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Why cant the country go bankrupt


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I know in a conventional situation the debt would be simply bought by another bank, but what if it was not, what if it was written off

Then all the owners and investors in that bank would be massively out of pocket, and that would include most (maybe all) of the pension funds in the UK, it would harm pretty much everyone in the country, it would also be legally impossible

 

---------- Post added 20-12-2012 at 13:35 ----------

 

 

Iceland's whole ethos was the debt was created illegally and so was null and void.

That certainly wouldn't be the case with the majority of debt owned by UK banks.

 

I'm not even sure that Iceland applied a policy like that. Debt wasn't written off when they bailed out their banks, deposits were, completely the opposite.

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Then all the owners and investors in that bank would be massively out of pocket, and that would include most (maybe all) of the pension funds in the UK, it would harm pretty much everyone in the country, it would also be legally impossible

That certainly wouldn't be the case with the majority of debt owned by UK banks.

 

I'm not even sure that Iceland applied a policy like that. Debt wasn't written off when they bailed out their banks, deposits were, completely the opposite.

no the country would be bankrupt and as what happens now things would be protected before they go under:hihi:. this gov and the last were warning people that only the first £50 grand of any money they have in the banks is protected why is that i wonder ?
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no the country would be bankrupt and as what happens now things would be protected before they go under:hihi:. this gov and the last were warning people that only the first £50 grand of any money they have in the banks is protected why is that i wonder ?

 

It's £85k I think... for each bank...if this is a big worry for you then you need to spread your money round, ricgem :D

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Then all the owners and investors in that bank would be massively out of pocket, and that would include most (maybe all) of the pension funds in the UK, it would harm pretty much everyone in the country, it would also be legally impossible

That certainly wouldn't be the case with the majority of debt owned by UK banks.

 

I'm not even sure that Iceland applied a policy like that. Debt wasn't written off when they bailed out their banks, deposits were, completely the opposite.

 

I never said my idea was perfect :D

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no the country would be bankrupt and as what happens now things would be protected before they go under:hihi:. this gov and the last were warning people that only the first £50 grand of any money they have in the banks is protected why is that i wonder ?

 

You're not following the thread. Wex was asking about letting banks fail, not the country defaulting on it's debt.

 

The country defaulting on it's debt would have no immediate impact on us as individuals within the country. In the longer term it would make us all much poorer though.

 

---------- Post added 20-12-2012 at 15:25 ----------

 

this gov and the last were warning people that only the first £50 grand of any money they have in the banks is protected why is that i wonder ?

 

Because it was true (it's been increased to 85k as someone said).

 

It's also 85k within the same banking group, so don't hold 50k in HSBC and 50k in First Direct and think you're safe.

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You're not following the thread. Wex was asking about letting banks fail, not the country defaulting on it's debt.

 

The country defaulting on it's debt would have no immediate impact on us as individuals within the country. In the longer term it would make us all much poorer though.

 

Other countries that have defaulted seemed to do much better economically after they defaulted. It causes severe short term problems when the government finds it hard to borrow & the country has to live within it's means, but in the longer term they can rebuild their economy without the crippling debt.

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