B of E props up US banks with £22bn 'swap'

[BigLepton]

Apparently the Bank of England needs to prop up the US banks with £22bn of our money. . . . .

http://afp.google.com/article/ALeqM5iwJ96BBI5gWCmx...

[tricky69]

Not just BOE, but all the bank ECB, BOJ and fed as well..... funnily enought the bank of Russia were not able to help ! hahaah

[215cu]

I doubt the Fed needs our money to prop it up, I'd imagine it's to spread risk because the market is failing to do that adequately.

Bank of Russia has $700bn of reserves, or it should have. Mind you after Russia's away-day in Georgia, it's stock market has collapsed. Oh dear.. boo fking hoo.

Edited by 215cu on Thursday 18th September 13:22

[Gooby]

Didnt we spend 60 years paying back loans and interest to the US? I hope the interest rate is good!

[tricky69]

215cu said:

I doubt the Fed needs our money to prop it up, I'd imagine it's to spread risk because the market is failing to do that adequately.

a total of about 247 billion will be made available, not sure what you mean by spread risk ? It is simple to reduce the pressure in the US short term funding markets... The problem will come if this does not help, with a lack of faith in the markets and banking world it might be too late.

I don't think this is the last time we see this happen fyg, cash hording by banks is becoming laughable

Edited by tricky69 on Thursday 18th September 13:26

[BigLepton]

tricky69 said:

Not just BOE, but all the bank ECB, BOJ and fed as well..... funnily enought the bank of Russia were not able to help ! hahaah

The BOE are the only one doing it with 'my' money!

[FourWheelDrift]

Gooby said:

Didnt we spend 60 years paying back loans and interest to the US? I hope the interest rate is good!

We'll ask for a high rate of return a few long lease airbases (got to keep the Canadians in check ) and they can have Madonna back.

[tricky69]

215cu said:

I doubt the Fed needs our money to prop it up, I'd imagine it's to spread risk because the market is failing to do that adequately.

Bank of Russia has $700bn of reserves, or it should have. Mind you after Russia's away-day in Georgia, it's stock market has collapsed. Oh dear.. boo fking hoo.

Edited by 215cu on Thursday 18th September 13:22

How long did they last ? 10 years since the last blow up.... they have done well !

I bet all their billionaires are not hanging around either ! hahah

[Timmy35]

anonymous said:

[redacted]

now stop that. We established yesterday that Mervyn King doesn't take it up the chuff. That's Darling's job.

[jammy_basturd]

With little to no knowledge of financial deals like this one, how exactly does it work?


And, to those being negative about it, how does this differ to banks taking your savings and mortgages and investing them around the world since, well, before breakfast at least?

[BigLepton]

jammy_basturd said:

With little to no knowledge of financial deals like this one, how exactly does it work?


And, to those being negative about it, how does this differ to banks taking your savings and mortgages and investing them around the world since, well, before breakfast at least?

Well, the general gist is that US banks have bugger all liquidity, so we send them some of ours and if the US economy recovers we get it back and everyone is happy, if it crashes we've lost it and the UK tax payer is going to have to put his hand in his pocket again.

[FourWheelDrift]

BigLepton said:

jammy_basturd said:

With little to no knowledge of financial deals like this one, how exactly does it work?


And, to those being negative about it, how does this differ to banks taking your savings and mortgages and investing them around the world since, well, before breakfast at least?

Well, the general gist is that US banks have bugger all liquidity, so we send them some of ours and if the US economy recovers we get it back and everyone is happy, if it crashes we've lost it and the UK tax payer is going to have to put his hand in his pocket again.

Don't worry about it, the BoE have it all insured against loss with AIG.................oh...........hang on.......

[plasticpig]

BigLepton said:

jammy_basturd said:

With little to no knowledge of financial deals like this one, how exactly does it work?


And, to those being negative about it, how does this differ to banks taking your savings and mortgages and investing them around the world since, well, before breakfast at least?

Well, the general gist is that US banks have bugger all liquidity, so we send them some of ours and if the US economy recovers we get it back and everyone is happy, if it crashes we've lost it and the UK tax payer is going to have to put his hand in his pocket again.

By some very rough and ready reckoning the BOE is currently lending the banks somwhere in the region of £200bn So £20bn is a drop in the bucket.

[BigLepton]

plasticpig said:

BigLepton said:

jammy_basturd said:

With little to no knowledge of financial deals like this one, how exactly does it work?


And, to those being negative about it, how does this differ to banks taking your savings and mortgages and investing them around the world since, well, before breakfast at least?

Well, the general gist is that US banks have bugger all liquidity, so we send them some of ours and if the US economy recovers we get it back and everyone is happy, if it crashes we've lost it and the UK tax payer is going to have to put his hand in his pocket again.

By some very rough and ready reckoning the BOE is currently lending the banks somwhere in the region of £200bn So £20bn is a drop in the bucket.

People treating the odd £20bn here and there as a drop in the bucket is why we currently have a credit crunch!