US debt crisis.....

[R1Geezer]

With the latest debt crisis in The US to add to those of the EU. Is it time to separate the high street banking function from the "casino" banking function so the casino banks can do their own thing and be allowed to fail if they scr3w up? We all know that no government will let a high St bank fail, hence we bail out the whole show at a cost of zillions. With the US and by connection, everyone else on the brink of meltdown, is it time to protect the taxpayers of these nations from the "too big to fail" syndrome? The US may not be savable next time.

[jno]

hmm, are you thinking of returning to the pre-Maggie set-up? It actually sounds sensible to me, though I've no idea if it's practicable any more.

[sp1814]

R1Geezer

It would be difficult to implement, because it cannot be done unilaterally, and banks would have to spin off their (very profitable...normally) investment business from it's traditional retail arm. From what I remember from my days working for one of the high street banks, it was the commercial and investment arms that made the big bucks...and coupled to that, you'd need to consider the investment portfolios of charities, mortgage brokerages and pensions administrators who invest in products under the control of investment firms.

If we floated them off, and they crashed, the ripples spread much further than the City Of London.

[R1Geezer]

Not saying it's easy and believe me, I work in a bank. I just think something should be worked out.

[keyplus90]

Collapse of the interest based economy. It was inevitable.

[R1Geezer]

yes the evil Usary keyplus of course in Islamic counties they don't have it, they just have fees....err hang on!

[keyplus90]

No you are wrong. In Islam it is not allowed but Islamic countries they do have it. Whatever the reasons behind that IMF, trying to copy others, fear of being branded backwards or even extemists etc but evetually they will see the results too. I would say in more plain words what you could not say.

[Old_Geezer]

In danger of derailing the original question I think, but: I see no reason why one is able to ask for financial reward for loaing out, say a ladder or a car, but somehow it is apparently wrong to do exactly the same to loan out money. I makes no sense. IMO money loans are cheap in comparison to physical item loans. The money lender gets a raw deal relatively speaking. I just wish I could convince the building society to pay me more.

[jno]

it used to be banned for Christians too, which is why Jews took over the trade. Risky business, though, as borrowers might prefer to kill you than repay you.

[Old_Geezer]

Meanwhile I was under the impression that the problem with the US is that for decades they have been running their economy on bigger and bigger loans. And that it was bound to hit the fan at some point. A country is sensible to borrow to invest, or get it though difficult times, but it has to pay back during the good times. I've not looked at the details but I suspect this latest deal is most likely to push the problem just a bit into the future, but short term fixes seem to be the order of the times.