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Why did the rescue package take so long?



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Published Date: 08 October 2008
THE Government and Bank of England last night finally decided on a rescue package for Britain's ailing banks, after a day of panic selling on the Stock Exchange. The Chancellor promised to unveil steps this morning to put the banks on a "longer-term sound footing" before the markets reopened. It was expected this will mean the government taking a direct stake in the major banks, in order to provide them with stronger capital reserves.
While this intervention is more than welcome, the question will be asked: why did it take so long?

Since the markets opened on Monday, the shares of Britain's leading banks have been in free fall. Both the Prime Minister and the Chancellor have ma...



The full article contains 492 words and appears in The Scotsman newspaper.
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  • Last Updated: 07 October 2008 8:39 PM
  • Source: The Scotsman
  • Location: Edinburgh
  • Related Topics: Leader comment
 
1

david hill,

bern, swiss 08/10/2008 15:21:25
The government's rescue of the banks may stabilise the global financial crisis temporarily, but where the far bigger problem of economic stagnation and decline lies firmly upon the horizon now. The reason, with the US's total debt when all is taken into account at the end of 2007 was $51.1 trillion (projected to increase to around $53 trillion by the end of this year), sheer interest payments estimated at over $2 trillion a year, estimated toxic debts of financial institutions of over $4.1 trillion and total global debt exceeding $100 trillion (approx. 2-years of total global GDP output), no amount of capital injection will save the global economic system from eventual collapse as it is being pursued today. I give it no more than 18 months to fail.

The only situation that could bring global stability to the economic system is the influence of China and its direct intervention. Unfortunately pride by Western politicians will not allow this to happen, but where eventually they may have no other option but to take this decision to save the world economy from decades of economic stagnation. That is what we risk now with uncoordinated political indecisiveness in the West. These are plain truths and no more.

Dr David Hill
World Innovation Foundation Charity (WIFC)
Bern, Switzerland

 

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