Banking Hypocrisy and Doublespeak 101

Banking Hypocrisy and Doublespeak 101 class is now in session. See if you can spot the occurrence in Darling Says Banks Best Run Privately, Damps Lloyds Speculation.

Chancellor of the Exchequer Alistair Darling said U.K. banks are best run privately as he tries to calm speculation the government is about to take a majority state in Lloyds Banking Group Plc.

Darling said today the government has already put in place a program to help banks. The Treasury is playing down talk that Darling will hold discussions with Lloyds executives this weekend.

“I have made it clear on many, many occasions that we believe that banks are best run on a commercial basis in the private sector, properly supervised and regulated,” Darling told reporters in Rome. “That’s our clear preference and our clear belief.”

Turn in your answers please. Extra credit is given for datelines.

September 29, 2008
UK lender Bradford & Bingley nationalized

Mortgage lender Bradford & Bingley confirmed Monday it is to become the second bank nationalized by the British government since the financial crisis began.

In a deal hammered out with Spanish bank Santander, B&B was being taken into public ownership after uncertainty over its future prompted savers to withdraw "tens of millions of pounds."

British Finance Minister Alistair Darling said B&B assets were sold to Santander's Abbey division for just over £600 million pounds, or about $1.1 billion.

"My priority was to protect savers and depositors, but also to ensure that we got a good deal for the taxpayer," Darling said.

"We had to stabilize the situation in order to protect the banking system as a whole."

Wednesday 8 October 2008
£50bn bid to save UK banks

After another tumultuous day, Brown summoned the Bank of England governor, Mervyn King, and Financial Services Authority chairman, Lord Turner, for emergency talks last night on the future of the banking system.

They also discussed concern that UK customers of the collapsed Icelandic bank Landsbanki risked losing thousands of pounds in savings. The Treasury is racing to hammer out a rescue for the high street banks and holding high-level negotiations with Icelandic authorities about the payouts for 300,000 customers of Icesave, an offshoot of Landsbanki, who have a total of £5bn saved with the bank.

Brown and his embattled chancellor, Alistair Darling, were preparing an announcement for this morning outlining historic changes to the way the banking system is owned and operated. "We have been working closely with the governor of the Bank, the FSA and financial institutions to put banks on a longer-term sound footing," Darling said after last night's meeting in Downing Street. He said the Bank had again put large sums into the money markets over the day, and was ready to do more if necessary.

October 13, 2008
Royal Bank of Scotland under state control

The Chancellor will move to take control of the Royal Bank of Scotland today by injecting £20 billion of taxpayers’ money.

The Government is also expected to take over HBOS in the most dramatic extension of state ownership in the British economy since the war. The bank’s rescue takeover by Lloyds TSB appeared to be on the brink of collapse last night.

As governments around the world scramble to prevent the collapse of the global financial system, Alistair Darling will unveil plans for a £40 billion “recapitalisation” of the banking sector.

January 22, 2009
UK may inject $13.8 billion into Northern Rock

The British government is considering injecting as much as 10 billion pounds ($13.80 billion) into Northern Rock to use the nationalized bank to ramp up mortgage lending, the Daily Telegraph reported.

Northern Rock became the first British casualty of the credit crunch in September 2007 when the bank, heavily dependent on wholesale markets for its funding, revealed that it had been forced to seek emergency support from the Bank of England.

The bank was nationalized in early 2008 after attempts to find a private sector buyer fell through

My Dear Darling ....

Actions, especially repeated actions, speak louder than words. Not only have you nationalized multiple banks, you are further injecting taxpayer funds into them.

Darling Quotes To Live By ....

September 29, 2008
"We had to stabilize the situation in order to protect the banking system as a whole."

February 14, 2009
“I have made it clear on many, many occasions that we believe that banks are best run on a commercial basis in the private sector, properly supervised and regulated.”

Please give yourself extra credit bonus points if you mentioned "Darling Quotes" or if you said "My Dear Darling" anywhere in your answer. A look at nationalization in the US is coming up later today.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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