How the EU's 'Basel 2' Directive helped trigger the financial crisis

Little Englander (sour) · 07-10-2008, 03:56 PM

My worry is that the government are waiting for the price of bank shares to bottom out and buy up (with our money of course) for a song. They call it re-capitalisation (nationalisation)

What are the implications of the government owning big banks?
doesn't bear thinking about.

Baron von Lotsov · 07-10-2008, 08:04 PM

Yes it is a shift to the Left for certain. How much damage can a broken government do? The last time Labour was in power we had nightly power cuts. I think the voters got the message by that time. How long will it take now though, what with New Labour education in schools and so forth? It seems that when Brown did that party speech the voters shifted some 10 points in the direction of New Labour. It does not look very good at all, especially now they are back at work.

Tom Wilde · 14-10-2008, 12:21 AM

I only just read Christopher Booker's very useful article. Curiously, half an hour earlier I was chatting with a German friend who works for one of the big banks over there, and who made very similar points. He blamed the difficulties faced by a number of banks on the mark-to-market valuing system which they have to use to value their assets. He said that EU rescue efforts are focusing on changing the accounting rules so that certain financial assets can be valued at their purchase price rather than at their current market value (which can be close to zero). This avoids the banks having to declare themselves insolvent. He didn't mention (perhaps he didn't know?) that the mark-to-market requirement was imposed by the EU in the first place.

07-10-2008, 03:56 PM	#11 (permalink)
Little Englander (sour) Senior Member Join Date: Dec 2006 Location: Portsmouth Posts: 949 Party: English Democrats	My worry is that the government are waiting for the price of bank shares to bottom out and buy up (with our money of course) for a song. They call it re-capitalisation (nationalisation) What are the implications of the government owning big banks? doesn't bear thinking about. __________________ Little Englander (bigoted)

07-10-2008, 08:04 PM	#12 (permalink)
Baron von Lotsov Senior Member Join Date: Aug 2007 Posts: 1,082	Yes it is a shift to the Left for certain. How much damage can a broken government do? The last time Labour was in power we had nightly power cuts. I think the voters got the message by that time. How long will it take now though, what with New Labour education in schools and so forth? It seems that when Brown did that party speech the voters shifted some 10 points in the direction of New Labour. It does not look very good at all, especially now they are back at work. __________________ "A government big enough to supply you with everything you need, is a government big enough to take away everything that you have..."

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14-10-2008, 12:21 AM	#13 (permalink)
Tom Wilde Moderator Join Date: Sep 2004 Location: London. Posts: 2,886	I only just read Christopher Booker's very useful article. Curiously, half an hour earlier I was chatting with a German friend who works for one of the big banks over there, and who made very similar points. He blamed the difficulties faced by a number of banks on the mark-to-market valuing system which they have to use to value their assets. He said that EU rescue efforts are focusing on changing the accounting rules so that certain financial assets can be valued at their purchase price rather than at their current market value (which can be close to zero). This avoids the banks having to declare themselves insolvent. He didn't mention (perhaps he didn't know?) that the mark-to-market requirement was imposed by the EU in the first place.