| Topic: | Re:Re:Re:Re:Re:The Real Big Story : UK Economy continues to shrink under Gordon Brown | |
| Posted by: | Fraser Pearce | |
| Date/Time: | 27/10/09 16:39:00 |
| “I tend to find it highly contemptable that you can blame the current world economic situation on the UK government.” - He isn’t. ----- “The first first cause is the global banking system, second is the lack of non consumer regulation in the UK, this was set up in the 80s and was allowed to continue to the present day. The Conservatives promoted this, Labour embraced it and allowed it to happen and the UK banking system, or at least some parts of it, milked it for all it's worth - and still do.” - You seem to be confusing deregulation with non-regulation. The current UK regulator is the Financial Services Authority. It was created by the Financial Services and Markets Act 2000, as part of the UK’s attempt to align UK and EU law. As such, the Bank of England’s analytical approach to regulation was replaced by the FSA’s layers of process, themselves based on inflexible and complex regulations in keeping with the EU’s Financial Services Action Plan. This was why, despite being given regulatory powers far beyond the Bank of England’s, the FSA still failed – it didn’t try to understand what did and didn’t work but instead relied on bureaucracy and process to do the job. This prompted massive regulatory failure that was exploited by risk-taking FSIs. The Conservatives did not “promote this” failure nor was the primary cause of this failure in the UK – the FSA - “set up in the 80s”. We’ll never know whether the Tories would’ve done anything different had they been in power at the millennium. Then again, they weren’t the ones in power then, were they? ------- “As the old saying goes, no one believes they are the bad guy.” - Absolutely, although this applies as much to the regulators and government as it does to ‘the bankers’. The bankers, however, ain’t the ones running the official enquiries. ------- “There are ways we could have reduced the impact of course - but do the voters of Britain want us to become closer intergrated with Europe and, eventually, Asia?” - You seem to be advocating membership of the European Economic Area without even realising. It’s the UK’s closer integration with ‘Europe’ that precipitated Britain’ regulatory failure to begin with. The UK replaced the UK-specific regulation of the Bank of England with the ‘one size fits all’ framework of the EU - which was designed to apply to 27 countries, none of whom had a financial services sector as big, broad or deep as the UK’s. Furthermore, with EU membership, it’s either/or. You can’t be in the EU and “eventually” have something remotely similar with Asia. ...That’s why the EU’s a customs union, not a free trade area. ------- “You could blame Labour for the current economic situation but I think you'd be missing the point by several miles.” - True, from a global perspective. Any idea why the UK is in considerably worse a situation than most of its peers though? |