Paid Members ReturnOfTheMack Posted March 6, 2011 Paid Members Share Posted March 6, 2011 So, in your scenario, Northern Rock would have gone under, taking with it the life savings and mortgages of hundred of thousands of people. How exactly do you see the rest of this scenario playing out? What happens next? No, because the country wouldn't have been in the same state it was in at that point if I was in charge. Obviously it's a moot point anyway. At that time Labour were right to bail out the banks. But they were also responsible for placing the country in the position where the banks had to be saved in order to prevent meltdown. Â Do you not think it would be a positive thing for people to wake up and stop entrusting all their wealth to banks without even a moments thought about it? Â Â The banks have the power as they have the worldwide money and have done for a couple of hundred years. I highly doubt Labour, or indeed anyone, could have legally managed to stop them having so much power by the time the crash happened. Link to comment Share on other sites More sharing options...
Happ Hazzard Posted March 6, 2011 Share Posted March 6, 2011 Hang on, you've already backtracked on your previous post. Make it clear to people if they choose to invest their money with a privately owned bank, it is at their own risk.  At that time Labour were right to bail out the banks.  I'm getting the distinct impression you've not thought this through at all. Time to start throwing out some random numbers, isn't it? Labour were right to bail out the banks given the position they were in at that time. But that position was of their own making.  If it is made abundantly clear to everyone that their money is not guaranteed if banks fail, then the government should have no obligation to bail out banks. Link to comment Share on other sites More sharing options...
Moderators neil Posted March 6, 2011 Moderators Share Posted March 6, 2011 If it is made abundantly clear to everyone that their money is not guaranteed if banks fail, then the government should have no obligation to bail out banks. Dear Happ Hazzard, Â I am opening up a new bank. I offer a whopping 10% interest on any money you deposit with me. Your money is not guaranteed. Â I look forward to your deposit. Â Regards, Â Bank of Neil Link to comment Share on other sites More sharing options...
Moderators PowerButchi Posted March 6, 2011 Moderators Share Posted March 6, 2011 If your money isn't guaranteed you may as well have William Hill as your bank, for christ's sakes. Link to comment Share on other sites More sharing options...
Paid Members tom Posted March 6, 2011 Paid Members Share Posted March 6, 2011 If it is made abundantly clear to everyone that their money is not guaranteed if banks fail, then the government should have no obligation to bail out banks. Dear Happ Hazzard, Â I am opening up a new bank. I offer a whopping 10% interest on any money you deposit with me. Your money is not guaranteed. Â I look forward to your deposit. Â Regards, Â Bank of Neil Can you give him a loan, and the re-possess his internet access when he can't pay it back? Link to comment Share on other sites More sharing options...
Happ Hazzard Posted March 6, 2011 Share Posted March 6, 2011 If it is made abundantly clear to everyone that their money is not guaranteed if banks fail, then the government should have no obligation to bail out banks. Dear Happ Hazzard, Â I am opening up a new bank. I offer a whopping 10% interest on any money you deposit with me. Your money is not guaranteed. Â I look forward to your deposit. Â Regards, Â Bank of Neil Why should it be the governments responsibility to guarantee money invested privately? If people want to bank their money at no risk, they should use a post office account. Â What incentive is there for the banks to act responsibly if they know full well that the government will bail them out when things go wrong? It's like a no-lose bet for them. Â Plenty of people invest money at risk. 10% isn't a bad return, depending on how great the risk is. Link to comment Share on other sites More sharing options...
Moderators neil Posted March 7, 2011 Moderators Share Posted March 7, 2011 So why haven't you given me your money yet? Link to comment Share on other sites More sharing options...
Happ Hazzard Posted March 7, 2011 Share Posted March 7, 2011 So why haven't you given me your money yet? Because I am not convinced your bank is going to be solvent in a years time, particularly if you are offering 10% interest. If something looks too good to be true, it generally is. Link to comment Share on other sites More sharing options...
Moderators neil Posted March 7, 2011 Moderators Share Posted March 7, 2011 And if every bank in the UK was non-guaranteed don't you think the majority of people would think the same way? Link to comment Share on other sites More sharing options...
Yoghurt Posted March 7, 2011 Share Posted March 7, 2011 What a daft point to try and make in an utterly stupid manner, totally unintelligent neil, poor show. Link to comment Share on other sites More sharing options...
Happ Hazzard Posted March 7, 2011 Share Posted March 7, 2011 And if every bank in the UK was non-guaranteed don't you think the majority of people would think the same way? Not really. People are prepared to risk their money to get a return on it. Â I don't think banks are guaranteed even now, are they? There's no absolute guarantee that the government are going to bail them out every time. Â The point is that people should think about where they put their money. Link to comment Share on other sites More sharing options...
Loki Posted March 7, 2011 Share Posted March 7, 2011 So, going back to my scenario then, Happ, you put big posters up telling people that their money isn't safe in banks, but people still have to, you know, get mortgages and put their money somewhere, so hundreds of thousands of people still choose Northern Rock, which then goes bust. Â Again, how does this scenario play out? What happens next? How does the Happ government deal with that crisis? Link to comment Share on other sites More sharing options...
Kenny McBride Posted March 7, 2011 Share Posted March 7, 2011 The problem was a lack of good regulation. In the old days, a bank like Northern Rock would have been picked up on sooner. Its directors would have been called in to the Bank of England and been told that they were selling up to a bank that was more viable. Panic would be avoided and people's investments would be protected. The idea that Northern Rock would have gone to the wall and everything would have been lost is nonsense. The government already had an insurance scheme to cover fairly large deposits and the mortgage book would have been sold off if NR had been allowed to collapse. The problem was that because the news got out that things were shaky and the regulators weren't able to step in and do something about it to properly avert a panic and all the ensuing chaos that would cause, we ended up with a situation where the government had to step in and guarantee far more than it should ever have needed to. The loss of confidence in the system as a result of that and the similar problems in the States and elsewhere are what triggered the seizing up of the whole system, leaving us where we are today. Link to comment Share on other sites More sharing options...
Kenny McBride Posted March 7, 2011 Share Posted March 7, 2011 By the way, did anybody hear the suggestion that instead of just selling all our RBS shares back into the market, the government is now considering giving every adult in the country about 1000 quids' worth of shares to do with as they please? I actually rather like the idea. Link to comment Share on other sites More sharing options...
Yoghurt Posted March 7, 2011 Share Posted March 7, 2011 http://www.bbc.co.uk/news/business-12663730 Â I know lots of people are against banking bonuses but banks like Barclays and HSBC surely there is no recourse considering the money is entirely their own to do with as the please, they're turning a profit, I don't see the problem. I see a problem with RBS giving bonuses as that is legitimately government bail out money. Â I'm aware there's an anti-success strain that permeates a lot of members here but surely earned money is yours to do with as you please. Nobody forces you to use Barclays and HSBC after all. Link to comment Share on other sites More sharing options...
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