Reply to: Is Robert Peston...

[Stan.goodvibes]

*dargs thread back on subject*

Well I said it once before on here without getting a stoning - I only get to read Peston on the BBC website as i can't pick up the beeb on my telly over here.

I enjoy reading his column. He rocks...

[BrilloPad]

Guess who had all his savings in Icesave...

Your nxt door neighbour? The Aga Khan?

[Cyberman]

Of course they were in crisis due to bad lending practices and business model!

You still don't get it.

[Cowboy Bob]

... and of course we were not in a CRISIS were we ?

Guess who had all his savings in Icesave...

[Bagpuss]

... and of course we were not in a CRISIS were we ?

Of course they were in crisis due to bad lending practices and business model!

[Cyberman]

Purpose
The lender of last resort serves to protect depositors, prevent widespread panic withdrawal, and otherwise avoid damage to the economy caused by the collapse of an institution. Borrowing from the lender of last resort by commercial banks is usually not done except in times of crisis. This is because borrowing from the lender of last resort indicates that the institution in question has taken on too much risk, or that the institution is experiencing financial difficulties (since it is often only possible when the borrower is near collapse).

... and of course we were not in a CRISIS were we ?

[Bagpuss]

Bagpuss, you show your ignorance of the duty of the BofE as Lender of the Last Resort. If you ran the Treasury, all banks would now be bust.

Purpose
The lender of last resort serves to protect depositors, prevent widespread panic withdrawal, and otherwise avoid damage to the economy caused by the collapse of an institution. Borrowing from the lender of last resort by commercial banks is usually not done except in times of crisis. This is because borrowing from the lender of last resort indicates that the institution in question has taken on too much risk, or that the institution is experiencing financial difficulties (since it is often only possible when the borrower is near collapse).

[Peoplesoft bloke]

Or maybe
Richard Young at
http://robertpestonmustdie.blogspot.com - Sadly lacking in content.

[Peoplesoft bloke]

Is CyberTory really called Robin Bruce?

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2007/11/rocks_wholesale_run.html

[Cyberman]

It's not the banks, it's the fault of the Government not lending our money to prop them up earlier. If so they could have continiued lending 125% equity of an inflated housing market to people who can't pay it back on self cert. Any fool can see that no bankers are to blame here.

Oh and Peston made them do this!

Cybertory

Bagpuss, you show your ignorance of the duty of the BofE as Lender of the Last Resort. If you ran the Treasury, all banks would now be bust.

[Cyberman]

Absolutely not. Either the traders have a brain and think for themselves, or we may as well turn the markets over to a random number generator. The damage to shares was done by people too ignorant to make informed decisions - the bankers.

There are stock market laws/rules and these have been broken by HMG Treasury & Peston. There will surely be an investigation in due course.

[Cyberman]

Clarification: When I say "all round" I don't mean the whole crunch.

I agree that the problem is caused by US toxic debt, and the securitisation of same, but I don't agree the NR had a high proportion of Toxicity in it's UK operations.

Also, I'm not saying Peston is responsible for the credit crunch, but I do wonder where he gets his info from.
His leaking last Sunday caused the banks share price (their prime generator of security) to be depressed at exactly the point the government wanted it to be low (i.e. when they were buying up stocks).

Absolutely correct. Northern Rock had no US-subprime debt, which makes it all the more scandalous that it suffered due to the levels of sub-prime debt of other banks which dried up the moneymarkets.

Peston and HM Treasury were responsible for causing the run on the Rock. Everything should have been conducted quietly behind closed doors, and the result announced afterwards. To announce/leak while discussions were going on was inept and could even be corrupt because of effects on the stock market and possible insider trading.

[Cowboy Bob]

The culprits are the insider/s that are leaking financially sensitive information to him..... ie HMG Treasury. They have left themselves wide open to being sued for the damage to shareholder value.

Absolutely not. Either the traders have a brain and think for themselves, or we may as well turn the markets over to a random number generator. The damage to shares was done by people too ignorant to make informed decisions - the bankers.

[Moscow Mule]

I doubt it, once the borrower of last resort is used in that fashion (to cover bad lending practices) people will always panic. The damage was done before the government was invloved. Subsequent panic in banking this year is a result of US market sentiment, not Mr Peston or the BBC if only he were that powerfull. This mess is driven by poor business practice, government colluded with the banks to some extent by having interest rates too low for too long in order to fuel the tax intake from the housing bubble..Brown's 05 paper lauding credit driven economy springs to mind. Ultimately though this irresponsible boom has made banks too vulnerable in times like this and for that I blame the Banks, then the government for failing to regulate them properly, not for lack of further funding!

Clarification: When I say "all round" I don't mean the whole crunch.

I agree that the problem is caused by US toxic debt, and the securitisation of same, but I don't agree the NR had a high proportion of Toxicity in it's UK operations.

Also, I'm not saying Peston is responsible for the credit crunch, but I do wonder where he gets his info from.
His leaking last Sunday caused the banks share price (their prime generator of security) to be depressed at exactly the point the government wanted it to be low (i.e. when they were buying up stocks).

[Cyberman]

I doubt it, once the borrower of last resort is used in that fashion (to cover bad lending practices) people will always panic. The damage was done before the government was invloved. Subsequent panic in banking this year is a result of US market sentiment, not Mr Peston or the BBC if only he were that powerfull. This mess is driven by poor business practice, government colluded with the banks to some extent by having interest rates too low for too long in order to fuel the tax intake from the housing bubble..Brown's 05 paper lauding credit driven economy springs to mind. Ultimately though this irresponsible boom has made banks too vulnerable in times like this and for that I blame the Banks, then the government for failing to regulate them properly, not for lack of further funding!