Subordinated debt, however, takes a higher priority than equity so this is a good role for government.

It also prevents having to nationalise the banks which we really don’t want to happen.

Most responses here still show the same need to blame the government for all problems. Damn the government for not raising interest rates to control us in our desire to indulge ourselves. Now if they had done so I wonder if any blog responses would have lauded them.

What is being overlooked is that there are solvent banks. Moreover even the insolvent ones have realizable assets. The notion that those who got into the mess are the best to get out it is absurd. The solvent banks illustrate the fact that is was possible to run a bank properly over the last decade.

The other point is that this crisis does not have its origins in the capitalism: just the opposite. the Clinton administration actually fostered the provision of mortgages to lower socioeconomic groups who, normally, would never have obtained loans. The Uk government and regulators stood idly by while mortgages of over 100% were offered and 6 times income.

The UK base rate was kept artificially low as a result of having property prices excluded from the inflation target. This is now working against reductions as the myopic Governor of the Bank of England has stuck to the narrow targeting.

As to the financial sector regulation is needed to ensure competition. We have had a state of oligopoly, which is going to be made worse by the “sweet heart” takeovers. Adam Smith never advocated “free for all”. We need to have, not detailed regulation, as supplied by the FSA, top level regulation to preserve competition and ensure separation of functions.

Finally there is no crisis so bad that governments cannot make it worse. We will live to rue the day of the days of the packages in the UK and USA.

So, ID Cards still haven’t been abandoned, the NHS Plan for IT still has not had a merciful stake through its heart, and lo and behold but the morons are planning a mega-database of communications, which will do little save for promoting the use of strong encryption.

Similarly their insanely-measured poverty targets are still having money thrown at them in the vain hope of finding a solution, and the low-paid and benefit-dependent classes are still subject to iniquitous rates of marginal taxation.

How’s about these silly buggers in Government ceasing playing fast and loose with taxpayers’ money, and putting their own house in order first?

And I do not think the Conservatives would in office have done much different.

It should remove the threat to business by offering taxpayer loans to business in order to keep them liquid and save jobs.

Russia did this a fortnight ago.

Limit the affects of banks ‘power’ on our society by making alternative funding available at interest rates and loan payments which are affordable and geared to the business, and put people first by saving jobs.
Our manufacturing base and infrastructure must be protected.

The banking sector should revitalise itself by raising more capital through the sale of shares.

No one is seeing the obvious problem by the USA’s $250,000 deposit guarantee which will inevitably mean some European depositors will be moving money to the U.S. So savings rates here must either be improved or tax on the returns must be lowered to make saving here more beneficial.

Forget the free market because the only one’s paying for it are British homeowners as the whole of Europe has enjoyed the ride on the British public’s personal indebtedness.

Our home equity has driven Europe.
Our balance of payments deficit proves we buy more from Europe than they do from us, and its clear that without a housing boom in Britain enabling tens of thousands of British homeowners to take money from their homes, many European house builders would likely not be in business.
Same with European car manufacturers.

It is OUR debt that’s keeping the “free market economy” on the road and it’s time to put a stop stop it.

I theory nothing. He could even put a fraction of his clients cash into something solid like, gold or silver, the rest could be loaned out with the agreement of the lender for a risk premium – otherwise called ‘interest’. His bank notes might bear the legend, “I promise to pay the bearer on demand 1/10 of one ounce in gold.”, at todays price that would be £50 each.

Or he might start something like http://goldmoney.com/

Of course, if he accumulated too much gold or silver, he would be too juicy a target for government to ignore. Bet you he would be nationalized before you could say ‘RBS’.

Actually, unless you’re China or Saudi Arabia, is this such a bad idea in the long run?

I’ve just been through a few more of our airports and its ridiculous, this is not going to stop any terrorism, but boy is it good at causing maximum inconvenience to the ordinary citizen

And the checks are so different between airports, how come some want your laptop out of the bag, others not, some want your belt off others not (why do we all have to stand around with our trousers falling down?) some you can get on board with no photo id, others your passport is gone over with a fine tooth coomb?

Heathrow playing with its web cams and messing us around standing on the X (there’s already a photo in my passport you dummies)

So much time wasted queuing

This is not the way to run a country

(sentence left out)
Who is kidding who?

My godson has a few quid in his kiddie bank, he will be buying a bank soon, and then you’ll have to listen

Oh how we laughed

Nurse! … bag him; V-tach; stand clear; shocking at 360 Joules …. OK, sinus rhythm. No, that wasn’t an episode of Casualty, that was my investment manager today.

While I think the taxpayer will have to guarantee all deposits & perhaps all interbank loans. This can be done by an administrer in bankruptcy or a takeover just before bankruptcy which places zero value on shares.

What I am worried about is the Japanese precedent – they put all their effort, following the 1991 proprety crash, into ensuring banks which were bankrupt were propped up. They saved the banks but at the cost of going from nearly 10% growth to zero for the next 14 years. Much better to have a painful but short crash.