UK's 125 Billion Dollar Pre-emptive Bank Bailout?Submitted by Jake Mellow on Fri, 06/22/2012 - 10:59
A weird thing happened the other day. I was sitting with my partner (who happens to be a bank manager) and listened on the news to the British Chancellor George Osborne telling us that the Bank of England was giving 80 billion Pounds (125 billion dollars) to the major banks so that they could invest in small business in Britain.
Now my partner knows that banks are not giving many business loans out as they have a very strict criteria on what exactly makes a new business worth investing in. She told me that just pumping money into the banks would not make this strict criteria suddenly melt away. So I said if the government was so concerned why didn't they pump money from the Bank of England directly into small business and avoid this nonsensical bank route?
[Click through for video]
I felt at the time that this whole thing sounded off somehow. Was this some sort of cover-story for a pre-emptive bailout of the banks? Maybe to do with the Euro crisis? Then last night I hear about Moody's bank downgrades which the government and banks have known about for some time.
Moody's have downgraded many major banks.
This is what the already bailed-out bank RBS (with tax payers money) had to say:
''The downgrade could mean RBS would need to find an extra £9bn in collateral for its debts.''
RBS along with NatWest suddenly had a 'technical glitch' yesterday and could not process pay cheques etc. This backlog has continued today.
This all seems more than a little coincidental to me and smells really, really fishy, but the media is of course downplaying this 'expected' downgrade.
http://news.sky.com/home/... (click on 'UK Banks Hit With Credit Downgrades' link)