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Snooth User: Philip James

How does the UK respond when Euro bank back their funds?

Posted by Philip James, Oct 6, 2008.

After the governments from 5+ Euro countries including France, Ireland, Germany and other power houses come out and back all the deposits in all their nations banks, how do the other countries respond?

http://biz.yahoo.com/ap/081006/eu_e...

This is clear Tragedy of the Commons game theory. Once one country breaks ranks then they all need to follow. If the UK follows then the US may not have much of an alternative.

Replies

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Reply by RachelNYC, Oct 9, 2008.

As of yesterday morning the UK announced they would be following suit. Though I like the idea that they are buying preferred stock and may see some of the tax payer money back in time. Seems a little better than the privatizing profits and socializing losses system we are heading for in the States.

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Reply by Philip James, Oct 9, 2008.

Rachel - well said. At one point congress proposed that if the US government bought the debt then they should distribute any profits to the taxpayers who funded it in the first place. Clearly that got struck down pretty fast!

My sisters boyfriend has most of his savings tied up in the iceland bank that froze its accounts the other day. Its getting pretty scary when a country is on the verge of default

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Reply by RachelNYC, Oct 10, 2008.

Whole councils in the UK are going to be wiped out by the banks in Iceland. Seems that Leeds and several other had 100's of millions of GBP invested in the Icelandic banking system.

A few months ago I never thought an institution like Lehman Brothers could disappear overnight, and now they have to go and top it with a whole country becoming insolvent.

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Reply by Philip James, Oct 10, 2008.

Cornwall County Council - where my parents live and where my dad worked, is pretty exposed to this Icelandic mess, so i'm hearing a lot about it from just that point of view


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