News from Labour Matters

Tory plans to take banks into BoE administration wrongheaded

Snowflake5 uses LabourHome’s blogging platform to highlight a spectacular Conservative u-turn about the merits of nationalisation of troubled banks such as Bradford & Bingley:

“As recently as his Newsnight interview at his party conference, Osborne was saying that banks should not be recapitalised, but instead they should be taken into administration by the BoE.

The problem with that option is that anyone with over £50k in deposits loses all their money straight away, as do all other creditors. in B&B for instance, a third of the deposits were held by people with more than £50k there.

Fortunately Alistair Darling took a different approach, and all B&B depositors kept their money.”
Read the full article.

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