Alistair Darling floats the idea of a bad bank
Slowly but surely the UK government would appear to be leaking various details of the proposed "bad bank" which would use taxpayer money to acquire potentially toxic assets from a variety of UK banking operations. Initially the idea had been suggested some months ago due to other options and a general discomfort amongst UK taxpayers it appeared that the "bad bank" idea had been dropped. So who would benefit from a "bad bank"?
Yet again we would see taxpayer's money used to invest in assets which in the real world would be potentially worthless and high risk to say the least. This would then allow the UK authorities to pump further money into the UK banking sector via the backdoor at the expense of UK taxpayers, putting potentially billions upon billions of pounds at risk. The current bill for the various rescue packages and stimulus programs in the UK runs into hundreds of billions of pounds, but there are concerns that UK government debt could reach £3 trillion over the next two years.
Many are now suggesting a change of tack as the ongoing injection of billions upon billions of pounds into the system does not appear to be having any noticeable impact and taxpayers are facing ever-increasing tax increases in the future. Many believe that the "bad bank" idea could be a pivotal point with regard to the future of this Labour government which is coming under increasing pressure from all sides.
Share this..
Related stories
Standard and Poors downgrade UK outlook to negative
Renowned credit rating agency Standard and Poors has today downgraded its rating on the UK to negative. This means that the credit ratings agency believes that the UK economy is in danger of weakening in the short to medium term which could lead to UK debt ratings being downgraded. This is a significant blow for the UK government as the authorities will require further funding which will increase...
Read MoreIs the Scottish economy on a knife edge?
News that the Diageo rescue plan has ultimately failed and the company will be closing down its Kilmarnock plant, although investing additional funds in other Scottish operations, is another hammer blow for the Scottish workforce which has been under significant pressure of late. Despite the fact that the Scottish executive has been very aggressive in its stance against the Diageo move, which ulti...
Read MoreIs the UK government being held to ransom by the banking sector?
As news that 80,000 Royal Bank of Scotland members of staff are set to sue the government over their bonus scheme continues to filter into the market, there is a feeling that the UK government is being held to ransom by the banking sector. Despite the fact that banks in the UK have literally been saved from receivership by the billions of pounds pumped into the industry it appears as though bankin...
Read MoreHas the US economy turned the corner?
There was a sudden reduction in the U.S. trade deficit published today with the announcement of a $32.9 billion deficit for October against a "downwardly revised" figure of $35.7 billion for September. The main kicker for the improvement in the trading environment seems to have been a rise in exports, helped by the weak dollar, although the very fact US businesses seem to be experiencing an improv...
Read MoreUK recovery at risk because of reduced credit
The International Monetary Fund (IMF) has again stepped in to kick the UK economy when it is down. The association believes that the UK, more than any other developed country in the world, is at risk over the next few years from reduced levels of credit for both consumers and businesses. It is estimated there will be a shortfall of £280 billion this year between required loans and liquidity avail...
Read More