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Old 02-12-2008, 05:54   #1
Kryten
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Another bank goes bust (London Scottish Bank) but gov bail out all savers!

http://news.bbc.co.uk/1/hi/business/7758117.stm

So we have a 50,000 GBP cap officially on deposits, but the chancellor still decides to bail out all savers at London Scottish Bank even if they have more than 50k deposited. So was there really a point in the 50k cap if he is going to just bail out everyone? I mean they were a very small bank so if someone was stupid enough to deposit over 50k with them then surely that is their own fault?

The excuse used is that he does not want a run on other small banks, but surely if a bigger bank went bust he was have to do the same saying he doesn't want a run on all banks?

London Scottish Bank seemed to have a very bad business model anywa really (lending to people buying high-rise flats and ex-council right-to-buy type mortgages which surely have to be some of the highest risk loans out there?

Personally I would have said let them close down and only refund the first 50k.
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Old 02-12-2008, 10:29   #2
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Probably bailing out his chums.
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Old 02-12-2008, 11:46   #3
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Never heard of them!
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Old 02-12-2008, 13:48   #4
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I dont think Darling has a choice though, does he?

He needs to stop a run on the banks, but he cant formally commit to guaranteeing all savings coz it'd bust them.

So, he has to play this game....
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Old 02-12-2008, 15:53   #5
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Yeah, I see him picking and choosing his games to play though?

Will be interesting to see what happens if more banks go to the wall
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Old 08-12-2008, 16:47   #6
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I've heard of them - a few people I know who really shouldn't have been able to get a mortgage managed to get a mortgage via these jokers!
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Old 08-12-2008, 17:23   #7
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Quote:
Originally Posted by KennyVader View Post
Never heard of them!
They are more well known for their door to door loan business (a bit like provident) and their debt collection business Robinson Way. They've always targetted the sub-prime market.
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