Mr Clegg fibs again today. He tells us he would split investment banking from clearing banking to stop another banking crisis.
Was he asleep during the crisis? Lehmans went bust – that was a pure investment bank. Northern Rock went bust – that was a pure mortgage bank. Alliance and Leicester and Bradford and Bingley got into trouble – both specialist mortgage banks. Fanny and Freddie needed taxpayer subsidy – both mortgage banks. What’s his answer to that?
The truth is the banking regulator didn’t ask for enough cash and capital from any sort of bank. That’s why they got into trouble, when the monetary authorities decided to lurch from super loose to super tight money.
Promoted by Christine Hill on behalf of John Redwood, both of 30 Rose Street Wokingham RG40 1XU