Britain’s banks may need to be bailed out by taxpayers again, an economic think tank has warned.
Source EA Today
The New Economics Foundation calculates that banks’ own borrowing needs will more than double to £25bn a month next year – something it dubs a “funding cliff”.
Whilst total public sector support for the banks already amounts to at least £1.2 trillion, it says this will not be enough.
In its report ‘Where did our money go?’ the NEF concludes: “We believe the public sector is likely, once again, to be asked to bail out the banks for the emerging funding gap.”
The report also refers to a “shocking lack of information” about where the money used to bail out the banks had been used and what the banks have done in return for the support.
Andrew Simms, policy director at the think tank and a co-author of the report, says there has been “scant new regulation… to prevent a repeat of the crisis”.
Simms argues for a rewiring of the banking system, calling for the creation of a ‘Big Society Bank’, a green investment bank and a Post Office bank.