What would have happened...

[Kathyan]

if the banks had been allowed to go under?

[fairkatrina]

some people would have lost all/most of their money, but those banks that were left would be stronger as a result of the influx of new customers, and the public would not be paying to underwrite the savings held by the banks that are struggling.

[andy-hughes]

I think it is a hypothetical question because the apparent perceived potential collapse of the ecconomy simply could not, and would not be allowed to happen - as has proved to be the case.

[Kathyan]

andy, I realise that they would not have let it happen, but I was curious to know what could have happened had the Government not stepped in!

[Whickerman]

the country would have been bankrupt that very day.

Money does not exist - it is a virtual concept - so it's not like you could take your paycheque in to your company an get a shovel of gold to cash it. Nor could your company's debtors pay in this way, or creditors be paid. Expand that exponentially...

[derekpara]

Whickerman. I must admit a lack of knowledge here, but I thought money, in the form od gold, is transferred from one institution to another. Or is it ALL kept in the Bank of England for every bank ?