Let the banks go bust.

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I thought what happened was they passed legislation which ring fenced the domestic aspects of their banking to protect Icelanders and suspended their currency trading to protect it. That achieved they defaulted on the greater proportion of their bank depositors who were based outside Iceland by allowing the external part of their banking to go bust. This left other parts of the European banking sector to pick up part of the tab of people who had trusted the Icelandic Banks with their money and that's probably all of us since many local authorities had "our" money invested with them. Sure their economy took a sharp dip for a while but they are relatively few in number and could down-rate to more self sustaining basic agrarian and trade activities and get by for a few years. Besides which they appear to have been looked on with incredible generosity by the European banking sector and the IMF- in contrast to Greece and Spain for example. That may have something to do with their strategic position in terms of NATO of course. :dk:

It would appear that a bunch of wild men with horned helmets came across from Iceland to Europe in their long boats did a bit of looting and pillaging and then sailed back home with their booty. When we asked for it back they said they had lost it all on the way back home neglecting to say they had actually kept a bit back for themselves for emergencies. Now they are proposing to give us lessons in navigation! You have to admire their brass neck or is it horned helmet ?:rolleyes:
 
Good people loose money when banks go bust.

Banks should be owned by the state. Now there's a thought...!!
 
Once you've all decided which ones, please let me know so I can move my money if necessary!
As said, alot of blameless people would lose money. Retail deposits represent a big chunk of most banks' sources of funds which they then lend out. Many small deposits = many votes = extreme reluctance of politicians to be blamed for doing "something" when these days the Government are expected to do "almost" everything. In effect de-risk the trials and tribulations of a hard life for joe public in return for their votes.
 
What we see today is partly the fruits of government de-regulation of the banks. That allowed banks to make up their own code of conduct which read along the lines of "we just do what we want" If under pressure to justify anything then they would have a cozy lunch with Gordon Brown. That deflected any chance of checks being made from any other department (afraid of the wrath of GB).

Miss-Selling is is still just at the tip of the ice-berg along with rate fixing - SWAPS - Internal Fraud etc. The greed that drove all of the above is still there and possibly even greedier as money gets harder to come buy.

State owned Banks? Yes we could have our honest, moral high ground politicians running the show. The very same that will squander your money on their own self interest.
 
You have to admire their brass neck or is it horned helmet ?:rolleyes:

They get away with it because (a) they are small and not worth pursuing and (b) they don't expect to do the same sort of business in the future so it doesn't matter that people will avoid them.

So in real terms in such a difficult situation they had nothing to lose.

Not much different from an individual in dire circumstances entering an IVA.
 
Banks should be owned by the state. Now there's a thought...!!

Would you put your money in a Chinese state owned bank (not a subsiduary in an other country such as UK) or Argentinian state owned bank ....... ?
 
The extreme right of capital (banks etc) is exactly the same as the extreme left (communism etc) in that they both can only survive using other people's money, they create nothing for themselves.

Biggest laugh I've had all year is a bank 'business' manager trying to tell me how to run my business... I told him that if he was that knowledgeable, why isn't he doing it?

Silence....
 
They get away with it because (a) they are small and not worth pursuing and (b) they don't expect to do the same sort of business in the future so it doesn't matter that people will avoid them.

So in real terms in such a difficult situation they had nothing to lose.

Not much different from an individual in dire circumstances entering an IVA.

So I guess you are saying what Iceland President Olafur Ragnar Grimsson is saying is fairly irrelevant to the UK situation then ? Me -- I just don't like people who as the Americans put it "Welch on a bet"
 
The extreme right of capital (banks etc) is exactly the same as the extreme left (communism etc) in that they both can only survive using other people's money, they create nothing for themselves.

Biggest laugh I've had all year is a bank 'business' manager trying to tell me how to run my business... I told him that if he was that knowledgeable, why isn't he doing it?

Silence....

The joke about investment banking that I most enjoyed as an ex one is that investment banking is truly the only communist industry - all the earnings of capital devolve to labour..(and some animals are more equal than others).
 
So I guess you are saying what Iceland President Olafur Ragnar Grimsson is saying is fairly irrelevant to the UK situation then ? Me -- I just don't like people who as the Americans put it "Welch on a bet"

Basically yes.

I wonder how the Irish feel about things compared with Iceland. Their government rashly stepped in and guaranteed their banks .... oops.

OTOH in 25 years time maybe that will pay off in terms of respectability.

I suspect it can't and won't pay off for them- and the reason for that is the Euro.

If a country such as the UK stands by its commitments and has its own currency then people do remember long term that it doesn't welch. That does have downstream value in terms of costs of government debt, institutional debt, and perceived investment risk.
 
The joke about investment banking that I most enjoyed as an ex one is that investment banking is truly the only communist industry - all the earnings of capital devolve to labour..(and some animals are more equal than others).

Excepty it is not a joke, I can assure you. For many, many years a number of investment banks had certain parts of their businesses that operated on a "full payout" model, whose business was actually arbitrage of their own senior managements ignorance, stupidity or greed rather than doing business with third parties.

One notorious case had a Structured Finance guy agree a deal that gave him 20% of all the P&L, except that in calculating that all costs and internal recharges were capped at 50K. Result was that even when his unit was running at an operating loss in normal accounting terms, he was getting 20% of not far of the gross.

Anyhow, the "let the banks go bust" idea is fine for Iceland who effectively defaulted but bear in mind to avoid a full scale bank run the UK Government had to bail out 230,000 UK savers in Icesave to the full extent of their savings - £3.5bn.
 
Anyhow, the "let the banks go bust" idea is fine for Iceland who effectively defaulted but bear in mind to avoid a full scale bank run the UK Government had to bail out 230,000 UK savers in Icesave to the full extent of their savings - £3.5bn.

I don't think that the Icesave crisis would have caused a full run on the UK banking system. Just on Icesave. Arguably not our problem - but HMG stumped up (our money) ....

I do think that the court decision makes a mockery of things. I haven't bothered reading any of it in detail but my feeling is that the court has been probably lenient on its application of its interpretation of what has gone on.

Had the dispute been by Icelandic government to get deposits back from the UK from an equivalent 'Britsave' product then I'm sure the court would have quite easily found against the UK.

But then I'm cynical about a lot of things.
 
Basically yes.

I wonder how the Irish feel about things compared with Iceland. Their government rashly stepped in and guaranteed their banks .... oops.

OTOH in 25 years time maybe that will pay off in terms of respectability.

I suspect it can't and won't pay off for them- and the reason for that is the Euro.

If a country such as the UK stands by its commitments and has its own currency then people do remember long term that it doesn't welch. That does have downstream value in terms of costs of government debt, institutional debt, and perceived investment risk.

I have no sympathy for the Irish Banks nor Govt...the Govt were up to their armpits in the failure of the banks...on particular Anglo-Irish. People have been arrested...and will go to jail because of the scandal.
 
State owned Banks? Yes we could have our honest, moral high ground politicians running the show. The very same that will squander your money on their own self interest.

+1

After seeing what a Horlicks our politicians made of the Foot & Mouth crisis I wouldn't trust them to run a bank..... I wouldn't really trust them to run a bath. :doh:
 
If they can't run a Bank why on Gods earth would you allow them to run a whole country...?

Chinese Bank? Yes, I'd put my money with a Chinese Govt Guaranteed Bank...as I would into a Turkish GG Bank at the moment.
Are you saying that Britain has control over its society similar to what Afghanistan has?

Low skill/risk jobs like running banks is an ideal function for the state – the financial crisis we are in now is because of Bankers and the people they have deliberately preyed on. Western Governments at least normally have higher morals than that and would do a far better job!

Problem is Bankers are like Real-estate Agents, they add very little value to society, anybody can collect and lend money out, it is a low skilled job performed by very smart thieves - at the moment. Bankers should be encouraged to move toward the productive end of the economy, grow something, make something, build something, take a real risk!
In the meantime give it to the State, and if they can’t run a nice simple little bank, then they sure as heck should not be put in charge of running a whole Country now - should they?
 
When will people ever learn. If Bank A is offering way over the odds - its a risk. There is no such thing as a free breakfast. (Apologies to Steve for using a food analogy).
 
I find the situation over the past 6 years beyond real life belief.

One question,,, WHO exactly is it that the entire planet every country, every continent owe all this debt to? it's not me? is it you? we have a debt and or deficit of 70bN the US a couple of hundred or so.

WHY? show me the bloke we owe it to and somebody pop him!! Just like Scrooge, debt resolved :)

I jest here but as the entire planet is in a financial debt, WRITE IT OFF!! by say 50% set regulations in place globally and restart the world economy and employment prospects.
 
Root cause as far as I can see was Fractional Reserve Banking or Living in LA-LA Land as it sometimes known. In economist Murray Rothbard's analysis, the practice of fractional-reserve banking amounts to a form of fraud, embezzlement or legalized counterfeiting

Fractional reserve banking - Wikipedia, the free encyclopedia
 

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