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You have landed on the moon, do not pass go, pay the banker £37bn

As you peer at the net pay figure on your monthly pay slip (willing it, without any justifiable reason, to be a bit more than last month), the Government’s decision to hand out thirty-seven thousand million pounds to the banks – yes £37,000,000,000 or £37bn if you like – may be so far removed from real life that you reach for your X-Box so you too can join the game.
But it’s happened. And it’s your money. Not that you can have any of it. But will the bail-out make you richer or poorer? Is it for better or worser?
Well, it depends on quite a lot of things. Potentially it’s good news for borrowers, homeowners who are struggling, savers and probably investors. The government wants the banks to make money available to homeowners and small businesses. It also wants people in difficulty with their mortgage repayments to be supported. Savers too need worry less about security now that the Government is underwriting their money.
But you might also think that the Government has taken a huge risk with your money as a tax payer – recovery may take a long time. And you might not relish the clampdown on competition or the hyping up of red tape and regulation that goes with greater security in the future.
Current thinking is that the massive bail-out will slowly allow banking and the economy to return to normal and that the credit crunch will fade – good news for personal loans and a more buoyant finance industry.

October 23, 2008 at 7:28 pm | personal loan | No comment

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