What? That's nothing... Freddie and Fannie had financial footprints of around $5t, and Lehman's $1t.Almost £50bn, good lord!
AIG bailed out...
- Thread starter Stelly
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Zimbabwe
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the fact that AIG was potentially going to be bailed out helped a rally in the US yesterday & we've seen gains in the FTSE today - if AIG had been allowed to fail then it would be very bad news for the markets.
still there is probably more bad news still to come in the next few weeks/months
How do you know HBOS is in trouble? Even the FSA thinks it isn't.
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AIG failing would have more impact than Lehman, a lot of people and businesses would have lost their insurance cover overnight.
No they wouldn't, AIG is insured against that.
Would whoever insures AIG actually be able to pay out, though?
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I'm hoping HBoS isn't in trouble, got my capital from my house sale in with them at the moment, and it's more than £35K......
Yes.. there is a word insurance market that insures insurers who insure insurers. For example, Canary Wharf is insured in majority by one company. If the whole thing blew up, there is no way you could expect that insurance company to pay out - instead, they insure the insurance they have sold, as AIG will have done in many parts.
How much more? If you open another bank account with another institution (not Natwest, RBS, Halifax or HBOS Holdings) you can be guaranteed up to £72k.
Also, they're not going into trouble. The FSA have said they've seen evidence that they are well capitalised. If they got into trouble due to short-selling of shares, then a bank like Lloyd TSB will step in and buy because HBOS is an incredibly lucrative company, even in these times. They hold the most deposits in the UK, as well as the most good mortgages.
Should something even more disastrous happen and a bank not take over, the government would bail out HBOS. Why? Because it is exposed directly to customers, and customers would feel a big pain if they went under. It is the investment banks being left to fend for themselves.
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HBOS is only in trouble from speculation, if people lose confidence in it from falling share price they will withdraw there money and we have another northern rock.
Well not quite like northern rock, as it is actually financially sound as long as people do not act crazy and start doing abnormal transactions and isolate it from the interbank lending.
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AIG had to be bailed out or it would destabilise many more banks by throwing more debt into question of risk. This would be worse than what we have already seen. They should not have bailed lehman as it was just starting to get silly. It would have cost a lot for not that much stabilisation to the market, I doubt it would have eased its lending problems quickly and so its better to cut it out completely.
Well not quite like northern rock, as it is actually financially sound as long as people do not act crazy and start doing abnormal transactions and isolate it from the interbank lending.
//Edit
AIG had to be bailed out or it would destabilise many more banks by throwing more debt into question of risk. This would be worse than what we have already seen. They should not have bailed lehman as it was just starting to get silly. It would have cost a lot for not that much stabilisation to the market, I doubt it would have eased its lending problems quickly and so its better to cut it out completely.
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Quite a bit more, although it's mostly in joint accounts with my wife. Would we be covered individually for £35K, or is it just per account, I wonder? Even so, would still need to move some around to stay below £35k each.
I'm not sure, but if it is the good case (that it is per person, and you can double your cover by having two holdings in different institutions) then you could guarantee up to £144k between you, which isn't bad.
Where are you getting £72k from?
Also, RBS and Natwest have separate guarantees so you would be covered for £35k in each of them.
And it is only a loan, 24 months, 11% pa. Their situation is far from 'fixed'.
Crikey, I didn't realise the terms were that bad. They need a buyer then, and not many can afford AIG. Could be a way for Dubai investment groups to get an even tighter stranglehold on the American market then they already have with oil.
Odd - What have Natwest and RBS got to do with HBOS ????