Anything the global financial system can do, local government can do worse

Individuals who lost more than £50,000 in the Landsbanki collapse certainly let greed get in the way of good sense, and certainly don’t deserve the generous bail-out terms that the government has given them. However, that pales into insignificance compared to the 20+ local councils who’ve lost tens of millions between them in Landsbanki deposits. And who won’t get a penny back, as compensation schemes for bankrupt banks only protect retail investors.

These organisations actually have people employed with financial qualifications in working out what to do with their money. And it’s not like they haven’t been burned before by the collapse of a dodgy bank that just happened to be the highest interest payer (if it is in fact possible to work in local government finance without being told about the BCCI collapse and its knock-on effect for councils, then there’s a systemic problem in that everyone in the entire industry is completely inept).

It’s unfortunate that local taxpayers can’t recover the missing assets from the idiots in question, and the councillors who’ve singularly failed to oversee them (and who, I’m willing to stake near-Landsbanki-style amounts of money, will be more or less equally drawn from the ranks of the major parties).

Update: The Daily Mash calls it right: “oh fuck, we meant ‘Luxembourg’”…

3 thoughts on “Anything the global financial system can do, local government can do worse”

  1. Can't we? I thought the provisions for "surcharging" a councillor were quite draconian, and I can certainly remember a lot of people on the Left whingeing that they were a Thatcherite plot against local government in general and the Labour Party in particular.

    Let's serve a writ and surcharge Boris for the forty mill of TFL's…

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