Bank bailouts and banker bashing

How the UKAR was funded we don’t know but as it was nationalised it would not need capital just loans and these can be at a much lower cost to the taxpayer

Rubbish, the nature of the asset is irrelevant to the type funding, it is always debt. Governments dont have equity, but see below.

The annual report shows some different figures than do the OBR and Rothschild for payments to the government in taxes and fees and higher debt outstanding.

Because the OBR and Rothschilds separate out the Fscs laons from the loans to fund the company. This is detailed in the accounts in note 21. So I think it is still considerably safer to rely on their figures than someone with limited analytical skills on the internet.

it seems much more likely the business/portfolio has a value above book

Why? Because they sold a small book at a profit? We have no idea of the likely outcome but it isn’t going to change the analysis markedly, certainly not enough to make your case that there is a substantial profit.

Also the funding cost of the support would have been much lower than for RBS and Lloyds equity stakes.

As noted above rubbish, asset makes no difference, debt is used.

THM – thanks for the reminder, I was quite disappointed when I first looked at that page but there is some gold in the “will we get our money back section there, viz:

The money needed to buy the shares was provided by longer-term funding in the form of Gilts, government bonds on which interest is payable. If this cost of financing is taken into account, the result of the sales is a combined shortfall of £530 million

Not good

The Treasury expects to recover the cash lent to Northern Rock and Bradford & Bingley, including the loss on the sale of Northern Rock plc, and the cost of the gilts issued to fund the loans

Oh look, they fund each type of asset in the same way in contradiction to what you assert.

The money needed to make the interventions was provided by longer-term funding in the form of Gilts (interest-bearing government bonds purchased by investors for periods of up to 50 years), at a cost of just under 3% a year.

So pretty close to the rate required by my analysis, which you can’t reconcile.

No doubt, despite the fact my broad analysis is in line with what the FT, the OBR, Channel 4, the National Audit Office, Andrew Tyrie think, your completely contradictory position will be right.

Junky is right, you are just a right wing TJ.

JY apart from betting Man U would finish out side the top 4 I can’t think of an argument on here with you I’ve been on the wrong/losing side of

😆

You’re wrong about pretty much everything – just shows what a deluded fantasy world you live in.

Hi grum thanks for coming to play 🙂 Scottish Referendum, threat of UKIP to Labour, General Election 2015 ? What side of the argument was I on, fantasy world ?

Nice catch JY, should have been grandson of course but the meaning remains valid IMO. Is that the most significant one you can find, there must be others surely 😉

@mefty there are many ways to provide support, the asset guaranty scheme didn’t require debt. The government could support UKAR with guaranties. We don’t have enough information to calculate the cost of the funding, it would be nonsensical to have funded run-off loan portfolios like Northern Rock and Bradford and Bingley with long term debt. Your funding strategy should always be with reference to the type of asset being funded, or not funded if using guaranties for example. I’m happy to let the job market decide on the merits and value of my analytical skills.

@nick just trying to put the other side of the argument.

In 2009 Labour estimated the bailout would lose between £20bn and £50bn, now on the same basis we have the Tories are projecting a £14bn profit. No doubt in my mind that by 2017 the figure will be higher again. The bailouts where the right thing to do and will deliver substantial profits for the nation as well as having prevented a much more significant recession.

JY, I might prove to have been wrong about Greece, I thought they’d agree a fudge and extend the bailout. Now seems like my preferred, but not expected, outcome is that they default and leave the EU is a distinct possibility it being talked about quite openly.

huh…

OK – so I’m emigrating to The Netherlands in 8 weeks. I wonder what this will mean for the exchange rate!?

We don’t have enough information to calculate the cost of the funding, it would be nonsensical to have funded run-off loan portfolios like Northern Rock and Bradford and Bingley with long term debt.

Add inability to read, see THM’s link:

The final return from Northern Rock and Bradford & Bingley. The Treasury expects to recover the cash lent to Northern Rock and Bradford & Bingley, including the loss on the sale of Northern Rock plc, and the cost of the gilts issued to fund the loans, but the taxpayer may not be compensated for the risk taken on or the opportunity cost of the money lent.

Costs arising from the additional government borrowing raised to finance the purchase of the shares and loans.. The money needed to make the interventions was provided by longer-term funding in the form of Gilts (interest-bearing government bonds purchased by investors for periods of up to 50 years), at a cost of just under 3% a year.

There were loans, they were financed by gilts at just under 3% – plain as day.

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edit: Anyway I am off to sun bathe.

Hi grum thanks for coming to play Scottish Referendum, threat of UKIP to Labour, General Election 2015 ? What side of the argument was I on, fantasy world ?

We all agreed yes would win we disagreed on what we wanted to happen. Only you could think that you alone predicted a NO vote.
I cannot be bothered doing the rest as they are just pure fantasy and you will disagree

Nice catch JY, should have been grandson of course but the meaning remains valid IMO.

If you think knights exist today to protect the queen and this is a valid point i dont think i need any more to prove that your views are somewhat at odds with reality. At best its 500 years out of date and that is being kind. You think Mick Jagger and Michale caine and Brad have a job of protecting the queen. Its already a reductio ad absurdum
This is why you are always correct. No one on that thread agreed with your sentiment and yet you are still correct.

Of course there are loads more we could play pidgeon chess about or you could just read the reply above
No more from me I have more chance persuading the ex wife of something that I have you 😛