Mervyn King blames the banks for the Crisis and the Cuts.

So, telec, RBS have, as yet, to return a profit, it was looking good for 2010, but got shafted by the Irish financial situation. No profit means no payback to those that bailed them out in the first place, as I said 85% of nothing is nothing.
Just thought I would include this from the 9th of Jan 2011:

RBS chief Stephen Hester awarded a £2.5m bonus.

Stephen Hester, the chief executive of the Royal Bank of Scotland, is to be paid almost £7 million just two-and-a-half years after the state-controlled bank was bailed out by taxpayers.

So if RBS haven't returned a profit,who the **** is paying the bonus?
 
The Conservatives would have done better if they had inherited a healthy economy like Labour did when they came to power.
 
Nobody is paying too much attention to what Merv is saying, he will be out of his job at the earliest opportunity.
 
The Conservatives would have done better if they had inherited a healthy economy like Labour did when they came to power.
Their handling of the country was the very reason they were kicked out for 13 years right when the country was in a Boom. Note - not the economy but their bloody awful politicians and their bloody awful electoral campaign against Blair. How interesting that the tories went for a Blairlike figure to get them back into power and he appears to be screwing the pooch in a spectacular fashion already.

The only people burying their heads in the sand today are the Libs. If they don't get out of this coalition in the very near future they are buried as a party. A price worth paying for power (or the appearance of it?), I fear not. IF there is another quarterly shrink or mark time, then I think Gideon, Dave, Nick and the rest will be facing the country sooner than they think.
 
"the staring mad-man Balls."

Sir how dare you Talk about UK's next PM like that ?

"The Conservatives would have done better if they had inherited a healthy economy like Labour did when they came to power."

Very true that the Tory's had 'Blown it' over the pound shadowing the DM and George Seros made a Billion mainly from other Investors, Gamblers to you and me.
But the economy was on an uprole when Major 'Crapped out'.
Something Brown denied for almost all of his 13 years running the economy.
In his last few months in power when even he knew He had blown it he made a Comment in the House about 15 years of 'Growth'.
The Torys screwed up and Labour put their twist on what had happened and never allowed it to be forgotten.

john
 
Just thought I would include this from the 9th of Jan 2011:

RBS chief Stephen Hester awarded a £2.5m bonus.

Stephen Hester, the chief executive of the Royal Bank of Scotland, is to be paid almost £7 million just two-and-a-half years after the state-controlled bank was bailed out by taxpayers.

So if RBS haven't returned a profit,who the **** is paying the bonus?
I've heard this 'argument' a thousand times over, and I just can't make sense of it.

We could refuse to pay the bloke, in which case he'll simply go elsewhere; or we can try and replace him with someone cheap, who won't be up to the job. I don't see a third option?
 
I think Merv's more interested in trying to distract people from the fact inflation is about 5% and you only get 0.5% at the bank at best.
I believe the post above is true. King has been over twenty years at the B of E and yet he sat about doing nothing whilst the failed oaf Brown's stupid policies and constant meddling allowed the nation approach the edge of bankruptcy.

I am not sure how King has remained in office since the general election.

However, despite the squeals and shrieks from the 'Labour numb-nuts', the main cause of the financial shambles was the shambolic and wholly inept direction from the failed, lumpen oaf Brown; aided and abetted by his tame mad-man Balls.

The GIGANTIC problems facing the coalition government, worsened by the absence of David Laws and the presence in office of Vince 'Hindsight is Best' Cable, were generated - some deliberately - by the hapless and hopeless administration headed by the failed and lumpen oaf Brown.

Some of 'the problems' generated are as close as possible to being criminal acts. Additionally the never ending and expensive interference by the European Union is a burden we could do without.
 
I've heard this 'argument' a thousand times over, and I just can't make sense of it.

We could refuse to pay the bloke, in which case he'll simply go elsewhere; or we can try and replace him with someone cheap, who won't be up to the job. I don't see a third option?
So let him go,there appear to be a number of people on this website who think they could do a better job,not to mention a number of people within the Banking sector who probably could do a better job for less money.

I understand why these people get bonuses,but I don't understand how the CE of a Failed Bank can get a bonus,what for?

Okay it lost less money this year than it did last year,but it's still a millstone around the taxpayers neck,and if the bank hadn't been so free and easy with our money,they might just have broken even this year (sorry,they would have made a loss of 9 million).

I also understand that more than 100 staff at RBS earned more than £1m last year, despite Government attempts to restrict bankers' pay ?

I'm just sick and tired of someone 'pissing on my back,and telling me it's raining',it's a great pity they don't pay these people what they're worth,but if they did that maybe the bankers would end up owing us money,eh? :)
 
The Banks caused this
Fallacy. The banks didn't cause this anymore than supermarkets have caused the obsity crisis in UK. What caused it was lack of oversight by the BoE/Treasury; a failure by the BoE to target asset price inflation when deciding upon interest rates; a huge demand for credit by the overwhelmingly primeval, illiterate and innumerate masses that comprise the majority of the UK population; mixed in with an element of risky lending by the banks, itself excerbated by the aforementioned lack of oversight etc.

The 'crash', when it occured was massively compounded by HMG's insistence on bailing out the banks. The only people that should have been bailed out were depositors - bondholders, shareholders and all other investors should have been allowed to be wiped out.

I have little sympathy for both little businesses that are struggling and even less for householders/homeowners - they either founded their businesses on flawed models with no contingency for a time when there would be credit restrictions; or borrowed recklessly without factoring in the effects of compound interest, interest rate rises, inflation in general, and an inability to fund the debt they took on. Mugs.
 

Yes-Sir

Swinger
I believe the post above is true. King has been over twenty years at the B of E and yet he sat about doing nothing whilst the failed oaf Brown's stupid policies and constant meddling allowed the nation approach the edge of bankruptcy.
For sure it's true. The Bank of England has consitantly missed the 2.00% CPI inflation target, not just now but in the past too by letting inflation go above 2.00%. At least now he can claim he is fearful of hiking rates because it could damage growth. His policy now is simple though: allow inflation (RPI being the better measure) to stay at 5% so reduce consumer debt in real terms. This specifically helps the profligate who borrowed irresponsibly and harms the prudent savers.



I also understand that more than 100 staff at RBS earned more than £1m last year, despite Government attempts to restrict bankers' pay ?

Because they would earn more if they started up their own City business. If they were in Mergers & Aquistions at RBS they would start an M&A boutique, if they are traders they would start a Hedge Fund etc and pay themselves 20% not 3%. To get paid £1m they have a good track record (it gets paid over 3 years so future record too) and must be making more than £30m each for the bank (says a lot about how much RBS is losing elsewhere...). Getting paid that much they certainly have the cash to setup a firm. So, why don't they go off and do this? Because it's easier to work for a bank and have less risk...but like anything push them too much and they will leave. Boutiques and Hedge Funds are sprouting up all over the place. Tons of small firms are harder to regulate than lots of big ones.

It comes back to one of my earlier posts -> we need more compeition from banks which means LESS but BETTER worded regulation. Regulation always focuses on the banks instead of smaller firms because of the systemic risk. The more regulation the more loopholes and prevents competition/new entrants.

The government also needs to do more to educate people about basic finance - start in schools to make more informed decisions in the future. Offering 125% mortgages is stupid but to actually accept it...!?

Anyway this is just another merry-go round. We had the boom and this is a recession and there will future ones, it's just a question of what causes the next one.
 
The Conservatives would have done better if they had inherited a healthy economy like Labour did when they came to power.
By that logic you can blame John Majors Government for loosing to NL. I knew it! The mess we are now in is all Thatchers fault!
 
Their handling of the country was the very reason they were kicked out for 13 years right when the country was in a Boom. Note - not the economy but their bloody awful politicians and their bloody awful electoral campaign against Blair. How interesting that the tories went for a Blairlike figure to get them back into power and he appears to be screwing the pooch in a spectacular fashion already.

The only people burying their heads in the sand today are the Libs. If they don't get out of this coalition in the very near future they are buried as a party. A price worth paying for power (or the appearance of it?), I fear not. IF there is another quarterly shrink or mark time, then I think Gideon, Dave, Nick and the rest will be facing the country sooner than they think.

What he said!
 
Whenever these chancers (bankers, comodity traders, share dealers etc) are interviewed on business programmes, they always emphasise the massive profits they make and bang on about if they fail - they will get shown the door. This argument is used to justify the massive salaries and eye-watering bonus culture - it is a high risk business they claim. However, the bankers have shown quite clearly that it is not risky at all - they get the bonuses regardless of whether they make massive profit or loss.

That is fine if the shareholder allow it. The argument now is should we as the taxpayer allow this behaviour at a time when we are being asked to pay for the policies that kept the chancers in business. When Labour took over the banks by bailing them out, they should have laid down the conditions. Frankly the idea that the heads of our failing banks would have walked away into other jobs is quite laughable. Where would they go having ruined one bank - to another ruined bank?

Mervyn King oversaw this fiasco - he hopes to cling on for a bit longer and will try desperately not to upset either the Condems or Labour, you never know who will be his next boss or honours sponsor!
 
Bank of England governor blames spending cuts on bank bailouts | Business | The Guardian

Not according to most on here - but I think I'll take the word of the Governor of the Bank of England instead.

Labour overspent - absolutely and I do not wish to revisit that old ground. But King is absolutely on the nail when he says that the cost of these cuts is being borne by those who absolutely did not cause it. In this I include small businesses and the "squeezed" middle class too.

The Banks caused this and are skipping off into the sunset with pots of our cash, all with the connivance of the Tories - and Indeed the previous Labour administration who failed to enforce swingeing regulation when the banks were in their knees.

The Barnsley by election was a taster. The March in London on the 26th will be another. The people outside the Westminster bubble ARE angry and are intelligent enough to see through all the spin and bluster. Interesting times indeed.
Why did the banks get into trouble?

Ah yes! The people who they lent money to were defaulting.

Why were they defaulting?

When you get to the bottom of that question, you should see that the banks, for all their selfish greed, were nothing but a link in the selfish greed of all society and the deliberate policies by a succession of UK governments - but in particular New Labour - to fuel that greed.
 

Blogg

LE
Nice misleading headline and predictable spin from the Guardian, conflating two distinct issues

Perhaps someone would care to point out at precisely what point in proceedings that Mervyn King said bailing out banks =spending cuts?

All parties are agreed that deficit reduction is necessary and yes some banks screwed up bigtime because the risk/reward ratio was and still is wrong.

But to suggest that bailing banks has led directly to public spending cuts is wrong. If all the bust banks were still trading happily on their own account there would still have to be cuts.

A bit less economic misery in general but cuts there would have to be. The seeds of this were sown by Gordon Brown and his insane policies.

".......He believes that the need to reduce the deficit is common ground between the parties and claims to have had “a good relationship with all three chancellors on his watch”. What about with the man who was one door up from Alistair Darling in Downing Street? Mr King smiles thinly: “That is for others to say ... "

Mervyn King interview: We prevented a Great Depression... but people have the right to be angry - Telegraph
 
IMHO,the Banking Crisis was caused partly by the banks reckless lending,and part by lack of regulation by Regulators,who appeared not to notice what was going on.Banks need to be ordered to split their ''investment'' activities from their normal lending and deposit acceptance activities,asap.
 

chieftiff

War Hero
Nobody is paying too much attention to what Merv is saying, he will be out of his job at the earliest opportunity.
I wonder if he has been saying this to his political masters in the past without anybody paying attention or if he has just worked it out, hindsight is a wonderful thing especially to those responsible for these things.
 

Grumblegrunt

LE
Book Reviewer
more and more voices ar enow saying the bailout was a bad thing as it was too fast and the bankers dictated it.

the banks needed bailing out but in the right way, all they did was throw super cheap cash at them which is what started this whole love of credit and the speculation surge when they tried to stop the dot com bubble from driving the US into recession. now the US is still in a recession but in denial that its a depression by playing with the figures and fake headlines. meanwhile the banks are speculating with all that cheap cash and finding other markets to screw up like food and fuel.

they would have been better to enforce an extension to all the bad mortgages so people kept the low rate and banks became landlords so the banks were forced to husband their assets better and kick the trading arms into touch.

old merv is right, the baby boomers had it all then f@cked it up interesting article on it in the mail I think on how you have baby boomers with three houses while their kids cant afford one. the only way for kids to redress the balance is mass patricide I reckon. make them pay for their own old age or pursuade their children to look after them like the asian communities.

now we see them complaining that they trapped abroad in overpriced houses which they bought to live the dream and can they come home - simple answer - no, get stuffed, greed got you there so now ride it out like the rest of us or come home and live in a pokey little flats or inner city terraces as pennance for your avarice. no such thing as free money, unless you work in a bank of course :)

News | Mail Online.

Mervyn King interview: We prevented a Great Depression... but people have the right to be angry - Telegraph

cant find the right article now as I'm on a different laptop - figures but I'll linky it when I do as it was quite good.

its stupid to say it wasnt the banks fault as they didnt have enough oversight to tighten them down. the banks had it imposed on them after the 1930s but they asked/bribed/cajoled their way out of the regulation which set it all off again. it is the banks fault for not having enough social responsibility and having a corrupt bonus structure with greedy staff to run it.

Mervyn King is right. If the banks face no risk, we shall all go down - Telegraph
 

Yes-Sir

Swinger
Nice misleading headline and predictable spin from the Guardian, conflating two distinct issues
Agreed. The bailouts are 2% of our national debt. We will get that back. The other 98% of the just over 1bn is tax rises and spending cuts.
As I say, the BoE governor is distracting people over the fact that 5% inflation and a 0.5% base rate means we lose 4.5% a year of our savings, or if you borrowed too much you have 4.5% less to pay back each year on your debt.
 

Grumblegrunt

LE
Book Reviewer
Niall ferguson is doing another series on 4, his last one on the ascent of money is very good whether tv book or audio book. banks have been stripping the public with greedy schemes ad cons for centuries. the dot com bubble being the last major case to straddle the world.

you only have to look at stocks now to realise its a hairs breadth from collapsing again with silly figure brandished for the likes of facebook and zynga who dont actually make anything or ocado trying to float thinking it is worth billions when it didnt even own anything other than a fleet of vans, how can a company which has never made any money be worth anything at all let alone the 1.3 billion or whatever they thought it was worth?

they should make it illegal for you to resell stocks for 6 months after purchase and abolish futures trading. that would stop food and oil speculation as well. how can you sell something you do not own nor ever intend to.
 

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