NO MORE BAIL-OUTS FOR BIG BANKS Update 6 Nov.,2016

BANK OF ENGLAND

Update 6 Nov., 2016 -
What about the £150bn given to the banks? Is that not a kind of bail out?

New regulations coming into force that the world’s 30 biggest banks will not getting any more bail-outs.  They are ordered to build up funds to fall back on if there is a crisis again, like in 2008. At that time the amounts reached £850billion to bail out banks from taxpayers’ money.

Royal Bank of Scotland received £45billion. The Lloyds Bank received £20billion

Under the new ruling the banks are forced to keep 16 per cent to 20 per cent as assets for to be used in a crisis. It will cut down investors and shareholders because of the money                                                                                                              being held back.

It is feared that this ruling would result into higher borrowing costs for customer. However, the Financial Stability Board (FSB) of which Mark Carney is chairman and governor of the Bank of England advises the banks to cut wheeler-dealer bonuses and shareholder dividends.  Mark Carney called it totally unfair to use taxpayers’ money to bail-out banks.

He added further: “The banks and their shareholders and their creditor got the benefit when things went well. But when they went wrong the British public and subsequently generations picked up the bill and that’s going to end.”

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The chairman of the Treasury Committee, Andrew Tyries, MP said: “Only when these reforms are tested by experience will it be clear whether they are enough.  What is more, effective resolution will be reliant on national regulators co-operating at s time of crisis.”

British Banking Association, chief executive, Anthony  Browne, said: “The banking industry strongly supports this work, which is a really important step in ending ‘too big to fail’ and ensuring that never again will taxpayers have to step in to bail out banks.”

It sounds a good rule but it should also be forbidden that the amounts for the assets will not be passed on in higher mortgages. It should be taken out of the bonuses and shareholders’ dividends. Bonuses should not be paid out. People get paid for their work therefore what are bonuses for, especially those high bonuses for executives? It is ludicrous.