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.
March 17, 2009
Wonder what the God Obama thinks of Brown blaming the Americans for the whole thing!
Interesting how the AIG disaster was caused by the team in London but this wasnt Gordon’s fault, no sir.
The whole system set up by Gordon has lost all credibility and the the only way out is to start again. It will take a long time to get the credibility back and the current Govt spending is only going in the wrong direction.
Long term damage of Labour will be huge.
March 17, 2009
There used to be a description for people who took no responsibility and upon whom no blame ever stuck. It was ‘teflon shoulders’. Brown has become the master of ‘teflon shoulders’.
March 17, 2009
But eventually the teflon wears out.
What do you do then.
You chuck it away because everything sticks to it eventually.
Then you get a new one, that hopefully perfoms better.
We had the frying pan with Blair, we are now into the fire before the storm.
March 17, 2009
The only “apology” that is acceptable from Brown would be his immediate resignation and a general election.
March 17, 2009
To be perfectly clear, under Brown’s tripartite system the regulator responsible for the “prudential supervision” of banks is the FSA, NOT the Bank of England.
As stated in this Memorandum of Understanding, which bears the names of Gordon Brown, Mervyn King and the then Chairman of the FSA:
http://www.bankofengland.co.uk/financialstability/mou.p df
“The FSA’s responsibilities
3. The FSA’s powers and responsibilities are set out in the Financial Services and Markets Act 2000. Within the scope of the Act, it is responsible for:
i. the authorisation and prudential supervision of banks, building societies, investment firms, insurance companies and brokers, credit unions and friendly societies;”
If a bank is allowed to operate in such a way that eventually it becomes insolvent and needs to be bailed out by the taxpayer, that represents a supervisory failure by the FSA, not by the Bank of England.
I say “Brown’s tripartite system”, but I can’t help wondering whether it was part of some wider EU plan.
March 17, 2009
Can you believe the hogwash Gordon Brown comes out with? Wishes that he had spoken out against light touch regulation! He boasted about it and lectured other Finance Ministers regarding his approach and told them that they should follow!
Tomorrow he will have an interview with the BBC in which he will also say that he wishes that he had also spoken out against the following:
1. Abolishing Tax Relief on Pensions – this left investors looking for somewhere to invest their capital – many chose property, which was one causal factor behind the house price bubble (whilst taking 100bn quid from Pension funds)
2. Pump Priming the economy following the dot com crash – this ‘avoided’ a recession and facilitated Gordon’s hubristic boast that he had ‘abolished Boom & Bust’. But it also meant that we lost the natural economic cooling effect that recessions bring
3. Shifting from the RPI to the CPI – this removed House Prices from the inflation figures and helped deliver interest rates that were too low for too long which was another key factor behind the Bubble
4. Failing to build financial reserves during his ten years as Chancellor to prepare the country for the next downturn. After 15 years of growth, the UK was borrowing billions going INTO a recession
I’m not interested in Mr Brown’s apology. His assessment of his handiwork is irrelevant. The only opinion that counts is that of the electorate.
Your day of reckoning awaits Mr Brown!
Unfortunately, so does ours – we’ll be paying for Brown’s hubris for the next 50 years.
March 17, 2009
It also needs to be borne in mind that another reason why this Government did not do anything about the dangerous debt and asset value bubble building up, is that the feel-good it generated made it more likely that Labour would be reelected.
March 17, 2009
Labour simply do not get it.
Proof? Here is a quote from the Labour List website on the interview with the Prime Minister. He starts with the denial as said in the blog by our host.
Then we get this:
“At the heart of (the Prime Minister’s) attack lies a new version of his successful demolition of the Tories at the 2001 and 2005 elections – that they would slash spending on vital public services. “I think it’s essential that Labour wins the next election for the sake of the country,” he says.
(He then refers to Neil Kinnock’s speech about “Do not grow old etc”)
But, with the sun streaming in from the Downing Street garden, Brown smiles as he says that an election is the last thing on his mind.”
I look in vain for any sensible figures, any desire to admit that we are in any danger that can be averted, any intimation of the sheer size of our borrowing.
Debt is slavery.
And we waltz into it with abandon.
March 17, 2009
“Northern Rock, RBS and HBOS were all British banks, controlled by British Regulators.”
Were they not substantially regulated by the EU?
(Not, of course, meaning that to suggest that Brown is free of responsibility).
March 17, 2009
No amount of pointing will fix this house of horrors. The thing needs pulling down and rebuilding from the foundations up. Gordon has spent so much time plastering over cracks that he’s forgotten the size of the problem to begin with.
Great Britian does need to be told the truth about the whole cover-up, I trust David Cameron will have the Post Labour Assessment of the State of the Nation speech, shortly after taking the keys to No.10
The country needs to know the full picture, they need to be reminded that Gordon Brown and those that surround him are responsible for the national neglect of duty. With this, the country can pull together in returning to some kind of viability.
March 18, 2009
Can somebody please ask Mr Brown to answer these questions:
1) How the global problems he so often refers to actually inhibited his Government from controlling the credit bubble that got out of control in the UK?
2) How exactly did Global policy stop his government from controlling how much people could borrow against their salary, with respect to obtaining a mortgage?
3) Exactly which Global policy inhibited his government to act in raining in the credit which so many other forecasters had warned about?
4) Again exactly which Global policy inhibited his Government from controlling the risk that UK banks were allowed to take?