum, I am interested in other peoples views, even a slight deviation from the OP questions always brings out interesting comment. I am concerned that the Coalition could be damaged (see my post) and interested in other points of view. Jeeeeeez.
In that case, I misinterpreted the angle you were coming from - I had the impression that you were in favour of government action to stop workers receiving their money.Institutions that weren't bailed out byt he tax payer can do what the hell they like with their money, the sheeple are too easily influenced by the media and left wing criminals.
HOWEVER, institutions that had to take government bailouts are IMO not entitled to slap eachother ont heback and hand out bonuses until they've repaid the amount used to bail them out. If their staff don't like it they could always go and work somewhere else, after all a free market allows us to makes those kind of choices. They wouldn't have jobs at all if the bail out hadn't of happened.
Before you all get upset, im not a commie or a leftie, I hate the socialist criminals that were in power for 13 years, but for institutions who wouldn't have existed if it weren't for government rescue are behaving poorly to say the least by giving out bonuses, when their own poor business practices required them to take government help.
Like i said, if you're an intitution that didn't require bailing out, fill your boots. Unfortunately though, most of the sheeples viewpoint on it is "he's got more cash than me that shouldn't be the allowed" which isn't what I'm saying.
If of course bailouts have been repaid, then ignore what ive just said!
HOWEVER, institutions that had to take government bailouts are IMO not entitled to slap eachother ont heback and hand out bonuses until they've repaid the amount used to bail them out. If their staff don't like it they could always go and work somewhere else, after all a free market allows us to makes those kind of choices. They wouldn't have jobs at all if the bail out hadn't of happened.
Before you all get upset, im not a commie or a leftie, I hate the socialist criminals that were in power for 13 years, but for institutions who wouldn't have existed if it weren't for government rescue are behaving poorly to say the least by giving out bonuses, when their own poor business practices required them to take government help.
Like i said, if you're an intitution that didn't require bailing out, fill your boots. Unfortunately though, most of the sheeples viewpoint on it is "he's got more cash than me that shouldn't be the allowed" which isn't what I'm saying.
If of course bailouts have been repaid, then ignore what ive just said!
Sticks. said:
Perhaps those of us not in the banking sector could suggest to our employer the argument that a huge bonus is good for the taxpayer and start a thread with the replies.
If it is also good for their business, I expect that they will be in favour of it. Sticks. said:
Why is it assumed that costs don't come out of profit, and thereby affect returns for shareholders and investors? A lot of people, and LAs, will be looking at the loss they've had to accept in their investments and consider it's being spent on champagne.
Just walk us through what investments you think people lost money on, and how the bank making more profit will compensate them.neilr said:
Institutions that weren't bailed out byt he tax payer can do what the hell they like with their money, the sheeple are too easily influenced by the media and left wing criminals.
HOWEVER, institutions that had to take government bailouts are IMO not entitled to slap eachother ont heback and hand out bonuses until they've repaid the amount used to bail them out. If their staff don't like it they could always go and work somewhere else, after all a free market allows us to makes those kind of choices. They wouldn't have jobs at all if the bail out hadn't of happened.
The problem is, the staff that walk out are the ones earning the very profits that will pay back the bailout. You can't retain them without paying them. By definition, the best ones making the most money for the business are the most able to walk elsewhere where they will get paid.HOWEVER, institutions that had to take government bailouts are IMO not entitled to slap eachother ont heback and hand out bonuses until they've repaid the amount used to bail them out. If their staff don't like it they could always go and work somewhere else, after all a free market allows us to makes those kind of choices. They wouldn't have jobs at all if the bail out hadn't of happened.
Sticks. said:
Du1point8 said:
Why is it a daft comment about more bonus = more tax = every one happy?
What happens if no bonus??? 2 billion or so lost in tax to the taxpayer?
Perhaps those of us not in the banking sector could suggest to our employer the argument that a huge bonus is good for the taxpayer and start a thread with the replies. Might have to censor a lot of the language.What happens if no bonus??? 2 billion or so lost in tax to the taxpayer?
Why is it assumed that costs don't come out of profit, and thereby affect returns for shareholders and investors? A lot of people, and LAs, will be looking at the loss they've had to accept in their investments and consider it's being spent on champagne.
Will the coalition be ousted? Yes imo, if the opposition is up to it, just as Callaghan was in 79 for being held similarly to ransom and failing to realise the national dislike of what it perceives as unfairness.
However, I would guess that once prior year losses (which are very significant) have been offset against any current year profit, there will be no corporation tax payable. Therefore, the exchequer will receive NO income from the loss making 'bail-out' banks, other than that received from the income tax on the employees.
Is it not better for the government to receive something (50% approx) from the bonus payments (which the banks may be legally obliged to make in any case)?
Admittedly, difficult to balance the percieved unfairness against government cashflow requirements - however, the last lot landed the country in this predicament in the first place - and that should not be forgotten - ever.
neilr said:
HOWEVER, institutions that had to take government bailouts are IMO not entitled to slap eachother ont heback and hand out bonuses until they've repaid the amount used to bail them out.
I posed the (loaded, because I know the answer) question below on another thread. No one answered it. Perhaps you'd be so bold...eyebeebe said:
Serious question - how much money was lent to the banks? Backed up by a reliable source if possible, so that rules out the majority of the mainstream British media!
I thought that the government/tax payer had taken equity in the form of shares and preference shares and also underwritten some banks' liabilities in return for quite a handsome fee. I wasn't aware that there had been any loans made or bonds issued- in the sense of principal and interest to be repaid. Therefore any cash to be returned to the government/taxpayers will actually be made by market participants when the government sells their holdings, rather than the banks themselves.
I thought that the government/tax payer had taken equity in the form of shares and preference shares and also underwritten some banks' liabilities in return for quite a handsome fee. I wasn't aware that there had been any loans made or bonds issued- in the sense of principal and interest to be repaid. Therefore any cash to be returned to the government/taxpayers will actually be made by market participants when the government sells their holdings, rather than the banks themselves.
Did anyone watch the BBC Parliament this afternoon - Johnson had called the Chancellor in for an "urgent question".
Johnson probably wished he hadn't. Osborne totally demolished him - and in fact, demolished all the Labour MPs questions. Was probably his best performance yet.
nutshell:
Labour's contract with RBS had no stipulation regarding Bonus payments for this year. They said to RBS that this year, they could pay market rates. This is the reason RBS are paying out healthy bonuses this year. There's f
k all the Govt can do about it. However the govt has said nothing is off the table. Furthermore, it turns out that over the past 13 yrs only 25 firms had signed up to the Govts code of conduct. Since Jan 1st, that figre is now 2500. (I was shocked to hear that).
Blears (yep she's still there!) questioned Osborne about the size of the bank bonuses. Osborne's riposte was "when you were a member of the Cabinet, bonuses were £11.5 billion..."
lots more but it was bloody good.
eyebeebe said:
neilr said:
HOWEVER, institutions that had to take government bailouts are IMO not entitled to slap eachother ont heback and hand out bonuses until they've repaid the amount used to bail them out.
I posed the (loaded, because I know the answer) question below on another thread. No one answered it. Perhaps you'd be so bold...eyebeebe said:
Serious question - how much money was lent to the banks? Backed up by a reliable source if possible, so that rules out the majority of the mainstream British media!
I thought that the government/tax payer had taken equity in the form of shares and preference shares and also underwritten some banks' liabilities in return for quite a handsome fee. I wasn't aware that there had been any loans made or bonds issued- in the sense of principal and interest to be repaid. Therefore any cash to be returned to the government/taxpayers will actually be made by market participants when the government sells their holdings, rather than the banks themselves.
I thought that the government/tax payer had taken equity in the form of shares and preference shares and also underwritten some banks' liabilities in return for quite a handsome fee. I wasn't aware that there had been any loans made or bonds issued- in the sense of principal and interest to be repaid. Therefore any cash to be returned to the government/taxpayers will actually be made by market participants when the government sells their holdings, rather than the banks themselves.
It is a common misnomer that the banks we own were purchased through debt and that they "owe us money", though that said there were loans made to some institutions, which have been repaid I believe.
All that aside, neilr's point is valid, the banks we own will likely not return to the bonus levels they want until the government is no longer their majority shareholder.
Edited by Marf on Tuesday 11th January 19:04
Marf said:
All that aside, neilr's point is valid, the banks we own will likely not return to the bonus levels they want until the government is no longer their majority shareholder.
And until when concerns about the risk of political interference affecting their ability to recruit and retain key staff is likely to depress their share prices...Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff