"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... I have to accept my responsibility"Those are the words of Gordon Brown at this weekend's Bretton Woods conference. I wonder how the BBC will report this admission...
Do also remember that the ICB report that calls for the beak up of the large banks will have to draw attention to the size of Lloyds Banking Group. A bank that grew so large as a result of the takeover of HBOS, a takeover that Gordon Brown and his team urged upon Lloyds Bank TSB, as it then was, following the collapse of Lehman Brothers. The merger was pushed through as Gordon Brown's government overruled UK competition law.
Gordon Brown's fingers are all over the banking problems in the UK just as they are all over the size of the UK debt. The BBC do report this story but also present Gordon Brown's defence, apparently he was not the only one who had made mistakes so we should forgive him:.
'"We know in retrospect what we missed. We set up the Financial Services Authority (FSA) believing that the problem would come from the failure of an individual institution," he said.Sorry Gordon, had you not boasted of how you had 'abolished boom and bust' I might have been prepared to partially forgive you but you were vainglorious and were exposed for what you are, so I hope your reputation is trashed and that you are as hated by the rest of the country as you are by this blogger.
"So we created a monitoring system which was looking at individual institutions. That was the big mistake.
"We didn't understand how risk was spread across the system, we didn't understand the entanglements of different institutions with the other and we didn't understand even though we talked about it just how global things were, including a shadow banking system as well as a banking system.
"That was our mistake, but I'm afraid it was a mistake made by just about everybody who was in the regulatory business."'
I probably hate him more than you do. His uselessness has cost me my business, and as a result my wife has been in hospital for the past seven months suffering from depression following a serious suicide attempt last August.
ReplyDeleteBut Brown isn't entirely to blame. It was Blair who put him into No. 11, knowing all of his faults. It was Blair who lacked the courage to remove him when his failings were beginning to have a profoundly damaging effect on the economy, and it was Blair who stepped aside and allowed Brown to take over No. 10 without a murmur.
Any fool should have realised that it is not the big banks that fail first but the smaller banks who get squeezed as markets tighten. After they fail the risk becomes systemic.
ReplyDeleteThe idea that a big bank suddenly fails because everything goes wrong at once is incompetent naivety. The idea that this can be prevented by a box-ticking entity like the FSA is laughable.
Already forgotten about by the BBC. Of the TV news I saw yesterday, all I got from the BBC was when they read out a newspaper headline which mentioned Gordon's admission. Funny how the BBC love to remind us what Mrs T did, even though that was 20+ years ago, yet Gordon Brown admitting he got it wrong and put the country into the mess we now find ourself - nothing from the BBC.
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