One of things that have struck me during the last three years, is the lack of banks going out of business in the UK, and Europe in general.
In the USA forty three banks have failed during 2011, but this is down from 157 failures during the whole of 2010. Since 2008 around 800 American banks have failed.
In the UK, a sign of things to come is the recent and un reported failure of a small, south coast, bank called Southsea Mortgage & Investment Company.
As the Daily Telegraph reports:
Most of the bank's 267 savers, who had a total of £7.4m on deposit, will get all their money back under from the Financial Services Compensation Scheme (FSCS).
However, 14 customers with more than £85,000 on deposit face losing any money over the maximum protected by the FSCS and will have to join other creditors to claim their losses back.
This is a tiny bank, but the precedent has been set.
In addition another Danish bank that the government refused to help, has been allowed to collapse, the second this past year.
Now, one thing that sticks is my mind is the introduction to A Diary of the Great Depression, written by a lawyer called Benjamin Roth in 1931.
The author tells us he is: "living through an historic thing that will long be remembered".
Roth the painstakingly, or perhaps heartbreakingly, records the banks that collapse on a daily basis. By 1934 it totalled over 15,000, or about half of all the banks in America, that had collapsed.
Now, in today's world we live in an unrestricted environment; without the shackles of a gold standard.
With the power to print money without the backing of gold, we may not see the same scale.
And as for the pitiful sight of depositors queuing outside a bank, the bank runs currently underway (Greece et al) are electronic.
It is for the above reasons that the latest news on Lloyds is disquieting: according to the latest bank of England Financial Stability Report, as reported in the Financial Times (£):
Lloyds Banking Group's exposure to the riskiest kind of mortgages is more than double that of any of its top five rivals in what is potentially a ticking time bomb for Britain's largest high-street lender.
Data published last week by the Bank of England showed that loans representing more than a quarter of Lloyds' mortgage book are worth at least 90 per cent of the property value they are secured against.
And that makes today's story on the BBC, House prices continue to fall in England and Wales even more worrying.
