
Inded, the scale of the recovery task is enormous. The Bank of England yesterday published the latest of its Financial Stability Reports. I got this graph from the current issue: it shows a composite measure of liquidity in the financial system: last month the index was over 2 standard deviations below the long run trend - there's the credit crunch. The Bank's report is very up to date and written in clear, concise language - well worth a read if you have the stomach for it! In light of yesterday's decision by Halifax Bank of Scotland (Ireland) to stay out of the Irish Government's Guarantee Scheme then Table 1 on page 32 of the BoE report provides some context. It shows that HBOS's Tier 1 Capital Ratio (one measure of financial security) will rise from a current level of 8.6% to 12% once the UK Government measures are in place. RBS will be even higher.
But while the banks are putting their house in order, there's a whole new generation of young people who will never see them in the same light again. Which probably goes for their parents as well.
great post
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