The government’s disastrous bank share buying policy has landed them with payment of a pension of £650,000 a year to the former CEO of RBS for the rest of his life. I doubt they can do anything about it, other than pay up,. It leaves them defending the indefensible. There is no way public money should be abused like this. They should not have bought the shares and lost so much on them.
Now they wish to compound their errors by putting the taxpayer on risk for up to £600 billion of bad and doubtful debts. Why? Can we afford it? Why should we have to fork out for other people’s mistakes? What’s in it for taxpayers?
None of the banks concerned is currently at risk. The Regulator is happy for all of them to carry on trading. They all have enough capital, we are told. There is no run on the deposits.
The government says it needs to take these risks on in order to get the banks to lend more money to people. Why do they want to do that? People and businesses are short of income, short of turnover, worried about their jobs, short of profit, short of cash. They are not short of loans. The whole point of this crisis is people are too much in debt, not too little. Companies near bankruptcy for want of orders will not be kept going by burdening them with more debt. They need revenue.
So why does the government want to force the banks to lend more? And why do it by offeirng to underwrite £600 billion of debts, when they could lend money directly to people and companies if they must at less risk and much less potential expense?
They are seeing nothing clearly. They are gripped by a collective governmental madness. They are ignoring all the warnings about excessive public sector debt. They are trying to cure a problem of overlending by more borrowing, and cannot see how foolish that is. They blundered into buying bank shares “to save the banks”, simply to lose most of the money. Now they are blundering in to buying or guaranteeing bad loans and debts to “get lending going again”. The poor old taxpayer is being wiped out, and the savers mugged.
Think again, government. Do not sign this rotten deal.