OK the bit that will surprise people. Brown is right to say the Banks need to tell him all the bad debt that they have.
A solution can only be found when the problem is fully known. However, we were assured back in October that such a hard case had been made to the Banks that they could not possibly need to come back for more cash...ah, well. Plan fails at first test of battle (Shorting of banks was removed on Friday, Barclay's, RBS and LLoyd's near collapse within a couple of hours).
So, we have a new plan, to offer insurance to the Banks for their bad debt. Seems quite sensible, could allow credit to flow freely again. More sensible than printing money....
However, hang on, no one knows how much the toxic assets are worth - that is the entirety of the credit crisis problem. How is the Government going to be able to value them for Insurance purposes. Better to recapitalise the Banks again by far than try this plan. I see no insurance experts in Government able to pull this off - who are they going to ask, the rating agencies?
Given the last attempt in October the track record is pretty poor. I see much more taxpayer money going down the swanny. Worse, at this rate the Country will run out of money in 2009 and be forced to go the the IMF.
The UK perhaps is the Bad country after all.
