So here, for any of you who might have forgotten, is a quick reminder: some £76bn from the Treasury to buy shares in RBS and Lloyds Banking Group ; £200bn worth of lender-of-last resort liquidity support provided by the Bank of England to stricken banks at the height of the crisis; £250bn of wholesale lending guaranteed by the Bank through the credit guarantee scheme; £185bn of loans to banks through the Special Liquidity Scheme; £40bn of loans and other funding to Bradford & Bingley and the Financial Services Compensation Scheme. Then, deep breath, there is the £200bn of liabilities taken on board from the Asset Protection Scheme, and the £200bn of cash poured into the economy through quantitative easing .
It isn't really fair to add this all together – some of the cash is merely guarantees rather than actual pledged money, some isn't technically a fiscal injection; much of it will, in time come back to the Government – but if you did you would find that the total amount of cash poured, in one way or another, into the economy is well above £1 trillion. In fact, it is not far off Britain's entire annual income.'
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Well, if that was just a small business on the high street going bust owned by Joe Bloggs, would they be guaranteed free money or pick me up loans from the Government?
ReplyDeleteMost definitely not, so why should it be any different for Banks?
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