Northern Rock is the banking failure that just will not go away. Today, the Office of National Statistics announced that the growing pile of guarantees will have to be placed on the government accounts.
So far, the government is down a cool £90 billion. Furthermore, this newly acquired liability has pushed government debt up by 6.7 percent of GDP, giving a total public sector net debt of about 44.4 percent.
There is a lesson here for the government, that is, if it cares to pay attention. Failed banks are enormously expensive. So it would be a good idea to limit the reckless risk taking behaviour with a good stern dose of effective supervision.
The banks need to be reined in, and kept on a tight leash. With house prices slipping and many banks and building societies looking decidedly pasty, it might be a good idea to get ahead of the game push the FSA into doing some work.
2 comments:
Meanwhile non-dom foreigners continue to live in the UK without paying tax on their worldwide assets--no wonder the luxury housing sector continues to increase in value exponentially. The UK has become a tax haven for the world's rich, and in so doing has made the country unaffordable for the average citizen. Not only do we welcome all EU citizens here--and they can go on Social Security, get free housing, medical, etc.--we are also a very nice holiday camp for hundreds of thousands of refugees (who get preference over native Brits when it comes to social housing). So the average man is sandwiched between the very rich on one hand, and the needy on the other. Result? Housing is impossible. Prices for food and basics are soaring. And the government pats itself on the back for its philanthropic attitude. And we can't even produce a bona fide property crash, it seems. The foreigners and low, low interest rates will hold up the bubble. It stinks to very heaven.
turtlefoot,
I can only agree with you. In fact, I have been thinking of doing a post on the non-dom problem.
Alice
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