The banks are returning to profit, but where did it all go wrong?

The news that the major United Kingdom Banks are returning to profit is welcome. In 2008 most of them were at risk, so it seemed and most of them needed taxpayers’ money directly as an injection or indirectly as a guarantee which gave people confidence to keep their money in the banks. After nearly two years the confusion surrounding what went wrong is beginning to unravel. Banks are inherently potentially insolvent businesses.  There are two definitions of insolvency and these apply as much to the large financial institutions as they do to individual people. Continue reading