The Crisis that dares not speak its name.

The UK's new Banking Act, which gives greater powers of intervention to the Bank of England, is coming into force.
The act enables the Bank to intervene more quickly to help troubled banks and protect investors.
The Bank will be able to give hidden support to stricken banks, with the aim of maintaining financial stability.
However, critics of the act say it throws a cloak of secrecy around the banking world, which could be detrimental for consumers.
The act allows certain decisions to be exempt from disclosure under Freedom of Information laws.

Source

Business Secretary Lord Mandelson warned against "feeding rumours" and said such comments could in themselves cause damage to the UK car industry.
Culture Secretary Andy Burnham said the union claims were "irresponsible".
But Unite insists more than 6,000 UK jobs are at risk and it would have been irresponsible not to have spoken up.

Source

It would appear that the government of U.K. has a new and interesting way of dealing with the economic cluster-bomb upon us currently,

"Don't say anything, it will all go away!"

Brilliant. Sheer genius. I wish I'd though of this years ago; perhaps all my domiciled pachyderms would have conveniently disappeared leaving me in blissful ignorance that in fact anything was wrong.

So, factories are going to close, but don't say that because they actually will.

Don't say a bank is in trouble, because it will get in trouble.

It would appear that our government has credited us mere mortals with powers only reserved for Hindu deities and is intent we do not use them.

Now, can you say,



R-e-v-o-l-u-t-i-o-n...

All what they are trying to do is to save the banks from stupid people!

Northern rock had done mistakes, but it was the media and the bankrun that killed it!
If I remember correctly 30 THOUSAND pounds (per saver) are automatically government backed. Did you see those brainless sheeple queueing to 'save their money'? Are you trying to tell me, that they all had over 30k?? And yet they brought northern rock down in the end.

So I fully agree with those figures not being opened up to the media and the sheeple. It's a shame for the educated, but the professionals still know what's going on.





EDIT to add, sry for rant

[edit on 21-2-2009 by Aldolas]

Just tried to start a discussion on this, not realizing this thread was on the same subject.

I've asked the mods to close it.

Here's my take:

Foolishness or firm action?


Source

My initial reaction is: the stock market isn't going to like this one bit. On reflection the idea has merit, as long as the intervention from the Bank of England is effective.

It all comes down to trust in the BoE.

Here's a clear positive:

If a bank collapses, the act allows for savers to receive compensation within a week.

But hang on: what if savers then redeposit their money in another bank that has gone/is going belly-up? Presumably they'll get it back in a week and then deposit it somewhere else. But hang on...

Note:

Transferring customers from a failed bank to another should also now be easier.

Substitute "one" for "a" and the whole thing becomes farcical.

So, the act allows certain decisions to be exempt from the Freedom of Information Act.

What can you ask for?
You can ask for any information at all - but some information might be withheld to protect various interests which are allowed for by the Act. If this is case, the public authority must tell you why they have withheld information.

Directgov

So, as I see it, even before this current act the Bank of England could still legitimately withhold information to protect various interests. The only difference is that now they don't have to tell you why.

The act also states the organisation has a month to answer. Even a day's trading can be along time in economics, I can't see how releasing information 28 days after an action has been taken is going to have any detrimental effect, unless of course things are really in the toilet.

Sounds like an British version of,

"Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

This isn't about banks exclusively. Apparently we're also not to know how secure our own jobs are. I think if you asked most employees if they would like to know how secure their jobs were their answer would be unanimous.

Europe is truly a MESS.....appears much worse than the U.S

some of the big banks there can not be nationalized by the gov't (they are too big) and it appears some country's would need to act in their neighboring country's best interest at a time when they are hurting....at least in the U.s we could nationalize the banks should they be insolvent...(and so long as we over pay for the toxic debt) the foreign country's bond holders who we likely will bail out.. should still be wililng to finance our huge deficit and keep mortgage rates low

i wonder how much a True Collapse in Europe Could further bring down the U.S

In the U.S it looks like the economy is re-setting to a lower level of activity....due to a lack of Extra unsustainable credit .....because a large engine for credit creation called securitization grew during this decade and then collapsed in Aug of 07...and in doing so credit from this "new engine" has collapsed....the other engine......the tried and true bank lending has not been hit that bad yet.....it's just a large period of pain is still likely from the self reinforcing spiral of rising foreclosuere's and falling consumer spending and rising unemployment.....