News
 Printer Friendly
 Email this article | |||||
162% Leap in Bankruptcies | |||||
| The following is an adaptation of an article appearing in The Herald on 17th October 2008. Insolvencies in Scotland hit record levels as stock markets took a further battering amid growing concerns that the global bailout of banks has come too late to avert a deep global recession. Latest statistics showed yesterday that the number of Scots going to the wall rose by more than 160% with nearly 6000 people and 300 firms going bust. There were 4055 bankruptcy cases between July and September this year, up 162% on the same time last year. The data from the Accountant in Bankruptcy also revealed that there were 289 notices of Scottish firms going into liquidation or receivership in the past three months - up a hefty 43% from the same time last year. The Scottish Government said the rise in bankruptcy cases came after the introduction in April of new debt legislation which made it easier for people on low incomes and low assets to be declared bankrupt. The Bankruptcy and Diligence etc (Scotland) Act 2007 introduced the Low Income, Low Asset route, ending the need for people to prove apparent insolvency in order to apply for their own bankruptcy. Justice Secretary Kenny MacAskill said the impact of the legislation had been predicted because it gave the public a new route to bankruptcy. But he agreed that work was needed to deal with the issue of insolvency and bad banking practice, and called on Westminster to use its powers on reserved matters. He said: "As well as dealing with the difficulties of bankruptcy we need to deal with the problem of irresponsible lending. Consumer credit is currently reserved and we require action to be taken to protect people from the harsh winds that may be blowing. There must be a maximum rate for lending and there must be a requirement for responsible lending." Stock Markets Meanwhile stock markets in Europe slumped after more grim economic news from the US stoked fears that the world´s largest economy is plunging into a deep and protracted recession. The FTSE 100 index of leading British shares closed down 218.20 points, or 5.4% at 3,861.39 - wiping a further £51bn from the value of blue-chip stocks. On Wednesday, the Dow Jones recorded its biggest one-day percentage fall since October 1987, closing almost 8% down. It came after the US government followed Europe´s lead and announced it is to pump some $250bn (£125bn) into shares of its leading banks as part of the $700bn (£350bn) package passed by Congress earlier this month. Japan´s Nikkei had its worst day since 1987 with shares down by 11%. The unprecedented streak of share price volatility extended last night, when the Dow rallied to close 400 points up after falling 380 in the opening minutes of the session. CMC Markets dealer James Hughes said: "Just when we thought the dust was beginning to settle we see another day of huge falls across the world." Across Europe, France´s CAC 40 and Germany´s Dax fell almost 5% and 6% respectively. Switzerland´s central bank also announced the latest multi-billion bailout - this time of banking giant UBS. But Mr Hughes added: "The difference from past moves is the fact that the main worry is not the bank bailout plan but the fears of global recession." The renewed selling over the recent days has meant that the world´s stock markets are heading back towards the levels they were at the start of the week, before they breathed a sigh of relief on the unveiling of a series of bank rescue packages from governments around the world to restore confidence. In London, the battered banking sector was experiencing mixed fortunes in the wake of the government´s rescue plan, which will see taxpayer-funded cash injections of up to £37bn in HBOS, Lloyds TSB and Royal Bank of Scotland. HBOS - seen as the weakest of the trio - was down 2% yesterday, although merger partner Lloyds TSB and RBS were virtually unchanged. Nevertheless, other banks were the day´s heaviest losers, with Fortis plunging more than 26%. HSBC shed 4%, Santander ended down 6.5% and BNP Paribas lost 7%. RBS said financial sector rescue packages put together by governments and central banks would serve as a shock absorber but were unlikely to prevent most euro-area economies from falling into recession next year. Questions? Should you have any questions or comments then please don´t hesitate to contact me using the details below. Best regards, Stephen Cowan Managing Partner Yuill + Kyle Debt recovery + Credit control Lawyers, Scotland scowan@yuill-kyle.co.uk W: http://www.debtscotland.com T: 0141 331 2332 Debt Recovery Ignited! | |||||
| Printer Friendly
Email this article | |||||
| Back | |||||
