Archive for the ‘Credit Crunch’ Tag

Bailing Out The Banks But What About The Holes

lehman-brothersThe first anniversary of the failure of Lehman Brothers has been accompanied by the views of financiers and commentators on the events of the past year and what happened as the world found its prosperity slipping away. Questions over the failure to save Lehman Brothers are common currency with some claiming the governments who came to the aid of the banking industry should have done more.

What you don’t hear from the leaders of the bank is the failure of their boards and directors to fully disclose the extent of their financial problems. We currently hear the European Central Bank expressing the view the financial crisis for the banks will get a lot worse before its over and their losses may more than double by the end. All very worrying for the rest of us as a secure and profitable banking system is essential to the country’s financial security.

However, we now hear the Institute for Public Policy Research say the rapid return to the City’s bonus culture shows the banking system has not reformed its ways and it could all happen again. Its clear the governments of the world need to act far more quickly to prevent a reoccurrence as all the dithering is doing nothing to bring confidence back to the country, an essential part of our future prosperity.

Predictions Of Downs Are On The Up

As the credit crunch rolled over the western world and headed off to the east, financial pundits, economists and politicians got out their tarot cards, crystal balls and tea leaves to try and out do each other in the predictions stakes. There has emerged two general camps, those who say it will all be over in less then two years and those who predict four or five years of slowdown and financial turmoil.

At some point in the future a few clever, or more likely, lucky individuals will claim their ability to understand the financial markets has meant they were able to predict the end of the credit crunch. A few will also profit by judicious investment in the high risers on the stock market and currency exchanges.

The more intriguing prediction is who will win the next general election which must be held by June 2010. That’s just 14 months away and well before anyone expects the current financial downturn to end. The UK’s national debt will pass the £700 billion mark sometime this year, almost half the total earnings of the whole country. Such figures may not mean a lot to most voters, but the impact on financial policies and tax rates will make for one of the more interesting election campaigns of the post war period.