Alistair Darling threatens nationalisation for the UK banking sector
Alistair Darling has this evening threatened to nationalise the whole UK banking sector in a move aimed at bringing to the fore the ongoing battle between the government and the financial sector. There is no chance that the sector will be nationalised but the very fact that Alistair Darling has even mentioned the term should be a wake up call to those in the mortgage industry especially.
The UK government has a long memory and will not forget how the banks appear to have reneged on their earlier agreement regarding the bailout and the increased liquidity expected in the marketplace. While this is not the time for settling old scores it appears inevitable that the financial sector will at some stage "pay the price" for its affective of lack of activity.
It seems that no matter how much pressure is placed on the UK financial sector there appears to be a willingness to block any attempt to increase liquidity in the economy which is having a seriously detrimental effect on the UK. The UK government has injected hundreds of billions of pounds into the system and while they could borrow more in the short to medium term this would create a fiscal drag on the UK economy for many years to come.
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