Scottish Independence – Sterling and the Bank of Last Resort – Ignore the Reckless Ranting of Desperate Unionist Politicians – This is the Definitive Position

 

 

 

 

 

 

 

When Northern Rock, RBS, HBOS  and other UK banking institutions failed, the UK Government belatedly stepped in with a financial bailout. But with Scotland independent, could Scotland expect English taxpayers to stand behind a failing Scottish institution?

George Osborne and his “Better Together” lot repeatedly broadcast, in the course of the referendum campaign, that in the event of a Yes vote the Bank of England would not allow Scotland to use sterling and would not act as the lender of last resort should Scotland experience financial difficulties in the future.

In the course of a “face to face” meeting on National television in Scotland Alistair Darling accepted Scotland had every right to use sterling and this would not need the authority of the Bank of England.

But he repeated the “mantra of fear” that the Bank of England would not provide bank of last resort support. But in reality Osborne and Darling were only intent on providing substance to their mendacious propaganda since they were well aware that provision of financial support to Scotland, if requested would not be withheld.

Precedence for such support had been established, at the time of the World financial crisis in 2008 when, the UK loaned Ireland £20 Billion, (at a knock-down rate of interest). In a statement, seeking understanding of his decision to, “prop up” the Irish economy George Osborne, UK Chancellor said, “Ireland is our very closest economic neighbour and we must assist.”

 

 

Last week,, said Labour “massively overpaid”, while

 

 

Bank of England officials and Grant Shapps (Conservative Party chairman)  claimed the UK Chancellor had botched the banking bailout and the Bank of England would never match the £10bn profit (out of the crisis) made in the US.

Sir Mervyn King, Governor of the Bank of England, said  “The sad truth is, in 2008, the idea of focusing efforts on recapitalising the banking system was a UK idea. We got there first but, like many UK ideas, the Americans developed it faster and better.”

The US forced all major banks to take State money, buying the stakes at about half their book value. The UK paid roughly twice the US rate, taking positions in the three worst-affected banks – RBS, Lloyds and HBOS.

A Treasury source said: “The Government judged that without a taxpayer injection the banks would have collapsed, with consequences for financial stability and people’s money, and it judged that was an unacceptable risk to take. The Government was bailing out UK banks with global operations.  Ireland was one international business, but not the only one.”

 

 

 

 

80% of the peak losses at RBS stemmed from its London-based businesses. The financial crisis shows us that bailing out the banks – like reinsurance – is a risk that is global in nature and shared between countries, and any tales about Scotland having to accept the burden all by itself are pure myth.

 

 

 

 

 

Bankers know perfectly well how the system works.

When Sir Philip Hampton, chairman of RBS gave evidence to the House of Lords in November 2012, he was quite clear:

“We have used many central banks as a lender of last resort for the many operations that we have in the many jurisdictions in which we operate. That is a key part of what central banks do in the jurisdictions that they control. Just because there might be an independent Scottish Government does not mean that all our lender of last resort facilities would disappear; they would be continued.”

This works when a country has a banking and a fiscal union, as the UK does.  And is supportive of the SNP’s plan for  “two governments one central bank” in the event of a Yes vote in the referendum.

The Bank of England would provide “bank of last resort” support to Scotland, if necessary. But should difficulties arise with the foregoing arrangements the final fall-back position (assuming both  rUK and Scotland retained membership of the EU) would be to seek assistance from their EU partners. Successful requests simply require a majority vote in favour, but the decision is binding on all EU members.

Provision of financial support would not be breaking new ground since this is exactly what occurred  when Ireland, Spain, Portugal and Greece were extended bank of last resort backing from the EU and the Bank of England donated its share.

 

 

 

 

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Gordon Brown Launches in Scotland

Gordon Brown Launches in Scotland

His speech on pensions was meant to re-launch the Better Together campaign as a positive movement, but his contribution simply continued Better Together’s negativity and scaremongering, as well as being repetitive and lacking in credibility.

The former Labour Prime Minister simply repeated claims made by former UK Government minister Michael Moore in September 2011 and by Tory Leader Ruth Davidson in February 2012. It is also surprising that Brown was chosen to speak about pensions, given his own record on pensions as Chancellor and Prime Minister.

The 1979 Conservative Government reduced the long term value of the State Pension when it abolished the link between the State Pension and earnings.

As Chancellor and then Prime Minister, Gordon Brown did not restore this link.

Brown introduced the notorious “pension stealth tax” which reduced the value of retirement funds by at least £100 billion.

And despite stating the Labour Government was helping the poorest pensioners, as Chancellor, Brown increased the state pension by just 75p in 2000.

With a Yes vote pensions will continue to be paid in full and on time, just as they are now. Scotland is also better placed to afford our pension costs than the UK as a whole.

Expenditure on social protection, which includes pensions, has been lower in Scotland than the UK over the past five years. In all 42% of Scottish tax revenues were spent on social protection in 2012-13, in comparison to 43% for the UK as a whole.

Gordon Brown and the Labour Party – Friends Of Scottish Pensioners – Not on Your Nellie!!!!

 

 

 

 

Gordon Brown: Sentenced Scottish pensioners to ever decreasing pensions in refusing to restore the link between the State pension and earnings.

 

Gordon Brown : Removed £5 billion, (recurring annually) from pension funds.

 

Gordon Brown: Created the obnoxious, stealth tax decimating the value of retirement funds by £100 billion.

 

Gordon Brown: Flogged 60% of the UK gold reserve for a pittance.

 

Gordon Brown: Increased pensions by a stupendous £0.75p in 2000.

 

Gordon Brown: Bailed out the banks in 2008 purchasing shares at 3 times the going rate.  The R.B.S. bailout cost the UK taxpayer £45 Billion. But if Alistair Darling and Sir Nicholas MacPherson had acted timeously the bailout would have cost the taxpayer  £15 Billion.

 

Gordon Brown: Spouts about the excellent work of Westminster with an attendance record of less than 13%.

 

Gordon Brown: Voted in the Commons on Scottish matters less than 13% of the time.

 

 

 

 

 

 

Lender of Last Resort – A Timely Reminder For the Future

 

 

Lender of Last resort

Bankers know perfectly well how the system works. When Sir Philip Hampton, chairman of RBS gave evidence to the House of Lords in November 2012, he was quite clear:

“We have used many central banks as a lender of last resort for the many operations that we have in the many jurisdictions in which we operate. That is a key part of what central banks do in the jurisdictions that they control. Just because there might be an independent Scottish Government does not mean that all our lender of last resort facilities would disappear; they would be continued.”

 

 

 

 

Carousel Banking RBS Losses

Let’s get back to 2007.

At the time RBS, HBOS and others were in danger of failing, the UK Treasury finally stepped in, (after much dithering on the part of Alistair Darling et.al.) with some financial assistance.

The main package of financial support, had been provided, to the Bank, (at least 3 weeks before) by the USA.

80% of losses in the market, were attributed to RBS London based business operations.

Lets look forward, (to an independent Scotland)

Westminster politicians, (in a rather purile fashion) continue to broadcast that an independent Scotland, should not expect English taxpayers to stand behind failing Scottish banking institutions.

A reminder; 80% of losses at RBS in 2007 were attributed to (Carousel Banking) in London. That would be one liability removed.

All banking crisis, (in a world free trade market) are global and losses will always be shared between countries. Myths, (mischeviously circulated by Westminster politicians) are pure piffle.

In a banking crisis banks will call upon many Central Banks as a lender of last resort. That is the over-riding role of Central Banks in the jurisdictions that they have control over. e.g. 80% of losses attributed to London in 2007 would still be the responsibility of a UK government.

Don’t let them scare you into submission. Vote, “yes” to independence

Student Loans Universities

They need an “overhaul” BBC propaganda says, Public Sector sells off like this to the City is great but bankrupt universities in England will be able to;

1. Buy a share of the loan book, not all of it. They could also be paid for their services in part in debt.

2. Even a strong university like Leeds would go from having debt equivalent to about 38% of its current annual income to well over 100% within three years.

3. The idea is still in early stages and would also require careful design to avoid unwanted consequences – for example, the easiest way to cut loan defaults would be to, ADMIT FEWER WOMEN AND STUDENTS FROM POORER FAMILIES, since both groups tend to have lower lifetime earnings.

4. But if universities were to share some risk, the Treasury might allow them to charge more.

The student loan system is in crisis. A significant number are not being paid off, (£billions) and they will need to be treated in the same way as sub-prime assets. This means some financial body will take the outstanding loans on and pursue ex-students for the money +interest on the default.

http://www.bbc.co.uk/news/education-28528824

Vote Yes Scotland to keep us out of the madhouse.

Fracking

Fracking. It appears licenses have been awarded and drilling has begun in Scotland. All new to me. Very worrying.
Find out if your home is likely to be affected check the excellent site which provides full details of fracking activity in the UK.
http://frack-off.org.uk/locations/
Also check out the experiences of members of the public in the USA
http://rt.com/usa/154408-fracking-trial-family-sued/
http://rt.com/usa/gag-order-children-fracking-settlement-982/
http://rt.com/usa/oklahoma-earthquake-record-fracking-961/
http://rt.com/usa/barge-shipments-fracking-waste-297/
http://rt.com/usa/california-fine-vintage-fracking-727/
http://rt.com/usa/study-methane-fracking-water-280/
http://rt.com/usa/fracking-rules-gas-oil-443/
Also check out the views of the Chief Exec of Exxon
http://rt.com/usa/exxon-ceo-fracking-lawsuit-180/ Not in my backyard. Exxon Gas chief exec