Last October, the Bank of England presumably at the behest of the Government made secret emergency loans to the Royal Bank of Scotland (RBS) and Halifax Bank of Scotland (HBOS). These totalled some Â£61.6 billion pounds and prevented them going under. What this amounts to is that banks that the general public thought were on the verge of going under had already effectively done so. Details of this ‘Emergency Liquidity Assistance’ have just been released.
Bear in mind the banks were loaned almost twice the defence budget to do this. At a time when troops were dying for lack of equipment. Criminal!
This also paints the picture of how serious this situation was and how close we came to a total banking collapse.
What annoys me though is that it is labelled ‘the crisis’, is put down to ‘global’ issues and that ‘no-one saw it coming’. There are many commentators who wrote of the dangers as well as some politicians who kept pointing out the perils of the way credit was fuelling the boom. The Internet is full of sites where bloggers and forum users were discussing a potential meltdown. I well remember reading them.
What we have suffered from is a Chancellor made PM together with a BoE boss, FSA regulators and senior banking officials all who were out of their depth. They were swimming in an ocean when they should have been paddling in a pool.
And now we have Gordon talking about a ‘New World Order’ that he is part architect of. Where do we think that is all going to lead? Eldorado?