Taxpayers Robbed To Bail Out Banks!


The Bank of England yesterday mortgaged £11 billion more of taxpayers’ money to shore up the big UK banks, as bank bosses held talks with central bank Governor Mervyn King.

In a statement issued before the meeting, the Bank said it was adding an extra £5bn to the normal weekly funds available to commercial banks, making a total of £11bn available at the weekly auction.

It added that another £5bn a week will be available, at least until its next monthly meeting which takes place on April 9.

Yesterday’s auction was three times over-subscribed.

Earlier in the day, the Council of Mortgage Lenders (CML) called for action from the Bank of England to improve levels of liquidity, warning that otherwise the mortgage market will face ‘ongoing problems’.

CML director general Michael Coogan warned that demand for mortgages could not be met by lenders.

The CML reported that gross mortgage lending was £24bn in February, a seven per cent fall from £25.9bn in January, and was six percent lower than the £25.6bn of February 2007.

Meanwhile the latest monthly survey from the Halifax showed that house prices across the UK fell by 0.3 per cent in February, taking the annual rate of house price inflation down from 4.5 per cent to 4.2 per cent.

The Nationwide suggested a faster slowdown, with its fourth monthly price fall in a row and said house prices in the three months to February had been one per cent lower than in the previous quarter.

The Royal Institution of Chartered Surveyors said the number of UK surveyors reporting house price falls in February was close to the historic level of June 1990.

Giving evidence to the House of Commons Treasury Select Committee on Wednesday, Chancellor Alistair Darling had said that the UK housing market was in a much stronger position than in the US.

Housing supply had exceeded demand in the US which led to plummeting house prices, a situation not seen in the UK, he claimed.

l Swiss banking giant Credit Suisse yesterday issued a profit warning because of its exposure to the US subprime loan crisis.

In a statement, the bank said: ‘In light of the difficult market conditions in March, at this time, Credit Suisse believes it is unlikely to be profitable in the first quarter.’

The news came as the country’s finance minister said Swiss banks caught by the credit squeeze should not expect state help.

Finance minister Hans-Rudolf Merz said the state will not bail out banks which are in trouble, adding: ‘We should let the market take its course.’

However, he said that if the situation worsens and threatens the stability of the entire Swiss financial market, the relevant authorities will snap into action.

The country’s largest bank, UBS has posted a massive subprime-related writedown of $18.4bn for 2007.