Good Question
Robert Peston finds something puzzling: B&B collapse to cost City £9bn
All of which begs a big question: why on earth didn’t those big banks club together to rescue B&B rather than let it collapse and be nationalised.
Surely that would have been cheaper for them.
Their apparent inability to act collectively for their common good is not altogether encouraging.
The City in the UK = Wall Street in the US. £9bn = $16.6 billion US. Financial Services Compensation Scheme [FSCS] in the UK = Federal Deposit Insurance Corporation [FDIC] in the US.
The FSCS and FDIC are both funded by the financial institutions they insure, not tax dollars. If the money runs out, the banks get an assessment for more. Wall Street and The City have not been acting in their own best interests, and that’s why governments have to get involved.
