UK News

Insights from the UK and beyond

Do we need a bank bail-out?

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darling1.jpgEU leaders went to Paris at the weekend and vowed solemnly to co-operate in their handling of the credit crisis. By Monday all bets were off as different countries either broke ranks or strained at the leash in their desire to protect their own private savers first by offering blanket guarantees.

That spectacle has raised all manner of questions — should there be a continental banking regulator for example, to fill the gap between the various central banks and the global regulators like the IMF? 

For Britain it raises the immediate question of whether the government should move to stop any seepage of funds abroad by guaranteeing all savers’ deposits. At the moment deposits are guaranteed up to 50,000 pounds.

But the issue of guaranteeing savers’ deposits runs alongside the wider question for Chancellor Alistair Darling of whether Britain should bail out its banks in a blanket operation rather than just acting on a case-by-case basis — effectively buying a stake in the strugglers in a part-nationalisation.

Turbulence or meltdown?

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dax-trader-hands-on-head-alex-grimm.jpg *** For full coverage of the financial crisis click here***

The events of the last five days have been traumatic for the world of high finance and banking — and may yet become so for the man in the street if confidence in banks fails to hold.

Venerable finance houses are falling like cards, all manner of exotic and unsound practices are being revealed and many of the old rules — like the competition reugulations that stopped Lloyds buying Abbey National in 2001 — have gone out of the window.

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