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The Financial Instability Report

The Bank of England (“the Bank”) released their Financial
Stability Report today … or should we rename this the Financial
Instability Report as that’s what we’ve seen for the last few months.

The
Report reviews the UK banking system every six months and started back in 1996.
In that first report, the Bank said: “The most recent figures suggest
that the banks are in good shape. They are strongly capitalised and, on that
basis, well placed to expand their lending.”

And that’s just what they
did.  For example, today’s report notes that UK banks had an equal amount of
deposits to loans back in 2001 but, by 2007, had lent £700 billion more than
they had on deposit.

£700 billion more than they had in deposits?  Were
they mad?

Yep.

Read
more …

About Chris M Skinner

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here…

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