Tuesday, October 05, 2010

Prepare for the next banking bail-out NOW!

The IMF warns in its Global Financial Stability Report, linked here, that the banks will soon come knocking for another four trillion dollars (four followed by twelve noughts). In a Telegraph article the following is noted:

Although the IMF does not mention individual countries, it is clear it has concerns about the UK. According to the Bank of England, British banks need to refinance £750bn-£800bn of funding by the end of 2012, £285bn of which is emergency support that expires in the same period.

The IMF adds: “Without further bolstering of balance sheets, banking systems remain susceptible to funding shocks that could intensify deleveraging pressures and place a further drag on public finances and the recovery.”

As the UK has now bankrupted itself in a failed attempt to rescue the spivs and charlatans who created this mess it seems sensible to adopt a more rational solution for the next round of banking bail-outs of which the IMF has so kindly now provided timely notice.

Money held by private individuals and small private companies with commercial banks allowed to proceed to liquidation should be honoured by a state owned bank duplicating the current account balance on production of 12 months statements from the failed bank. If crossover of accounts to the Government backed venture were accomplished in advance, individuals and companies would be saved much anguish and all taxpayer funds dispersed could be certain to be going to where they are most needed.

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