A View From Middle England - Conservative with a slight libertarian touch - For Christian charity and traditional belief - Free Enterprise NOT Covert Corporatism

Friday, August 31, 2007

Banking on the bankers?

"It's a technical breakdown, Mr. Mainwaring," said the hapless Pike. "But don't worry, we're flushed with liquidity!" You can just imagine the retort of "Stupid Boy!" coming back, as a befuddled Mainwaring tries to work out the true meaning.

Barclays Bank have said that a "technical breakdown" in the UK's clearing system forced it to borrow £1.6bn from the Bank of England. Apparently, it is the second time this month that the bank has tapped into the central bank's emergency credit line, sparking fears it is facing a cash crisis. Is it really a technical breakdown or could it be human error? What machine has owned up to being so careless? Mr. Micawber would have given some advice to these bankers, who basically allowed borrowings to become greater than their reserves at the end of the trading session.

"Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

A Barclays spokesman said "Had there not been a technical breakdown, this situation would not have occurred. In these challenging times the dramatisation of such situations is of no help to markets, their members or their customers." So just let it be swept under the carpet, then?

I just love these corporate types. They take the bonuses and the lifestyle, but babble away in obfuscation the minute a problem arises. They'll get a shock if customers come in telling them they too have had "technical breakdowns" in becoming overdrawn overnight!


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