In These New Times

A new paradigm for a post-imperial world

Massive bailout for British banks fraudulently presented as nationalisation

Posted by seumasach on October 8, 2008

The text below is the full text of the governments latest rescue scheme. This has been presented via the media and and right across the political spectrum as some kind of nationalisation or partial nationalisation of the banks. Here are the references to the governments role in this arrangement and the conditions attached:

“the Government is establishing a facility, which will make available Tier 1 capital in appropriate form (expected to be preference shares or PIBS) to ‘eligible institutions'”

“If the Government is to provide the capital, the issue will carry terms and conditions that appropriately reflect the financial commitment being made by the taxpayer. In reaching agreement on capital investment the Government will need to take into account dividend policies and executive compensation practices and will require a full commitment to support lending to small businesses and home buyers.”

“The current expectation is that the guarantee would be issued out of a specifically designated Government-backed English incorporated company.”

“In order to facilitate this process the Government is making available £25bn to be drawn on by these institutions if desired to assist in this process as preference share capital or PIBS and is also willing to assist in the raising of ordinary equity if requested to do so.”

“It is being made available immediately to the eight institutions named above in recognition of their commitment to strengthen their aggregate capital position.”

In summary, there are “expectations” that the government will take shares in the banks “if desired”. Apart from that £200 bullion plus is to be made available subject to vague commitments. The banker’s word is his bond: the government bond is the banker’s This statement makes absolutely clear the subordination of His Majesty’s Government to the banking cartel. Britain is now a fully-fledged kleptocracy which  claims entitlement to all available wealth in the country. The process of the fleecing of the population through inflation, taxation and assorted acts of fraud has now been set in motion, in earnest.

Cailean Bochanan

8th October, 2008

Guardian After consultation with the Bank of England and the Financial Services Authority, the Government announces that it is bringing forward specific and comprehensive measures to ensure the stability of the financial system and to protect ordinary savers, depositors, businesses and borrowers. In summary the proposals announced today are intended to: • Provide sufficient liquidity in the short term; • Make available new capital to UK banks and building societies to strengthen their resources permitting them to restructure their finances, while maintaining their support for the real economy; and • Ensure that the banking system has the funds necessary to maintain lending in the medium term. In these extraordinary market conditions, the Bank of England will take all actions necessary to ensure that the banking system has access to sufficient liquidity. In its provision of short term liquidity the Bank will extend and widen its facilities in whatever way is necessary to ensure the stability of the system. At least £200 billion will be made available to banks under the Special Liquidity Scheme. Until markets stabilise, the Bank will continue to conduct auctions to lend sterling for three months, and also US dollars for one week, against extended collateral. It will review the size and frequency of those operations as necessary. Bank debt that is guaranteed under the Government’s guarantee scheme will be eligible in all of the Bank’s extended-collateral operations. The Bank next week will bring forward its plans for a permanent regime underpinning banking system liquidity, including a Discount Window facility. In addition the Government is establishing a facility, which will make available Tier 1 capital in appropriate form (expected to be preference shares or PIBS) to ‘eligible institutions’. Eligible institutions are UK incorporated banks (including UK subsidiaries of foreign institutions) which have a substantial business in the UK and building societies. However applications are invited for inclusion as an eligible institution from any other UK incorporated bank (including UK subsidiaries of foreign institutions). In reviewing these applications the Government will give due regard to an institution’s role in the UK banking system and the overall economy. Following discussions convened by HM Treasury, the following major UK banks and the largest building society have confirmed their participation in a Government-supported recapitalisation scheme. These institutions comprise: Abbey Barclays HBOS HSBC Bank plc Lloyds TSB Nationwide Building Society Royal Bank of Scotland Standard Chartered These institutions have committed to the Government that they will increase their total Tier 1 capital by £25bn. This is an aggregate increase and individual increases will vary from institution to institution. In order to facilitate this process the Government is making available £25bn to be drawn on by these institutions if desired to assist in this process as preference share capital or PIBS and is also willing to assist in the raising of ordinary equity if requested to do so. The above institutions have committed to the Government that this will be concluded by the end of the year. In addition to this, the Government stands ready to provide an incremental minimum of £25bn of further support for all eligible institutions, in the form of preference shares, PIBS or, at the request of an eligible institution, as assistance to an ordinary equity fund-raising. The amount to be issued per institution will be finalised following detailed discussions. If the Government is to provide the capital, the issue will carry terms and conditions that appropriately reflect the financial commitment being made by the taxpayer. In reaching agreement on capital investment the Government will need to take into account dividend policies and executive compensation practices and will require a full commitment to support lending to small businesses and home buyers. The Government will take decisive action to reopen the market for medium term funding for eligible institutions that raise appropriate amounts of Tier 1 capital. Specifically the Government will make available to eligible institutions for an interim period as agreed and on appropriate commercial terms, a Government guarantee of new short and medium term debt issuance to assist in refinancing maturing, wholesale funding obligations as they fall due. Subject to further discussion with eligible institutions, the proposal envisages the issue of senior unsecured debt instruments of varying terms of up to 36 months, in any of sterling, US dollars or euros. The current expectation is that the guarantee would be issued out of a specifically designated Government-backed English incorporated company. The Government expects the take-up of the guarantee to be of the order of £250bn, and will keep this under review alongside ongoing monitoring of capital positions and lending volumes. To qualify for this support the relevant institution must raise Tier 1 capital by the amount and in the form the Government considers appropriate whether by Government subscription or from other sources. It is being made available immediately to the eight institutions named above in recognition of their commitment to strengthen their aggregate capital position. The Government has informed the European Commission of these proposals and is actively talking to other countries about extending these proposals and has committed to work together with them to strengthen the international system. The Government is moving ahead immediately with the internationally agreed proposal for colleges of supervision and other measures to improve supervision of the system. After discussions with the major economies at the G7 meeting on Friday, the Government and other countries agreed on the need for a meeting at heads of Government level.

One Response to “Massive bailout for British banks fraudulently presented as nationalisation”

  1. smeddum said

    I ve been try to get this meassage on George Galloway on Facebook for an hour.

    ““It was essential the government propped up the banks’ capital base, it had to provide lending to banks that can’t borrow money from others to pay their debts. And we had to have a guarantee of bank debts, if we were not to see a full-scale financial panic and the collapse of the whole debit and credit system. But having put the money in, the government now needs to force the banks to pay the public back in return.”
    George Galloway from the socialist unity link supplied by Joseph.

    This is a total misreading of the situation. It is different to prop up the vast majority of Bank accounts which is needed, for people to feel safe, but on top of that we are taking on board bad debt that cannot be sold because it is basically a fraudulent machinations of hedge funds. We will be waiting forever, meanwhile in the here and now , we are being taken as suckers.

    We need to learn from the american workers who held protests all over the United States.
    http://video.google.com/videosearch?client=safari&rls=en-us&q=bailout+protest&ie=UTF-8&oe=UTF-8&um=1&sa=X&oi=video_result_group&resnum=12&ct=title#

    And these organizers
    https://inthesenewtimes.com/2008/09/29/bail-out-the-people-not-wall-street-bankers/

    It is hard to believe that Galloway has been taken in by this scam on the workers. At least John McDonnell recognizes this as the “nationalization of losses”.

    In other words it is not nationalization at all,but the biggest scam in British history, only comparable to the “glorious revolution” of 1688 .

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

 
%d bloggers like this: