Friday, 20 August 2010

Financial disasters 3 - the banking crisis

Earlier this month, the BBC’s business correspondent, Robert Peston, revealed that the new Basel rules designed to prevent a repeat of the banking crisis have been watered down into ineffectiveness. http://www.bbc.co.uk/blogs/thereporters/robertpeston/2010/08/basel_allows_banks_to_play_the.html.

That’s a shame. In London’s Disasters, I tell the story of the crisis, and of how the bail-out of Britain’s banks had cost £850 billion by December 2009. That’s about £14,000 for every man, woman and child in the country.

I mentioned in my blog of Aug 13th that those responsible for the South Sea Bubble in the 18th century had their estates confiscated. (They got off lightly. One MP wanted them to be tied up in sacks and thrown into the Thames.)

No such problems for those responsible for the banking crisis. We all know the story of Sir Fred Goodwin’s pension, and of how in February 2010, RBS announced that even though it had lost £3.6 billion in 2009, it wanted to pay out £1.3 billion in bonuses. (See also my blog of Jan 20, Feb 10 13, 16, 18, 2009.)

*More coverage of the book from the Wandsworth Guardian:-http://www.yourlocalguardian.co.uk/news/local/wandsworthnews/8331276.Wandsworth_s_past_disasters_revealed/

and Docklands 24 http://www.docklands24.co.uk/content/docklands/news/story.aspx?brand=Docklands&category=news&tBrand=docklands&tCategory=znews&itemid=WeED17%20Aug%202010%2015%3A35%3A37%3A037

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