Monday, November 26, 2007

Classic Harding

There's an absolute stormer of a comment from Neil Harding on this post by Mark Wadsworth.
So you would have let Northern Rock collapse and the British banking system collapse with it? Millions of jobs would have been lost and our economy would have been crippled.

This is a joke, isn't it? No, it's just typical Harding hyperbole.

Companies go bust in various industries every day: they don't cause the collapse of their entire industry. How would one badly run bank going bankrupt cause the collapse of the entire British banking system?

Did the British banking system collapse when, for instance, Barings Bank went bust?

Er... no.


Anonymous said...

Tipping points are strange phenomena.

It was most unlikely that the Barings debacle would have led to a run on the banks since very few individual 'men in the street' were involved. On the other hand, television coverage of queues of depositors outside NR could very easily have precipitated a general run on the banks.

Much as I loath and detest pretty well everything that this awful Government stands for I believe that they had no option but to stifle a potential run on the banks. If it turns out to have cost the country £2bn, £20bn or more, so be it - cheap at the price.

One could argue that the Governments response to this crisis was well orchestrated. After all they did nip the queues in the bud as it were. There were several much larger banks waiting in the wings for queues to form outside their High St branches had NR been allowed to suffer the slings and arrows of unregulated capitalism.

Having got that off my chest on the basis of 'fair's fair' I'd like to record that I think that the cynical, spinning, corruption of our current Government is sickening.

Frighteningly not many men in the street notice or care.

Now I'd better go and lie down - I can feel my blood pressure reaching heights of which many medics would disapprove.

The Sage of Muswell Hill said...

An orderly liquidation of Northern Rock with the Treasury guaranteeing depositors' money (NOT the interbank stuff) would have been just as effective in staving off panic. However, this would not have solved the problem of losses of jobs and shareholders' money in the North East: these would have cost votes so all of us have to pay for Labour to hold up the Labour vote in its heartland. As somebody blogged elsewhere: would the Treasury have been so concerned about job losses if this had been Southern Rock?

Anonymous said...

If they'd let it go bust, there would have been a great press inquest. At some stage, there would have been some questioning of what the 'credit crunch' really is - and how 'credit' and 'money' magically appear in the smoke and mirrors world of FRB.

That was the unthinkable outcome for the govt.

Roger Thornhill said...

What umbongo says.

The "troika" failed the Economy for letting Northern Crock go on for so long and then political expediency (as with Rover etc) gets in the way and vast sums of our money are poured into a company so a few get rich and some useless tosser in a marginal can cling on another term and so qualify for a fat pension for life at our expense.

Anonymous said...

Sod the Rock, what about that bloody website design? Couldn't he fit any more scroll bars in?

Machiavelli's Understudy said...

I'm not sure of where to post this, but seeing as you're already discussing one tedious Labour cunt, I might as well ask here.

Have you ever thought about doing an up-to-date shredding of that twat, Alex Hilton? He's a bit of a shrill prick, you know.

Has even been defending that racist Miranda Greel, I think... Which Labour aren't anymore, as they're light of a few bob or two :)

Mark Wadsworth said...

Ta for link, as ever.

AD627 said...

"television coverage of queues of depositors outside NR could very easily have precipitated a general run on the banks."

Balls. The reason there were TV pictures of queues was that Northern Rock had aggressively closed its branch network. Therefore, pitching up to collect actual cash (rather than rely on an unreliable website that might take 3 days to transfer the money even when it was working) involved a trip to one of a very small number of branches. This led to queuing and those devastating TV pictures.

Banks with a proper branch network (the other major players) or those bright enough reach an agreement with a network bank would not have suffered the same fate.

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