ΒιΆΉΤΌΕΔ

It will be interesting to see how much the RBS share price reacts to the equity issue. A post issue slump could be driven by the banks desire to quickly employ the equity, or just a generally lower return on capital employed by the bank. Has there ever been such a large equity issue in British banking to compare to?

I heard about this and my first thought was wow, I might be able to buy shares for the 1st time in my life. What a pity we can't..

GC

After the last ΒιΆΉΤΌΕΔ blog on the credit crunch, I'm just waiting for the ΒιΆΉΤΌΕΔ's many Daily Mail readers to blame Gordon Brown for RBS having to rebalance its books.

He's Scottish, and so is RBS, so it must be his fault.

Dont forget: What goes up does down and vice versa. These supposed risky assets will accrete value as prices firm in the credit markets. At that point the banks will accrete value onto their balance sheets. This means banks share prices are a bargain at the moment and in the long term will gain as the credit market impairment resolves in the medium to long term.

As a Northern Rock shareholder I've already paid the price for my Board's recklessness - RBS shareholders, welcome to the party - you're getting off much more lightly than I did. And good for the BoE for 'encouraging' the Banks to pass the pain not only to their customers but also their shareholders.

One aspect of our UK economy I haven't heard mentioned in the recent turmoil, is the Private Funding Initiative. There could well be many Government, and local Government projects that are waiting for Private Funds to get things built. Is this money and this type of funding under threat?

I think many people expected something like this to happen. It was clear at the time of the ABN takeover and the year end results that that wasn't the last of the bad news re ABN and write downs from RBS.

I am convinced that the real reason LIBOR is still high is the totally rational view to many that UK banks haven't come clean 100% re their exposure to sub prime in the US; CDO's et al let alone any potential downside from the rapidly falling UK property market.

Many people have concentrated on the domestic private property market i.e. household mortgages but just how exposed are the UK banks to commercial property developers and property owners?

I walked down Leadenhall Street, Fenchurch Street and then Minories on Wednesday afternoon to a meeting and saw several large offices being re developed in totality standing empty.

With 10,000 or is it 20,000 or maybe 40,000, it depends which paper you read, jobs to go in the City this year just who is going to fill all these re developed offices let alone the new buildings going up in the City?

In Birmingham it is just as bad with large numbers of offices to let before the huge developments around Snow Hill get finished. Even the Bull Ring shopping centre seems to have more and more unoccupied or closed units and those open all seem to have sales on.

Expect much more bad news than good from the UK banks this year.

What about the nasties these banks are hiding 'off balance sheet' in structured investment vehicles? Will they be able to smuggle this poison into the Bank of England in exchange for treasury bonds?
Anyone out there know?

I've just accpeted a job at RBS (in IT).... Should I be worried?

Robert preston is the worst presenter I've ever had the misfortune to listen too and watch. Full of hyperbole and exaggeration. The guy is a joke.

Re tax payer exposure - M King said that any B of E loans had to be made on the basis of all risks being borne by the borrowers. That implies a very severe haircut on the collateral, which in turn influences the amount of capital that RBS needs.

I seem to remember making similar comments in your blog when RBS released it's Year end results.

It's still amazing that it's diluting the shares in the company by 25% or so without a fall in the share price. Sir Fred will have to go and the company should be asset stripped.

Looks like a masterstroke by Fred Goodwin to me. All the big UK banks (excepting maybe Lloyds TSB) need to take further writedowns and raise capital.

RBS have scheduled their righst issue first, which means they'll have the pick of the capital.

They might take some short-term criticism for this but in the long-term, being the first UK bank to move on this gives RBS first-mover advantage.

Well done Fred for biting the bullet - I'll be buying RBS shares today.

I have no time at all for RBS or Fred Goodwin.

The bank brings nothing to the Scottish economy other than its direct contribution of jobs etc.. In fact it's done more harm than good because it will happily lend to overseas buyers of Scottish or UK companies. Worse, it has and still will lend to private equity companies and we know all about the value of private equity to an economy don't we Robert...!

I'm actually quite ashamed it still uses the word "Scotland" in its name..

If you are about to be, or are working for a bank - be afraid - very afraid...

This would explain why RBS have decided NOT to reduce the interest rate on my SVR mortgage in line with recent BoE decision to trim rates by a quarter point.

And they had the nerve to send me a letter stating their decision to leave mortgage rates static was because the rate is now competitive with products currently on the market.

There was me thinking RBS failure to lower my SVR from 6.45% to 6.20% was purely down to profiteering, how silly of me.

I find it difficult to believe RBS has voluntarily decided to improve its capital ratios ahead of Gord's bank bail out. A rights issue is tantamount to an admission of failure, may make FG's position untenable. More likely that RBS has no other option but to go for this rights issue.

I am not sure whether we are at the beginning of the end of the credit crisis, but we have certainly reached the end of the beginning. RBS has just done what the other banks will have to do, which is to restore its capital. We should not critisise Sir Fred for taking this action; he should have been critisised far more for taking over ABN Ambro at a time when it was already apparent to many that credit problems were looming.

As it is, the shareholders at RBS will have to stump up the money, which is only right and proper - they are part-owners of the business (even if it's a very small part for most).

akadhyde, you say:

"Dont forget: What goes up does down and vice versa. These supposed risky assets will accrete value as prices firm in the credit markets. At that point the banks will accrete value onto their balance sheets. This means banks share prices are a bargain at the moment and in the long term will gain as the credit market impairment resolves in the medium to long term."

I'm sorry, but there is NO justification for this statement: "What goes up goes down and vice versa"

What meaningless tosh! Of course it doesn't. What goes down MIGHT go up. It might go down further!

"These supposed risky assets will accrete value as prices firm in the credit markets"

Again, this so clearly not a fact. If only there was a tab to click that would hide hot air posts like yours...

I reckon I could write a script that would pick the logical holes in non-posts like yours...

Maybe you would be better going to another forum where you could tell people why the Xbox 360 is better than the Playstation 3 or something equally trivial, we're trying to have a meaningful discussion here...

I would imagine that RBS have decided to go to their shareholders for more capital as they expect their shareholders to top up the capital at less of a cost than the Bank of England.

Also, if they expect their assets to recover in value then they get to keep the upside rather than give some of that away.

I agree with the poster re getting in your request for money first. The banks that wait until their 1st quarter reports to ask shareholders for funds could well find the well is empty by then.

Maybe Sir Fred thinks he can get more money at a cheaper cut in share price from his shareholders next week than he will next month or in Q3.

Surely this degree of recklessness with the investors money constitutes illegal behaviour on the part of the Directors of the company?

Ian

Once upon a time I used to have a business account with RBS. That was transfered out 6 years ago with the banks insistance that a minimum monthly charge was paid on the account in spite of the fact that it had no overdraft facilities and less than 4 transactions a month (one of which was a transfer in). I received no reply to my protestations on this charge and transferred the account (again no communication) to another bank. I wonder how many more liquid business accounts they lost in their persuit of immediate (and in this case) short term profits?

Interestingly the Bank I transferred to performed exactly the same action 18 months ago and it has also lost my business.

I suspect I have a good idea which bank is going to be the next to have a rights issue....

The machine has only just started the wash cycle, and there is a full program yet to run.

I anticipate a serious decline in the U.K housing market, I anticipate fore-closures rising significantly as the general economy slows and (unfortunately) people do lose their jobs, and I expect bank losses to continue to rack up.

The impact of this will be to increase the costs of money, causing corporate adventures to extend no further than the end of their garden path.

All the equity deals that have been racked up over the last 3-4 years are also due to be resolved. If corporate earnings are in decline, then this will restrict their ability to manage their leveraged finances.

In Australia last year Qantas was nearly brought (and subsequently re-mortgaged) by a private equity partnership. But for a bad piece of shareholder brinkmanship the deal would have succeeded. One of the major parties to Airline Partners Association went belly up (last month I believe) during the recent sharemarket turmoil. It was so leveraged that it was shorted into insolvency.

I expect events like this to continue as I believe debt as a wealth creating business practice is finally seen to be the risky venture it is, and that those (and there are alot) that are over-extended, pay the price.

This is probably the first good news we have had for some time.

The reality is begining to dawn on this generation of bankers that they have to resolve the problems of their industry and not wait for a handout from the taxpayer.

I see that the days of the fat bonus are now numbered.

The ABN-Amro takeover was September, and the credit crunch started in June-July!

As pointed out , any observer - let alone professional banker - could see RBS was paying a top-of-the-market price, on the brink of a down-turn.

Gantlord, I don't believe a long rant against another poster constitutes much of a "meaningful discussion".

Actually he is probably right. The mark-downs are so severe because there is little or no market in the securities in question, irrespective as to whether they are good, bad or ugly.

When the markets return - which they will - and it becomes clearer which securities are worth good money there will be some massive write-backs. In the meantime we and the markets have to guess who are holding the real duds.

If you think they are all duds please tell us on what evidence before shooting your mouth off at someone who is probably as in the dark as the rest of us, including you.

Firstly, GantLord, wind your neck in. This blog is designed to allow anybody post their views on the credit crunch, the housing market, and any other topic listed. Just because somebody's opinion or thoughts do not match yours, does not mean that you should verbally attack them, or their opinions.
Why not offer your opinion, as opposed to reserving comment solely to ridicule others?

More importantly, and back to the topic, I grant RBS that this is a brave move, if it transpires as is being assumed, but I would rather wait and see their official announcement on further write downs and share issue before hailing this as the 'first step to recovery'.
Granted, there needed to be one of the big 5 to step forward first, and this places an enormous amount of pressure on Barclays et al to follow suit, but how can we be sure that it will be a full show of all the dirty laundry? The answer is we can't, and other banks will see it the same way. There is an unavoidable air of suspicious undertone, perpetuated by the torrent of risk still lying dormant on 'off-sheet' investment vehicles.

Although I genuinely praise the brave first step, I feel that it will not carry the desired impact on the dishonesty and distrust between banks, even if others follow suit, and the undertones will remain.

Even the suggested 'bail out' by the BoE goes ahead next week, it will be a case of closing the stable door after the horse has bolted. The mindset is strong enough to survive any attempts at shaking it, and bribing banks to trust each other will just not work...

Morebalanceplease, totally agree with you.

If, as expected, RBS "purge" themselves next week and disclose full details of their potential losses due to poor lending criteria, then it is just another example of inefficient management - remember it was the antics of the Northern (C)Rock Executive who brought that Bank into disrepute, not the Government, BoE or the FSA.

After years of gloating about profits, the decisions of "Fred the Shred" have now lead RBS to this humiliating position. Fred Goodwin has made thousands redundant due to their inability to keep up with his management style. He should now be the next recipient of a P45 but no doubt his failures will be rewarded with a "golden handshake"!

RBS now needs to get back to banking basics with responsible and controlled lending and should take the lead in restoring credibility to the UK banking system

Robert Preston - like most of the ΒιΆΉΤΌΕΔ at the moment -reports everything in the most downbeat way - there is clearly an agenda to talk up a recession. Nowhere in the latest blog does it comment on RBS's Β£9Bn+ 2007 profits (even with a large sub-prime write off). It gives the impression RBS is in difficulty.
I am sure that the banks will all go to the market to raise capital like this - which is not a sign of crisis - so don't imply it by reporting it like this.
We have high employment, low interest rates and the economy is generally healthy (I notice the ΒιΆΉΤΌΕΔ didn't report the drop in the unemployment numbers announced recently). The mortgage market here is not the same as the US and whilst there will be some people struggling because they have over borrowed, the ΒιΆΉΤΌΕΔ should stop giving the impression that meltdown is occurring as it's not.
I believe the ΒιΆΉΤΌΕΔ's agenda (and that of much of the media) is to get rid of Gordon Brown at the next election. That will already happen (he's virtually done that himself anyway), so dont make the whole country suffer by talking us into a recession in the meantime.

CrumberNuncher, and I with you!

If anyone wants a more expert opinion on the matter, I have just found the text of a speech delivered yesterday by the BoE's chief economist in which he says;

"At root, the problem is one of a lack of trust in a context of incomplete information about the scale and distribution of the likely losses associated with mortgages, other loans and derivative products. As the experience of Japan during its β€˜lost decade’ attests, a return to normality in the banking
sector requires both credible revelation of those losses, as well as injections of fresh capital. We are well down the revelation path, at least in regard to losses associated with the US sub-prime mortgage securities market. The IMF has estimated these at around $450 billion, evaluated at current market values (alternative assumptions can generate slightly different figures), although
reasonable projections of default rates suggest that the actual losses if the assets are held to maturity will be considerably smaller."

Whilst the cynics on this board (most) might question the source, the whole speech is a good insight into the way the BoE is looking at the credit crunch, inflation and house prices. Worth a read.

In actual fact I think the BoE bailout might work OK if they are effectively swapping collateral with uncertain worth for collateral with certain worth and enabling that to be "passed around". What would be unforgiveable, though, is if they did not create robust review procedures to ensure that the collateral they accept is as good as they could reasonably expect.

Much oprobrium has been heaped onto the banks some with more justifcation maybe. The point is, the credit markets are impaired and therefore many valuations are mark to model for some valuations (IASB/FAS 157 Type 3) and for the rest the market is poor.

Remember we are not speaking of "write offs" but "write downs". And, given the state of certain aspects of the credit markets, it is logical to state that liquidity will return - at some point. At that point, these "Type 3" assets will become at least "Type 2" and value will accrete. Once sufficient captial has returned the banks will do what the corporate sector has been doing as a whole for the past 10 years until the imapirment in the credit markets: buying back equity. Such a cycle is a natural consequence of when debt is cheaper than equity. So one can look at it simply in terms of a rebalancing - more equity funding when the debt martkets are too epxensive or impaired. But only as one half of a cycle.

And Mr. Peston: the issue is not liquidity, it is solvency. Somewhere in RBS a dim view has been taken of likely prospective solvency margins. That could be seen as bell weather that further rightdowns are likely in the shorter to medium terms. But my point remains. Sooner or later there will be accretions. Sooner or later there will be equity buy backs. It's the way it goes.

And Mr. Gantlord: you are understandably upset but I am hopeful my comments allude you a firmer grasp/understanding.

Dear Mr Peston,

one day when the subject of the credit crunch and banks has run it's course, or perhaps sooner - can you investigate how Eurozone inflation is calculated and compare it to the method it is calculated for the British economy.

I think it would make for a fascinating article.

I think this is the beginning of the end , from a high finance perspective , this not to say house prices won't keep falling , or jobs won't be lost , but the fact that bankers realise they need to be pro active in getting their companies working again .
I for one will start to look at property again in the next few months in terms of purchase with a view for completions in Sept .

As much as RBS and others come out everynow and then and do a wobbly in front of us, what i would like to see is far far more supporting role by these banks towards their British customers. I hope the sub-prime losses do not find a way of being recovered slowly over time , via funny charges and schemes, by us the consumers - who is going to guarantee that?????
Accountability must be a priority from now on, i wish not to hear of another event , in ourtime, where a flexible net of risk calculations is seen to be Ok eventhough there are gaping holes taking place in its centre as every bank tugs on the edge of it, thinking there is tension folks - keep tugging!!!

Mr Akadhyde...
Nice response sir!

Morebalanceplease,
I wish I had your optimism. Unfortunately, I see banks expanding their margins at the expense of their customer base (the monthly charge for my current bank account has just been increased by 10%!), and then passing liabilities to all and sundry. If the opportunity presents itself to offload their mortgage backed assets in exchange for government securities, it increases their solvency in ratio to liabilities, but the trust issue remains. The BoE proposal will not be able to absorb all liabilities (their Β£13billion auction was again 4 times oversubscribed!) and these mortgage backed assets will remain hidden.

Nobody at this juncture has any finite knowledge of exactly how much is at stake, particularly 'off balance sheet', and more liquidity will not fill in the blanks and give us the answer that we all need. Banks will still be exceptionally wary of each other's liabilities, and as such, will continue to tightly control their lending criteria between themselves, and to customers.

The BoE's venture is a positive step, but is a mere drop in the ocean. The bank's will appreciate it in the short-term, but until the trust is restored, the market will remain log-jammed.

The only thing that can restore trust is a prolonged period of incident free trading, which hopefully RBS are trying to secure for their own medium term, and will issue a true to life write-down of all their mortgage backed liabilities. If others follow suit, trust will slowly be restored, but without it, neither the BoE or the Fed have enough in their coffers to make a big enough dent in $1trillion...

The biggest issue will remain, how honest are the write downs?

Honesty is the best policy... and although injecting liquidity at the expense of liability will help, it cannot possibly solve the problem. The problem is mistrust and dishonesty, both are pertuating the other in a vicious circle.

The sooner banks come clean, the sooner the crunch will dissolve... The quicker that happens, the lighter the long-term pinch for Joe Public.

I wonder how much of the new money raised by the rights issue will have been borrowed from other banks. Or even borrowed from RBS for that matter.

Does anyone apart from soveriegn wealth funds actually have and use real capital anymore?

How can RBS determine whether the money they recieve is capital or money borrowed in the interim whilst bonds etc are liquidated?

Do they care? Does it matter?

i had an argument (discussion) with my bank this morning as they had lowered the interest rate on my deposit account without telling me. The "banker" said well it is because the bank rate was lowered, i said what has the bank rate got to do with your interest rate, you need liquidity so surely you need to putting up savers rates. he then said to me well the government makes us lower our rates when the BOE rate goes down.i was (almost) speechless. I gave him 24 hours to restore my missing interest or i was closing the account, it took him only one hour to credit my account.
The banks are just using the current problems to increase their margins, they lower the savings rates without adjusting the lending rates. i have bank shares (looking pretty ugly at the moment so i dont think i will be taking up RBS offer to buy even more.)
I notice that all these "write downs" are not "write offs" so do not be surprised when the time comes round for the annual bonuses they will suddenly find some value in these assets!

For the last ten years, and more, shadow banking has grown exponentially. Whilst times have been good (for some) this did not seem to matter, but now the system is in crisis, people are realizing that they have no control over the now manacing shadow.

These off balance sheet (how can something really be off balance sheet anyway!) vehicles are full to overflowing with all kinds of toxic financial waste.

The obvious fiction that these entities are seperate from the institutions that created them, which notion worked while things were 'booming', has been shown for the fraud that it always was.

As long as the invisible system is in crisis then the 'real' system will be in crisis also. Only HONESTY can overcome this problem, which, given the corrent obfuscations of the financial institutions, may now take years to resolve.

I think all the banks are really struggling. A rather inarticulate person from the Co-Op bank rang me the other night blathering on about the credit crunch and basically asking me to reduce my credit limit. I inquired if this meant they were overexposed in terms of credit limits with their credit cards and he said 'I wouldn't exactly put it like that'. In fairness the word overexposed was probably beyond him so he couldn't put it like that but that was the jist of it. Has anyone else had a similar call from their credit card company?

So huge losses after all, not the profits that were reported last year. Top management members got their huge bonuses for performance. Thousands are now to made redundant, many who had nothing to do with the creation of this bubble. Plenty of heads should roll and bonuses returned to shareholders. It won't happen of course - it never does. The losses are covered, via the Central Banks, and the bill arrives later in the form of higher inflation.

Once the liquidity and solvency crises are solved, the savers and the taxpayers will pay the bill. Moral hazard is the problem for the family with negative equity. The Masters of the Universe will move on again - from the DotCom bubble to the subprime mortgage fiasco to next nice little earner. It's a wonderful life at the top, particularly if you have a golden parachute strapped to your back

Sounds to me like the beginnign of the end hopefully; the ''come clean or we wont back you'' stance of the Bank of England perhaps means there will be a big and final clear out and things will stabalise.

More bad news for sure, as each bank joins the club; but lets hope this will start bringing much needed confidence back.

Seems you got back in the nick of time Robert!

In theory things will pick up over time, in practise there's still a lot of toxic waste to be shaken out.

The sub-prime debacle isn't going to go away quietly until all (or at least most) of the skeletons are out of the closet. Lending money against an overvalued asset to someone with no means of repaying it is asking for trouble, and all the financial wizardry in the world doesn't turn a non-performing loan into a performing loan.

To those that think things will get better overnight, I think the phrase is "don't try to catch a falling knife". Good luck if you choose your own path.

Sorry but I don't believe the problems in the UK banking industry can be solved so simply as this.

For a start, this $10B presumably covers losses on the US sub-prime market. As house prices tumble over here there will be a new tranche of sub-primers and bankrupts to contend with.

Also, I am wondering where all this Β£10B will actually come from. No foreigners should want to invest in anything to do with sterling, and nobody in the UK has any cash.

Ultimately there is just not enough money to go around. Something like 2 trillion pounds has to be written off eventually - this is far more than shareholders in all the banks, or the BOE can ever come up with.

I trust that RBS's shareholders appreciate the irony of business people in pin stripe suits rattling begging bowls in their faces. What adds to the irony is that their problem has been made worse by their outlay to buy a foreign bank. I hope that bank managers will see the funny side when customers approach them for capital because they are short after buying Rolls Royces.

The comment attacking Fred Goodwin is absurd. He's shown himself to be an outstanding leader and as with today's news can take decisive action at a critical time.

The credit crisis has hit all global banks. What matters is how you respond. As a shareholder I know there's been some pain but it's been spread across the market and this news shows there light at the end of the tunnel.

Also the RBS management have shown themselves to be not only prudent but
decisive.

We all know there are problems on the high street, just look at their website which is still pushing mortages - when Northern Rock was in trouble all they wanted was deposits.

As a shareholder in RBS I am as peeved as anyone at the discount in their shares in the last few months. I can be forgiven for thinking a rights issue adds insult to injury. But the reality is that this is a global problem that needs solutions not scapegoats. What we are seeing today is maybe the beginning of the end of the credit crunch.

Fred Goodwin's leadership and judgement has been critical to the banks success for years. So I wouldn't doubt him now.

It would be the simplest thing in the world to shout for blood as RBS go to their investors for more capital. It would be easy and it would maybe be satisfying but it would be short termist.

In reality if you briefed headhunters on the sort of person you would need to lead a Group like RBS through the market crunch and their integration of ABN they would come back with one name - Fred Goodwin.

He has never sought to win a popularity contest but he has made a very, very good job of everything he has set out to do.

Wykhamist, my small contribution to the Β£10bn will come from my new government guaranteed Northern Rock deposit account. That's my way of balancing risk and reward, and I dare say most RBoS shareholders will do likewise. (With plenty of interest from Sovereign Wealth Funds as a backstop. They have plenty of money).

Could you give me a breakdown of the Β£2 trillion you think will need to be written off?

There is a total of Β£1.2 trillion UK mortgage debt secured against Β£3.5 trillion of property assets. Personally I believe the BoE and the banks will pull through. (My loss if they don't).

Do you know how much the UK banks wrote off in the last property downturn?

Robert, RBS bought ABN Amro, not just ABN which merged in the early 1990 with Amro!

Onto more serious issues, RBS was in line with other large banks with the methodology it used to mark to market it exposure. Any further write downs would be because of further deterioration in the market, unless you believe that Sir Fred and the board misled the market and the shareholders, not to mention the auditors? The North American banks were embroiled in the sub prime markets to a much larger extent than the UK Banks. Furthermore, the US housing market has had a more sever downturn to the UK market, in which RBS' main exposure would come from. This potentially explains the more extreme write downs by the US Banks.

To emphasise what others have said, Sir Fred has done an excellent job so far and there is no reason to doubt his judgement of the ABN Amro takeover. There are arguments about the timing but this takeover could be viewed as the final piece in the RBS jigsaw.

However, Barclays shareholders must be breathing a sigh of relief. If they are indeed in a similar capital position to RBS, despite recent capital injections from Asia, then the fact they lost the race for ABN Amro is very interesting. Although a large part of the offering was in shares, the cash element of the purchase and cash requirements to integrate would push Barclays into an even worse position. In this case, maybe we should be questioning the leadership of those in Barclays?

My view on the Barclays vs RBS thing (feel free to shoot down in flames!)

Throughout last year and this year, Barclays has always announced its results and writedowns etc about a week before RBS announcements.

I think that RBS, on hearing the Barclays results have always leveled their writedowns at about the same monetary value (you must admit, the numbers have been coincidentally similar to day). And as the level of writedowns are so uncertain (mark to market, mark to make-believe), thats easy enough to do.

Its now caught up with them, as they are being forced to admit that writedowns should have been SO much higher and are going tail between legs.

The RBS writedowns, especially the ABN part of them (baring in mind which parts of ABN that RBS ended up with - Wholesale), always looked VERY optimistic considering the size of the bank

All the banks who have incurred these huge losses should be held to account just as they have been in the USA.

In any other business, heads would roll for this level of incompetence.

We are seeing the reintroduction of state housing!
Mrs T sold off Britain's state housing -
The banks lent huge amounts of money for people to buy those houses as the first generation owners moved on.
The people they lent the money to are now struggling to pay the banks and lo-the government takes on those mortgages as collateral to save those banks.
Thus the state once again owns the housing stock!!
Why doesn't the government simply hand those mortgage deeds back to local authorities, let the Banks go broke and thus give back the local authorities their ability to give people what was intended when those houses were built
-affordable, decent housing without Rachman landlords!
Or is that just too easy:-)

Of course, anyone with a Pension plan, is indirectly a Shareholder.
And nearly every Pension Fund has invested some of our money in the British Banks.
So, of course most of the Rights Issue Shares will be bought by Pension Funds.

If this reduces the performance of the Fund then ultimately it will be us who suffer, in terms of lower Pension payouts.

Something to think about.

Post 52
If House prices fall, fewer houses will be built.
There are already insufficient houses on the market.
The people who have money will be able to buy the best of these.

The rest of us, will end up renting and possibly sharing a rented house or flat.

After all, in that situation, not many people will be able to have a mortgage.

Perhaps, the Government should build great tower blocks like they did in the sixties to house the burgeoning populace.

Would you like to live in one of those ?