UK GDP declining nearly at Great Depression rates

[SamuelRSmith]

NJ5 said:

kowenicki said:
@NJ%

To let banks fail would have been idiotic and irresponsible.... we would have Anarchy by now if we had let large retail banks fail.

Japan has a different problem.... it has a national debt that requires good GDP growth just to stand still.

Why would we have anarchy if some big banks failed? Lehman Brothers went into bankruptcy and we're still here.

It's becoming more and more clear that the "too big to fail" idea is just a way to steal money from taxpayers to bad banks with no clear long term benefit. In the end the debt is just being shifted around instead of solved.

We clearly need a banking system... we don't need every existing bank though.

 

The issue with the UK, though, is that the banks are so large and important that if they failed, they'd drag other banks down with them. There's a lot of inter-bank lending that goes on, and one of the problems was that banks weren't keen on doing this anymore (because they were worried about the other banks failing and thus not being able to pay the money back).

Letting a bank like Llloyds or Barclays fail could lead to the entire system failing.