BBC last night
BBC 1 had an hour long show about the financial crisis, that started as a ‘credit crunch’ and has seen banks and financial institutions fall like dominos starting with Northern Rock and taking in Halifax/Bank Of Scotland and Bradford & Bingley. Gordon Brown came out of this show really badly, they interpolated footage of him talking at high level finance dinners talking up the top financial institutions with disastrous figures on the present state of the eonomy.
The New Labour success story was built on ‘growth’ which now means voodoo economics, lending chains with no firm foundation and bankruptcy. The FSA (set up to regulate the industry) also dont come out of this show with pass marks, the only excuse they can come up with seemed to be that they ‘paid the best wages to attract the best candidates’ so anything that happened was not their fault!
3 things need to be looked into:
Similar companies should not be able to let to each other in a haphazard fashion.
Lending should have some solid basis ie not be sold on as an asset from company to company and have something to guarantee it.
There should be strict rules about what can be lent rather than leaving it up to the conscience of the lender, especially for business and ‘buy to let’ commerical borrowers.
It’s clear that most of the ‘growth’ in the last 10 years will evapourate with business finance being withdrawn and property prices going back to previous levels.
A couple of things in the Panorama show were just wrong, the main guy said something along the lines of ‘anyone who wanted to have their house price go up is at fault’, the average borrower does not have control over lending between City institutions or the way they regulate themselves. Also someone from the press said that the press had simply ‘reported what was happening’, if the press had not made the most of the Northern Rock people would have not withdrawn millions and it may not have had to get sold off cheap starting a chain of bad debt.
Who knows what these banks are doing with our money behind our backs? who will be the first to advertise themselves solely on the basis of not being involved in this? Although it sounds as if they all were..at least we are not as bad as Iceland!
Comment by Gavin — 17 October 2008 @ 4:02 pm
Or the USA. What will the UK get for the billions they are investing? If we dont get anything then we are giving preferential treatment to private companies if we DO then this will be seen as backdoor de-privatisation.
Comment by Matt — 5 November 2008 @ 12:16 pm