Govt and banking releationship explained.
 

Nicked from another forum, but I thought it summed things up nicely.

Government to Banks: Right you miserable lot, we have taken preference shares in you, now you have to start lending at 2007 levels AT ONCE.

Banks to Government: But if we do that, we'll soon be in trouble again - we can't start lending recklessly again. Can we? Are you going to underwrite the loans forever?

Government to Banks: No we're not, just until you're back on your feet.

Banks to Government: But we can't get back on our feet if we have to lend recklessly. The housing market is falling you know, we can't lend at high LTVs and high salary multiples - people will lose their jobs, we'll have to repossess and we (or rather you) will have lost money for the taxpayer.

Government to Banks: And that's another thing. Start playing the game with re-possessions. We can't have you going around re-possessing people all the time. It doesn't look good.

Banks to Government: So you want us to lend recklessly and, when the loan goes bad, not repossess to get at least some of the money back.

Government to Banks: Now you're getting the idea.

Banks to Government: But that doesn't make financial sense.

Government to Banks: So what. After 11 years of financial nonsense, you don't expect us to start making sense now do you.


Where will it all end? :Suspiciou

Nothing changes does it!

Les

Irony at it's best!

Anyone buying a house now anyway, is a fool.

I actually think Government have done a superb job, for once, in trying to sort the whole mess out - You could say they had a hand in making the situation in the first place.

But thier solution is miles better than the initial US solution of giving the banks $700 billion with no caveats whatsoever.

The banks want bailing out with public money, did they really expect to get that backing for free?

Agree to a point, but the " lets get lending back to 2007 levels " bit is plain wrong. It's irresponsible lending that got us into this mess, and IMHO the main reason for keeping NL in power, by making the sheeple feel rich.

Agreed, we don't want lending to go back to that level.

Although we have to accept that ultimately there is some price to pay for the sustained "cheap" living we had with low inflation rates and low interest rates, or rather the Government do.

As for keeping NL in power, I think Tories helped a bit by being an utter shambles from 1995-6 to 2005.

Agree, but I wanted to gloss over that! :thumb: