They're talking about a 45% income tax band for people earning £150k plus to fund it - don't think that will affect many of us, but it'll do a nice job on the bankers who are responsible for the whole mess! :lol:
Contrary to common belief, very few "bankers" get huge salaries.
The source of the current problem isn't British based - it comes from America where their interest rates were kept artificially low for a very long time. This meant that people who wouldn't ordinarily be able to borrow money were able to - unfortunately, being the type of people who can't ordinarily get credit, they bit off more than they could chew and couldn't replay the loan.
It doesn't matter how many times you say "your home is at risk if you don't keep up repayments" if the people doing the borrowing don't fully understand the implications - and before you say "well they shouldn't have been lent the money then", how do you prove that you understand the risk? Sign the agreement? That's what they did.
A bank is a bit like a fountain - money is constantly flowing in, while some is pouring out the bottom. As long as the amount coming in matches the money flowing out, all is well.
The money going out is made up of people withdrawing money, drawing mortgages and loans, and other banks borrowing money to make sure their own fountain keeps flowing.
If the money coming in dries up, then because money is still flowing out eventually it runs dry.
The banks stopped lending to each other because they had nothing to guarantee the loans. Until then, Bank A asked for a loan and Bank B said "OK, but what are you going to secure it against in case you can't repay it?" and Bank A offered it's mortgages - usually a safe option because people aren't going to risk losing their homes by not paying up.
Once lots of people stopped repaying their mortgages, Bank A was offering mortgages as security (like your house is for your mortgage) but Bank B said "Err... nope. Not accepting those now", so Bank A can't get the loan.
Net result: the current situation.
There are lots of other things that have contributed in one way or another to it - you can't put the blame on any one of them. Yes, there were greedy people working in banks, but there were greedy people pushing up the price of houses too. And greedy estate agents who got bigger commissions. And greedy mortgage brokers who encouraged people to borrow more than they ought... You get the idea.
Sorry for the long (and dull) post, but I hope it's explained, at least in part, what's been going on.
The bank I work for has been nationalised, is being broken up and sold off. I may or may not have a job when I come back after Christmas - time will tell.
