Kryten
02-12-2008, 04:54
http://news.bbc.co.uk/1/hi/business/7758117.stm
So we have a 50,000 GBP cap officially on deposits, but the chancellor still decides to bail out all savers at London Scottish Bank even if they have more than 50k deposited. So was there really a point in the 50k cap if he is going to just bail out everyone? I mean they were a very small bank so if someone was stupid enough to deposit over 50k with them then surely that is their own fault?
The excuse used is that he does not want a run on other small banks, but surely if a bigger bank went bust he was have to do the same saying he doesn't want a run on all banks?
London Scottish Bank seemed to have a very bad business model anywa really (lending to people buying high-rise flats and ex-council right-to-buy type mortgages which surely have to be some of the highest risk loans out there?
Personally I would have said let them close down and only refund the first 50k.
So we have a 50,000 GBP cap officially on deposits, but the chancellor still decides to bail out all savers at London Scottish Bank even if they have more than 50k deposited. So was there really a point in the 50k cap if he is going to just bail out everyone? I mean they were a very small bank so if someone was stupid enough to deposit over 50k with them then surely that is their own fault?
The excuse used is that he does not want a run on other small banks, but surely if a bigger bank went bust he was have to do the same saying he doesn't want a run on all banks?
London Scottish Bank seemed to have a very bad business model anywa really (lending to people buying high-rise flats and ex-council right-to-buy type mortgages which surely have to be some of the highest risk loans out there?
Personally I would have said let them close down and only refund the first 50k.