An interesting comparison

Whilst perusing yesterday's debate on the Northern Rock, which I covered in my previous post, I found a very telling comment. It was made by the former Labour Minister Frank Dobson. He was singing the praises of Spanish banks and explaining how Spanish banking law "will not allow banks not to consolidate off-balance-sheet debt. Spain’s new law requires that all debts and obligations be consolidated, recorded and transparent. Lo and behold, the Spanish did not get substantially involved in mad mortgages in the United States."

He went on to explain that "I gather from the Financial Times that the Spanish law has another merit. It has a counter-cyclical arrangement designed to ensure that banks’ capital and lending capacity is not reduced during an economic downturn, and that excessive credit is not made available during an upswing. We might discuss what financial stability is, but by and large it is a sound idea for the economy as a whole."

Can anyone think of a Government closer to home than Spain that encouraged, and indeed itself lived upon,"excessive credit"? A Government that has not repaid debt during the good years and so is worse placed than most other large industrialised countries to ride out the bad years? Do you really need any clues?