More demands expected

>the people are sure to make demands of the people's representatives who bought them on our behalf.

Damned right they are. Lets start with the Oft court case.

And lets get Brown to resign as its him thats put us in this despicable position.

The guy should be tried for treason.

Are you going to let him play the hero or will you robustly challenge him? If its the former, hang your head in advance!

37 billion.. !!!!!!


Thats nearly a third of our Quango budget.

What is Brown thinking of?

Why are the banks not telling us what they have done with their considerable previous year profits, or has it all been down to lack of due diligence. We haven't heard from a single banker yet.

Mmmm, but I was more than a little perturbed to hear the Darling say that any government appointees to bank boards would have banking experience rather than civil service experience ... the very last thing we need at the moment is more people with banking experience.

I'd like to see the following brought into the public sector ...

- retail banking (done)
- transport
- schools
- energy
- water

Everything else should stay as it is.

Yes Nick. How very amusing. But a bit like 6th Form debating points don't you think?

In the meantime, in the real world, we can be grateful that we have a PM like Brown in office to deal with a crisis. As with previous major problem areas (foot and mouth, Northern Rock) there has been quick and decisive action; the UK can make a reasonable argument that the action taken here has been the model for decisions taken elsewhere, especially in the US and Europe.

With the Conservatives trailing in Brown's wake, and his demolition of Cameron at PMQ's last week, perhaps the outcome of the next election is not the forgone conclusion it had appeared to be.

Oh dear, don't tell me we're on the slippery slope towards Orwell's worst nightmares.

The state is not best placed to run any industry, so I hope they do have some ideas of how to tidy up the problem of the banks balance sheets, and market liquidity, and then get out.

What mechanism is used for the government to acquire its stake in the banks, and I'm not referring to the preferenece share element? Are they acquiring shares from the market, at market prices, till they have the equity level they've announced? Or are they requiring the banks to issue them more shares directly, and if so at what price? Is this offer open to the general public, who might be inclined to buy if the price is right when there is also a level of government support? If not, do the banks have to get agreement from their existing shareholders to effectively dilute their equity stakes?

Hi Nick

Can you find out what the govt plan to do for the small businesses for whom the rescue plan has been too late. I closed my business 3 weeks ago due to this terrible mess. I cannot find an answer to my question - and I agree with your comment above - the banking system should be more answerable to the general public.

We are basically nationalising the Scottish banks, RBS and BoS, Royal Bank of Scotland and Bank of Scotland. This is being done by an unelected Prime Minister as defined by the fact that nobody in England has ever voted for him, and he was not elected as leader of the labour party, he was the only candidate and there was no vote. If there was please show me the voting papers, there are none.

So, a Scottish Prime Minister and Scottish Chancellor made the decision to nationalise basically Scottish banks.

This is a disgrace and Gordon must not be allowed to keep describing this as British banks. This is to save the labour party from annihilation at the hands of the SNP in the Glenrothes bye-election. This is nothing but pork barrel politics.

This is part of the labour party scorched earth policy of stripping England before the conservatives win control in England, but without overall control of parliament.

One suggestion for the annoying muzak which plays when the bank puts you on hold could be highlights of the PM's greatest budet speachs:-

You know the ones:-
There will be no more boom to bust

Prudance

2p cut in interest rates

oh and the best one from his first two budgets

The major cause of boom to bust is house price inflation and under the labour goverment we will not allow rampent house price inflation

Sir Fred Goodwin, 50, attended a grammar school in Paisley before studying law at Glasgow University, working as an accountant with Touche Ross, Clydesdale Bank and Yorkshire Bank. He was knighted for services to banking in 2004.

I hope he will now be stripped of his knoghthood for Diservices to banking 2008

I can see all sorts of demands emerging for further nationalisation (rail network, water companies, gas & electricity companies etc) - and in principle, a great idea. One small ... technical problem .... where's the money coming from???? or perhaps the Government will borrow from it's (our) own banks ...

I wonder if the government will break the contracts of those who work for the banks who have bonuses built into their contracts.

The reason why banks pay bonuses rather than higher salaries is because the bonuses are not part of the employees pension benefit. They can transfer their bonuses into their pension funds and get tax relief. This is what many do, why pay tax when you you can receive it as deferred salary when you get your pension, on which national insurance is not paid.

It's back to the 70s. No doubt the banks will be required to give cheap loans to the socially disadvantaged. Hang on a minute, isn't that how Bill Clinton started the sub-prime fiasco ?

Yep! Nationalie the railways purleeeese.

Dear Nick

OK, a sense of humour is good in times of crisis. But rather than goad the government about more nationalisation, perhaps a closer look at senior executive service contracts is needed to tackle the root causes of corporate greed.

While Sir Gred Goodwin may have foregone his severance entitlements, there is a hell of a tail on this one not just in the private sector, but throughout the higher echelons of most of UK government (national, regional and local) as well as business.

Performance management is rarely welcomed by those in charge of anything.

Peter Kenyon
https://petergkenyon.typepad.com/

It is a depressing to see the government taking control of our banks.

Things couldn't be any worse for the UK. At a time when we need much smaller government, it is growing beyond all recognition.

I'd much rather have seen the government provide a large pool of loan money available with published terms, than take shares in banks.

The other problem is that the bale out money, is largely to try and build confidence in the financial sector. What is the price of confidence?

I say that if Brown and Darling had not been holed up in their bunker and instead been leading from the front a few months back, that the cost to the tax payer of 'buying confidence' would be far lower.


No doubt - we will all now be required to work until the age of 85 - whilst having our pensions taxed the entire way.

This comment was removed because the moderators found it broke the house rules. Explain.

At a time when many people such as me are nursing losses of 40% on their ISA's and retirement funds, and are, or were, about to retire, facetious and inaccurate comments such as these made by Sgt Bilko really go down like a lead balloon.
Still, good news/bad news, it's all in a day's work for the hacks isn't it?
And, of course, if your pension is final salary/inflation linked and paid by HMG, who gives a **** about the rest of us?

Anyone spotted the advertisement in Monday's newspaper...

'Money Made Clear'

by the FSA.


Isn't this the organisation that has been responsible for regulation of the money markets during the past years?

Irony!

This comment was removed because the moderators found it broke the house rules. Explain.

Potential justifications for railways nationalisation:

1. Private sector contractors are failing in their obligations: STRIKE ONE in my experience. Fire individual contractors if they are crap, but the ones I use are fine.
2. Customers are not being served effectively: STRIKE TWO. Far better deals now than under British Rail. Far better service. Far better punctuality.
3. Management have begged Govt to bail them out for having failed to raise private sector finance: STRIKE THREE.

I don't think there are any other ones.

Other than communist apparatchiks on a quest for personal power.

No doubt that's a good enough reason for Mr Crow??

Is it a good enough reason for UK CUSTOMERS? Eh????

Back on 17th September, Brown seemed pleased with himself. He had "helped" to broker the Lloyds TSB takeover of HBOS, to avoid another massive injection of government funds.

Robert Peston wrote:
"However, for the avoidance of doubt, neither side has asked for taxpayers' money - either from the Bank of England or the Treasury - to facilitate this deal."

Today, the combined group will take a whopping GBP 17 BIL, to keep them stable.

Things are fast moving. But from a "no taxpayers' money" to GBP 17 BIL in 3 weeks suggests a gap in credible risk analysis. From the companies, the Treasury and the FSA.

Now Brown has his "Clause 4" moment out of the way, as Nick says, what's next? Let's hope its something with an engineering basis. Britain has some great, under-recognised and under-paid talent. At least they deliver "real" product.

Darling has said that the government are not going to intefere in the running of the banks.

If this is the case, then what is going to change?

Err... nothing...

If he doesn't think he can run the banks better than the existing crews, then what is he doing getting involved at all, rather than leaving it to them??

If he does think he can run them better, they why are we being denied his genius in protecting our invesment??

The government can't have it both ways...

Unless the opposition and press collued to let them...

Will the Government ensure that taxpayers money is lent prudently, so that we do not have further sub prime mortgage problems?

Will we have 2.5 x joint income multiples and maximum 95% loan to value, or in Gordon Browns attempts to continue the housing bubble, has he only extracted a commitment from the banks to lend lots of money, however irresponsibly?

I don't know how the PM will have time to sleep. His obsessive wish to be in control will mean that he will be phoning up the CE's of the banks at 4 in the morning.

Nice to see that he is claiming the credit for this scheme, he claimed the credit for the last one and that didn't work. If it goes wrong he will blame his sidekick.

The reality is the FSA have been asleep for the last 10 years; or were they told not to interfere in the Chancellor's economic miracle?

We have all been made poorer by the actions and policies of this government.

Again, the West Lothian question. Massive conflict of interest for a PM who represents a Scottish constituency.

Allegedly, Royal Bank of Scotland just happened to be the bank that got to the finish-line first to be bailed out. Thing is, the BoE should not bail out RBS. National Bank of a foreign power, with its own Parliament, and the English taxpayer bails it out? RBS EVEN PRINTS ITS OWN NATIONAL CURRENCY, that is how foreign it is.

Bail out Natwest if you like, by force majeure removing it from the command of RBS.

This comment was removed because the moderators found it broke the house rules. Explain.

Viva la revolucion! If only- this is a golden opportunity to revolutionise public services and essential industries in this country and return power to the people, or at least their representatives. However I won't hold my breath

I'd like someone to have the balls to ask Gordon the Golem what happened to his celebrated ending of "boom and bust".

You are getting the financial engineering now wait for the social engineering....

So now we own part of the Banks, can we suggest that their outrageus penalty charges are abolished and that all monies taken in this way are repaid to the unfortunates who in the majority of cases go overdrawn by a few pence.

And while we are at it can we have decent interest rates on current accounts, instead of the paltry0.01% that most feel obliged to give.

You can tell that Alistair Campbell and Mandelson are back.

The PM has got a new spin line - "Europe will follow Britain's lead".


So Brown is now out of the bunker and trying to build an image for himself.

The time to have taken a lead and inspire confidence in the markets was several months ago Mr Brown.

I heard the age of irresponsibility is over - and yet this has happened! We are sitting on a massive loss this morning as HBOS and RBS have dived. Nice!
I'm sure we won't see our money back for a good 20 years as the banks won't be able to recover as they will be too scared to
1. Lose their jobs
2. Lose their bonus
3. Lose their shareholders (ie us) with risky lending
Bonuses may go but so will the record profits

It has always been a dream of the old socialist order to nationalise the banks. Now, in order to 'save' the nation, that is what is happening.

The idea of Brown and Darling running the banks fill me with dread.

It's clear that the banks have made some very poor decisions about lending, but things could get much worse once the Dynamic Duo start dictating policy.

Be afraid. Be very afraid.

Look behind the spin of Brown's news conference and the government hand-outs and a very different picture emerges.
This isn't nationalisation. There's little accountability and parliament does not call the shots.
Today we see another eye-watering bank bail-out which has nothing to do with helping people and everything to do with throwing more cash at the City and saving Brown's skin.


https://theorangepartyblog.blogspot.com/2008/10/bulimic-bank-bail-out-makes-you-sick.html

With this newfound enthusiasm for nationalisation will Gordon drop the PFI as well?
Thought not.

It was quite obvious to the most impartiial observer that after this press conference the government is deeply in trouble.

No cuts to hospitals or schools spending and no answers as to where the money was coming from; the government has taken a further dangerous step into the unknown.

It doesn't know how ths will work, it doesn't know who is responsible; it doesn't know how much more will be needed; it has no idea of the write downs necessary and it can't say where the money is coming from.

The pre-budget report will be suspended is my confident prediction.

Sterling is collapsing again and at the moment every single day of this crisis has been the equivalent of the entire meltdown under John Major.

The comparison with the Swedish experience of 1992 is specious and false as then the whole of the banks bad assets were nationalise by the government and put into a separate 'bad' bank called Securum.

There is no way the government could buy up all the bad assets of the British banks because it would bankrupt the government.

The new rescue package is already failing in the markets because it was put together in haste by second rate intellects with political agendas.

Talk of 'doing anyhting that is necesary' is insulting nonsense; talk of being the 'rock of stability' os patronising in the extreme. We are all going to be paying for this govenrment's incompetent deregulation and spendaholic ways for a long time for a decade.

What a soaring triumph for the newlabour spending machine.

Call an election.

Well for the Billions of pounds spent I'd expect a lot in return, but here's just a few small requests:

- pass on fully any Bank of England base rate changes to variable and tracker rate mortgages (exiisting and new customers)
- base all customer call centres in the UK and allow customers the option of the first language of the operator they get connected to (e.g. separate customer service numbers for English, Welsh etc.)
- make administration charges (e.g. late payment) relate directly to the cost of the administration, and not use them as a profit making enterprise.

Nick,

pity the poor moderators today.

I want, ney, demand a public inquiry into this shambles, no charges should be brought against anybody! Why? Because as soon as charges are brought everything will be silenced because of laws of contempt and that once charges are brought nobody can say anything until the case comes to court. On second thoughts Gordon would probably want charges to be brought, oh Terry you are such a cynic, or should that be sceptic.

Meanwhile the great Aspidistra sits in the corner picking its nose.

In the past I have worked for banks that have been nationalised, not British banks, obviously.

The state owned all the commercial banks, who retained their original bank names, and who conducted their business, ostensibly in competition with each other.

In actuality, they all strived to benchmark with each other, since there was only criticsim as the likely outcome for doing anything out of step with the others. Plus all the staff were civil servants, and had the civil servant mentality. Plus all the top management were on three year tours of duty with a bank, and would simply get roatetd round to the next one on their list every three years.

I was working for them when they were trying to break out of the state owned environment, but it wasn't easy.

Meantime, I am very worried that we seem to be sleepwalking into the same situation here.

When I read some of the earlier posts from the usual suspects, crying out for further nationalisations (I thought clause 4 had been effectively killed off by Bliar) I despair.

History, not just British but all other countries, teaches us that state owned industries become feather bedded and technically bankrupt, simply kept alive by the state. When the banking sector is also owned by the state, then you have a problem.

Companies become unable to pay their bills, but are owned by the state and can't be allowed to fail Banks can't get money that they have loaned to these companies back, but since they are owned by the state, nothing happens. Eventually you can't get any external funding. Think Russia 1990-5.

Robert,

are the moderators on a bonus or what. Are they just that little bit slow today or have you had to call in the lawyers.

The problem with the BBC making these kinds of comments is that they are danger of becoming self-fulfilling prophesies. I would strongly urge the BBC to keep its opinions to itself.

"How people feel is to a large extent down to what people like us say and write" - BBC statement from Monday 29th September 2008, 9:23am (BBC Radio 4)

The problem with the BBC making these kinds of comments is that they are danger of becoming self-fulfilling prophesies. I would strongly urge the BBC to keep its opinions to itself.

"How people feel is to a large extent down to what people like us say and write" – BBC statement from Monday 29th September 2008, 9:23am (BBC Radio 4)

So Gordon Brown now has physical control over exactly who's allowed to get a loan/account, and can personally delve into the bank/credit-card accounts of virtually everyone in the country.

Great; I feel so much safer/better now.

Doesn't this scare anyone? The idea of Gordon Brown owning pretty much every bank in the country outright is terrifying to me.

This comment has been referred for further consideration. Explain.

Oh Gord(on)!!!

Does nobody remember how DIRE things were when nationalised industries were making huge losses and were run for the benefit of the trade union apparatchiks?

Hold tight, children, you're about to find out. We'll still be ripped off, only the rippers-off will be doing it at a loss to the taxpayer . . . .

I wish I were joking. I'm not.

As banking has now entered the public sector presumably this now means 40% of Banks staffs final salary pensions will be index linked !! (ha ha)

I can't help feeling that this bail out is another wheeze for the fat cat Bankers to get themselves out of a hole at everyone's expense.

It would seem to me that 3 weeks ago LTSB could afford to take over HBOS without the (apparent) need for government aid, now they go cap in hand Why ? was MR Daniels playing chicken.

OK, lets fix the current problem but having the dead hand of the state on the banking system will only be a short term fix. Long term we just need a better regulatory framework ..

who has moderated my comment?

Was it because I was slightly critical of Mr Brown?

I am baffled. Will I get an email explaining it?

Brown created this mess, now we are expected to praise him for spending loads of our money in an ATTEMPT to sort it out, which may or may not work. I for one am not pathetically grateful.

Will this be modded as well? Is this Orwell's 1984?

#6

Just read the breathtaking assertion by jimbrandt that

a) we should be grateful for having Gordon brown as leader...gratefull for what? For leading the first run on a bank in 140 years. For presiding over the age of irresponsibility and doing nothing about it?

b) for acting decisivley over Northern Rock? You waited six months while you dithered over what to do... billions of pounds were lost whilst you prevaricated.

Thois statement alone shows how delusional, incompetent and completely out of touch and out of control are the newlabour apologists.

Call that election.

Yes Nick, very funny debating points. But, more seriously, here's a political tip for you to think about.

There is, from the UK Government's point of view, very good reason for retaining the Edinburgh HQs of RBS and HBOS. Possibly the biggest long term political implication of all of these changes is that it will surely make the break-up of Britain less likely than it was even a couple of weeks ago. With both of Scotland's main banks controlled by the UK Treasury into the medium term, it will be far more difficult for Alex Salmond to persuade Scots to back a quick dash for independence in the 2010 referendum.

Given the number of people employed by RBS and HBOS in the Edinburgh area in particular and their wider importance to the Scottish economy and national psyche, the Scottish electorate is likely to become very much more risk averse than before: the current banking crisis is therefore likely to dampen enthusiasm for major consitutional change North of the Border.

And the fact that Brown and Darling (both Scots) have performed well in the crisis could also lead to a resurgence of support for Labour in Scottish Westminster seats: who knows, Pa Broon may yet hold on to Glenrothes after all. Alex Salmond's popularity and the general competence of the SNP Scottish Government are likely to mean that the SNP will remain in power in Edinburgh for quite some time. But it may be that they will have to live with devolution for longer than they would wish.

So beyond the banking crisis perhaps the main political implication of all this is that the UK is unlikely to break asunder in the near future.

Prof Spof

I never thought i would ever live to see a recession and a fiasco like this....

If i were the government i would not be appointing people with banking experience they would be far better off appointing people with bookmaking/gambling experience.....

These banks need their boardrooms swept clean of the incompetents who have put our nation at risk,just like we will sweep Labour from power and consign them to history when given our chance.

what a mess......and too all of these that think reporters are whipping up headlines,IMO many are understating the position because no one has come clean about the position we are in.

Let's be clear that Gordon Brown created the current banking regulatory environment in the face of Conservative Opposition warnings that it would not be able to deal with a systemic failure. For example, (one example of many):

Quote: With the removal of banking control to the Financial Services Authority it is difficult to see how and whether the Bank remains, as it surely must, responsible for ensuring the liquidity of the banking system and preventing systemic collapse.

The process of setting up the FSA may cause regulators to take their eye off the ball, while spivs and crooks have a field day. End Quote.

(Peter Lilley, November 1997)

Any chance of an apology Mr Brown?

"You must now be wondering what you'll get for your share of the £37bn..."

You wanna know?

Oh, yeah, you bet I'm wondering as I watch my firm being burned to ashes by the sudden collapse in sales. My 3 year old could figure that one out.

The same trainwreck I had to live thru under 'Sir John of Family Values' in the 90s.

Guy Croft

Pot @ 11

... "I hope he will now be stripped of his knoghthood for Diservices to banking 2008" ...

Yes, symbolic only but nevertheless should happen. Far more important, though, is to claw back cash bonuses paid over the last 5 years to SFG and countless others. There's an excellent case for doing this because it was money received under false pretences.

Oh yes and with interest please if you don't mind, chaps.

23 Fairlyopenmind

Very, very good point!

I agree with Bob Crow. In fact, nationalising the railways would be very cheap, since there is not much left to nationalise, now that Network Rail is in public hands and the DfT micromanages franchises down to the level of how many coaches they can have. As franchises come up for renewal, they would simply be taken into the control of a state-owned enterprise. And new trains can by purchased by the state rather than by the Rolling Stock Companies who have been charging exhorbitant rates, which the taxpayer pays indirectly via the ~ £6billion annual subsidy to the railways. (We paid around £1.5 billion just before the railways were privatised.)

Only the lunatic fringe would want to see everything private (inc. the police) or everything public (inc. every corner shop) so it's just a matter of getting the balance right, isn't it?

Here in the UK, we've been in thrall to the market and hence we've got the balance skewed too far in favour of the private sector. A little tweaking is required in order to get it right. All we need to do (now we've sorted out retail banking) is bring energy, schools, transport and water into the fold.

Result!

My comment is not entirely on Nick Robinsons blog but what I want to know, as a tax payer, is "Where has the money gone"? If this is a global "credit crunch" who has the money? As a Council Tax payer, I assumed that the money was being spent on the police force and schooling and digging up roads - but apparently a lot of this is actually in an Icelandic bank that now cannot be accessed? The money men made bad decision errors and have lost money that has been paid out once by the tax payer and chances are whichever decision is made by the Government will penalise the tax payer and not the people that caused this situation. If I had made an error as catastrophic as this I would not be in a job! When I got my mortgage I could only borrow x3.5 of my salary - if you did not earn the money you did not get the mortgage. What happened to the strict borrowing rules? Who agreed to lend to people who do not earn a salary? Who was monitoring what the Banks were doing? Where does the buck stop? Because it should not stop with the tax payers who will be the ones that suffer at the hands of the money men who made these appauling errors.

full nationalisation would work out better that what this government has done.
lloyds tsb who only recently bought the failing halifax hbos is now in trouble itself but the taxpayer has to fund not only lloyds but halifax as well?
well thats wrong in any book and seems like the taxpayers money is being conned out of the governments grasp. is this government so inept they forgot they helped lloyds takeover halifax?
or is there another reason lloyds can expect a double ammount of bail out money.
it still will do nothing to stop market traders trading and causing further problems down the line.

Gordon Brown is "leading the way" and is making Britain a "rock" with these measures (incidentally - funny how it's Brown who gets economics attributed to him as PM or Chancellor)

that may be true, even if his plans are reactionary and nothing particularly inventive - somewhat aggressive, but not radical

the sad thing is, I hope people won't accept Gordon as our new hero, as Labour have started plugging him as such - fact is when we get out of this he will have multiplied the debt that he already piled on this country with his reckless spending and ignored the warnings of a bubble for several years, i don't think people mind the debt to save our skins right now, but the level of debt already in existence was unacceptable, economic theory very obviously says you should be saving during a boom - but because he was arrogant enough to say there was no boom and bust, which was just an excuse to take on risky levels of debt, he decided to spend more than income - he's a menace who's using the situation to his personal advantage

simply put: when you're wealthy and in a good job and put yourself in debt, what happens when you get fired?

Re 6

Gordon Brown didn't act decisively with Northern Rock. He dithered for 6 months. And, if my memory is correct, Lloyds TSB offered to bail NR out with the support of £30m from the taxpayer. As a result of Brown's dithering that opportunity was lost and the taxpayer ended up with a liability of £100m. Also, his dithering was at the very least a contributing factor the queues of depositors wanting to withdraw their money and to the loss of confidence that has snowballed into the situation we have now.

Brown in charge? Heaven help us!

While I have been quick to criticise Gordon Brown recently, I have to say that his actions over the past few days appear to me to be as positive as could have been under the circumstances.

I don't think that this in itself will save his job or his party but it may reduce the number of seats that will be lost in the election to come.

On the other hand, the semi-nationalisation of the banks, if effective, will encourage open discussions on a similar approach to energy and transport.

And that could make all the difference.

The first Comment sums it up.

Gordon Brown allowed house inflation to rip due to the low interest rates.
Low rates were cause by Gordon Brown not including mortgage costs and council tax in the inflation figures.

10 years of low inflation - who is he kidding?

The Banks carried out irresponsible lending - multiples of earnings, which the FSA approved (the FSA rules being created by Brown).

No doubt the interviewers etc will fawn over Gordon Brown the saviour.
When the UK gave Alan Greenspan his Knighthood, brown insisted upon putting on the citation: 'for services to financial stability'. What a joke.

Dear Critic013 et al, It was not Mr Brown who is ultimately responsible for the problems we have now. Perhaps you were in short trousers at the time (or even now) but the deregulation of the financial institutions which led directly to the problems in the USA which ultimately has affected us here, was due to the free market reforms of a certain Mr Reagan and Mrs Thatcher. These 'reforms' led to the structural instability, unsustainability and ultimate failure of the financial institutions, along with the root causes of so many other of our social problems, too long a list to discuss here.

The silver lining of all this is that hopefully we will now see the final death of Thatcherism and perhaps the return of such concepts as 'Society' where cooperation is seen as equally important as competition, and where self interest (see Adam Smith) is not interpreted as selfishness and greed, and regulation of financial institutions is not seen as the intervention of the so called 'nanny state'. Lets hope that all that free market idiocy is relegated to the dustbin of history where it belongs. Perhaps the present pain is worth the long term gain!

Just think, a certain Mr C, (the one with a 'cunning plan') was extolling her virtues at a certain party conference in B'ham just a short time ago. God help us if those Muppets get in next time.

Brown: "There is an undertaking to restore the availability of loans to homebuyers and businesses to what it was last year."

Oh dear; he still doesn't understand. That was the thing that got us into this mess in the first place; too much lending to the wrong people and not enough capital to back it up. He's missed the whole point.

This is not a fatuous posting.

Presumably the direct stakes the government is taking in the banks (not the preference shares) will be held by the Bank of England, or its nominee company. These shares will be held by the state, effectively us. Will we be told the price at which these shares have been acquired by the state on our behalf?

Presumably the Bank, or the nominee company, will go on the shareholders register along with the other registered shareholders. All the shareholders will be liable to lose their money if the bank does fail, which government involvement is intended to prevent. Did the existing shareholders get a vote to decide to reduce their equity participation in the company? Did they get a chance to sell their existing stake to the buyer at the purchase price? Did they get a chance to subscribe for further shares at the same price as the buyer? Some of the existing shareholders in these banks are foreign investors, in some cases national investment companies of foreign governments. Have they been given any preferential, or different, treatment to investors in the UK, some of whom are pension fund managers, who like to keep their holdings in terms of market share.

Since share prices have bounced today, presumably we are now in profit on our new investment. What plans does the government have in mind to organise an orderly sale of their significant shareholding when the time is appropriate (not right now, obviously). Are there going to be quiet talks with preferred (from the government’s point of view) buyers, or a public offering?

These are the sort of questions that need to be asked of the government in the emergency debate that this crisis demands, particularly when considering the amount of, as yet, unearned money the government is committing to spend on our behalf. I’m watching with interest to see when this might take place.

I gather Gordon the Golem expects the electorate to award him a bonus of five extra years for his excessive risk taking with the public finances, which are about as transparent as the "off-balance sheet" assets of the banks.

The railways could benefit from nationalisation if there was a "big plan" that would accommodate growing population and climate factors. But I don't see a viable plan.

So if there is the anticipated carbon shortfall that we have known was projected for 2020 and we are not ready will the government of the day say: "Its a global problem and nothing to do with us!".

I would like to be able to make my claim now,

Can I be re-capitalised. as well, please..?

At firstI thought £100,000 would be enough but after I thought about it a bit more, the worst case scenario means I think maybe £200,000 would be better..

I have to say that without recapitalisation the risks of a systemic collapse that would bring down my children's Pocket money allowance, before spreading to engulf the local Pub, Garden Centre , takeaway and God know's what else just don't bear thinking about

I await your reply Mr Chancellor just let me know when you have cleared it with Mr Brown.

Great 'poisoning of the well' action by Brown & Darling!

Would the Tories even want to win the next election now? I can't imagine Cameron and his buddies got into politics to run a load of nationalised banks in a country where the public have totally lost all appetite for equities. They can leave all that to the socialists to sort out for another five years...

A 'snap' election could well be on its way!

Armchair economists beware. For all your bleating about the situation! Unfortunately the banks have been allowed to sit at the centre of our economy in an unsustainable way. The bail-out, and yes it is that, is a necessary evil or we all fall.

The professionals agree with the PM and CoE. I for one hope they are right.

As for other industries - I think it has been shown that govenrments running things doesn't work - but now, obviously, neither does complete free markets. Tougher regulation is now possible as the price of the bail out.

Councillors should go to prison for misappropriation of funds.

More has to be done than just inject billions to part nationalise certain banks. The market is reacting unfavourably to RBS, HBOS and Lloyds.

I am very uncomfortable about creating very large banking corporartions, particularly (a) if they need to be bailed out (b) they become difficult to manage as frequently they have many different brands and markets. RBS group should not have acquired ABN AMRO. As a former employee of HBOS, that merger or acquisition never created a happy working environment. There is case for splitting up those two entities again. But BOS would definitely be the stronger unit.

Taxes need to be cut, as people do not have the means to spend more. Plus more people are more savvy about financial affairs and are not so stupid as to take out more loans over and above their already crippling debts to spend the economy out of recession.

Was it not only a few months ago that public pay sector deals were being agreed at 2 percent per annum as any more would cost millions that the country could not afford? how times change...

Free banking?

There is something missing here. We--the public- have not yet been asked if we support these so called "bail outs".
Of course--it was the right thing to do in the emergency short term--but does the electorate get a look in anywhere at all as all and everything gets nationalised just like a communist state ?

When AD was pressed by Sian Williams on BBC News this morning to deny that Sir Fred would not be collecting his £500,000 pension, AD skirted round this by saying that he could not discuss individual cases.

That comment surely means that Sir Fred will walk away with his large pension intact.
The whole thing stinks.

Maybe what the government should do is ask for normal working people to volunteer to be representatives on these boards. As we are untainted by the troughing that seems to go on, normal people will be more able to say "The emperor has no clothes", rather than the very people who are selling the emperor his new outfit.

I own more banks? Wasn't Northern Rock and Bradford & Bingley enough banks for anyone?

Can anyone tell me what the FSA has been doing recently? Weren't they meant to ensure that this sort of thing never happened?

I think we should be told.

So we have Brown and Darling on TV to tell they have had to BORROW £37bn to prop up a banking system in their image.

And from a Government that's in serious hock to the tunes of hundreds of billions already.

BORROW from where, oh yeah, the banks.

Labour replaced the previous regulatory framework in 1997. This is the result.

We have to pay for their mistakes.

Blaming the bankers is very convienient, HSBC and other haven't keeled over have they?

Pardon me if I am not happy and not in on Gordon's jokes; it's my hard work and millions of us that has to pay for Brown's mistakes.

@56

Never thought I would say this.
I agree with you wholeheartedly sagamix

Another thought about the Unions suddenly jumping in about nationalisation.

I'd consider their proposals on the following condition: that they, as organisations, become non-party-political.

They represent one group of stakeholders: their workers.

The Govt, on the other hand, must represent the totality of the UK population, IRRESPECTIVE OF WHETHER THEY VOTED FOR THEM. It is intolerable for them to bow down before the demands of one small subsector.

So for the Unions to come back to the top table, they must remove party political allegiance.

OK?

So, it seems that underlying this rescue plan is the desire of Brown and Darling for the banks to 'start lending again.'

But wasn't that what got us into trouble in the first place? Responsible lending is of course essential to the economy, but irresponsible lending leads to ruin.

Gordon knows all about borrowing, as he has landed this country with a huge public debt - even before this latest crisis. He is the master of tax, borrow and waste.

The idea of the Dynamic Duo now running the banks should fill us with fear. But instead the BBC seems unwilling to challenge what is being done - and instead portrays Gordon as some sort of saviour.

What short memories people have!

Gordon is showing real leadeship on this issue. Other governments are following his lead. Old dogmatic approaches for and against nationalisation are irrelevant. The operating environment requires a decisive plan of action and that is exactly what GB and Alistair Darling have delivered.

In the real world this was a necessary decision taken by the right leader at the right time. So far from being the thin end of the wedge of resurgent nationalisation that the USA and other countries are now following in Brown's wake. Socialism is not very popular in the USA, you know.

#51

You're right.

With Northern Rock we should've rushed into a solution that we hadn't thought through, and bung billions of pounds to the private sector to take it off our hands (an alternative solution that some from an elite Oxford drinking club were suggesting).

Interesting article that I'm sure you'll heartily agree with Mr J D.

Gordon leads and the world follows

Call Robin a taxi.

#66 terryd15

Dear Critic013 et al, It was not Mr Brown who is ultimately responsible for the problems we have now. Perhaps you were in short trousers at the time (or even now) but the deregulation of the financial institutions which led directly to the problems in the USA which ultimately has affected us here, was due to the free market reforms of a certain Mr Reagan and Mrs Thatcher. These 'reforms' led to the structural instability, unsustainability and ultimate failure of the financial institutions, along with the root causes of so many other of our social problems, too long a list to discuss here.

It's so refreshing to have someone with such a rose-tinted view of the last eleven years. Bless.

#73 sdwatson

Tougher regulation is now possible as the price of the bail out.

You mean like the sort of regulation we had before El Gordito swept it all away and replaced it with the incompetent FSA?

The media are so soft on Brown - they 'report' the spin almost word for word.

How can any self respecting reporter allow Brown to pose as the global saviour and yet ignore his role in:

a) causing the problem

b) making the depth of the problem worse

And, Robin, the author of that article is Nobel Prize winning economist Paul Krugman (he won the award today).

Do you think he is better qualified than you to talk about the current economic situation and the quality of responses to it?

#6

"With the Conservatives trailing in Brown's wake, and his demolition of Cameron at PMQ's last week, perhaps the outcome of the next election is not the forgone conclusion it had appeared to be."

If you can call that final, childish dig "demolition" then good luck to you.

Brown richly deserves a verbal kicking over this whole fiasco. But in the last month the Tories have risen above that and have spared him both barrels. After the last 11 years and his disgusting, hypocritical speech in Manchester in September, I can tell you my vote is a foregone conclusion.

'the people are sure to make demands of the people's representatives who bought them on our behalf'
Do you mean that financial policy should be dictated by popular demand?
Perhaps the government might, for a change, try using a little foresight and wisdom and reduce their tendency to be surprised by the unintended and unexpected consequences lof their actions...

How does Mr Browns idea of holding the banks 'at arms length' correspond with having Government representation on the boards of banks interference in their operation? I heard nowhere in the statements that there would be Government appointed Directors.

Now our glorious leader has part nationalised a couple of banks and saved the world, will he tell us how he intends to stop these institutions reverting to the dishing out of 125% mortgages to all and sundry ? Isn't it time to set by law the amount of mortgage that can be given i.e. no more than 3 times salary and at least 15% deposit. This would reduce the risk , reduce the cost of housing, put a lot of estate agents out of business and stop the obscene profits being made by developers builders and speculaters. Sadly it will never happen, our glorious leader would never upset the upper classes and rich laour supporters to that extent.

#66

Do you think that Henry Ford should be made responsbile for all road deaths? After all, he made the motor car affordable to a larger group of people thus creating thep roblem we have today? Or is highway enforcement and policing the problem?

Do you think that a free market is the problem? Or the enforcement of the rules?

Do you think that the FSA is doing a good job in banking supervision? Or do you think that it should have been left with the Bank of England, as it was before Gordonomics took hold?

Do you think that the FSA is doing a better job at understanding the markets, or was it better when the specialist bodies were in charge of regulation, as it was before Gordonomics took over?

Do you think it was a good idea to lighten the rules on individual insolvency, just as the credit explosion was taking off? Do you remember the obscence adds on the telly saying you could write off 75% of your debts, under a new Government scheme? Anyway, who cared - it was the banks who had to pay the price.

Do you think that Gordon - who has luxuriated in the glow of increases in GDP and a low inflation and low interest rate environment for a decade - thought for one moment it was all down to Thatcher?

Of course not. He continued the free market economics because, properly regulated, they made sense.

He undermined regulation. No one else did.

To pin the blame on Thacher and Reagan is out of date rubbish.

This comment has been referred for further consideration. Explain.

6. jimbrant

You are a card

Northern Rock was a quick decision was it, lord help us if Brown decides to ponder on something then.

The Tories are trailing... mmmmm OK.

No idea if this is true or not, but hey.


Caught the last fragments of a new sarticle on radio 4 this lunch time.

The claim was that Northern Rock have almost paid off half of their government borrowing.

Interesting if true.

#81

All Brown's faults?

Why are Iceland's banks in crisis?

Why are the problems in Russia's stockmarkets?

What are German banks in trouble?

Why are American banks in trouble?

Why are Asian stockmarkets in a state of collapse?

Why are the IMF very concerned?


Why are global commentators calling recent events a paradigm-shifting shock to the world's financial institutions?

Gordon Brown seems to wield a lot of destructive influence to turn a domestic UK problem into a world destroying episode of financial contagion!

Alternatively, not much of the blame can be pinned on Brown - though a failure to regulate more closely (e.g. regulation strong enough to have stopped UK institutions investing in sub-prime US mortgage debt, and issuing associated insurance) and prick the housing bubble can be. That's what Dave and Gideon and other Conservatives always said wasn't it?

Oh. They said the opposite? We need to deregulate more? Really? Oops.