Saturday, 15 August 2009

B&B - huge losses for the taxpayer

I feel nauseous every time I hear the name "Bradford & Bingley". It is state-owned and it is, financially speaking, a stinking heap of toxic crap. It is not something that I can easily ignore since this mess now firmly belongs to UK taxpayers.

It has just announced a further £160 million of losses. Moreover, 40 percent of its mortgage book is now mired in negative equity. That is what you get when 60 percent of your loans were extended to buy-to-let and 20 per cent were self-certified loans.

However, I suspect that the B&B isn't something that can be safely filed away. It is not something that can be explained away as a past mistake. It As we move away from the terrifying events of September 2008, those commitments to tighten up banking sector supervision are being quietly watered down. Furthermore,We have yet to see a major overhaul of the FSA.

In short, five or ten years down the line, we could easily see another B&B turn up at the doorstep of her majesty's treasury, demanding a bailout.


Jim Kemeny said...

Agree entirely. Have you seen this?

mike said...

And why couldn't B&B have been left to go bust? Savers could have got 50K each, mortgage payers would have been forced to go elsewhere (or sell up) and that would have been the end if it. Instead we have this 160m+ bill. It's time for answers.

Marchamont Needham said...

Their HQ building in Bingley is well up in the running for "the ugliest building in the UK".

I would happily have paid 160m to see it dynamited.