muckles:
Winseer:
The banks have pulled the rug, and suggested that the Government bails this firm out by guaranteeing the outstanding loan book.Talk about “Wanting your cake and eating it”!
One of the potential deals was the Government bail Carrilion out, like they did for the Banks. I believe if you buy a company you buy its debts, which is why Rover was sold for a £1, but included millions in money owed.
The Conservatives have very sensibly refused to bail out the banks on this one. That’s a good thing, regardless of what Labour argue to the contrary BECAUSE it’s the exact opposite of what Labour (A socialist Government) did in the Banking crisis a decade back.
Winseer:
The banks, a private sector “industry” managed to get even a Socialist government to take money from taxpayers - without any T&Cs being levvied upon them whilst those bailout monies were put to use paying the huge bonuses again.Which “Socialist” government was that?
But yes banks do seem to want special treatment, they take the risk when they lend money that it won’t be paid, which is why they should practice due diligence before lending.Winseer:
Let’s not blame Carillion for what’s happened here.This is yet another Banking sin laid bare.
Why not blame Carrillion, they were running the business and it failed.
The failings of Carillion are that they expected the banks not to pull the rug, because the government would step in and guarantor the banks again like last time. Alas…
The faults then, are not “Systemic” as some pundits have been arguing. Carillion’s rank and file business is sound, and will probably be flogged off as a going concern. It’s the administration tier itself that is at fault, ie high-order management.Unless the banks have been lending more money than they have to bad risks like they did before the financial crash, then what sins have they committed, after all they’re supposed to lend money and expect it to be paid back, that’s how it works.
The banks hadn’t finished the current lending programme, but got cold feet due to a drop in confidence. If the next lot of money had been loaned, the final bust would have been put back a number of months at very least. There is less appetite these days for such risk-taking however. Banks want to chase the rising prices and revenues like the Stock Market as opposed to “Big business that’s too big” yet again.
It doesn’t work when they risk money they haven’t got on dodgy deals with the hope of short term bonuses and it goes ■■■■ up.
Nothing has been done, or even suggested yet - as how to stop the “rewards for failure” culture in big business today. It is big businesses that are relying on government intervention imo that still carry on doing this daft practice, that alas - will keep carrying on, because no one in a suit ever gets to go to jail when it all goes wrong. “Grab the bonus money, and then if the company fails, - I’m alright Jack!”Winseer:
I reckon the government should order the banks to keep on funding Carillion - and revoke their banking licences if they fail to comply.Our government is so weak right now though, that the betting is odds-on that they’ll let the banksters get away with it yet again.
Why should the banks be forced to support a bad risk, that’s how we ended up in the doggy doo last time?
The bad risks the banks supported last time, were sub-prime loans that they could squeeze higher interest rates out of, rather than pristine-credit-worthy borrowers, which they don’t give a hoot about. Flip your loan book over from Middle-class workers to benefit-claiming brudders - and it’s hardly any surprise that systemic default will happen sooner or later. It’s about to happen again with Credit Card books, I strongly suspect.It’s a business failure, the banks should have to ■■■■ up the loss, but the people who’ll suffer most are the small business who see naff all from the liquidation.
What the government needs to do is bring the operation in house, but honour the contracts of the small businesses in this.
I feel sorry for those small businesses in the supply chain who won’t get paid - bearing in mind that Carillion is well-known for kicking it’s invoice settlements down the road around 4 months or so. THIS is something (deliberately delaying settlement) that should be brought to an END forthwith by government. Banks lend money and take risks. Small Businesses are unable to borrow as cheaply as big business, so why the bloody hell should small businesses be effectively forced to extend 4 months interest-free credit which they can ill-afford to a large outfit that COULD afford to pay their damned bills on the nail?
(Strange how no government, Left, Right, or Center this past decade - has come up with a viable set of laws to combat this abuse of small firms by the big ones!)