Yet More Panicking Thread - Banking Crisis?

[Mrs Figg]

i have been following this on the news and its quite worrying. Maybe Lance can fill us in to know whether its worth panicking or not. But I guess that's the problem, contagion spreading. Now its Credit Suisse in trouble.

[halfwise]

Wait, Credit Suisse is in trouble? That's something worth panicking about. The silicon valley bank was not an indication of anything systemic since they made bad choices most other banks did not, so the stock market reaction was overblown. But Credit Suisse IS the system.

[Mrs Figg]

oh dear

[Lancebloke]

I don't think there is anything to worry about. Credit Suisse have had some shit go on over the last few years and this situation is more of a reflection of that.

We already know that governments will prop up any bank that is deemed 'too big to fail' but I wouldn't worry about that either.

There is a bit of a bubble going on, especially in the housing market, which is probably going to take until the middle of next year to correct itself... maybe even 2025. That will probably mean a few years of stagnation or static growth but these are the cycles that we always deal with.

[Pettytyrant101]

{{ Bugger the banks what about the rest of us?! My gas is three times a month higher, my electricity same, my food bill has at least trebled and there are less goods on the shelf to buy, my internet is about to take a big hike and on the other side my carers allowance for looking after my mum hasnt gone up a single penny, nor my hotel wages whilst inflation has gone up over 10% meaning I may have to try to get a THIRD job just to get the through a month, and presumably I get to sleep in my grave. And to rub salt in the wounds I live in an energy rich, energy exporting country and no one can afford their energy bills! Its a sick scandal. And what did the Tories do in the budget- reward people who already have massive pensions! Yet again a Tory budget for the well off and the working class and working poor shat upon from a great height.}}

[Lancebloke]

Well... I think bugger the banks is a bit silly as if banks collapse then everything else is pretty fucked. Banks uphold the entire international trade network so if they fail you will be having many more shortages of stuff on your shelves than you are today.

I do agree with your other points though. I am fortunate that the cost of living issues don't really impact me day to day and so while I am not going to say no to having a more secure future and hopefully early retirement etc, I would much rather freeing up of those burdens be targeted at people that need them, not people that would like them and my vote would back that up whenever I get the chance to do so.

[Pettytyrant101]

if banks collapse then everything else is pretty fucked.- Lance

{{ And right there is the problem, a bank can do as it wants, take all the risks it wants, gamble other peoples money all they want, and if they screw up they know they will just be bailed out because they are 'too big to fail'.
Wheres the incentive to good banking rather than gambling? And every time it happens the very people who caused it seem to walk away richer than ever before while everyone else pays more through their taxes for the bail out. }}

[Lancebloke]

I dont disagree with you Petty. In theory those decision makers should be responsible for their decisions with the possibility of jail time but that doesn't seem to be the case.

A lot of the reward packages are tied to shares which cannot be redeemed in the short term and so in those cases the performance of that bank should directly impact their pockets... but I think that is down to banks putting those policies in place.

I get the problem but there only seems to be a political will just after a crisis and by the time a follow through is needed the crisis and will have passed.

[Pettytyrant101]

In theory those decision makers should be responsible for their decisions with the possibility of jail time but that doesn't seem to be the case. - Lance

{{ Its not the case because the people who make the laws are the same people and their mates who are benefiting from the way things are. Nice little earner on a bank board when you retire from politics, share incentives for a nest egg. Its what its always been a 'you rub my back Ill rub yours' between finance sector in London and governments, especially Tory ones. Its the same reason there is an utter lack of social housing and a massive expansion of the private rented sector, because surprise, surprise Tories are some of the biggest landlords in the country. Its a stitch up. Always has been.
I suspect the City works just as it always has-}}

[halfwise]

I wonder if it's as simple as "throw the bastards in jail" to solve the problem. I of course know nothing of the banking community, but in many social systems the key decision makers are also nearly irreplaceable. There are often only a few people who really know how things work, and there is at least a temporary collapse if they are removed. Business bureacracies should be designed more robustly than that, of course, but I wonder how often they have such resilience in training of next in line staff.