This Taxpayer & Banks Business

Fitzjames

Now that the Govt has bailed out these banks with my money (all £50 billion million trillion or whatever) to keep them ticking over.
I presume
1 no banker fat cats in banks getting the subsidies will be awarding themselves massive bonuses at the next AGM
2 no shareholders in any of these banks will be getting any dividend (after all its my money.....all of it)

iguanamanc

If I'm stuck for cash and ask the Government to help bail me out to kickstart my economy, I now expect to recieve the same friendly treatment........

topper

amusing for you now where do you live and is it your money ?

peterstorey

I say old chap what about you be on my independent remuneration committee and I'll be on yours?

Fitzjames

Gin and Tonics all round......

iguanamanc

topper

will that be in Dublin then

peterstorey

Lining one's pockets is a global business these days transcending national boundaries.

Fitzjames

Alas all my millions, billions and trillions of tax go to Captain Darling.

And I see that £116 of my tax went to pay Tony B Liars TV licence!

topper

sorry I thought you were south of the border down Dublin way

do agree the Bliar bit though

spinoza

Must have missed it. Besides Northern Rock, no other UK bank has been bailed out.

Fitzjames

Yes. Swapping dodgy mortgages for government bonds (which dont forget is MY money).......sound commercial sense.
Gin and tonics all round.

spinoza

What are you on about?

It's a collateralised asset swap transaction (correctly priced, I might add) not a bail out.

Mozza

Priced cheaper then the banks are willing to lend to each other are they not?

spinoza

That's the idea.

spinoza

I bet no one here has read the actual statement.

It's AAA mortgage backed securities, the swap is continuously collateralised, and there's a fee payable (priced at LIBOR minus). It's extremely unattractive from the commercial bank's point of view.

Plechazunga

I don't understand

spinoza

It's not a matter of the Bank of England saying "Give us your dodgy mortgages and we'll give you government bonds", as the thread starter thinks. The Bank of England said "Give us your AAA rated mortgage backed securities, pay us a fee based on the inter-bank lending rate, and we'll give you a equivalent amount of government bonds, continuously adjusted for the risk of us taking these AAA rated mortgage backed securities, so you'll have to keep topping them up".

There's a large difference.

Plechazunga

AAA rated sounds pretty good to me...

spinoza

They aren't always, but here I doubt the Bank of England will accept anything that's not bulletproof AAA.

Mozza

Then it's a subsidy which take the piss given the end of the 10p tax band and the full retreat on non-dom tax

spinoza

It's cheaper than the price the banks pay to fund themselves at the interbank lending rate. It's not an especially cheap source of funding.

The reason the Bank of England wants to do this is because it wants to lower the interbank lending rate, which, besides making it a bitch to borrow from another bank, has ramifications on floating mortgages, company borrowing, business loans and consumer credit. It's not especially to help out the banks; in fact it's pretty unattractive for them, unless they're desperate.

By the way, the government didn't retreat on non-dom tax - I still have to declare my assets or face the £30k charge. They just retreated on how detailed I have to make the declaration.

Plechazunga

Apparently the pope has come out on the side of wealth distribution

He said the bible forbids the use of non-doms

coat