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Fsa Chief - Lord (!) Turner Admits They Have No Idea What's Going On

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http://business.timesonline.co.uk/tol/busi...icle5564878.ece

He said regulators needed to find a way to intervene before the risks in the financial system ran out of control.

“The changes which we need to make to create a sounder system for the future will be profound,” Lord Turner said.

“Central banks and regulators between them need to ... identify the combination of measures which can take away the punchbowl before the party gets out of hand.”

Lord Turner — who took over as FSA chairman last September — said that there had been a widespread failure to identify the risks which had been building in the financial system for a number of years and led to the current crisis.

While he accepted that there had been failures by the FSA in terms of regulation in the run-up to the collapse of Northern Rock, he said that the problems in the system were much wider.

“The far bigger failure — shared by bankers, regulators, central banks, finance ministers and academics across the world — was the failure to identify that the whole system was fraught with market wide, systemic risk,” he said.

“The key problem was not that the supervision of Northern Rock was insufficient, but that we failed to piece together the jigsaw puzzle of a large UK current account deficit, rapid credit extension and house price rises, the purchase of UK mortgage-backed securities by institutions in the US performing a new form of maturity transformation, and the potential for irrational exuberance in the market price of credit.

“We failed to realise that there was an increase in total system risk to which financial regulators overall — authorities, and central banks and in fiscal authorities — needed to respond.”

This is just more mendacious twaddle.

They ALL knew perfectly well it was an unsustainable bubble and chose to do nothing to stop it.

Only a total idiot would wait until now to suggest they need to do something about it. What were all these people doing for the last 5 years? Sitting in their offices with their fingers crossed and a bin over their heads?

Turner seems to be even more of a prat than his predecessor if he believes this nonsense.

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Perhaps we do have total idiots in charge?

perhaps however unlikely, the patsy politicians take most of the flak anyway (there job) stupidity from some of the bankers/cityboys yes but when a good few of them bailed out at the top you know it was designed to burst from 2001 onwards, after all a lot of people saw it coming at least that far back.

the bailouts have been the main giveaway (literally) with the pigmen lined up to rape the taxpayer with the blessing of the "goverment"....

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Lord Turner — who took over as FSA chairman last September — said that there had been a widespread failure to identify the risks which had been building in the financial system for a number of years and led to the current crisis.

:)

I think that some senior staff at the FSA (at least) had identified the risks - and chose to play them for personal gain.

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http://business.timesonline.co.uk/tol/busi...icle5564878.ece

This is just more mendacious twaddle.

They ALL knew perfectly well it was an unsustainable bubble and chose to do nothing to stop it.

Only a total idiot would wait until now to suggest they need to do something about it. What were all these people doing for the last 5 years? Sitting in their offices with their fingers crossed and a bin over their heads?

Turner seems to be even more of a prat than his predecessor if he believes this nonsense.

Isn't this just owning up to the failures of his predecessors though?

A common political trick to discredit the previous regime while saying you are the man to sort things out.

What you didn't highlight is the bit about house price rises being a key sign of things getting out of control, an admission that they should have not encouraged this bubble as much as they did.

And it is not even as though Broon or Merv didn't know about that, since Brown made a speech about it early in his stint as chancellor IIRC. I believe it was to blast the Tories for letting the economy run out of control and turn uncontrolled boom to uncontrollable bust.

Funny how it was different this time though.

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Isn't this just owning up to the failures of his predecessors though?

A common political trick to discredit the previous regime while saying you are the man to sort things out.

What you didn't highlight is the bit about house price rises being a key sign of things getting out of control, an admission that they should have not encouraged this bubble as much as they did.

And it is not even as though Broon or Merv didn't know about that, since Brown made a speech about it early in his stint as chancellor IIRC. I believe it was to blast the Tories for letting the economy run out of control and turn uncontrolled boom to uncontrollable bust.

Funny how it was different this time though.

What I find incredible is that armies of people can go into work everyday with pretty much one remit, and fail to notice house prices rising faster than GDP/CPI, fail to notice the expansion of bank lending, fail to notice LTVs over 100%, fail to notice exponential growth in securitisation, and then fail to notice that all of this may end in tears. The fact that he is the new boy doesn't excuse the failure of the FSA as a body imo. He's simply pointing out that the FSA have no idea what they're doing. If they didn't for the last 10 years there's little likelihood they will for the next 10. As evidenced by his knee-jerk reaction when he first took over saying that LTVs need to drop to 75-80% at the same time as Gordon is trying to expand lending, proving that they're all still as thick as each other. Different face, same incompetence.

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What I find incredible is that armies of people can go into work everyday with pretty much one remit, and fail to notice house prices rising faster than GDP/CPI, fail to notice the expansion of bank lending, fail to notice LTVs over 100%, fail to notice exponential growth in securitisation, and then fail to notice that all of this may end in tears. The fact that he is the new boy doesn't excuse the failure of the FSA as a body imo. He's simply pointing out that the FSA have no idea what they're doing. If they didn't for the last 10 years there's little likelihood they will for the next 10. As evidenced by his knee-jerk reaction when he first took over saying that LTVs need to drop to 75-80% at the same time as Gordon is trying to expand lending, proving that they're all still as thick as each other. Different face, same incompetence.

One can't imagine that they actually failed to notice; they must have noticed. However, for some reason, they didn't do anything about it. Given it was their remit to "do something about it", the question is, why?

Peter.

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His interview on R4 this morning was annoying, "must bring in new rules to ensure banks have the nec. capital ratios on their balance sheets..." hmmm.. <_< what, like the Basel rules that already existed? He gave a ten minute ranting monologue that was a political leg up for his chums.

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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