UK Politics
General Discussion for politics in the UK.
Please don't post to both !uk_politics@feddit.uk and !unitedkingdom@feddit.uk .
Pick the most appropriate, and put it there.
Posts should be related to UK-centric politics, and should be either a link to a reputable news source for news, or a text post on this community.
Opinion pieces are also allowed, provided they are not misleading/misrepresented/drivel, and have proper sources.
If you think "reputable news source" needs some definition, by all means start a meta thread. (These things should be publicly discussed)
Posts should be manually submitted, not by bot. Link titles should not be editorialised.
Disappointing comments will generally be left to fester in ratio, outright horrible comments will be removed.
Message the mods if you feel something really should be removed, or if a user seems to have a pattern of awful comments.
!ukpolitics@lemm.ee appears to have vanished! We can still see cached content from this link, but goodbye I guess! :'(
view the rest of the comments
We supposedly have $250k, but the FDIC has 1% of the money they say they cover. A very few big banks or many small banks fail and the FDIC is broke and the money would have to be printed by the fed and cause hyperinflation. I bet your regulator has only a small percent too.
Hyperinflation doesn't happen that quick.
Not all banks go pop at once. Usually when banks go bust in UK, the gov steps in, recovers them and sells after. Many banks are perceived as too big to fail.
I don't know a whole hell of a lot about the UK, so I will speak to the US. When the Federal Reserve raised interest rates, it has put tons of pressure on the commercial real estate office sector and has put serious pressure on most all of the regional banks. Your JP Morgan and your Wells Fargo are decently alright. But your local town banks are absolutely hurting. And enough of those very well could go bust to cause major issues. JP Morgan going down would be slicing an artery, but all these little banks going down would be death by a thousand cuts. You end up dying either way. It's just how quick does it happen?
Most of the smaller banks in the UK are gone. We don't have a lot of "town banks".
The risks to the US may be very different from here. Either that or you could be guilty of catastrophising.
From what I've heard, we have about 4,000 banks and so most of those are going to be smaller regional banks. We only have a few big ones that take up most of the news cycle.
Tell me you don't have a clue without telling me.
Obviously they can print it and give everybody their 250,000 back or whatever and if they do such then we will have hyperinflation like nobody's business and the 250k you get back will be not worth the paper it's printed on so to speak it won't be worth shit
Likely. It's like any insurance. Our FDA has a legal requirement as to the % the insurer must have available. It is well below 100% for any company.
Assurance like this as you say. The fact that governments with their own currency has the quantitive easing option means they can be a little more flexible than companies. But the cost is as described.
1995 was the last time we had to do it. With Baring's Bank, and it cost around 800m at the time.
But just like the US in 2008. Our government moved to use the same quantitive easing to bail out the banks rather than have to pay this way.
The issue is not so much the % of assets vs coverage. But how many banks when looked at under the marketing are owned by the same company. And even with so few companies. They are all taking the same risks.
So when a bank goes. Assurance like our FSCS and your FDIC only cover individual/personal accounts. Investment or company accounts do not have this protection.
So the huge mergers the last 30 to 40 years of banking have allowed. Means any one bank actually means millions of customers, rather than having the risk divided as the systems were set up for. And even if the company paid out those customers in such huge numbers. The quantitive easing would like be equalled by the actual damage to investment and company fiscal availability.
So econs are forced to do as both the US and UK did in 2008 rather than let the banks fail. Its just a mess. And i seems like the banks are just taking it for granted and refusing to learn.