I have always been more interested in how we get out of the present mess than in how long it will take to wring an apology from the saviour of the world.
The Guardian interview is, we are told, a kind of apology. The PM accepts he was responsible – well that’s progress. He regrets that he did not “mount a popular campaign ten years ago to demand more responsible regulation of the world’s financial markets”.
There’s a clever wriggle. In one bound the apology becomes part of the spin to tell everyone that this is a global problem, with the implications that the problems lay elsewhere and to underline that the PM himself was right all along in his thinking.
It’s too clever by half. It won’t wash. It shows he still does not understand.
Let’s try once again to explain it.
Northern Rock, RBS and HBOS were all British banks, controlled by British Regulators.
The British regulators had the power to require those banks to hold more capital and cash if they thought that necessary. They did not do so. The British Regulator signed off on the Northern Rock business plan.
The damaged Bank of England, undermined by the Brown reforms, the very same bank that is now printing fivers in desperation at the shortage of money, was lecturing the banks that it was their fault the money markets had no money in August and September 2007, when they helped bring on the crash. The British competition authorities could have stopped the mergers which created mega banks. The size of RBS made it an especially difficult case to handle, and the merger of LLoyds with HBOS damaged LLoyds needlessly and badly.
This crisis was brought on by bad regulatory calls as well as by greedy senior bankers. The supervision of banks, as the Chancellor reminded us yesterday in the House, is primarily a matter for the host country of the headquarters of a global bank. In the cases of RBS and LLoyds/HBOS that was and is the UK.