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28 Oct 2008
Today’s Bank of England (BoE)'s report on financial stability indicates a recession as severe as that of the early 1990s would lead to credit losses of £130bn for Britain's six biggest financial institutions and could possibly also wipe out the whole £50bn government-backed funding package.
The losses were predicted for the country's five biggest banks and the Nationwide Building Society if mortgage arrears and business failures rise as high as in the last recession, The Times reports.
‘The instability of the global financial system in recent weeks has been the most severe in living memory,’ Sir John Gieve, BoE deputy governor, financial stability, said. ‘And with a global economic downturn underway, the financial system remains under strain.
‘But it is better placed as a result of the exceptional package of capital, guaranteed funding and liquidity support. That is helping to underpin the banking system both directly and by demonstrating the authorities’ determination to do whatever is needed to restore confidence.’
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More money for banks
What were the supposedly independent non-executive Directors doing when the executives were being paid vast bonuses on deals that cost the bank shareholders vast sums? What are they doing now when it is proposed to pay out bonuses because "we did quite well"?
Should they not be sacked if they do not hand in their resignations? Should they not also resign from other companies of which they are executive or non-executive Directors?
Posted by: John S, 28 Oct 2008 | 00:00
Banks need more taxpayers money
I fail to see why they should get any more than has been pledged, and certainly nothing more until the extent of their bad debts has been put into figures. There is little reason to believe that the banks are in any way honest in their public pronouncements.
Posted by: Mike Feinson, 28 Oct 2008 | 00:00