Monday, October 20, 2008

The politically expedient tinkering begins....

Back in February this year, Alistair Darling told the House of Commons that
The new board [of Northern Rock] will operate at arm’s length from the Government with commercial autonomy for their decisions.
Then last week, when everyone became outraged that Northern Rock had the highest repossession rates, Gordon Brown defended criticism repeating that,

"important to note that it is at arm's length from government.... It is not a company we are running on an everyday basis"
Then, over the weekend, we have Yvette Cooper telling the banks (including Northern Rock and the others that they now have a major share in) that they must cut their repossession rate. So much for arm's length huh?

This is how it is going to be now of course. Politicians won't take actual decisions in banks, but they will, for political purposes, try to shape the actions of banks where commercial reasons are detrimental to votes. They just won't be able to help themselves.

14 comments:

Anonymous said...

Assuming they're telling all the mortgage providers the same message, your complaint is unfounded.

dizzy said...

Yeah because the timing with the NR figures is just a coincidence.

marksany said...

if the gummint is telling RBS not to reposses my house, I can stop paying my mortgage. That will help me afford the little luxuries in life; like gas, diesel and food.

Lola said...

It's like picking at a scab. They'll just make it worse. Wankers.

Anonymous said...

So those of us that have been sensible pay to keep all the tossers in their houses! Shouldn't have been running around with a fistfull of credit cards for the last 10 years!

Dave B said...

There was more of that in Mandelson's interview.

T England said...

Anon 12:25:00 said...
So those of us that have been sensible pay to keep all the tossers in their houses! Shouldn't have been running around with a fistfull of credit cards for the last 10 years!

Well said!
I was thinking exactly the same myself only this morning, I have pumped money into my house, I havn't taken out any loans & I have money put aside for a rainny day, WHY THE HELL DID I BOTHER??????
I might as well spent the lot & looked to this credit loving, cant stop borrowing government to surport me & the family when it all ran out.
OH well!
Looks like this insane government are trying to get everyone doing the same all over again! Looks like it's spend spend spend & then look for the hand outs!

John Evans said...

As an aside, I do wish Yvette Cooper would stop using the phrase, "It's the right thing to do," when referring to an opinion or value judgement. She mouthed it umpteen times on the Andrew Marr show.

Only Blair with his open channel to God has the right to use it, surely? :-)

Croydonian said...

Note also that if NR and all of the other People's Banks are bullied into following poor business practice, it will take longer for them to become sufficiently liquid to get out from under Brown's less than invisible hand.

Unsworth said...

Yvette Cooper has no sense at all of right and wrong. Thus 'the right thing to do' could be equally 'the wrong thing to do' - she wouldn't know the difference.

And now Brown has to all intents removed the whole Northern Rock fund from the balance sheet - probably because 'it's the right thing to do'.

Brown and his Brownshirts said...

Interfering with the running of Capitalist Companies. Isnt that the definition of Fascism ?
Creating a database tracking your every move, phonecall, email internet browsing habits etc ?
Isnt that the definition of Fascism ?
New labour , New Fascists !

Pete, Scotland said...

Is there now discernable discrimination between Government banks and private ones?

tankus said...

hMMM Did hear of a bonus scheme in the rock paid out on closing as many accounts as possible ...!

Anonymous said...

Problem is....debt liabilities are considered assets in the banking world-So, if you allow people to stop paying their mortgages, the banks share price will crash. if you stop the banks clawing back some of the asset value via repossession, the banks share price will crash. ( they are legally obliged to do this to achieve best value for their shareholders) If people can default without consequence, it will accelerate the crash as more people simply stop paying the mortgage. Also, the banks would have to re-price the higher risk into existing ( at re-setting time ) and new mortgages, resulting in much higher interest rates, accelerating the housing market crash and increasing the number of mortgage defaults and repossessions. Libor would also rise to take into account the increased risk, as no-one would know how many defaults each bank was going to get and so would be reluctant to lend. The law of unintended consequences is a bitch...