King: Banks need to admit extent of bad debts before recovery King: Banks need to admit extent of bad debts before recovery
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  1. #1

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    Martin@AS Financial 's job has never been outsourced


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    Default King: Banks need to admit extent of bad debts before recovery

    Recently, we have seen some historically low mortgage rates as a result of the BOE Funding For Lending Scheme. The important message to take from King's speech is that this can only be a temporary measure before rates return to a more normal level as they are being kept artificially low.

    (Taken from Mortgage Strategy)

    Bank of England governor Sir Mervyn King has warned banks to accept that loans will continue to go bad and to concentrate on boosting capital so that the economy can recover.

    Speaking to the South Wales Chamber of Commerce in Cardiff yesterday, King said insufficient capital remained a problem.

    He said more than 20 banking groups covering 80 per cent of lending to households and businesses have now signed up to the Bank’s Funding for Lending Scheme, which aims to encourage lending through access to finance at cheaper rates.

    King said: “The Funding for Lending Scheme can only be a temporary scheme. The window of opportunity which it provides must be used to restore the capital position of the UK banking system.”

    But he warned lenders need to admit the extent of losses held on their books before the recovery can begin.

    He said: “I am not sure that advanced economies in general will find it easy to get out of their current predicament without creditors acknowledging further likely losses, a significant writing down of asset values and recapitalisation of their financial systems.

    “Only then will it be possible to return to a more normal provision of vital banking services so crucial to an economic recovery. In the 1930s, faced with problems of sovereign and other debt similar to those of today, the pretence that debts could be repaid was maintained for far too long. We must not repeat that mistake.”

    King said it was clear the rebalancing of the UK economy is proceeding at a “slow and uncertain pace”. He said the Bank’s Monetary Policy Committee will think carefully before extending its £375bn quantitative easing programme, but that it does stand ready to do so.

    He added: “Printing money is not, however, simply manna from heaven. There are no shortcuts to the necessary adjustment in our economy. The problems in the world economy mean we shall have to be patient.”

  2. #2

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    Anything given to banks will only be used to pay bonuses.

    Everyone has borrowed to much - particularly from the future. Now the future wants it back.

  3. #3

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    We will not get out of the recession until something drastic is done with the Banks. The politicians are either gutless or corrupt.

    Execute the bankers and nationalise the banks.
    Brexiteers remind me of religious fanatics, only faith, no facts.

  4. #4

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    Quote Originally Posted by zeitghost View Post
    Visits Wales to see wot it's like & ends up in the rich bit.

    Par for the course, really.
    So he was talking from your house then.

  5. #5

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    Quote Originally Posted by Paddy View Post
    We will not get out of the recession until something drastic is done with the Banks. The politicians are either gutless or corrupt.

    Execute the bankers and nationalise the banks.
    And where is there any evidence that the public sector could run anything?
    Let us not forget EU open doors immigration benefits IT contractors more than anyone

  6. #6

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    Quote Originally Posted by DodgyAgent View Post
    And where is there any evidence that the public sector could run anything?
    Many companies were run with a profit that went into the exchequer and the costs of services such as water was a lot cheaper.

    BP
    Rented Housing
    Roads
    Thomas Cook
    Water
    Electricity
    Midland Bank etc etc
    Brexiteers remind me of religious fanatics, only faith, no facts.

  7. #7

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    easy encourage competition and put the banks into a position where they have to compete.

    They need a balanced portfolio,
    general public lending, Business lending, mortgages, shares & options trading.

    move the Golden geese of bank accounts & mortgages out to competition and watch the banks scramble.
    "If you didn't do anything that wasn't good for you it would be a very dull life. What are you gonna do? Everything that is pleasant in life is dangerous."

    I want to see the hand of history on his collar.

  8. #8

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    Quote Originally Posted by DodgyAgent View Post
    And where is there any evidence that the public sector could run anything?
    NASA put man on the moon, the Los Alamos project created the atomic bomb, Bletchley broke the Enigma code, DARPA invented the internet, CERN the WWW.
    Seems like the public sector can be pretty effective.

    HTH, BIDI.
    Hard Brexit now!
    #prayfornodeal

  9. #9

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    Quote Originally Posted by sasguru View Post
    NASA put man on the moon, the Los Alamos project created the atomic bomb, Bletchley broke the Enigma code, DARPA invented the internet, CERN the WWW.
    Seems like the public sector can be pretty effective.

    HTH, BIDI.
    You're quite correct there, but...it was private contractors who provided a lot of the services and also I don't really think that many of the organisations mentioned above actually built most of the equipment themselves but outsourced it.
    Brexit is having a wee in the middle of the room at a house party because nobody is talking to you, and then complaining about the smell.

  10. #10

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    Quote Originally Posted by sasguru View Post
    NASA put man on the moon, the Los Alamos project created the atomic bomb, Bletchley broke the Enigma code, DARPA invented the internet, CERN the WWW.
    Seems like the public sector can be pretty effective.

    HTH, BIDI.
    Bletchley park.
    "If you didn't do anything that wasn't good for you it would be a very dull life. What are you gonna do? Everything that is pleasant in life is dangerous."

    I want to see the hand of history on his collar.

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