From The Times:
Figures released yesterday in the Bank's annual report showed that in the 12 months to February 28 it raked in profits before tax of £995 million... The profits surge for the Old Lady of Threadneedle Street has already paid a big dividend for taxpayers. The Bank made an initial payment to the Treasury of £203 million on April 3 and a further, similar sum is set to follow in October under rules that require the Bank to hand back a quarter of its post-tax profits to the Government on two dates each year...
The Bank has also earned large amounts from the £185 billion loaned to banking groups in the form of Treasury bills, under its Special Liquidity Scheme (SLS)... As security for its loaned funds, the Bank continues to hold £287 billion-worth of hard-to-trade, illiquid assets that it swapped under the scheme.
*ahem*
1. Why bother distinguishing between pre- and post-tax profits? The tax goes to HM Treasury; half the remaining profits are paid as dividends to its sole shareholder HM Treasury*; and the retained profits belong indirectly to its sole shareholder, HM Treasury.
2. The Bank of England appears to be incredibly badly run. In exchange for underwriting/guaranteeing £287 billion of crap, it has only managed to extort £1 billion from the commercial banks who dumped the stuff. That's barely a one-third of a per cent mark-up.
*/ahem*
* Unless you subscribe to the conspiracy theory that the Bank of England is privately owned.
Two Birds, One Stone!
1 hour ago
5 comments:
Maybe it's a hope not a conspiracy?
After all apart from all it's board-members being chosen by Gordon Brown, the BoE is "independent"*.
The one eyed man is "king" so maybe some people in this land are blind enough to believe the BoE is independent.
Entirely off topic, but really, what can you do with Brown? Everything he touches turns to shit. He's bankrupt the country and now he's bankrupt of ideas. The only answer he has to any problem is to regulate it. And to try and mask all this failure he goes on spinning and spinning. Hence these dodgey numbers from the B of E.
L, I suppose we could use him as a walking warning about the dangers of socialism and/or the 'houses can only go up in value' myth?
I once worked for an American bank that made a multimillion dollar fee convincing the French State owned SNCF not to buy its trains outright but to lease them from a French State owned bank who reduced their tax bill by claiming depreciation costs from the trains, thus getting an effective interest free loan from the French government, part of which it kept as profit and the rest was passed through to SNCF in the form of reduced rental costs, thereby reducing the losses at SNCF so that the government didn't have to put in so much annual subsidy.
Alex, that is brilliant, that's a bit like the UK government now giving PFI companies low-interest loans to ensure the schemes stay profitable.
But in your case, there was still a subsidy because the bank/SNCF taken together paid less tax/interest than otherwise. OK, they are both state-owned so the net subsidy is nil, what we have to try and identify is by how much the actual manufacturer of the trains (assuming this to be privately owned) managed to bump up the price of the trains.
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