They lent money to people who they knew could not afford to pay it back.
"In view of the way of the world", if in any other industry you had made that mistake, your business would have gone to the wall.
The banks knew though that that rule does not apply to them and the taxpayer would bail them out.
How did Barclays pay us the taxpayer back, by paying 3% tax on last year's profits.
I think that's the issue.
Did the Bank do anything wrong
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David Johnson
- Posts: 7844
- Joined: Fri Jul 14, 2017 2:40 am
2infro
They also went big on casino banking. So for example, there were increasingly complex trades done for vast amounts of money where the traders doing this stuff and their management had no real idea of the value of what they were trading.
All they were interested in doing was flogging complex derivatives to make a huge profit so they could get their large year-end bonus and head for the hills if need be. This resulted in the vast majority of banks having toxic debts which had to be insured by us, the taxpayer to prevent the banks going kaput. If you imagine Northern Rock with queues of people wanting to get their money out, to the nth degree you get the idea.
Cheers
D
All they were interested in doing was flogging complex derivatives to make a huge profit so they could get their large year-end bonus and head for the hills if need be. This resulted in the vast majority of banks having toxic debts which had to be insured by us, the taxpayer to prevent the banks going kaput. If you imagine Northern Rock with queues of people wanting to get their money out, to the nth degree you get the idea.
Cheers
D
Re: Did the Bank do anything wrong
[quote]How did Barclays pay us the taxpayer back, by paying 3% tax on last year's profits[/quote]
But Barclay's didn't receive any bailout funds from the government so why should it have to pay anybody back?
But Barclay's didn't receive any bailout funds from the government so why should it have to pay anybody back?
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David Johnson
- Posts: 7844
- Joined: Fri Jul 14, 2017 2:40 am
Twingo
All of the banks on the UK?s high streets owe their survival to public financing. According to the Bank of England, the British taxpayer provided more than ?1 trillion of public money to rescue the banks from collapse.
Through short-term loans, loan guarantees and quantitative easing (pumping money directly into the economy), the Bank of England helped to bolster bank?s balance sheets. Banks such as Barclays therefore benefit from a promise that taxpayers will never let them fail, because it would be too damaging to the UK economy.
Thus, even though it did not take any direct state help during the financial crisis, former Barclays boss, John Varley, had to acknowledge the crucial role played by the government in rescuing the City as a whole:
"Even those banks who did not take capital from governments clearly benefited (and continue to benefit) from these actions. We are grateful for them, and our behaviour should acknowledge that benefit."
Cheers
D
Through short-term loans, loan guarantees and quantitative easing (pumping money directly into the economy), the Bank of England helped to bolster bank?s balance sheets. Banks such as Barclays therefore benefit from a promise that taxpayers will never let them fail, because it would be too damaging to the UK economy.
Thus, even though it did not take any direct state help during the financial crisis, former Barclays boss, John Varley, had to acknowledge the crucial role played by the government in rescuing the City as a whole:
"Even those banks who did not take capital from governments clearly benefited (and continue to benefit) from these actions. We are grateful for them, and our behaviour should acknowledge that benefit."
Cheers
D
Re: Did the Bank do anything wrong
"But Barclay's didn't receive any bailout funds from the government so why should it have to pay anybody back?"
Although Barclays was not directly rescued by the UK government - unlike Lloyds and Royal Bank of Scotland - it has been able to borrow extremely cheaply because of the Bank of England's decision to slash interest rates, and because markets perceived that the government would not allow any big bank to fail.
I could argue that even without the bank bailouts paying 3% corporation tax is still scandaless!
Although Barclays was not directly rescued by the UK government - unlike Lloyds and Royal Bank of Scotland - it has been able to borrow extremely cheaply because of the Bank of England's decision to slash interest rates, and because markets perceived that the government would not allow any big bank to fail.
I could argue that even without the bank bailouts paying 3% corporation tax is still scandaless!
Re: Did the Bank do anything wrong
[quote]I could argue that even without the bank bailouts paying 3% corporation tax is still scandaless![/quote]
Well i admit i really don't know how much % it should be (obviously 3% seems small) but they already paid ?2.8billion in other UK taxes last year.
Im not defending them, but it seems as though everybody see's the 3% figure and assumes that they total they paid in taxes last year, which is incorrect....unless they made nearly 100Billion in profit last year, in which case im incorrect
Well i admit i really don't know how much % it should be (obviously 3% seems small) but they already paid ?2.8billion in other UK taxes last year.
Im not defending them, but it seems as though everybody see's the 3% figure and assumes that they total they paid in taxes last year, which is incorrect....unless they made nearly 100Billion in profit last year, in which case im incorrect