Skip to main content

Bailing out the banks' customers and their customers/employees

I tend to think that the UK proposals with Tier 1 capital for the banks are better than the USA proposals which involve the government buying "toxic" debt. Although some of the "toxic" debt may indeed be quite sweet and undervalued what the USA proposals do is to reward the shareholders.

What the UK proposals do is to underpin the banks so that the government gets its money back, but the shareholders and management only win out once stability returns and the consequences of their decisionmaking is recognised.

To that extent they do not bail out the banks, but instead bail out the banks' customers.

For those that argue for insolvency they need merely to look at what has happened with IceSave where the bank accounts have been frozen. Imagine what would happen if a big bank's accounts got frozen. People's wages would stop being paid and noone would be able to pay for anything until the administration had made some progress.

To that extent this bails out the banks' customers employees, customers and suppliers. The shareholders of the bank still have to cope with the final outcome of decisionmaking whatever that may be.

What we need now also is a cut in interest rates.


Gordon said…
Some of the US "toxic" debt is, no doubt,fairly sweet. However, under the US plan I somehow doubt that this is the part that the banks will rush to sell to Uncle Sam.

Call me an old cynic but I think they will offer up the very worst of it.

Popular posts from this blog

Statement re false allegations from Esther Baker

Statement by John Hemming
I am pleased that the Police have now made it clear that there has been a concerted effort to promote false criminal allegations against me and that the allegations had no substance whatsoever.
I would like to thank Emily Cox, my children, Ayaz Iqbal (my Solicitor), my local lib dem team and many others who supported me through this dreadful experience. There are many worse things that happen to people, but this was a really bad experience.
It is bad enough to have false allegations made about yourself to the police, but to have a concerted campaign involving your political opponents and many others in public creates an environment in which it is reasonable to be concerned about ill founded vigilante attacks on your family and yourself. Luckily there was a more substantial lobby to the contrary as well, which included many people who were themselves real survivors of abuse, which has helped.
I am normally someone who helps other people fight injustice. …

Millionaires and politics

The Labour Party spent most of the last election criticising me for being a successful businessman (aka millionaire). That is business in the private sector employing over 250 people. It is worth looking at the situation for the Labour Candidate now:

For the year 2016-7 Annual Income from Parliament74,962Specifically for her book51,250Other media income etc5,322.82Total declared income131,534.82

Traditionally anyone with an annual income of over £100,000 has been considered to be a millionaire. I did not use my position in parliament to increase my income.

I have been asked for sources for this. This BBC piece looks at how one should define rich. It was written in 2011 so the figures will be slightly out of date. There are perhaps 2 relevant pieces:
"In 1880 a rich person would have had £100,000 in assets or an income of £10,000 a year, he says. About a hundred people a year died leaving £100,000 and by 1910 this was 250 - "a microscopic fraction of the number of death…

Homelessness vs Selling Books

Candidates in elections tend to find themselves very busy with lots of things to do.  It is, therefore, necessary to prioritise things to ensure that the important things are dealt with.

To me the issue of homelessness and rough sleeping is an important issue.  Therefore, when Birmingham's Faith Leaders group contacted me to ask me what I would propose and whether I would work with them to make things better I was pleased to respond with my views and indicate that I would work with them after the election.

The Faith Leaders Group (Bishops and other religious leaders in Birmingham) have now sent out their report.

Sadly, according to their report,  I was the only candidate for Yardley to respond.  The group in their report said:

"Particularly disappointing was the lack of response from some of those candidates seeking re-election as MP for their respective constituencies."
It is worth looking at the priorities of my opponent.
Interestingly today she has decided to be at th…