Published: December 4th 2009 - at 2:27 am£850bn: official cost of the bank bailout
Government support for Britain’s banks has reached a staggering £850bn and the eventual cost to taxpayers will not be known for years, the public spending watchdog says today.
The National Audit Office (NAO) revealed that £107m will be paid to City advisers called in to work on the rescue because the Treasury was too “stretched” to cope with the sudden financial crisis which broke in the autumn of last year.
The commitments include buying £76bn of shares in Royal Bank of Scotland and the Lloyds Banking Group; indemnifying the Bank of England against losses incurred in providing more than £200bn of liquidity support; guaranteeing up to £250bn of wholesale borrowing by banks to strengthen liquidity; providing £40bn of loans and other funding to Bradford & Bingley and the Financial Services Compensation Scheme; and insurance cover of over £280bn for bank assets.
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Reader comments
No, this isn’t true and is just playing into Tory hands.
gbp850bn is the maximum theoretical liability faced by the government. For it to actually be the cost of the bailout, all the assets backed under the various schemes would have to be worthless. While some of the Scots banks’ investments were towers in the desert, etc, the vast majority were UK houses, which still exist in a country where we still have a housing shortage, and so are still worth most of the money lent out to pay for them…
Let us cherish the memory that it was banking directors evidently maintaining their fiduciary responsibilites to their shareholders and their concerns about the competitiveness of their banks which got us into the present mess in the first place.
Hilariously some Tories now seem to think Ben Bernanke is some kind of guru because he made a dig at Gordon Brown (thinly veiled attack on Ron Paul and Alan Grayson).
That’s right, Bernanke, the man who allowed massive fraud to take place and gave free welfare handouts to his Wall Street masters, while destroying the dollar and the US middle class. We don’t know exactly how much Ben spent on his buddies because Ben won’t allow an audit.
I know, let’s shove all the country’s wealth down a bottomless pit. Oh hang on…
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- Liberal Conspiracy
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- Rupert Read
£850bn: official cost of the bank bailout http://bit.ly/5pFmGK And STILL we are not in control of lending to small businesses, bonuses…
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RT @GreenRupertRead: £850bn: official cost of the bank bailout http://bit.ly/5pFmGK And STILL we are not in control of lending to small …
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[...] Finance, Misreorting. Leave a Comment It does no-one any favours when you report that “the official cost of the bailout is £850bn“. Because the amount that the government stood to insure is not the cost. And the [...]
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