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Wednesday, 9 December 2009

Darling reaping Brown's ineptitude

Had Brown not been seduced by the siren songs of his exclusively banking sector advisers during the crisis, and had he been bold enough to split the retail and transaction banking sectors from the wild buccaneers of the investment banking world, Darling would not now face the problem he faces today.

A tightly regulated retail banking sector, with deposits guaranteed by government, would not have a bonus problem. Normal profits would regulate both shareholder returns and HR reward structures. These 'boring banks' would offer the citizen and taxpayer a rock-solid national banking system.

Allowing the investment bankers to do exactly as they liked, with absolute freedom, on the other hand, would reap a rich reward for the Treasury (and us) from successful buccaneers - and no costs at all from those that fail, for just as their reward and bonus schemes would be beyond government interference, so would their losses be beyond bailout. Bankers would not flee abroad, and Darling would not be faced with destroying the city's risk culture by inappropriate regulation.

Now that Myners, Shitty Vadera and the rest are creeping away from Brown, their job done, he faces the ignominy of having thrown public money at the banks with as much zeal as his 1970s foreparts ever did to British Leyland or British Steel and with as little effect.

Brown's utter fiscal ineptitude must now be clear for all to see; why the nation ever permitted this greasy-haired Scots technical college lecturer to meddle with the nation's finances will be a puzzle future generations will not comprehend.


Weekend Yachtsman said...

Darling might be proposing to destroy the City with inappropriate regulation, but in all likeliehood he'll be out of office before he can actually do it (crosses fingers, touches wood, etc).

otoh, Sarkozy and henchmen also plan to destroy the City with inappropriate regulation, and who elected them? Who can remove them?

Nobody and nobody.

We're stuffed whatever happens in our little local election.

Budgie said...

I agree Raedwald, separation of retail and investment banking is a must, for all the reasons you state.

As for Brown, his incompetence is apparently boundless. To cut the nearly overwhelming debt Brown has generated the government needs to copy Ireland: cut state sector pay and pensions - a 10% saving using a tapered cut so that the low paid were least affected would really eat into UK government debt.

We also need to chop useless projects like EU membership, ID & NHS databases, and carbon cap and trade (which is largely the culprit for shutting Tata/Corus plant at Redcar).

hatfield girl said...

Sunday, 6 May 2007, Sarkozy was elected President of France, democratically, directly, by the people of France.

With respect, Weekend, it's the Brown junta's foreign policy failures and the refusal to hold the referendum offered in Labour's 2005 manifesto on our relations with the EU that make the UK subject to French policy. The French can vote Sarkozy out. We can't vote Brown out - we've been denied a general election since Brown assumed power.