It is reported that Lloyds Bank is increasing its provision for payment of compensation for mis-selling payment protection insurance by £1.8 billion to nearly £10 billion:
I have two questions about this, one moral and one economic:
1 how many people have been or will be sent to jail for ripping off the customers of this one bank to the tune of £10 billion? and
2 what was the money doing before it stimulated the UK economy (assuming it's true that it has had this effect)?
Surely, the money was somewhere else before it was paid back to the defrauded customers? If I cheat you out of £100 you don't have the money anymore but I do. You can't spend it but I can. When I am found out and pay the money back, now I don't have £100 but you do. So you spend it and I don't. How does any of this affect the economy?
Quote:
But BBC business editor Robert Peston argues that despite these provisions being "an extraordinary badge of shame" for the banks, the payouts have actually helped stimulate the UK economy. "These PPI payments have played a very big role in encouraging economic recovery," he told BBC Radio 4's Today programme. |
I have two questions about this, one moral and one economic:
1 how many people have been or will be sent to jail for ripping off the customers of this one bank to the tune of £10 billion? and
2 what was the money doing before it stimulated the UK economy (assuming it's true that it has had this effect)?
Surely, the money was somewhere else before it was paid back to the defrauded customers? If I cheat you out of £100 you don't have the money anymore but I do. You can't spend it but I can. When I am found out and pay the money back, now I don't have £100 but you do. So you spend it and I don't. How does any of this affect the economy?
via JREF Forum http://ift.tt/1kD6JJz
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