Quote of the day
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“The banking industry did not cause a housing bubble, it wasn’t the one setting monetary policy and it wasn’t in charge of the regulator.”
- Angela Knight, the chief executive of the British Bankers’ Association, as the banking industry today warned the Treasury that plans for a “supertax” on bankers’ bonuses would damage the City’s reputation as a financial centre and risk an exodus of companies abroad. She said that it was a “populist” measure aimed at boosting the Government’s popularity. “In a tight fight for a general election you are going to take your opportunity.” She also questioned the “practicality” of such a measure — a view that several leading accountants have already expressed, saying that such a move could breach their human rights. (full story HERE)
Witanagemot Blogs
So who lent the money to the people who asked for mortgages? And who traded and invented lots of financial devices based on mortgages many of which were unsound? Dearly as I would like to blame the governments, they did not. They did just sit on their hands as their regulators fiddled and faddled.
I dunno, I reckon you can still reserve some of your hatred and irritation for the Government for setting up such a rubbish regulatory and supervisory system in the first place.
People, in general, were also to blame, of course. Just because some were seduced that 125% mortgages made sense or that they could afford 5x salary or higher didn’t mean that they had to subscribe to the illusion and thereby further inflate it.
12years of fiddled inflation figures cannot have helped
The root of all our problems stem back to a system which was supposed to set interest rates independently but slavishly refused to call the government to task on the fixed inflation rate it was asked to attain.
The BOE and the government lied over inflation for years, and debased our currency at the end to prop up its own failing system.
The banks did what banks do, they profiteer. They always have and for the government to now complain about it after they deliberately let go of the leash to fuel their own political careers is the grossest hypocricy.
Never underestimate how much Labour politicians hate the City.
They probably don’t believe they did cause the housing bubble. They probably believe they are just servicing the demand and it’s the demand that is causing it – and they have a point.
Having said that, if a bank goes bust it is the fault of the CEO, directors and shareholders. If a government decides that the consequences of banks going bust are so bad they have to set up a regulatory system to stop it from happening, and the banks all go bust anyway, then that is the government’s fault.
The fact the regulatory system failed to stop them going bust is Gordon Browns fault – although he probably doesn’t believe it is.