Banking crisis: Your questions answered
Posted on October 13, 2008 by Richard Beddard
Filed Under Ramblings |
Many of our banks are to lose their independence, or some of it, investors are to lose their dividends, and the rest of us are going to find it rather more difficult to borrow for years to come. Even the bankers are resigning.
It’s hard to disagree with commentators that recent events are momentous, so what does it mean for private investors? I don’t have the answers now, but Steve, our beloved editor-in-chief and the editors of our sister publications Moneywise and Money Observer will be answering your questions in a special edition of iBall to be filmed on Wednesday and webcast on Friday.
So come on, put them to the test. Alison Bell, iBall’s presenter will ask the questions, and make sure we get some answers. So what do you want to know? If you have any questions please email me ( richard.beddard[at]iii.co.uk ) or leave them in the comment form below.
Thanks 
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17 Responses to “Banking crisis: Your questions answered”
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Greetings Richard,
Worrying times indeed.
I still have a few shares in Lloyds but I would have thought their dividend was a little safer than the likes of RBS and HBOS.
What do you and your team think?
JH
I hold HBoS preference shares.
Will we continue to receive dividends ?
I have a large shareholding in lloyds. lloyds were proud that they were not exposed to the sub prime market. so much in fact they raised this year dividend by 2% and proclaimed they are in good shape. How come they have gone to the government for moeny and what happens to my shareholding and what are my rights?
Just how much debt is RBS hiding?
1) In February they told us no rights issue required. Stupid to think it.
2) £12bn later it’s all gone in just a few weeks
3) HMG pump in another £20bn to stop it imploding
. . . still nobody knows. Is RBS a black hole sucking in cash out of control? Does anyone know in their boardroom? Does Gordon Brown know?
Should we just let it burn out?
I hold RBS & HBOS - currently sitting on a significant (-75%) loss.
If I continue to hold, surely in the medium term(2/3 years max.) I can expect to get my money back ?
I have holdings in LTSB & Barclays. If they are not paying dividends why keep them because the price will drop as they will be sold.?
It will be years before probably before they reach the price I bought them for.
If the bailed out banks are not going to pay dividends how are they going to attract investers?
And who his going to buy same so that the taxpayer gets their money back
I understand that the Government is lending to these banks (in a way investing in these banks) because ultimately they expect to be paid back (tax payers money!). What then is the point of penalising those people who take their own hard earnt money and invest it into these institutions whose management were supposed to be paid huge sums for looking after and ensuring growth of these investments and didn’t. Why should any person with common sense support any organisations by investing if soon as problems occur the investor looses their money! Surely, these are the people who own the company. I think the government should stop supporting these top managers and paying them off with huge handshakes for doing a bad job. They still live life of luxury while joe bloggs on the street has not only lost his investment, his savings, possibly his old age pension. I say confiscate the personal assets of those who have not done the jobs properly - that is what they are paid for! People lost money in Railtrack and the private investor was burnt, Northern Rock and how come these institutions are still operating so there must be money there somewhere! Why the hell does the government not sell to someone like Richard Branson who always managed to turn company’s around. Northern Rock would have been saved. I think he should be the industry secretary we may have success in many areas as he obviously understands markets etc.
All the talk by Gordon Brown and the news reporters has been about protecting Savers and borrowers. Nothing has been said about the individual investor saving for their future and pensions who like me have seen their stake in Banks such as RBS, HBOS and Lloyds literally robbed from them by this government. In years to come the Government will make a tidy profit and I believe they should compensate share holders from these profits as we had no democratic say in what the board and the government did recently on capitalisation of what was our (Shareholders) Banks. If the Government had bought tranches of ordinary shares in these Banks over a period of a few weeks / months the share price would have slowly gone up and the Markets would have been provided with confidence.
My question is basically the same as others, having a substancial holding in Lloyds TSB is it time to;
1. Cut our losses and invest whats left elsewhere.
2. Hang in and hope the share price moves upward.
3. Is Lloyds issuing shares in place of dividends this year and followig years.
I’m amazed at HMG’s surprise, and fained horror at what has happened. Also, of the bankers who were forced to resign, what was their crime really? Was HMG really ignorant to the fact that banks had demand for borrowing in excess of their deposits, so they borrowed between themselves and lent it to the great unwashed who in-turn used it to buy appreciating houses - I think not.
I suspect if any bank in isolation had got on its moral high horse and said “this is a bit silly, and could end in tears”, it would have gone down long before now.
I don’t know who is responsible, but I feel that the Banks simply satisfied a demand from a largely capitalist society.
Now finally to my question. If we could wind the clock back 20 years - how / what should we have have done differently?
Maggie privatised, Brown Nationalise back to the what both parties believe in. Money makes the world go round !. Without the banking industry, we would not have such a robust economy. This government has made billions from deregulation introduced by Maggie. How can you have a government run Banks?
OK, My question, Will the government employ the same culprits? so at the end of all this is same old same old. If FSA is next to useless than what chance do the government have of running these banks and instilling regulations?
Could you explain to me where the government gets its money from to bail out these banks .With money being so tight how can they suddenly find 500 billion pounds? is this as some sort of loan from the tax payers?
I have a few HBOS 6.475%PRF 6.475% NON-CUM PREFERENCE SHARES, dating from the takeover of Birmingham Midshires. I believe dividends payments will be suspended as part of the rescue plan, does this also apply to preference shares?
I believe owners of the Bradford & Bingley 11.625% PERPETUAL SUBORDINATE BONDS will get little and nothing back, sharing the same fate as the holders of ordinary shares, in this the case?
I have watched in horror over the last few weeks as the financial markets went into turmoil. The government has effectviely provided facilities to allow Banks to operate, those facilities are being provided by the taxpayer with HMG getting a double digit percentage return on the funding they are making available. Im still quite bemused at RBS issuing new shares for 65.5p per share given that i bought the last issue of shares at £2.00. If a small % take up the new issue offer the government will control circa 60% of the bank and would be the majority shareholder. If the RBS black hole gets deeper (Lehmans Exposure) will the government then be forced to Nationalise RBS?
I was relieved when they nationalised the banks. I have a pension with Hargreaves Lansdown which is currently mostly held in cash. The problem is they use a pooled account managed by RBS. If RBS went bankrupt then I doubt my cash would have been protected in this situation (goodbye years of pension savings!).
My question to add to the list:
What will stop these banking executives simply moving to another industry in order to get their excessive executive pay?
hi,
I have a very large shareholding in RBS and sitting at a loss. I just became a day trader and almost all of my money tied up with RBS now. is there any sign of share price going up near future, I mean in few weeks or I would be better to cut the loss and move on.
regards