New bank bail-out to cost billions

[DGP1]

New bank bail-out to cost billions
http://uk.news.yahoo.com/21/20090118/tu ... 23e80.html
2 hours 20 mins ago
Press Assoc.

Officials worked throughout the weekend to finalise the second bail-out in three months which is expected to see the Government increase its stake in the banks while underwriting up to £200 billion of so-called "toxic assets".

The Treasury had been looking at the proposals for some weeks after it became clear that the initial £37 billion bail-out in October had failed to provide a sufficient platform for normal lending to resume.

However they were given added urgency by Friday's dramatic stock market falls amid fears that the banks were set to reveal further massive write-downs in the forthcoming results season.

Gordon Brown, in Egypt for an international summit on the Gaza crisis, said that the measures were intended restore lending to businesses and households amid fears that the shortage of credit is driving Britain deeper into recession.

"We know that the essential problem, that has been held back by what has been happening internationally over the last few months, is the resumption of lending and the expansion of lending," he said.

"What we want to do is see businesses get the money that they need to be able to create jobs and secure investment for the future. What I want to see is people who are mortgage holders having access to mortgages at prices they can afford. That's what tomorrow's programme is all about."

It appears that the plan has two main elements. One involves an insurance scheme for the "toxic assets" which the banks were left with after the collapse of the sub-prime mortgage market in the United States. Under such a scheme, the banks would pay a fee to have their bad loans underwritten by the taxpayer up to a certain level.

This would help "ring fence" the bad assets - estimated at around £200 billion - and limit their losses, freeing-up capital which could then be used to lend to individuals and businesses.

The second element could see the Government ease the terms of its original bail-out in which it took preference shares in some of the banks. These carried an onerous 12% rate of interest, encouraging the banks to pay them back as quickly as possible at the expense of lend.


I knew this would happen, we bailed them out but that wasn't good enough for them they want more Right now the government should be looking at nationalisation of all the banks and punishing those who are responsible for this disaster.

[pcb]

They are bailing out greedy bankers and allowing us to go under for a percieved 8 billion deficit on pensions, Also allowing the car industry to go under unlike the US who have just bailed out their car industry. just does not make sense. New Labour just looking after the private banks who started this downturn. As for those MPs who have the bottle to stand up to Brown good on them because most of the weak minded New Labour MPs are looking after themselves. John McDonnell and his ilke are few and far between at least they have not betrayed their socialist ideals. New Labour will lose the next election and then blame the left. Small minded idiots!

[banner18]

Wonder what happened to all them billions the banks were making for over a decade? You couldn't go five minutes without hearing Barclays made 4.4 billion, HSBC made 8 billion, Halifax made 3 billion etc... Year on year we heard this. Where is all this money now then? The fact is that it is in a very few people's hands and the 'little billy bob working man' has now got to pay for these billions that have been taken out of the system. The whole thing stinks and is a disgrace.

[Yahoorsur]

The last bailout has'nt worked and for this to work is stretching credulity a bit far,NATIONALISE the banks,and while we are at it,Fred the Shred Goodwin et all,should be arrested,held without bail, on charges of embezzlement,fraud,and any other charge that I can think of,they have hoodwinked us,and run off with the money and it's us and our kids that are going to pay for the madness of the last 20 years,better still a lampost and a length of rope,would be my preferred option for that bunch of thieves and rogues

[k979aaa]

From what info i have it is £200 billion plus £50 billion and another £250 billion in backed assett's? so 1 trillion pound's all together with the £500 billion pound bail out just three month's ago our whole GDP is 2.6 billion pound's a year a debt too far by far!.

[Yahoorsur]

Just a couple of comments on the Gruinad site,I agree wholeheartedly with them



Mcdermid
19 Jan 09, 9:20am (about 9 hours ago)

Now let me see if I have got this straight.

A bank that has lent a Russian ,"business man ",two and a half billion pounds that can't be repaid,is going to be saved from bankruptcy,by the taxpayer,to the tune of a total of £300bn,but when that same taxpayer defaults on his mortgage,by a few thousand pounds,{because he has lost his job,not because he was incompetent},why ? ! ,what a different story,he can expect to find himself in the street,a natural and normal result of the capitalist system by which we all live.

Well not quite all, if you are a bank,{the epitome of the capitalist system},then none of the normal rules apply to you.The taxpayer must be content with the knowledge that his money has gone to save a system,that lent billions to foreign enterprises,in a total lack of competence and skill.

Well Brown and his motley crew must thank all the gods in the world,that they are in charge of Britain and nowhere else,for anywhere else,would find them in hiding from a very,very angry population.One day the moribund British population will awake and then the system will be called to account, will not be a pretty sight.

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Clip | Link MJTValfather
19 Jan 09, 9:22am (about 9 hours ago)
What this government doing is truly terrifying - because if it goes wrong, the country will be bankrupt. What that will mean for anyone claiming a state pension or who genuinely needs welfare, I don't know but we will see poverty and deprivation not seen in sixty years. W

What contigency plans have the government put in place to ensure it doesn't go wrong? Why are we allowing banks who have taken taxpayers money, allowed to lend to foreign billionaires whose companies shortly go bust. Why aren't billionaires whose companies have been lent billions (and then default), not being taken to court and stripped of all their assets? And why, in God's name, are people in the City in banks bailed out. part owned by this government allowed to have bonuses? If there is belt tightening, then that is the first place the axe should fall.

Also, when we talk about "the banks" we are talking about a handful of inviduals who run them - why aren't these individuals being investigated and where possible, sued in civil courts for everything they own, if it is proven that they have been wilfully reckless (even if within the bounds of the law).

if it means that we have an exodus of these people, these wealth destroyers, then so be it. They have wrecked our economy while earning hundreds of millions; we can find talented people who won't and won't cost us as much.



We are going to pay the price,Royal mail sold off,0000s of job losses,all so the system can keep on staggering from one crisis to the next.

[banner18]

Just a couple of comments on the Gruinad site,I agree wholeheartedly with them



Mcdermid
19 Jan 09, 9:20am (about 9 hours ago)

Now let me see if I have got this straight.

A bank that has lent a Russian ,"business man ",two and a half billion pounds that can't be repaid,is going to be saved from bankruptcy,by the taxpayer,to the tune of a total of £300bn,but when that same taxpayer defaults on his mortgage,by a few thousand pounds,{because he has lost his job,not because he was incompetent},why ? ! ,what a different story,he can expect to find himself in the street,a natural and normal result of the capitalist system by which we all live.

Well not quite all, if you are a bank,{the epitome of the capitalist system},then none of the normal rules apply to you.The taxpayer must be content with the knowledge that his money has gone to save a system,that lent billions to foreign enterprises,in a total lack of competence and skill.

Well Brown and his motley crew must thank all the gods in the world,that they are in charge of Britain and nowhere else,for anywhere else,would find them in hiding from a very,very angry population.One day the moribund British population will awake and then the system will be called to account, will not be a pretty sight.

Recommend? (65)
Report abuse
Clip | Link MJTValfather
19 Jan 09, 9:22am (about 9 hours ago)
What this government doing is truly terrifying - because if it goes wrong, the country will be bankrupt. What that will mean for anyone claiming a state pension or who genuinely needs welfare, I don't know but we will see poverty and deprivation not seen in sixty years. W

What contigency plans have the government put in place to ensure it doesn't go wrong? Why are we allowing banks who have taken taxpayers money, allowed to lend to foreign billionaires whose companies shortly go bust. Why aren't billionaires whose companies have been lent billions (and then default), not being taken to court and stripped of all their assets? And why, in God's name, are people in the City in banks bailed out. part owned by this government allowed to have bonuses? If there is belt tightening, then that is the first place the axe should fall.

Also, when we talk about "the banks" we are talking about a handful of inviduals who run them - why aren't these individuals being investigated and where possible, sued in civil courts for everything they own, if it is proven that they have been wilfully reckless (even if within the bounds of the law).

if it means that we have an exodus of these people, these wealth destroyers, then so be it. They have wrecked our economy while earning hundreds of millions; we can find talented people who won't and won't cost us as much.



We are going to pay the price,Royal mail sold off,0000s of job losses,all so the system can keep on staggering from one crisis to the next.

[Yahoorsur]

Calling the banks to account.

A good article from Martin Kettle

http://www.guardian.co.uk/commentisfree ... ed-goodwin" onclick="window.open(this.href);return false;

Scathing about the political culture and failing of ambition thats apparent during this crisis