The UK Banking Bailout

[EternalOptimist]

Ah ha, a poster with some genuine input. Can you elaborate please?

The building societies fit neatly into the environment that you have described, the loans are secured and value may eventually return. Most firms borrow, some borrow massively, as the recession bites, some fail , which is a loss to the bank, the banks become cautious, more firms fail. etc
toxic debts. high risk debts.

Many institutions wrapped their loans/debts into instruments, other institutions bought the instrument without understanding what was in it, these were sold on and traded. Until you know where the trail ends -
toxic debts.high risk debts.

[AtW]

Many institutions wrapped their loans/debts into instruments

AAA rated quality assets

[Incognito]

The building societies fit neatly into the environment that you have described, the loans are secured and value may eventually return. Most firms borrow, some borrow massively, as the recession bites, some fail , which is a loss to the bank, the banks become cautious, more firms fail. etc
toxic debts. high risk debts.

Many institutions wrapped their loans/debts into instruments, other institutions bought the instrument without understanding what was in it, these were sold on and traded. Until you know where the trail ends -
toxic debts.high risk debts.

I didn't think the nationalised banks were heavily exposed to this type of security.

Link

It is not clear whether RBS has sustained losses. The trading book of its global banking and markets division was worth £16 billion at the half-year, although CDO trading was a small part of this total.

I thought they were mainly the root cause of this by repackaging their sub-prime lending and it's pension funds and the likes that have lost the real money.

[AtW]

RBS bought ABM Amro (or whatever it was called) who were heavily active in USA giving loans and credit cards to people who could never repay it, not all of it was secured and even if it was some other credits (morgage) had priority in claims.

The kind of things banks were allowed to do is ridiculous - Lehman Brothers bought yellow cake for uranium enrichment ffs!

[Incognito]

RBS bought ABM Amro (or whatever it was called) who were heavily active in USA giving loans and credit cards to people who could never repay it, not all of it was secured and even if it was some other credits (morgage) had priority in claims.

If it's an American institute then it's covered by TARP, it's not our problem. I actually wonder just how little of the bailout is to pay off for exposure to US debt.

Linky

The kind of things banks were allowed to do is ridiculous - Lehman Brothers bought yellow cake for uranium enrichment ffs!

Please don't steer the thread off topic, I know how you feel about the banking sector in general.

[EternalOptimist]

I didn't think the nationalised banks were heavily exposed to this type of security.

Link



I thought they were mainly the root cause of this by repackaging their sub-prime lending and it's pension funds and the likes that have lost the real money.

maybe, but RBS (and hbos) delved heavily into complex instruments, which was great when they held their value (for co profits and bonuses), but once they became devalued the entire organisation was in trouble.
Will the share price ever recover ? who knows

[AtW]

If it's an American institute then it's covered by TARP, it's not our problem. I actually wonder just how little of the bailout is to pay off for exposure to US debt.

I am pretty sure TARP does not cover everything (like credit card debts or loans) - it's not that straightforward either.

[suityou01]

Ah ha, a poster with some genuine input. Can you elaborate please?

I am deeply wounded

[Incognito]

maybe, but RBS (and hbos) delved heavily into complex instruments, which was great when they held their value (for co profits and bonuses), but once they became devalued the entire organisation was in trouble.
Will the share price ever recover ? who knows

Was that scare not over last October? I thought the market was panicing because that's when the Lehman Brothers credit auction was?

The missus works on the loan desk of one of the yank banks and she always bores me with her tales of how the world is going to end.

[Incognito]

I am deeply wounded

Everyone knows the country's broke mate.