Bank crisis

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Ten years on from the start of the financial crisis there are still warnings about the risks to our fragile economy especially in the wake of the Brexit vote. The Jobs Economist consultancy study in 2013 found one in seven of all employees were made redundant almost two-thirds of those losing their jobs were men and the most redundancies were reported in 2009. The Bank of England estimated the financial crisis cost the British economy up to £7.4trillion in lost output. In 2010 Andrew Haldane, the Bank’s executive director for financial stability, said: “As well as the immediate costs of supporting the banks and the recession, there is an output loss equivalent to between $60trn and $200trn for the world economy and between £1.8trn and £7.4trn for the UK. The Bank of England estimated the financial crisis cost the British economy up to £7.4trillion in lost output. In 2010 Andrew Haldane, the Bank’s executive director for financial stability, said: “As well as the immediate costs of supporting the banks and the recession, there is an output loss equivalent to between $60trn and $200trn for the world economy and between £1.8trn and £7.4trn for the UK. There have been many figures banned around regarding how much the bank bailout cost UK taxpayers. Based on the figured from the National Audit Office its estimated that it cost each taxpayer £3,500 at the time however this may all be recouped, earlier this year it was announced that Lloyds recently had repaid their bailout in full. Labour MP Alistair Darling who was Chancellor of the Exchequer in 2008 told the BBC of the scariest moment of the crisis. He told the broadcaster: “I had to go to one of these meetings of European finance ministers, and I was asked to come out and take a call from the then chairman of RBS (Tom McKillop) who said the bank was haemorrhaging money. “Remember this was not only the biggest in the world, it was about the same size as the entire UK economy. “I said to him, ‘How long can you last?’ And what he said to me shook me to the core. He said, ‘Well we’re going to run out of money in the early afternoon’.” He said if the government hadn’t intervened quickly and bailed them out, “there would have been blind panic throughout the entire banking system, not just in the UK but around the world”.

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