Britain's Banking Calamity

On Thursday (21/6/12) the computerized clearing system for Britain's Natwest bank which also serves the Royal Bank of Scotland (RBS) and Ulster bank failed. This left customers including employers who use the banks to pay their employees unable to move money in and out of their accounts. The fault seems to be continuing today (24/6/12) and the backlog has forced Natwest to open it's high street branches on a Sunday for probably the first time in history.

The computer fault came on a big day for the global banking system. On Thursday the credit ratings agency Moody's downgraded 15 banks including Goldman Sachs, Lloyds TSB and HSBC. This was due to a growing feeling within the industry that governments are no longer prepared to bailout failing banks leaving them more exposed to any bad debts they have on their books.

This creates a possibility that a large bank could fail. If that were to happen it would create a situation similar to the current situation with Natwest with customers suddenly being unable to access their money. So Britain faked the banking fault in order to intimidate governments across the world (especially within the Eurozone) into continuing to pour taxpayer's money into the banks.

Oh and I think there was also a hope that my Thursday post on Syria would be different from what it was.