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Bank Bail Out

On 28 Mar 2015 at 11:04pm Paul Newman wrote:

Just replying to skeptical Green who claimed that "The National audit office says the cost of the bailout was �850 billion."
I don`t want to be unkind but it really is astonishing that as we approach an election in which the deficit is the key issue quite intelligent people say this sort of thing.
As the National Audit site will confirm, the cost of buying shares in RBS and B and B ( plus odds and sods ) was about �140 b , The current amount outstanding is actually �133b I guess because we have sold some shares lately ( which have financed election give-aways )
This bail out was opposed by right wing opinion( well libertarian opinion) but I digress. This does not appear as a debt as we own the shares
The interest on the additional borrowing does, of course, appear and thats about �5b pa or about 0.3% of spending.
At the time this was drawn down in �10 b amounts and was all quite exciting but, thank goodness stability was attained
In order to give the Banks stability a further set of guarantees were issued which amounted to �750-�850 b.
These are in various forms and I have seen different figures but it is of that order
Those guarantees were never called upon , so do we all understand now . NOT CALLED ON , and have been reduced to a nominal amount , �21 b

It looked for a while as if the taxpayer was going to make a profit on its cash share acquisitions but I think it will end up being a loss , it does not appear in the deficit anyway as we own most of the shares still
So the cost of the Bank bail out is about 0.3% of Public expenditure , a not inconsiderable sum ,nearly half what we give away in Foreign aid our vast National Debt and �100b deficit however has absolutely nothing to do with it.
I do hope that is clear and if one or two people grasp the facts of our National life then all is good . Its not hard I'm sure you can see its basic maths with one or two scary words thrown in thats all.
That private risk was underwritten by the state is quite true , that it actually cost anything much is not
Ithenku

On 29 Mar 2015 at 10:51am Mark wrote:

Morning Paul. We had all of this 6 months ago. I enjoyed it then. I learnt a lot about public finances. Then Alfie Sterling made a special guest appearance explaining in which ways you were fiddling the figures and called you a "blinkered idealogue" which amused me. Ed Can Do was also quite powerful on the issue as I recall.

On 29 Mar 2015 at 2:50pm bastian wrote:

And of course what poeple don't realise is that what is meant by a government bailout for the banks is infact the honour of securing the little peoples wage packets that are paid into banks (whom we can no longer trust not to lose our money). In this country everybank account is secured to a value of �35,000 should a bank fail. Thos epeople who say regularly on here, let the banks fail-don't also explain that to do that means you and me losing our wages for that month and anyhting we had out away incase of an emergency ( roof leaking, a death you anme it) so the so called bail out is infact the honouring of that pledge to not allow us, the little man, go under; which is what used to happen in the 18th and 19th century-(read some old books, there are many references.)