Is there another banking crisis on the way?

[Tangled up in Blue]

http://gu.com/p/2nh4m
The Head of the Bank of England thinks there might be.

 

[Cricko]

I have been saying it for ages..The PM and his cronies have no idea what they are doing to this country. The long term effects will be catastrophic.

 

[osymandus]

Im in agreement here , and even teh serious rebutal from teh chairperson of the BAA seemed to agree with him .

 

[GBJ]

Ron Martin dislikes this

 

[Neil_F]

I have been saying it for ages..The PM and his cronies have no idea what they are doing to this country. The long term effects will be catastrophic.

Long term effects of what?

 

[Cricko]

Long term effects of what?

Spiralling unemployment...Costs of living going through the roof..Fuel and Food prices reaching ridiculous unaffordable prices.The housing market all but dried up..Kids with degrees that cannot find jobs....The armed forces being crippled..The Banks only now thinking of profit before customers...The list is endless.

You may think the PM is wise by blaming Labour for messing up , it was a world wide problem..The Tories would of done nothing different....These extreme cost cutting measures he is implementing will bring this country to it's knees.If he wanted to do something right he would offset the debt over a 50 year period not try a quick fix which is making no difference whatsoever to his lifestyle.

If I ever hear the pompous **** ever use the terms .."I feel your pain, but we are all in this together" to workers who are now reaching the breadline I am sure I am going to kick the TV. Who the **** does he think he is, nothing but a jumped up middle class idiot with absolutely no grasp of reality.

He is even trying to become a world statesman now.." We will use force if we have to to get Gadaffi out"..

My arse you will.

 

[Hotman]

Before my comments, can i clarify that my extracts will be from http://www.telegraph.co.uk/finance/.....-but-people-have-the-right-to-be-angry.html and http://www.telegraph.co.uk/finance/...ncial-crisis-Bank-of-England-chief-warns.html , rather than the paraphrased Grauniad interpretation of the above...

Within the Telegraph (2nd link) King says:

“[With the banks] there isn’t that sense of longer term relationships.
“There’s a different attitude towards customers. Small and medium firms really notice this: they miss the people they know.”
The Governor adds that good businesses “keep a clear vision of who their customers are, and are run by people who don’t think they should simply maximise profits next week.”

With all respect, King does not get involved with the departments who service "small and medium firms", nor the firms themselves. I am in a very fortunate position to be on good terms with bankers, from small business unit managers, through the commercial and corporate departments, up to heads of business units and directors. I also work day to day with businesses that are firmly in the "small and medium" sector.

As an impartial observer to the above dynamics, the banks are working extremely hard to build these relationships with SME's, and also to correct their previous mistakes in judgement. Appetite for lending is returning, although there is still a balance between strength of the plan and security required by the banks. However, the biggest thing coming out of most banks is the businesses that they are keeping alive on "life support". There will undoubtedly be a tranche of businesses with funding cut, and their balance sheets already have the provisions for this.

With regards profiteering, this is more about stabilizing the balance sheets whilst there is scope in LIBOR etc to include margins, because market tolerance wont keep up once base rate increases, and it is essential for the banks to be well capitalised.

I'd be interested to know how many SME's King has spoken to, and whether he has observed the workings of commercial and small business banking units?

 

[Hotman]

Spiralling unemployment...Costs of living going through the roof..Fuel and Food prices reaching ridiculous unaffordable prices.The housing market all but dried up..Kids with degrees that cannot find jobs....The armed forces being crippled..The Banks only now thinking of profit before customers...The list is endless.

You may think the PM is wise by blaming Labour for messing up , it was a world wide problem..The Tories would of done nothing different....These extreme cost cutting measures he is implementing will bring this country to it's knees.If he wanted to do something right he would offset the debt over a 50 year period not try a quick fix which is making no difference whatsoever to his lifestyle.

If I ever hear the pompous **** ever use the terms .."I feel your pain, but we are all in this together" to workers who are now reaching the breadline I am sure I am going to kick the TV. Who the **** does he think he is, nothing but a jumped up middle class idiot with absolutely no grasp of reality.

He is even trying to become a world statesman now.." We will use force if we have to to get Gadaffi out"..

My arse you will.

What would you do differently, other than sit and moan about it?

 

[Hotman]

http://gu.com/p/2nh4m
The Head of the Bank of England thinks there might be.

Rather than a third hand article, what's your opinion on it?

 

[Cricko]

What would you do differently, other than sit and moan about it?

I would set out a long term plan to sort the finances over a 50 year period as was done after the war when we had huge debt..I would not cut the public sectors so harshly..I would try to support workers rather than belittle them with excuses and tell them we have to do it this way, your job loss is a shame but hey ho......No wonder Kids of today need a quick fix when they are led by a government that wants the same. Why is my opinion classed as a moan to you just because if differs from yours?

Actually I need to take a breath on this as it is making me seriously angry....I will be back ..In the meantime you tell me why the government will not cut fuel charges to help all business and public alike when they take 66% of the revenue from it.

 

[Hotman]

I would set out a long term plan to sort the finances over a 50 year period as was done after the war when we had huge debt..I would not cut the public sectors so harshly..I would try to support workers rather than belittle them with excuses and tell them we have to do it this way, your job loss is a shame but hey ho......No wonder Kids of today need a quick fix when they are led by a government that wants the same. Why is my opinion classed as a moan to you just because if differs from yours?

Actually I need to take a breath on this as it is making me seriously angry....I will be back ..In the meantime you tell me why the government will not cut fuel charges to help all business and public alike when they take 66% of the revenue from it.

I agree that in an ideal hypothetical world we would look towards a 50 year reduction, heck why not go for 250? But the last government have left the country in such a state that an immediate cut is required to reduce ongoing interest payments. I'm sure you know how interest on debt compounds.

I doubt that PM and his cronies are belittling workers either - I'd suggest that if they are being told what you believe they are, then it would be coming from their HR departments. Not really DC's fault!

And as to why they can't cut fuel taxes - why can't they cut every tax? Think about it... you are the one that doesn't want spending cuts!!

 

[Hotman]

PS Cricko as for worldwide problem, just a few charts for you to chew over before going off on a "cut taxes, increase spending, and somehow reduce the debt" rant....

Image 1 - structure of debt vs other countries

Image 2 - historic private/public sector debt/GDP by nation

Of course, our way out of this is to cut taxes and save everyone's jobs...

Image 2 quite clearly shows how the current position is the previous governments fault. Whatever DC and cronies do, they will be very unpopular, as allowing it to stay as it is will cause EU sanctions, and unrest.

Now please don't get me wrong - I don't know the answer, as I'm not an economist, but I understand my own limitations in debating.

 

[Tangled up in Blue]

Rather than a third hand article, what's your opinion on it?

I find myself(for once)in complete agreement with the Director of The Bank of England.

 

[Hotman]

I find myself(for once)in complete agreement with the Director of The Bank of England.

Amazing - perpetual disagreement with Mervyn King is probably the only thing we have in common.

 

[Tangled up in Blue]

Amazing - perpetual disagreement with Mervyn King is probably the only thing we have in common.

<King's comments are a warning to the chancellor, George Osborne, as a government commission considers whether to force high street banks to sell off their investment banking arms<

This seems to be the key point to me.High street banks should be forced by Government legislation(something the Labour Party also ducked in Government but should sort out their policy on in oppostion)to sell off their investment divisions.
I would also agree with MK's comments that the banks are not doing nearly enough to help SME's(mainly because their hands are tied by the need to maximise investment yields).

 

[MK Shrimper]

I would also agree with MK's comments that the banks are not doing nearly enough to help SME's(mainly because their hands are tied by the need to maximise investment yields).

Er...........

 

[Hotman]

I would also agree with MK's comments that the banks are not doing nearly enough to help SME's(mainly because their hands are tied by the need to maximise investment yields).

They are - proof will be when the "life support" is switched off I'm afraid.

Also on Thursday a director of Lloyds made it clear to me that 80% of funding applications are currently accepted. And please don't confuse me for a banker given my defence of them - my aim is to get them to accept far more, and keep the life support going!!

 

[osymandus]

I think an issue here is asuteraty measures are need (to quote the old farming anologly leaving a field fallow for a year till it comes back and can yield long term bountiful supplies) which should included profit making . Kings statement is about the recreation of teh same environment that caused the crisis in the first place is returning.

Sadly its not really the banks fault , in that they are simply following the function and resources they are layed out with , rather its what their ultinmate aim and product of teh economic models they follow . I.e virtual wealth and no real product.

 

[Holy Joe]

I would set out a long term plan to sort the finances over a 50 year period as was done after the war when we had huge debt..I would not cut the public sectors so harshly..I would try to support workers rather than belittle them with excuses and tell them we have to do it this way, your job loss is a shame but hey ho......No wonder Kids of today need a quick fix when they are led by a government that wants the same. Why is my opinion classed as a moan to you just because if differs from yours?

Actually I need to take a breath on this as it is making me seriously angry....I will be back ..In the meantime you tell me why the government will not cut fuel charges to help all business and public alike when they take 66% of the revenue from it.

I don't think we have 50 years to sort it.

Why not cut fuel charges - because this is income - if it isn't collected on fuel it will need to be collected from elsewhere (or less spent)

 

[Holy Joe]

http://gu.com/p/2nh4m
The Head of the Bank of England thinks there might be.

I'm not sure King does say that there is another crisis on the way in that article. He simply warns that in his opinion not enough has been done to prevent a similar crisis in the future.