Cost of UK financial sector bailout could hit £140 billion
Lord Turner, the head of the Financial Services Authority (FSA), has spoken to the Treasury select committee today with regards to the overall cost of the financial bailout in the UK. Despite the fact that the Treasury had initially suggested losses in the region of £10 billion-£50 billion, Lord Turner seemed to indicate the cost could be higher with a suggestion of a range between £70 billion-£140 billion.
There is no doubt that there will be a cost to UK taxpayers with significant losses evident on share stakes in Lloyds bank and Royal Bank of Scotland, large-scale capital injection into money markets and a number of loans forwarded to the likes of Northern Rock (which are still to be repaid). However, no matter how large the cost of the UK bailout there is no doubt that the UK authorities had no option in the short term because a collapse of the financial sector would have led to a collapse of the UK as a whole.
It is easy for us to sit back now and suggest that the government made mistakes, the Bank of England made mistakes and the FSA made mistakes but ultimately at the time they were faced with a situation never seen before in living memory. Have lessons been learnt? We hope so........
Share this..
Related stories
UK tax authorities confirm 27 MPs under investigation
The UK tax authorities have today confirmed that 27 members of Parliament are currently under investigation regarding their expenses. Not only are MPs under pressure from an internal parliamentary investigation into expenses, but the tax authorities are also investigating whether any tax laws have been broken by the 27 MPs in question.
In a rather interesting development, the tax au...
All eyes on the budget this week
There are many areas of the UK budget announcement, expected on 22 April, which will attract the attention of investors and observers around the world. First we have the issue of the ongoing budget deficit, which is expected to increase to a record £175 billion, the largest post-war deficit. Then we have the issue of personal taxation, with an acceptance across the board that UK taxpayers will be...
Read MoreDiageo and Unilever sound alarm bells over UK taxes
Despite the fact that the UK government has forged very strong relations with businesses in the UK over the last decade the ongoing crusade to increase tax income for the authorities looks as though it could seriously backfire. Diageo and Unilever, both multinational companies, have today sounded the alarm bells for the UK government suggesting they would look at possibly moving overseas unless th...
Read MoreLegal aid system under review
In what many believe is a long-awaited review of the legal aid system, Kenneth Clarke has announced a review of the service with a potential 25% saving targeted for the short to medium term. This is a system which has attracted fury from the UK public and increased dramatically in size and cost over the last 20 years. The UK government has made clear, from day one, that no one department will be i...
Read More