Tuesday, 11 November 2008

Banking 101 for Calum Cashley

Calum Cashley in his latest post says:

"Hang on, says I, was it Burt and Mathewson who got HBoS into trouble? No, indeed it was not, it was Stevenson and Hornby, these are the jokers who got the bank hopelessly lost and are now claiming to have the map which will get the bank back out of the swamp. Who do you trust?"

George Mathewson may have retired as Chairman of RBS in 2006, while Peter Burt as Chairman of the BoS attempted to take over the NatWest and merged the bank with the Halifax. Seeing that as far back as 2004 Vince Cable was warning against the rising debt levels in our banks:

"We cannot avoid the fact that by this summer individuals are collectively going to be more than £1 trillion in debt and the relationship between debt and income is higher than it has ever been historically. Each month lending is increasing by around £10 billion of which a large proportion is unsecured lending.

"This is an issue which needs urgent attention, with interest rates predicted to rise by over 1% in the next year we need to decide what level of debt is sustainable or many will find themselves unable to sustain their debts as the costs of repayments rise."

Therefore neither man can be as completely exonerated as Mr Cashley would have us imagine. So while I say we have to do evenrything to save our banks lets be level headed and Barak Obama-like about this and not territorial and John McCain-like.

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