Just to remind every one what went on in the 2008 crash
Published in the Independant December 2009
How to spend £850bn bailing out the banks... and £107.1m on financial advice
£76bn To purchase shares in RBS and Lloyds Banking Group
£200bn Indemnify Bank of England against losses incurred in providing over £200bn of liquidity support
£250bn Guarantee wholesale borrowing by banks to strengthen liquidity in the banking system
£40bn Provide loans and other funding to Bradford & Bingley and the Financial Services Compensation Scheme
£280bn Agree in principle to provide insurance for selection of bank assets
£671bn Total Government spending in the financial year 2009-2010
£32.9m Slaughter & May - Commercial legal advice
£15.4m Credit Suisse - Financial advice on a range of measures, including Bank Recapitalisation and the Asset Protection Scheme
£11.3m PricewaterhouseCoopers - Advice on APS
£8.7m Ernst & Young - Due diligence on APS, Northern Rock
£7.7m KPMG - Due diligence on APS
£7.4m Blackrock - Valuation advice on APS
£5.3m Deutsche Bank - Financial advice on a range of measures
£5m Citi Financial - Advice on Aps
£4.9m BDO Stoy Hayward - Valuation of Northern Rock
£4.5m Goldman Sachs - Financial advice on Northern Rock
£1.5m Morgan Stanley - Financial advice on Bradford & Bingley
£2.5m Other advisers - Financial advice on a range of measures and proposals to revive Britain's ailing economy
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Much of the cost was loan guarantees that was not actually paid out, the cost that was not recouped was massive, which is why austerity has lasted so long.
The US had its problems as well but leading up to the crash Northern Rock and others were lending at 125% of equity. “Financial Advisors” were selling self certified loans on commission, most thought the boom could go on for ever - it didn’t. The FSA was supposed to be regulating the Banks but they just sat on their fat backsides enjoying expense account lunches and watched it happen.
The US and UK did badly, The EURO countries much better because sterling fell from 65p/€ to 90p/€ a fall of 30%. Domestic transactions did not hurt too much but imports cost a lot more. Sterling was recovering nicely until the Brexit chaos, falling back to 90p/€, currently it’s recovered somewhat to around 85p/€
What happens now is anyone’s guess, but with politics being put before economics it doesn’t look good.