What do you get if you add a £1 trillion bank to a £2 trillion bank?

Bigger losses.

We now know that if you force a merger of a loss making bank with an OK bank you end up with a bigger bad bank.

We are about to find out that if you own two big loss making banks, they own you. Hold onto your purses and wallets.

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7 Comments

  1. rugfish
    Posted March 7, 2009 at 11:42 am | Permalink

    Over the next (?) weeks and months I expect to see Headlines saying:-

    “Hyper-inflation hits UK”

    “Sterling matches the Dollar”

    “Another 500 Billion to cover bank losses”, and another, and another…..

    “Welcome to the UK Weimar Republic”

    What I won’t expect to see, is:-

    “Parliament decides to smash UK economy”

    “Labour cabinet resigns”

    “Brown says sorry and calls election”

  2. chris southern
    Posted March 7, 2009 at 1:24 pm | Permalink

    buy gold and hide it!

    as for my business, i’m paying for future services of freelancers i use so that the falling pound won’t screw me!

  3. mike stallard
    Posted March 8, 2009 at 12:34 am | Permalink

    In Queensland, when the government’s credit rating fell from AAA to AA, the Prime Minister called for an election.
    In the Sacred Mother of Parliaments, printing a lot more money was not even discussed.
    Parliamentary reform is now as urgent as the economic crisis management. It will be a long, uphill struggle. There will be lots of mistakes. No doubt a few swindlers will also emerge. Lots of wo/men in tights will have to change their clothes.
    But New Labour has proved that you can appoint Labour supporters to committees, to the Speaker’s Chair, to the House of Lords, and, by handing out blackberries to everyone and muzzling the Cabinet, you can turn a democracy into a dictatorship very easily.
    Elections? Already, on the net there have been rumours about Glenrothes. Postal votes and electoral boundaries are worth a look too.
    This is all relevant.
    Bank nationalisation ought to have been a democratic, not an electoral decision.
    Either way, it could be disaster.

  4. Stuart Fairney
    Posted March 8, 2009 at 6:29 am | Permalink

    Another example in the sometime “how much is a billion?” series

    If the entire Manchester United first team of outfield players, each earned £100,000 a week net of tax each, then in order to pay off a £1 Trillion debt, it would take the entire outfield 1st team a million years to settle the debt, NOT including interest.

    • alan jutson
      Posted March 8, 2009 at 10:36 am | Permalink

      Stuart
      Agree with your thoughts about relationship of huge sums that the average person cannot relate to, to figures/examples which they can.
      Only then will the message sink in.

  5. Andrew Duffin
    Posted March 10, 2009 at 10:12 am | Permalink

    “Hold on to your purses and wallets”

    Only to happy to oblige you in that – the trouble is, without me doing anything at all, the contents of said wallet will soon be worthless.

  6. Andrew Duffin
    Posted March 10, 2009 at 10:12 am | Permalink

    Argh!

    Only TOO happy.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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