Please could you comment on my thoughts as to why the RBS share price and banks are at rock bottom. And why banks were balied out.

1) Around 30-40% of Britiains Economy runs through RBS IT systems and infrastructure every day (ie CHAPS, BACS, Business payments, big money transfers, Peoples wages, business banking etc). If RBS was allowed to fold this would all go with it, causing mayhem. This should never been allowed to happen and vital services such as the above should be run by independent people (just my opinion)

2) RBS owns other banks such as Coutts (Which I believe has very prestigious clients) and Adam & Co. If RBS was allowed to fail then as far as I am aware depositors with these banks would also have lost all deposits above a certian amount. Basically a lot of welathy and ‘important’ people will have lost a lot.

3) RBS employs 150,000+ people. That is a lot of people to be made unemployed all at once.

4) Banks as we know are the real govt’s of countries, whether that be the central banks or normal banks (Federal Reserve, BOE etc). And Govt leaders would have been put under extreme pressue to bail them out.

5) Federal reserve and BOE lend money to Govts at interest, so the latest bailout monies given by the Fed and BOE will in theory make them lots of money in interest in the future.

6) Somehting fishy going on with RBS shares. My guess is that in the future RBS shares will spike at somepoint and the Govt will cash in then selling them to private investors (probably middle eastern/Chinese) who will then have a majority stake in the company. Or perhaps another bank will purchase the shares.

7) Do we think the whole bankingfinance collapse was an accident. We have to remember that there are a lot of intelligent people in this industry. If yes then purely comes down to greed and shortsightedness on a massive scale. If not then why is this happening, is it a master plan from the capitalist elite?

Maybe some of these comments are far fetched, but something to think about.

Reply: No-one was suggesting in Parliament or banking circles letting RBS go under. The row was over the way of keeeping it going – loans or equity, longer term or shorter term, guarantees or purchase of shares etc. The shares have been depressed becuase investors cannot be sure of the extent of the losses. Taxpayers will only make an overall profit if the liabilities are well managed and the losses stopped.

What do you think I should do, hold or sell, i’m in two minds. I would like to know what you would do personally if it were your money. Thanks.

REPLY: I AM NOT ALLOWED TO GIVE INVESTMENT ADVICE ON THIS SITE. You should seek professional advice based on your own circumstances, and current prices and prospects.

We talk not of accounting niceties but of real obligations to pay.

As for the indebtedness incurred to recapitalise banks (i) Draper the xxx must first take into account that the assets must first be used to repay the lenders (ii)the bank capital ratios are so low they are not likely to be of much help in a downturn so maybe the government might PRUDENTLY consider all sums invested as lost.

Great news for us taxpayers

The greatest fear of the politicians and their economic advisers is fear itself (to borrow a phrase): The fear that others will follow.

Another hidden agenda and, another supposition that has been debunked by the failure of Lehman.

This is not so much a question of whether we can let it go bust but now, whether we as taxpayers are willing to see our hard earned income squandered on such false arguments.

I can’t see how a practically insolvent bank can lend to anyone? Isn’t there a real danger that any Government bailout will just end up paying out to existing depositors who will stuff it under the mattress? After all, who wants to keep money in an insolvent bank?

I can’t see why the capital can’t instead be injected into a newly established bank or two with fresh balance sheets. A bank with no outstanding liabilities would attract capital from investors desperate to find a bank with… well… no outstanding liabilities, and the capital will be far more likely to reach the businesses and individuals that need it.

It really is a worry when the crazies get their hands on or near the levers of power but I think we’re all on the same wavelength here and can (deal with them-ed)!