Remember all those official assurances about how our £100bn would be safe with the Crock? The huge deluge of "comfort" from our rulers and betters that the guarantees would cost us nothing?
Well, here's a reminder (and see all previous Crock blogs gathered here):
- FSA - "We believe [Northern Rock] is solvent, meets all capital requirements, and has a good quality loan book." (FSA chairman Callum McCarthy 17.9.07)
- Darling - "Bank of England lending is secured against Northern Rock's assets such as high quality mortgages, assessed by the Financial Services Authority as being of good quality" (21.01.08)
- Brown - "Most people agree that Northern Rock has a quite high-quality loan book and I can assure you that our aim in all of this is to secure the best deal for the British taxpayer." (20.01.08)
- Cooper (Yvette, not Tommy... or was it the other way round?) - the guarantees "have not been called upon, so they've not actually created any cost for the taxpayer"(18.2.08)
Now we hear that their advisors, Goldman Sachs, told them months ago, and well before February's formal nationalisation:
"that in a “base case scenario” the Treasury would be left with a “net subsidy” to the bank of some £1.28 billion."
And from the sound of it, that base case did not envisage a recession - now inevitable - and did not envisage anything like a 25% house price crash - now pretty well the consensus view. So £1.28bn will just be the down-payment.
In truth, nobody sensible ever believed those official assurances in the first place. But we now have confirmation that ministers were not just naive and incompetent - they lied through their teeth.
The wonder is that 25% of voters still seem to think these lying tossers are fit to rule us.