I had to re-read Mervyn King's words in the Telegraph this morning to believe them. Yep, couldn't be clearer.
"From the start of the crisis, central banks provided emergency loans but these amounted to little more than holding a sheet in front of the emperor to conceal the nakedness of the banks. They didn’t solve the underlying problem – banks needed not loans but injections of shareholders’ capital in order to be able to absorb losses from the risky investments they had made. From the beginning of 2008, we at the Bank of England began to argue that UK banks needed extra capital – a lot of extra capital, possibly £100 billion or more. It wasn’t a popular message. .........That bold action (to nationalise RBS and Lloyds) in October 2008 could have happened sooner; bailing out the banks came too late to prevent the financial crisis from spilling over into the world economy. The realisation of the true state of the banking system led to a collapse of confidence around the world and a deep global recession. Over 25 million jobs disappeared worldwide. And unemployment in Britain rose by over a million."
One can actually hear the dripping sarcasm in the words 'That bold action..' in describing Brown's dithering, panic and confusion, and the accusation is clear - if Brown had acted quickly, and boldly, then the global recession may have been averted.
Two things. Up until now we've been told it was the Septics wot triggered it - Fannie Mae and Freddie Mac lending to junk people for junk real estate. Now it seems it was our dear banks, mired in greed, rapacity, obfuscation, fraud and balance sheet distortions.
Secondly, Brown didn't cause recession. His stupidity may have triggered it, but it was the same greedy, rapacious etc. bankers as above that caused it.