I have yet to hear of any other country's public sector having suffered a body blow in Iceland.
People are shocked at not only the money councils have sitting in deposit accounts, but that so much was in these banks. Few seem to have wondered how much better it would have been deposited in domestic banks. Surely, it's what you'd expect? It's what most countries would do. Lose a point or two of interest, but would demonstrate confidence, and help the UK bank's liquidity at the same time. No doubt there is much more dosh spread around the world in exotic banks.
Yet another casualty of the UK's obsessive free market globalism. Everything's farmed out to foreign companies (next year's national census? contracted to a US firm). Cost of everything and value of nothing. Again.
The spectacle of Darling saying to councils "well you should have known better" with the reply "hold on, you told us to be speculators and get best return" is pathetic. Life for the government is going to get uncomfortable on this issue. Concerns were raised by both opposition parties months ago, but appeared to have been ignored.
The government should be telling public authorities to patronise the domestic economy wherever possible. It never crosses Labour's mind.
BACK IN JULY Vince Cable was warning about Icelandic banks.
quote:
Charity organisations revealed that more than £125 million had been deposited in the banks before an emergency meeting with Paul Myners, the City Minister, where they demanded protection for their assets.
The Chancellor seems keen to make a distinction between "private investors' money" and public investors' money..........when in reality, they are the same thing!
All the money Local Councils invested, was tax payer's money. Who will Councils look to "punish" when Council Taxes are raised, and public services lowered, to compensate them for their losses?
We pay once, that is considered right.
We pay twice, we think they are taking the proverbial.
If we sit back and allow them to make us pay three times, it would be appropriate for them to consider us all simpletons.
We should not pay three times for their crisis... We should wake up, and fight for a system where the wealth produced from our own labour is not stolen by others.
Simple rule which should have been applied. If anything bucks the Market, in this case, an extra 2%,regard with suspicion, don't touch with a bargepole. Professionals in Local Govt. should have known this.
It is hard to say that most councils were anything more than a bit misguided. Ours has over £7m in Icelandic banks which is too much but understandable as they spread their reserves and grant monies across a mix of investments. We also have some long standing local ties with Iceland in the area.
Having said that, of course gift horses should have their mouths well examined. But isn't it one of New Labour's favourite consultative companies Capita that has been advising local authorities to put money into Icelandic banks?
Originally posted by TrevGo: I have yet to hear of any other country's public sector having suffered a body blow in Iceland.
It's probably happened. It's only just starting to play out in other nations. The Icelandic banks only shut down in germany yesterday.
Plenty of public sector bodies getting their fingers burned here. One city authority alone (Freiberg) has 47 Million Euros with Lehmann Bros that it may not be able to recover.
In retrospect UK local authorities should have left all their money only in AAA accounts in the UK (or at least larger EU members), but hindsight is a wonderful thing.
The fact that local authorities spread their risk so thinly has actually helped in this instance. If they could only invest in the UK, exposure to each individual institution would increase.
I really think local authorities cannot be blamed for this. They abide by strict regulations on where they can put their cash and the exposure they have to any individual institution. The Icelandic banks were top rated at the time, and were well within the regulations - in fact I think they were some of the banks recommended by guidelines.
The ratings - Standard and Poor etc. - have shown to be worthless. Rather like our own FSA. But, of course, it would be wrong to blame the Local Authorities.
Originally posted by snowinthestow: I really think local authorities cannot be blamed for this. They abide by strict regulations on where they can put their cash and the exposure they have to any individual institution.
True but there is a backlash from some other public sector bodies. They point out that "people talk" and a big subject of financial conversation in recent months has been the flakiness of the iceland banks.
Originally posted by snowinthestow: I really think local authorities cannot be blamed for this. They abide by strict regulations on where they can put their cash and the exposure they have to any individual institution.
True but there is a backlash from some other public sector bodies. They point out that "people talk" and a big subject of financial conversation in recent months has been the flakiness of the iceland banks.
It is the Spiv-lite consultants that advised the public sector bodies that should bear the responsibility.
I have noted , over the years, a creeping Spivanomicism in the public sector and, indeed, the private sector. The purpose of an organisation is secondary to individual gain. The views of subject matter experts are second to the views of those following the latest management fad.
I am not surprised the Spiv-lites invested in dodgy banks as their objective was to make themselves look good as quickly as possible to ensure promotion and/or bonuses. Meanwhile, those actually DOING the work looked on with bemused awe as a result of being brainwashed into thinking that the Spiv-lites knew what they were doing.
However, when the music stops, the Spiv-lites walk away with the cash and the real workers catch the blame-wave.
Originally posted by Nick14: We should not pay three times for their crisis... We should wake up, and fight for a system where the wealth produced from our own labour is not stolen by others.
Ha Ha Ha Did you lift that from The Communist Manifesto? Wish I knew what it meant.
Originally posted by Nick14: We should not pay three times for their crisis... We should wake up, and fight for a system where the wealth produced from our own labour is not stolen by others.
Ha Ha Ha Did you lift that from The Communist Manifesto? Wish I knew what it meant.
Why do some assume that those who ask for more fairness are automatically Communist? We have seen greed and we ask for fairness. The claim that there are 'Reds under the bed' does not wash any more. We can see what the right-winger have done to us.
You think that the current situation is a result of a fair and equitable system that ensures that all benefit from 'trickle down'?
Originally posted by Sampanviking: See your armies of trauma councillors, dispute resolvers and race/gender advisors fall before the wrath of our fierce and mighty warriors
lol.
I agree with the last point too. Some of the biggest gurgling with excitement about crashing banks that I have heard has come from the most welfare-dependent.
OK for them to live off other people's money. Awful when it others doing so.
