Without a thorough review of all the assets that are being underwritten, the latest government bank bail-out means ministers are effectively writing a blank cheque to the banks that have arguably been largely responsible for the financial crisis.
The Government is now proposing to underwrite billions of pounds worth of debt which could leave taxpayers open to vast losses.
Ministers are offering hardly any details about the terms of this underwriting. Taxpayers are being signed up to yet another bank bailout, when it is clear the Government hasn't done its homework. The £100bn insurance of bad debts owned by the banks could result in enormous losses for taxpayers, since these assets are being insured in a falling market and there are still further big losses to come in the property market.
The Prime Minister says he is putting in place proper controls to monitor the use of taxpayers' money. They should already be there! Why weren't the banks required to make a full declaration of their bad loans when the £37bn was invested?
With RBS now 70% publicly owned, there can be no more excuses for it not to start lending at reasonable levels to viable businesses and individuals.
Showing posts with label northern rock. Show all posts
Showing posts with label northern rock. Show all posts
Wednesday, 4 February 2009
Northern Rock Bonuses
Nationalised bank Northern Rock is to award staff a 10% bonus.
Northern Rock, you will recall, was nationalised in February 2008 after a run on the bank in 2007. Once Britain's fifth-biggest home loan provider, it was taken into public ownership after it failed to find a suitable buyer from the private sector.
A Northern Rock spokesman refused to be drawn on how much money was being paid out, but pointed out that the staff-wide bonus scheme had been announced in October. He also stressed that no executives or senior management would benefit. The reward comes after staff met targets on repaying the bank's £26bn loan from the government.
Asked whether Mr Brown approved of the bonuses, the prime minister's spokesman said: "Northern Rock, as I think is well known, has repaid its debts to the government at a rate faster than originally planned for. Operational decisions such as this are a matter for Northern Rock."
Northern Rock still owes billions to taxpayers. At a time when millions of people are facing pay cuts or even unemployment, this bonus is hard to understand. And harder to accept.
Northern Rock, you will recall, was nationalised in February 2008 after a run on the bank in 2007. Once Britain's fifth-biggest home loan provider, it was taken into public ownership after it failed to find a suitable buyer from the private sector.
A Northern Rock spokesman refused to be drawn on how much money was being paid out, but pointed out that the staff-wide bonus scheme had been announced in October. He also stressed that no executives or senior management would benefit. The reward comes after staff met targets on repaying the bank's £26bn loan from the government.
Asked whether Mr Brown approved of the bonuses, the prime minister's spokesman said: "Northern Rock, as I think is well known, has repaid its debts to the government at a rate faster than originally planned for. Operational decisions such as this are a matter for Northern Rock."
Northern Rock still owes billions to taxpayers. At a time when millions of people are facing pay cuts or even unemployment, this bonus is hard to understand. And harder to accept.
Tories No Better Than Labour On Managing the Economy
Last week, the respected independent research organisation, the Institute for Fiscal Studies released their forecast for UK's public finances. Interestingly, they showed that Labour and the Conservatives are just as bad as each other at managing the UK economy.
Charting the UK's progress, they demonstrated the structural budget balance had risen from minus 5% of national income under the Tories to 1% after three years in government from 1979, but then fell back to minus 3% after eleven years. It then fell to minus 5% after 14 years, closing at minus 3% again after 18 years. Everyone remembers the Conservatives' humiliating failure with Sterling and the Exchange Rate Mechanism (ERM).
And guess what. Under Labour the structural budget balance started at minus 3% in 1997, rose to 1% again after three years, but then fell back to minus 3% after eleven years. The Institute for Fiscal Studies now forecast that the balance will fall again to minus 7% after thirteen years before closing at minus 3% again. And so no better than where they started.
So neither party left the public finances in a healthy position after many years in government.
After seeing so much crisis and failure, its now time to give Lib Dem leader Nick Clegg and the very well respected Lib Dem Shadow Chancellor Vince Cable and colleagues a chance.
Charting the UK's progress, they demonstrated the structural budget balance had risen from minus 5% of national income under the Tories to 1% after three years in government from 1979, but then fell back to minus 3% after eleven years. It then fell to minus 5% after 14 years, closing at minus 3% again after 18 years. Everyone remembers the Conservatives' humiliating failure with Sterling and the Exchange Rate Mechanism (ERM).
And guess what. Under Labour the structural budget balance started at minus 3% in 1997, rose to 1% again after three years, but then fell back to minus 3% after eleven years. The Institute for Fiscal Studies now forecast that the balance will fall again to minus 7% after thirteen years before closing at minus 3% again. And so no better than where they started.
So neither party left the public finances in a healthy position after many years in government.
After seeing so much crisis and failure, its now time to give Lib Dem leader Nick Clegg and the very well respected Lib Dem Shadow Chancellor Vince Cable and colleagues a chance.
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