Sunday, October 12, 2008

RBS Will Be Effectively Nationalised Tomorrow

Sources tell me that tomorrow the Royal Bank of Scotland will have a rights issue in a bid to raise £20 billion, which the government will guarantee. This is far higher than the £10 billion quoted by Robert Peston or the £12 billion given in today's Sunday Telegraph (now reduced to £12 billion on their website)

Given that no one is buying banking shares at the moment it is almost inevitable that the government will end up buying the whole lot, giving it a 50% stakeholding in one of Britain's leading banks. So the Queen's bankers will effectively be nationalised.

Robert Peston predicted on Friday on his blog yesterday that RBS would probably be the first to take advantage of the government's taxpayer's generosity and that the RBS chairman Sir Fred Goodwin would then fall on his sword.

Nationalisation is no longer the 'N' word which is used to be. And once it has been done once, it will be easy to do it again and again. So, tomorrow it will be RBS. The markets, far from seeing this as a stabilisation move, will then be searching for the next candidate. There is a real risk of much of the banking system ending up in the public sector by the end of the month.

Does anyone really believe the government will be any better at running banks than it was running the railways? But what is the alternative? Answers on a postcard to the usual address...


Anonymous said...

Here we go again, the English taxpayer is bailing out the Scottish.

molesworth 1 said...

Good. My winnings from this morning's F1 GP are currently winging their way to a NatWest account. Wouldn't want them to get lost..!

Andrew Efiong said...

Iain, the government will find it hard to run the banks as badly as the current crop of managers and shareholders have done.

Rather than seek stable returns - the hallmark of a bank - they went on swashbuckling adventures abroad with giant acquisitions and buccaneering adventures in the capital markets.

It's now costing millions of ordinary people a fortune and it could cause a run on the pound. Indeed we could get a repeat of 1979 when Britain had to go to the IMF for rescue funds and a workout plan.

Remember: Mandelson tries to defraud a single mortgage application and he has to resign. Brown's reckless regulation and "age of irresponsibility" will cost hundreds of thousands of people their homes and he's still in office, lecturing us.

Cassilis said...

"Does anyone really believe the government will be any better at running banks than it was running the railways?"

I'm no great fan of nationalisation (or this government) but given the history of Railtrack contrasted with the performance in the 3/4 years since Byers nationalised it that's a strange question...

Anonymous said...

"Does anyone really believe the government will be any better at running banks than it was running the railways?"

It used to be great when the government ran the railways. The trains were mostly empty and you could could claim a compartment carriage by pulling down the blinds then get your head down for the journey.

Anonymous said...

You must be joking.

The government was no worse at running the railways than the heavily subsidised private sector is today. Private enterprise was not even safe when they owned the track.

No monopoly should be privately owned.

Banks are licensed and privileged by the state - semi monopolists.
Banks have abused their position of trust and privilege.


cassandra said...

Separation of transactional cash dealing and current account holding from the rest of banking activities. Current accounts to be backed by government (with limits). Systems are already in place. It will have to be done quickly.

Anonymous said...

Dave is 100% for it!

David Cameron, Conservative leader
Adam Boulton Live, Sky News

Mr Cameron said he would support the government taking a majority shareholding in RBS, and called for a “real plan for the real economy”.

“I think the Prime Minister has done the right thing in announcing the plan to recapitalise the banking system, because doing nothing was simply not an option.

“What we need now actually is a real plan for the real economy. What‘s required now is the put in place those things to help families and businesses in what is a difficult time."

Asked if would support a government move to take a majority shareholding in RBS he said, “Yes, we think you need to do what is necessary to recapitalise the banks.

“Putting capital into banks to strengthen them needs to happen.”

Asked whether he supported John Maples’ call for top bankers to lose their jobs in the wake of the financial crisis he said, “I would be very surprised if they all kept their jobs. It is a matter for the boards of individual banks. Right now the important thing is to sort the system out.

“I have nothing against people earning good money and earning a good bonus – I believe in a market enterprise system. If the taxpayer is going to put money into these banks it would be completely wrong for senior executives in those banks to get a bonus this year. We do need to look at bonus systems that cause banks to take irresponsible risks.”

He accepted that borrowing would have to increase to fund recapitalisation, “Borrowing is gong to increase because money is being lent to recapitalize these banks.”

Will Cameron be crossing the floor soon!

Are u in the right party Iain?

Anna said...

Whatever the current crisis, if the solution is nationalising banks God help us all! What are the odds that govts will later relinquish control? There is much comment about G Brown looking happy... of course he is: smug, complacent, looking at his socialist paradise. How voters fall for this is beyond me, and I speak as a voter of modest income apparently now in "fuel poverty" with Gordo riding to the rescue. BAH!

Anonymous said...

Peston and his ilk have gleefully helped drive the market down for months with their "insider" gossip and innuendo. Then the politicians jumped in and made it ten times worse. Now even you're at it.

The problem is, nobody trusts any of the banks, even those that didn't play particularly fast and loose. No trust = no lending. It won't stop with RBS, the rumour-mongers will pick another target and on it will go.

Anyway, time to dust off plan B. Anyone need their bins emptied ?


Anonymous said...

we've all heard about the conspiracy theories about new world order and all that and you may or may not subscribe to all that,but surely a useful start would be the taking of banks and banking systems into state hands (using taxpayers money of course)and then using 'international agreements'to co-ordinate the running of these banks and the international flow of capital,'by agreement'of course so that it's all above board and transparent for the masses,who are,incidentally,more focused on making ends meet and the state of their mortgages and pensions....just thinking out loud.

Edward said...

Well, given that the US and UK government, through coercion on the part of the US government and lack of leadership on the part of the UK government, that got us al in this mess in the first place it is only right that they get us out now. Sadly however it falls on the taxpayers. For sure there has been greed and reckless risk taking in the banks, many of the culprits are being punished, but why is it that the politicians who also took part in this debt fest get away Scott free?

How many politicians turned a blind eye to the extraordinary property borrowing that was occurring on unsustainable income multiples knowing that this inflated their tax funded second homes? Where was the regulatory oversight that Brown so much trumpeted and devised? What use the tripartite solution that was meant to bring into being a robust framework; instead all we got was a bunch of self important busy bodies with power to interfere but zero responsibility.

Anonymous said...

You're not following the party line Ian, Dave is 100% behind Gordon, he went on the telly this morning and said so.

What strange times we live in, the Conservatives want to see a democrat in the White House and all the banks nationalised.

Anonymous said...

You think nationalisation will sort this mess out? RBS tomorrow, Barclays Tuesday, HBOS...

You think £400bn is enough? Why not £600bn, £800bn, £1tn, £2tn.... After all, Gordon and Alistair continue to bleat 'whatever it takes'.

Think Iceland, think bankruptcy of UK plc, think financial armageddon.

It's coming to a country you live in VERY soon.

Think I'm joking?

Anonymous said...


Will you or someone please tell Cameron to stop digging! He has placed him and his party in a hole and he keeps digging!

As regards Governments running banks, it means that The Guardian will be full of banking jobs now!

Chairmen/women of banks will have to go through the public appointments charade now.

Plenty of work for Labour Supporters who are numerate.

cassandra said...

anonymous 11:43

Right. Nobody knows how much poison is in the system. But you can bet those who put it there won't be left holding the parcel when the music stops.

Anonymous said...

I think that we are all getting carried away - true there are serious problems in the banking system but there are actually some UK banks that do not need or require government bail outs - HSBC to name one for a start. In addition Alliance & Leicester owners Santander plus Standard Chartered have also indicated they do not require UK Government Assistance so to say that all of the UK Banking System will be nationalised by the next weekend is probably not strictly correct

Anonymous said...

Just a thought Mr Dale.

With President Bush mentioning 'Common Purpose' and with David Cameron being associated with it - alongwith most of the Labour Cabinet - perhaps this is a 'Common Purpose'

I do hope Cameron read Matthew Parris is The Times yesterday!!

Gordon said...

Sky News have just been saying that the government won't be buying preference shares anymore and will actually be getting some say in the running of the banks.

(Slightly off topic: how do preference shares work? How does the government sell them later as won't they be worth less than normal shares given the lack of control that is associated with them?)

True Brit said...

anonymoron at 10:57: "Here we go again, the English taxpayer is bailing out the Scottish"

Iain, I note that you decline to publish profanity in your comments, but why then do you publish such ignorant prejudiced drivel as the comment above, which deserves no greater response than a two word epithet?

It really is such an ignorant and bigoted view for anyone to express - RBS is a large British bank that is as British as all of the other British banks that are being bailed out - yet you let an anonymous idiot get away with a gratuitous and unmerited go at the Scots (and right at the top of these comments too).

Are you the anonymous bigot yourself?

If not, will you denounce his/her ignorant bigotry?

mitch said...

they cant even run their own party finances what hope a bank.
bank shares will go off a cliff on monday they might even close the markets then there will be blood on the streets.

This should have gordon laughing like a drain so not all bad then?

Bishop Brennan said...

"Plenty of jobs for Labour supporters who are numerate."

Surely shome mishtake?


Iain Dale said...

True Brit, I publish it because I don't censor. If you really do think I wrote that comment anonymously you are seriously warped. Whatever your view of that comment it is not bigoted, it is an opinion - one which you are free to argue against. Instead you moan about bigotry. Pathetic.

Anonymous said...

Pedantic but - isn't there a legal difference between being a nationalised Industry or organisation and being a PLC with Government as (part)shareholder ??

Anonymous said...

True Brit says RBS is as British as all the other British banks.

Then why does RBS print Scottish banknotes
1 pound note featuring Edinburgh Castle
5 pound note featuring Culzean Castle
10 pound note featuring Glamis Castle
20 pound note featuring Brodick Castle
50 pound note featuring Inverness Castle
100 pound note featuring Balmoral Castle

This does not suggest to me that it is as "British as all the other British banks."

Let's face it most of the Bailout money will come from the English taxpayer and will be arranged by the Bank of England.

Anonymous said...

The worry is that the government will seek to meddle in day to day banking decisions.
For example, there has already been some talk about ensuring that banks which take taxpayers' money extend credit to small businesses on favourable terms. But the decision whether to lend to a particular business and, if so, how much and and what terms, is a matter for bankers, not politicians.
And then there is the diversity agenda: "X% of money must be lent to BME customers. Y% of staff must be disabled."
While the government can fairly say that it is not injecting all of this money just for RBS, say, to sit on it, but in order to get banks lending to each other again, it should not start trying to interfer in the detail.

Anonymous said...

alec salmon is already asking the government (in westminster not the parish council in edinburgh) for 'bail out' money.

has the dream of a 'go it alone' scotland(at the heart of europe of course)died before it even became a toddler?

norman said...

Anons, Gordo's rebuttal squad

Democrats are like one nation Tories. They are not socialist mantra chanters like Tony Benns or
Corbyns. Gordo with his BOE and FSA models and Credit boom soak up has made the nation bankrupt. He has engineered the Britain model of bust.
Cameron cannot simply walk away leaving thousands of pensioners like me who have put money in savings account in RBS. The nationalisation is just to protect
these pensioners savings who the Gordo forced them to put in banks by shutting post offices.
It is not to protect Lord Sleaze's Euro millions or Blair and Cherie's USA Bible circuit millions.

About those who blame Major for railway privatisation. Bliar and Brown had 11 years to undo anything they wanted just like they undid the traditional BOE oversight and put back weak BOE + weak FSA. Why did not Stalin Gordo
nationalise the railways in 1997? After all, The Two Jags, the union fat cat (literally and metamorphically!) was with him in the govt then.

Labour minions do not understand that Blair and Brown have added a few million immigrants into this country since 1997 and London feels like Mumbai with crowded public transport and trains. Britain has become an overpopulated mini-3td World country thanks to these two imbeciles.

Anonymous said...

bit elitist requiring any candidate for high office in a nationalised bank to be 'numerate'

but what will be the requirements for such an appointment ?

single parent,fairtrade bicycle riding, save the whale ---- ????

Man in a Shed said...

Brown will move to Nationalise HBOS also, as soon as he thinks he can get away with it.

He will then guarantee jobs in Edinburgh in the most expensive , even by his standards, by-election bribe in history.

As other commentators have stated its English money bailing out Scottish companies - in the interests of one political party and its Scottish leader and Scottish chancellor.

Anonymous said...

Goodwin is CEO, not Chairman.

RBS is a Scottish bank - look at the board: as we entered this crisis, it was composed entirely of Scots. Today's CEO and Chairman are Scots, the head office jobs are in Scotland, even the carpets in its buildings around the world are made in Scotland.

Anonymous said...

Anonymous 11.43; why are you speaking in code?

And why is Strauss-Kahn of the IMF also speaking in code?

What is it that threatens systemic collapse? Spell it out, man!
And don't say subprime mortgages. They couldn't bring down the system.

The systemic collapse will happen if credit default swaps, all $62 trillion of them, are left on the books.

These are bets placed by banksters that other people's mortgages and bonds will default. Given the recession, they will default.

That's the same as me taking a bet that your mortgage will go into default, and when it does I get paid the equivalent of your mortgage. I have no interest in your mortgage, but I have been allowed by the regulators to take a legal gamble on it through credit default swaps.

And 99 of my friends have done the same. That's why it's $62 trillion.
That's the leverage and the immorality of credit default swaps.

What is required is a judicial determination that all $62 trillion worth of credit default swaps are null, void and totally worthless.

If not, then we will get the systemic collapse, and the government will pay me my guaranteed deposit up to £50,000, provided the government and the UK is not bankrupt - as Cuba and Argentina once went bankrupt.

Time to call a spade a spade.
Credit default swaps have killed the banks. And they will kill governments if they don't legislate them out of existence. Now.


Colin said...

pass legislation that seperates and ring fences retail banking from investment banking, then let the markets differentiate the wheat from the chaff.

Anonymous said...

If Yvette Cooper's comments on the Andrew Marr show this morning are reliable, the Government won't have much of a say in the running of the banks. "Strings attached" to the money was as far as she would go, stressing that these would be on a case by case basis.

The greater danger, arguably, is that ad hoc regulation will give rise to conflicts of interest and inconsistent use of safeguards over the public money.

Anonymous said...

So Scotland's operation Darien 2 is coming to and end at last.
unfortunately it looks as if it may have taken a couple of English institutions with it this time (maybe the intention from the outset, knock it down and rebuild in Gordon's model).
All that scaffolding around Downing street is only there to hold up the walls from the vibration of the printing presses in number 11 as Alister bangs out another Billion of funny money to keep the head of the paper tiger from burning.

MikeyP said...

Presumably, if Harridan Harperson has any say in running the banks, that means no loans for white English males!

Rev. Spooner said...

And how much IS £20Bn? How is it possible to visualise such a figure?

Well, how about this: Imagine if, on the day Queen Victoria died, somebody had taken £500,000 in cash out into the woods and burned it.

Then they did the same the next day, and the next, and...

Today, that very elderly arsonist has just got back from torching his daily half-million. He STILL hasn't destroyed £20Bn.

(Excellent imagery nicked from a blog I can't remember* (sorry) a few weeks ago - the story then was regarding the £20Bn spent so far on the unwanted and useless NHS computer system).

*If it wasn't Burning Our Money, they missed a trick!

Gordon said...

Can I remind people that when the Lloyds takeover of HBOS was announced Mr Darling was on radio4 saying how he'd spoken with Lloyds management and emphasised how important is was to keep HBOS's Scottish offices open (which I believe just happen to be in his constituency). There was no mention of their offices in England. I'd say that is the English taxpayer bailing out the Scots

Anonymous said...

"Here we go again, the English taxpayer is bailing out the Scottish."

No he isn't, all UK taxpayers are bailing out the entire banking system. For God's sake, stop the bickering. We're all British, remember that.

jd said...

Time to start looking for a new bank then. The Government has enough of my money already.

Government will probably treat bank deposits in the same way they use (national) insurance payments...

jd said...

'We're all British, remember that.'

Speak for yourself.

Anonymous said...

If RBS went bust, there would be a lot of Scots with worthless banknotes in their wallets and there would be much wailing and gnashing of teeth throughout Bonnie Scotland. This would result in Mr Brown and Mr Darling having very poor job prospects.

Anonymous said...

"We're all British, remember that"
No: Britain = England & Wales; Great Britain = England, Wales & Scotland; United Kingdom = Great Britain and Northern Ireland (see your passport.

Edward said...

Anonymous Tony @12:43

Be careful where you live, the sky may fall down.

Sadly your post show a severe lack of understanding the CDS market. The number you quote is the gross nominal value of all contracts written. The actual losses that may arise will be a tiny fraction of the gross nominal values due to the netting effects both across the markets in general and within any particualr institution engaged in the CDS market.

For example, in respect of Lehman's credit default swaps the news on Friday morning was that the total values were $400bn with the result many commentators equated this to losses that the market will suffer. The truth, as determined by the Friday afternon ISDA auction, showed the final losses to be only $4.92 billion (net open interest). For sure a large sum, but less than 3% of the losses some people said would happen.

Anonymous said...

That's alright, Edward. I'm pleased and relieved to be corrected, if you are right.

But why, then, is the head of the IMF warning of systemic collapse, if the result of netting out credit default swaps doesn't add up to a hill of beans, according to you, and governments have guaranteed the banks?

I repeat - the head of the IMF is talking of systemic collapse.


salmondnet said...

Anonymous 1.38. "We are all British". No. We haven't been all British since 1997 when the Scots and the Welsh voted to be semi-detached (but still retained the same say over what the English do).

The priority for English money should be England. Just another chicken coming home to roost.

Auntie Flo' said...

If Brown trusts the British people as he claims to do:

Why does is he watching us English with spy in the sky drones everywhere?

Why has he made us the most surveillanced people in the western world?

Why does Privacy International classify UK with Russia and China?

And why, according to the government's own information Commissioner, is he sleepwalking us "into a surveillance state?

For the vast enrichment and authoritarian empowerment of Brown and his party faithful, that's why.

Anonymous said...

I've got a good idea let's send all our money to Iceland and if it all goes tits up it'll be free fish fingers for life. Karl Marx is having the last laugh after all.
freedom to prosper
PS Good news about the dog

Anonymous said...

Anonymous said...

"Credit default swaps have killed the banks. And they will kill governments if they don't legislate them out of existence."

On the up side, killing the liblabcons would be the quickest way to get to killing the tory bankers.

Anonymous said...

Time we had a new, 'Thread' Iain along the lines of, 'Why I think Cameron is right to back Brown'

Conservative but not slavishly so!


Victor, NW Kent said...

There has not been many signs of the bankers being able to run the banks well. On the other hand they do not lose personal data at quite the rate that the government does.

However, there is no way that the banks can get a huge helping hand without ensuring strict control on their affairs, directors, overseas acquisitions and bonuses.

There are quite a lot of potential directors that the government can foist on the banks - Kinnock, Vaz, Hain, Blair [a few of them], Charlie Whelan, Alistair Campbell, Piers Morgan, Wendy Alexander.

Norfolk Blogger said...

There has never been any reason why government should not run things better than private sector companies. In many countries nationalised state owned businesses thrive (just see across the Channel.

As for wondering about Railways just look at the mess the private sector has made of running banks. The government must be able to do better.

Don Tully said...

This will never be you Iain you filth as you'll never get in to parliament. How does it feel having sucked up to Widdicombe for so long to try to get her seat then fallen flat on your gay arse? You will never get a seat-your shit performance in Norfolk saw to that as the 'hello I'm GAY' candidate. I hope you and your husband die of AIDS

Iain Dale said...

Nich, not exactly very liberal of you, is it? I thought liberal's believed in small government.

king said...

ian dale you are a great blogger i have to give it to you and anonymous the uk has to help everyone out even if you are from scotland,england or northen irlend you are all one

Iain Dale said...

Don Tully, I will leave that comment in place so readers can see the kind of filth I have to put up with from time to time.

What a lovely person you must be.

Edward said...

Tony @2:15

Where does the IMF say that systemic collapse will be caused by credit default swaps? For sure Strauss-Kahn has said that there is a risk of systemic collapse and to this end is recommending explicit public guarantees of financial system liabilities. These liabilities will be, in part, credit default swaps, however will be on a net basis.

And yes I agree there is a risk of systemic collapse, this is due to the financial system having assets that are not properly valued (or provisioned), assets that have been accumulated, in large part, due to social engineering pressures being applied on banks by self-serving governments.

You talking about 62 trillion and implying these are real future losses is pure scare-mongering.

Anonymous said...

"Are u in the right party Iain?"

He most certainly is ...

... The government - this LABOUR government - has been unequivocally in charge since 1997. It has drastically changed regulation to a light touch 'risk based' model. It did so in 2005.
The 'Better Regulation Action Plan' should be hung round Browns neck as a noose that terminates his premiership.
How many times do we need to repeat his words before the nation wakes up?
"We will look to apply on a wider basis the principle of risk based regulation to financial services legislation and the work of the FSA. "
"The FSA, which we set up in 1997 as a world leading example of how to regulate financial services ... has already done valuable work on adopting a risk based approach and I welcome the thinking it is doing about how it can further reduce the burden of financial regulation."

Every single one of those words is a nail in Browns coffin of credibility.

Why did the Titanic ship of state hit the economic iceberg?

In this time of crisis the Opposition are offering support, certainly for the principle involved - well its the only option available - so the govt know they can get on with it without being criticised. All lefties can do is take advantage of this and make party political points - I think Browns pathetic party politicking at QMT will come back to haunt him - given the points I make above - he deserves it.

Anonymous said...

Wooops ...

if you want to know just how proud Brown was about his light touch ...

the proper link is here

Anonymous said...

Again thanks for the reply.

You can call me scaremongering, but I call it trying to get a handle on what the banksters have done.

You say the $62 trillion nets out to $775 billion based on Friday's auction/settlement, or whatever (Lehman's $400 billion netting out to $5 billion).

That result looks like Paulson's $700 billion. Maybe that's where he got it from. In any case, it has been covered and cannot bring down the system - you are right in that.

However, I am still looking for some justification for the statement made by you and by Strauss-Kahn that there is a risk of systemic collapse.

Is it not scaremongering if you and Strauss-Kahn have only these vague statements as justification?
"And yes I agree there is a risk of systemic collapse, this is due to the financial system having assets that are not properly valued (or provisioned), assets that have been accumulated, in large part, due to social engineering pressures being applied on banks by self-serving governments".

The last bit is party-political, unless you mean all governments are self-serving in which case it is tautologous.

What we can agree is that banking is in a scary mess. But I don't believe that no one can quantify it.

You see, I believe the banksters must know what they have done, but the public is being kept in the dark. So when the IMF boss, who to me is chief banker, says the system might collapse, I take his hint very seriously, and try to understand what could bring it down.

You say it's scaremongering to point at CDS's. You may be right.

So as a member of the public, I will just fuck off and know my place.


daniel said...

anon at 12:26 seems to be on the money (so to speak!)

The fact that the Scottish Nationalists are demanding money from the UK taxpayer is surely the opportnity for Brown and Cameron to unite and tell Salmond that his politics are utterly shameful and his response typically opportunistic.

Anonymous said...

Here's a teaser for you......

if the UK model for interventiom announced last week is copied globally....

and it works....

and it is credited to Gordon Brown (as Campbell will make sure it is)....

and Labour win an election in June 2009 as a result (mustn't jeapordise the progress we have made to rescue the world blah blah)......

then will that be a price worth paying to have avoided total financial meltdown.

I just think it might and that makes me very scared!

judith said...

Iain, I am sickened by that horrible posting you allowed us to see.

I hope you know that your regular readers enjoy your work and feel that you and your family are friends, even though we haven't met.

Anonymous said...

Iain I was disgusted by that, particular post, whoever Don Tully is.

I don't share your political beliefs, but I can't believe anyone would stoop to such depths as that odious person.

I wish you and your partner well, from a crusty 'ol Lefty

Anonymous said...

Auntie Flo' said... "If Brown trusts the British people as he claims to do:
...Why has he made us the most surveillanced people in the western world?"

We became that under the Major government. Labour simply carried on the Major policies with regard to surveillance.

Anonymous said...

looks like the Tories have given up on, 'Burying' GB they seem to be lining up to, 'Praise' him

Tory business chief backs Brown bail-out plan

Those are not words I would normally expect to write, but Simon Wolfson (chief executive of Next) did just that on the Andrew Marr prog today.

Sitting alongside the wonderfully dour Jon Moulton on the Marr sofa, I fully expected retail whizzkid Wolfson to stick the boot into the Government for its handling of the economy.

Why? Well, for one thing he co-chaired (with John Redwood) the Conservatives' Economic Competitiveness policy group last year. The report won lavish praise from George Osborne for its insight and tax-cutting zeal (though the leadership stopped short of endorsing all of its proposals).

For another, Wolfson donated £10,000 of his own readies to Dave Cameron's leadership campaign and has remained close to the Tory leader ever since.

But instead of going on the offensive, Wolfson proceeded to defend the Government's £500 billion bail-out plan.

"What we have to recognise and what's really important is that the money that is going into the banking system from the Government isn't money that is being spent. It's money that is being invested. There's a lot of nonsense being talked about it and my biggest concern is that actually we worry everyone to death and we worry the market to death.

"And actually when you look at what the Government's been doing, it's the quickest plan put together by any government across the world. We've had Opposition and Government working together. We've had the FSA, the Bank of England and the Treasury all working together to deliver what is in fact a very good plan - and will probably make money for taxpayers."

Now I know Wolfson is a smart guy who is probably more interested in shoring up consumer confidence to protect his own retail business than praising G Brown and A Darling. But still, they were words that may well come to be quoted by Labour.

tory boys never grow up said...

Perhaps you should tell your sources or their sources to keep their mouths shut - my guess is that someone down the line is almost certainly committing a crime. Insider dealing and putting out false market information are both criminal offences. Sadly they are very difficult to prosecute and identfify - but is something of a travesty that there have not been more prosecutions.

And before you all claim that this is a New Labour Law which you feel free to ignore - the first Insider Dealing legislation was introduced in 1980 - and I thought all you Tories are now converts to dealing with market excess.

Anonymous said...

Does the short term impact not depend on the underwritten price of the rights issue? For the longer term I wouldn't invest a penny in anything this lot were involved in running.

But why are we yet again finding market sensitive information on Government intentions apparently freely available via the BBC to allow wild speculation?

And why do we seem to have different Labour Ministers again speaking on the media giving contradictory answers on what role the Government intends to play in running the banks? Is there an internal battle going on? And do they care the damage to confidence is doing in the meantime?

Yeah Gordon, you are working tirelessly to ensure stability. Honest. We believe you.

By the way, did you see that, without a hint of irony, HMT is advertising this week for a "Deputy Director of Financial Stability". A little late perhaps?

Anonymous said...

Mr Anonymous, 5.51 really is digging his own grave.

Osborne was criticised by Darling for suggesting bank recapitalisation when he responded to Darlings disastrous non-statement on Monday.
"The Chancellor is angry that Mr Osborne has talked up a proposed recapitalisation plan for banks after a recent meeting with Bank of England governor Mervyn King and himself.
Stressing that all options were being examined, Mr Darling told MPs: "But it would be irresponsible to speculate on the specifics of future responses. "

1. Osborne was suggesting and supporting this plan long before Darling
2. Darling was dithering whilst Rome was burning all around him
3. The plan was a BoE plan not a specific Labour govt one.

Either way its not a question of this plan being wonderful - it has to be supported because its the only plan, the best of a bad bunch that is needed to sort out a disastrously lax regulatory regime implemented by one Gordon Brown.

Meantime its interesting to see lefties using this mess to play politics and help themselves whilst the opposition tries to be bipartisan in an effort to help the nation.

My view after watching Brown grin his way round a few marginals is to say 'enough', since you have stuffed us all for long enough its time to stuff you good and proper with the truth about your shambolic management of our economy.

I am sure that anyone who has read the link I posted earlier will realise what an incompetent mess Brown made of pour financial regulation

Anonymous said...

If we could nationalise this blog we could stop you writing all those f*$k!ng lists!

Anonymous said...

And just to really lay the lie to its all just 'me too' from the Conservatives - these were the words spoken by George Osborne on Andrew Marr's programme on the Sunday BEFORE Darlings disastrous and incompetent non-statement

"Well I think the answer is around recapitalisation. These banks are incredibly weak, their balance sheets are weak. You can deal with the symptoms, which is the liquidity problems - and I spoke to Mervyn King last week about that and I know the Governor of the Bank is doing everything he can - but I think there will be a role for creditors, for existing shareholders in recapitalising these banks, but also potentially for the government."

In terms of political ideology Osborne also pointed out
"You know a Conservative government in Sweden did that fifteen years ago and it may well be the case that the Labour government here will need Conservative support and involvement in some very big steps."

An with great perception Osborne also said
"but at the moment Gordon Brown's approach which is 'look, I'm going to deal with this case by case', I think is probably running out of road. "

Oh and in the same interview the saintly Vince Cable said
"I mean the kind of measure I was talking about would involve the government taking a stake in those banks that need to raise more capital -"

So none of what is happening (the remedy that is) is specifically and clearly Brown inspired.

The only thing inspiring Brown is to see if he can turn this crisis, this massive disaster facing, us to his own advantage.

Meantime the Conservatives have done absolutely the right thing - they have identified a sensible solution (one with a right wing history) and are supporting its implementation.

If the government make a cock up of it that is their problem, and our legacy.

Anonymous said...

Anon at 5.10pm is spot on. This is being orchestrated surely.

Meanwhile, deleting cretinous comments from Don Tully isn't censorship. This is a family blog and we don't need to read such rubbish. Perhaps it got rather boring in Tully's psychiatric ward today.

dick the prick said...

Africanmum - yup, fully agree - wanted to throw up.

Molesworth 1 - you bet on Alonso??? Unbelievably (lucky!!) estute gambling.

Anonymous said...

I'm sorry you are being subjected to awful comments Iain. The words chosen by this individual reveals more about them than anyone else ever could.

dick the prick said...

I already know how i'm gonna die - being run over by an ostrich - with my last word (told to all my family to have on my gravestone) being 'typical'.

I wish I was making this up.

Anonymous said...

I am sure I am going to bore the lefty anti conservative (pro Heffer) rapid rebuttal clique that lurk the nether regions of this blog -

... but sod you - here is another (YES ANOTHER) clear enunciation (and from a well known critical source) which points out the sense which has been talked by Cameron and Osborne on the unfolding crisis.

Both Osborne and Cameron have mentioned problem with the 'market to market' rules and the 'Basel problem' amongst other things.

Sadly the media are too ignorant to listen.

The point is the Tories are were ahead of the game are behaving sensibly and responsibly.

I am glad to se someone swat Heffer - he is an odious pr*ck.

beeb poll reporting said...

The Beeb quote the following stat from the Sunday Times YouGov survey:

Mr Brown and Mr Darling are more trusted by the public to the run the economy than their Conservative opposite numbers by a margin of 33% to 27%.

They seem to have forgotten the following other findings on the financial crisis:

53% of people thought that the goverment were too slow in acting

29% think Brown is handling things well, 37% think he is handling things badly.

People continue to favour Cameron and Osborne over Brown and Darling by 34% to 25% to improve their standard of living

67% of people expect that taxpayers will end up losing at least some of the money spent proping up banks (including 39% who expect them to lose “a lot”)

90% of people think the economy is in bad shape

75% of people expect house prices to fall next year (4% expect them to rise)

86% of people expect a recession in the next few years (including 20% who expect a 1930s style depression)

Anonymous said...

I hate to be boring ... I realise I am talking far too much ... but really we do need to look at the reason for disastrous turn this crisis has taken and here it is.

After slagging off one telegraph columnist I am happy to promote another. Christopher Booker
It is of course our old friend the EU.

"At the heart of this catastrophe lies a drastic change made last year to banking regulations, which has led to the current freezing of the money markets. Without it, most of the banks that have collapsed, such as Lehman Brothers, might have survived."

He too mentions Cameron - "When Mr Cameron admitted last week that a "new international regulation" which "automatically downgrades the value of banks" was "making the financial crisis worse than in previous downturns", he did not dare risk inflaming his party's Eurosceptics by referring to the EU directly. He merely coyly suggested that "our regulatory authorities" should get together with "the European regulators" to "address this difficult issue"."
A backhanded complement - but a complement.

The EU makes dissemblers of us all.

'EU Referendum' lay into the EU for having known about these problems for a very long time and are now trying to hide their laxness

James Higham said...

Things move full circle, don't they?

Anonymous said...

Yes there is an simple and workable alternative.

It is not the banks which need to be nationalized it is the issuing and printing of money which does. However there is no point whatsoever of having democratic control over anything. If the bankers control democracy or you no longer have a national democracy left.

Although a policy of publicly castrating top central bankers who lend too much to the wrong people, would be a highly motivating positive move in the right direction.

Perhaps if the banker spills the whole beans and repents of his sins, we could reduce the sentence to 100 lashes and banishment to Iceland.

No sorry; I am getting bored trying to be nice to these animals.

Perhaps it is just best to put the evil sods to death using the most painful methods yet known to man? After all it is usually best to make the punishment fit the true scale of the crime.

Atlas shrugged

Anonymous said...


You are George Osborne's mum and I claim my five pounds!

Anonymous said...

RBS and HBOS should be allowed to go broke. I really couldn't care less if these Scottish banks go broke.

molesworth 1 said...

Dick the Prick @8:54
Both astute and lucky... but @ 16/1, irresistible!

dick quite pricky said...

Iain bud - I got the wrong thread below; seriously dude - delete Don Tully. Africanmum hit nail - I dare say you set stuff like that but you've got a popular blog - don't mean your punters have to put up with it Landlord.

Australia up 5% - what's that? £20? Ah, that's a chuckle

dick the prick said...

Molesworth 1 - genuis - good man. jeez my cough is getting worse 'gghhuukkyy, ghhhuuckky gghhiitt' - seriously duse, that crash at 1st corner could be serious. He is very young, very young. He's in a good place though - heard him talking about Fuji before hand and it was a bit, you know, drivel. Game on.

Anonymous said...

now for the energy companies

Anonymous said...

privatisation of hospital cleaning has worked well

many more dead patients for students to practice on

a big thank you to deregulation

Anonymous said...

Hey RBS is no longer just about english, scot, or brit.. anything bad happens to it affect more than 170K folks AROUND THE WORLD!!! Think of the ABN AMRO folks in the fast east now wondering what going to happen to them all once the UK government begins their cost cutting measures if there are no takers. It's likely to be "bloody" outside of UK (or Europe for the matter)now that the RBS jobs in UK are secured by the state....

David Lindsay said...

Not only national sovereignty, but also the United Kingdom as such, have been significantly secured today.

The Bank of Scotland, 1695's definitive break with usury and entry into modern economics, the last institution to have been created by the old Scottish Parliament and to survive down to the present day, the pioneer of overdrafts and bank notes, is today effectively under the control of the British Government.

So too is its great historic rival, the Hanoverian Royal Bank of Scotland, set up to counteract the Bank of Scotland's Jacobitism, a rivalry which long extended to hording each other's notes in order to turn up with them, annually, at each others headquarters, there to demand, as "the bearer", to be paid "on demand the sum" stated on each of them.

The circumstances giving rise to the Union of 1707 have effectively arisen again, and have been addressed in pretty much exactly the same way.

Much the same people in Scotland overreached themselves, and that for the very same reason (the desire to be world players), so they have had to be rescued from London, itself acting under the direction of London-based Scots, but with everything that being rescued entails in terms of future control.

And why not? Remember, oh Scotland, that while there is the Union, neither the Bank of Scotland nor the Royal Bank of Scotland will ever go bust, just as you will always have a National Health Service, old age pensions, and all the rest of it.

Effective central government control of the Bank of Scotland, and outright central government ownership of the Royal Bank of Scotland, are very clear reminders of that.

More than that, they are constitutional safeguards of it, from today an integral part of the constitutional settlement that is the United Kingdom, a settlement now significantly stronger, safer and more secure than it was even yesterday.

How could any conservative and Unionist be anything other than delighted?