Sunday, November 8, 2009

Britain's Insolvent Financial Sector

Remember the John McFall interview on the BBC where he admits that Britain's financial sector is entirely insolvent. According to John that's also the view of the BoE monetary policy committee!

I've heard howls from unionists about how it was all Scottish banks getting the bail-outs etc. One commentor in Das Schottishman even ventured to suggest that Scottish independence was dead forever because Scots would never be able to pay off the bail-outs to the shareholders from the English taxpayer. Eh, the English taxpayers are the 'shareholders'.

Back to reality. Today is a RED alert day. John Waples and Iain Dey of The Times reveal that Lloyds, which is not a Scottish bank, is:

"being kept afloat with £165 billion of loans and guarantees from the Bank of England and other central banks around the world"

Maybe John and Iain can pass comment on John McFall's view that the banking crisis is systemic?

"The bank’s reliance on state funding, detailed in a document released last week in connection with a separate £21 billion fundraising, gives the first insight into the huge scale of aid extended to banks during the financial crisis."

Many unionists were saying last week that RBS was the worst run bank of all of them. That apparently is a sign of innate and unique Scottish managerial incompetence. Is this true?

"Royal Bank of Scotland is less exposed — it has about £40 billion in state funds. It has cut its dependency on state funding by 69% since the peak of the crisis."

Then there was HBOS. Another bunch of incompetent Scots getting bailed out by the largesse of the English taxpayer?

"Lloyds inherited most of the government loans from HBOS after it agreed to acquire the bank in September 2008. "

£165+ billion. That's 10% of Britain's GDP!

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