Monday, April 11, 2011
Gordon Brown fesses up
The interim report on the structure of the banks is long overdue and very welcome and I hope that the Government implements it in full. One important side effect though has been a confession by former Prime Minister, Gordon Brown that he got it wrong on the banks.
According to the Daily Telegraph Mr. Brown has now claimed he had not understood how “entangled” the world’s financial institutions had become:
Mr Brown said: “We set up the FSA believing the problem would come from the failure of an individual institution. That was the big mistake. We didn’t understand just how entangled things were.”
He added “I have to accept my responsibility.”
The paper says that Mr Brown is expected to face criticism in the Independent Commission on Banking report for relaxing competition rules which allowed Lloyds TSB, as it then was, to merge with HBOS, following the collapse of Lehman Brothers.
Given that Labour have been incorrectly blaming the banks for the entire economic collapse on their watch, does this mean that they have now accepted that it was their fault after all? If they allowed the banks to get out of control then how can they now lay the blame entirely at the feet of the financial institutions?
Gordon Brown has destroyed the Labour Party's alibi.
According to the Daily Telegraph Mr. Brown has now claimed he had not understood how “entangled” the world’s financial institutions had become:
Mr Brown said: “We set up the FSA believing the problem would come from the failure of an individual institution. That was the big mistake. We didn’t understand just how entangled things were.”
He added “I have to accept my responsibility.”
The paper says that Mr Brown is expected to face criticism in the Independent Commission on Banking report for relaxing competition rules which allowed Lloyds TSB, as it then was, to merge with HBOS, following the collapse of Lehman Brothers.
Given that Labour have been incorrectly blaming the banks for the entire economic collapse on their watch, does this mean that they have now accepted that it was their fault after all? If they allowed the banks to get out of control then how can they now lay the blame entirely at the feet of the financial institutions?
Gordon Brown has destroyed the Labour Party's alibi.
Comments:
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Nice try! Blame Labour for the foul-up. But don't forget that the Tories cheered on this 'liberalisation'. The economists too, bear a massive responsibility for not understanding the nature of the 'free markets' they are so eager to promote.
And us Lib-Dems? I was on the Lib-Dem macro-economic policy unit in 2002-3 and tried to get something in about asset-price bubbles especially housing. The clever LSE-based economist, Tim Leung, who chaired this group dimissed the idea out of hand. Only retail inflation mattered; the market would see to the rest.
Let's have more Keynes and Galbraith, less Friedman!
And us Lib-Dems? I was on the Lib-Dem macro-economic policy unit in 2002-3 and tried to get something in about asset-price bubbles especially housing. The clever LSE-based economist, Tim Leung, who chaired this group dimissed the idea out of hand. Only retail inflation mattered; the market would see to the rest.
Let's have more Keynes and Galbraith, less Friedman!
Of course The Labour Government must bear responsibility for not keeping tighter control over the UK banking system but most other developed countries made the same mistakes. The source of the problem can be traced back to the very low interest rate policy used by most countries to stave off recesion following the dotcom bust 911 and Lehmans.The same mistake is still being made with real interest rates being at around minus 4%
The reality is we will all have to accept a reduction of about 20% in our real wealth (ie roughly what we gained since 1997)Which means a reduction in the value of houses pensions wages and savings. It will probably then take till about 2020 to regain that 20% lose. No Political policy will change that. The political decision is how and who bears the most pain.
The reality is we will all have to accept a reduction of about 20% in our real wealth (ie roughly what we gained since 1997)Which means a reduction in the value of houses pensions wages and savings. It will probably then take till about 2020 to regain that 20% lose. No Political policy will change that. The political decision is how and who bears the most pain.
# posted by 
: 10:47 AM
: 10:47 AM
I am not so much trying to blame Labour solely for foul-up Conall as to point out that their tactic of using the banks as a scapegoat and washing their hands of any blame does not stand up to scrutiny.
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