So, going against your original post I think, you’re now saying that the profits should be poured back into services etc. rather than paid back to tax payers. Which they will be, and when the Government sells their shares, which they recently did in Lloyds then those profits will be ploughed back into the treasury. Likewise, when the banks start paying dividends again those profits will go back into the treasury.

So I think your beef is with the goverment, not the banks?

You’re only getting a tenner back Bob

@mefty has provided a pretty good explanation.

The Asset Protection Scheme has been very successful, basically the banks paid a big “insurance premium” and they have not made any claims (as the “insurance excess” was quite large and looses have been below that figure)

The banks where lent a lot of money at profitable rates, so that’s been a plus

The shares the government bought are currently worth less than was paid. It is worth noting that in Oct 2010 they could theoretically have been sold for a profit. The shares the US government bought in their banks (which were in a bigger mess) have been sold at a profit. This is partly as the US economy has recovered more strongly and also as the government has been a bit more pragmatic in supporting the banks rather than battering them further. At some stage it is likely the UK government can sell the bank shares for a profit.

Granted, more than a tenner, a lot more. But is anyone £26000 worse off because of it? As an individual? And I’m not talking about recession or redundancies, I’m talking about as a direct result of the bailout.

@runssianbob – in my view the UK is much better off as a result of the bailout than if there had not been one. The damage to the economy and small businesses especially had the banks failed would have been enormous. Also as per @mefty’s post most of the support measures have been profitable. Figures like £26k per head cost is just mis-information, trying to divide the total cost of support by each person without recognising a lot of the loans have been paid back or the “insurance” not used and in fact it has been profitable.

If the bank that has lent you money goes bust by way of mortgage, then as an asset of the bank, your loan will be sold to another institution. The terms of the loans will be binding on the successor institution, but as with anything legal you need to look at those terms as there can be ways, rarely, whereby the successor bank can make it economically untenable to continue the loan. In the rare circumstances where this can be done, it will be even rarer for it to be in the bank’s commercial interests.

So, going against your original post I think, you’re now saying that the profits should be poured back into services etc. rather than paid back to tax payers.

The government doesn’t have money. It’s all taxpayers. Exactly how much of the debt is owed by the Tories or labour?So by saying taxpayers, I mean the uk as a whole. I absolutely mean (and have done the entire thread) that the money goes back into the pot/hole so that we as a society can benefit.

So I think your beef is with the goverment, not the banks?

Well both governments actually. I thought that was obvious, hence questions around public consultation.

So jambalaya… Ultimately we should be thanking the banks for giving us this unique investment opportunity?

So jambalaya… Ultimately we should be thanking the banks for giving us this unique investment opportunity?

No of course not. What happened was a colossal failure of certain bank’s management and of regulation.

@mefty, loans could well have T&C which say the loan is potentially repayable a the lenders option in the event of bankruptcy for example. I was made to repay a mortgage 12 months after I got it as the lender decided to exit the business, it was in the T&C small print that they where allowed to do so at 3 months notice

The direct cost to the taxpayer is the cumulative annual cost of servicing the debt raised to cover the bailout, say, £5bn per year plus the cost of any support we are not expecting to be repaid, plu/minus any loss or gain on the sale of equity.

There are also the indirect costs, the downturn saw a massive increase in the defeciit, that has prob cost £200+bn over the last 5years. Finally there may also be the costs of any increase in the costs of general borrowing if UK is seen as a more risky borrower

In total that is ####loads in my estimation

In terms of individual mortgages, ask someone who had one with Northern Rock I guess. But I think the mortgage book is sold on with same T&Cs. I think it would be breach of contract to demand full and immediate repayment

What happened?

Joe Public got shafted and those who benefitted most (Bankers mainly, but also Politicians) continue to benefit and tell us how it could’ve been far worse if we’d just let them fail…

Prove otherwise.

@br Joe Public benefited hugely over the prior years.

@olddog – you say “say £5bn per year”, I take it you guessed this (at 2% implies £250bn of additional debt) ? Most of the headline figures for banking support (the ones in the trillions) refer to the maximum potential exposure for the asset protection programme which has actually been very profitable as the total amount of claims has (as far as I know) been zero ! We would have had an economic downturn even if every single UK bank was unaffected as the scale of the crises in the US was so large