How Does the Economy Really Work?

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Spanish Banks and the Lessons of 2008

(Photo credit: Vicky TGAW)

The true test of whether lessons have genuinely been learned from the financial collapse of 2008 is about to be tested as European governments (and the G8) discuss what to do about the recent downgrading in the credit rating of up to 16 Spanish banks.

Back in 2008, we were told that the use of government (i.e. tax-payers') money to bail out the British, American and other banks that were at risk of collapse was an exceptional response to exceptional circumstances; that it was a one-off act, never to be repeated in the new age of financial sobriety and austerity. No bank, we were told, will ever be too big to fail.

If such claims were true, we should expect to see no action at all taken by European governments, the European Central Bank and the International Monetary Fund over the problems faced by the Spanish banking sector. Indeed, we may well, depending on how serious the individual banks' liquidity problems are, see one or more of these troubled banks going bankrupt, rather than being propped up by more public debt.

And, while we're on the subject of likely scenarios, rumours are also circulating that Spanish pigs are learning to fly. 

As Anna Morgenstern notes:

There cannot be a state in which the ruling class act against their own interests wholly and consistently.

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QuickQuid: 1734 Reasons to Avoid

Too much month left after the money? Need a quick cash loan?

QuickQuid can help - with instant loans of up to £1,000 for first-time applicants and money in your account within an hour of the loan being agreed.

The trouble is, the company (a UK subsidiary of American-owned Cash Euro Net) will charge you an eye-watering interest rate for the privilege.

How does a "representative APR" of 1734% sound?

Avoid, avoid - especially in light of some of the horror stories told by customers about the company's allegedly aggressive collection polices.

The company's original adverts in 2009 were banned by the Advertising Standards Authority for being misleading. The ASA judgement states that:

"because of the rate of the interest charged and the potential vulnerability of consumers likely to be attracted by the ad, we concluded that the ad was likely to mislead consumers by omission of information concerning the rate of interest."

Furthermore, several individuals who have never taken out a loan with the company claim to have received intimidating letters from Cash Euo Net demanding payment of non-existent loans.

And, while we're at it, how about asking your MP why such an iniquitous rate of interest is permitted in the UK?

  

Follow up

In September 2011, Which Magazine reported Casheuronet UK, which operates Quick-payday.co.uk and Quickquid.co.uk, to the Information Commissioners' Office for alleged malpractice. 

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