Questions, questions
1. What on earth were local councils doing with sums of up to £40m, £50m sitting round in Icelandic banks, rather than being used to pay down debt, lower the cost of providing services, or - here's an idea - being invested in more services? Why didn't TfL use the money to hold down fares, for example? No one has neither asked nor answered that question.
2. Why is no one talking about the fact that there is still a huge amount of bad debt in the system that doesn't look like it's going to shift soon? Giving the banks more capital is fine, but it doesn't alter the fundamental point that if you don't know the value of the assets on one side of the balance sheet, you can't accurately say how much money you need on the other side of the balance sheet. Hence, methinks, why stock exchanges aren't even exhibiting a dead cat bounce.
3. Was the dinner that Gideon and Mandy had in Corfu the real life equivalent of the Pacino/ De Niro coffee scene in 'Heat'. And does anyone doubt that Gideon was had? He was flattered that the arch- flatterer wanted to pick his brains. And, BTW, he has a valet to serve champagne dinner/networking parties. Premier Cru crunch, anyone?
Labels: questions economics banks Iceland spectator george osborne peter mandelson
posted by BetaRish @ 9:26 am
2 Comments:
Q1. Can't tell you why Icelandic banks necessarily, but there *are* good reasons why they have pots of cash. For example - most people pay their council tax on the first of the month. Teachers get paid on (say) the 16th. So they have for (roughly) half a month, the teachers' salaries on deposit. Equally, they collect from you in equal installments (no other way being practical). But (say) payments to build a new swimming pool are erratic.
OK, so I get that a cash float is required. But if it's a float, why does it need to be so far away? Surely it should have been closer, so it's wasn't as at much risk?
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