Recapitalised banks 'cherry picking' applications.

The only banks that are truly ‘open for business’ are those that have received state funding, and this is on both sides of the book.

On the deposit side Anglo are paying market leading rates, they are now fully nationalised, and because their new owners have the deepest pockets the ‘better banks’ who didn’t need a state sponsored bailout cannot compete.

On the lending front only two banks are actively engaged in lending at somewhat regular levels, and they too were saved by the taxpayer (because that is where the state get their money from). However, rather than being the ‘saviours’ of the banking sector they are merely taking the best of applications and opting for the cream of the crop, any ‘increase’ in lending is as much down to artificially low margins on rates (state sponsored), and gaining customers that would have gone elsewhere in an operational market (because if every other bank is unable to obtain state funding to lend with then they have to lose customers to those that did …

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Recapitalised banks ‘cherry picking’ applications.

The only banks that are truly ‘open for business’ are those that have received state funding, and this is on both sides of the book.

On the deposit side Anglo are paying market leading rates, they are now fully nationalised, and because their new owners have the deepest pockets the ‘better banks’ who didn’t need a state sponsored bailout cannot compete.

On the lending front only two banks are actively engaged in lending at somewhat regular levels, and they too were saved by the taxpayer (because that is where the state get their money from). However, rather than being the ‘saviours’ of the banking sector they are merely taking the best of applications and opting for the cream of the crop, any ‘increase’ in lending is as much down to artificially low margins on rates (state sponsored), and gaining customers that would have gone elsewhere in an operational market (because if every other bank is unable to obtain state funding to lend with then they have to lose customers to those that did …

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The Credibility Crisis

I have written before about what can be termed a ‘credibility crisis’ and when I used that terminology it was in reference to the collapse of Bear Stearns and the fact that Alan Schwarz had said on a Tuesday that there was no problems with the bank (reminding me of the Alfred E. Neuman ‘what me worry?’ pictures) and then come Friday they were nose-diving into closure.

Credibility is a large part of what the worldwide financial crisis is about, and how that plays itself out in the market is something that should concern everybody because the foundations of any economy are not just the laws or the constitution but instead they are also the financial and economic management structures.

Solicitors of the world may disagree with me however, I would argue that wealth of itself has little to do with civilisation and advancement, because countries like the Democratic Republic of Congo, Nigeria, and Iraq are incredibly wealthy nations in terms of what they potentially have but due to money not flowing (and political corruption of the economy) they will …

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