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Gordon Brown: I Made A Big Mistake On Banks

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http://www.telegraph.co.uk/news/politics/gordon-brown/8441882/Gordon-Brown-I-made-a-big-mistake-on-banks.html

Gordon Brown has admitted he made a “big mistake” in the way he tackled financial regulation before the banking system collapsed.

In his first clear admission of some responsibility for the financial crisis, the former prime minister claimed he had not understood how “entangled” the world’s financial institutions had become. His comments will be seized upon by the Conservatives as proof that Labour played a part in the economic meltdown.

They come as the Treasury prepares to receive a review into how Britain’s banks should operate in the future. The Independent Commission on Banking (ICB), led by Sir John Vickers, is expected to recommend significant reforms to make it less likely that banks take unnecessary risks and to encourage greater competition. Mr Brown, who has been criticised for no longer attending the Commons to take part in economic debates, made his remarks while addressing a conference in Bretton Woods, New Hampshire, at the weekend. It was the first time he had commented explicitly on the system of regulation that he masterminded during Labour’s first term in power.

He focused on the Financial Services Authority (FSA), which he established in a surprise move on his first day as chancellor in 1997. It was widely criticised during the financial crisis for failing to predict and manage the turmoil. Mr Brown said: “We set up the FSA believing the problem would come from the failure of an individual institution. That was the big mistake. We didn’t understand just how entangled things were.”

He added “I have to accept my responsibility.”

The crisis in 2008 saw the rapid spread of problems from one bank to another because of how interconnected the global financial system had become. George Osborne, the current Chancellor, has announced that he is breaking up the FSA and giving most of its regulatory powers to the Bank of England. Mr Brown’s comments will help him to justify that decision. The former prime minister also said that the opportunity to secure a global agreement on financial regulation had probably passed.

“I do believe we’re going back to a race to the bottom,” he said, referring to countries competing to have the lightest regulation. Regulators are faced with the challenge of how to make the global financial system safer without prompting banks to leave for a country where financial regulation is seen as less onerous. “There should be an international agreement, otherwise you’ll just have banks threatening to move from one country to another,” Mr Brown told the audience.

Describing his time as chancellor, he said: “I was under, and Britain was under, relentless pressure from the City that we were over-regulating. All through the 10 to 15 years, the battle was not that we regulated too little, but that we regulated too much.”

Mr Brown is expected to face criticism in the ICB report for relaxing competition rules which allowed Lloyds TSB, as it then was, to merge with HBOS, following the collapse of Lehman Brothers. The merger, presented as an urgent move to stop panic in the markets, was highly controversial due to the size of the two banks. The Commission is expected to say that the creation of Lloyds Banking Group meant that one player has ended up with too great a market share.

It is expected to recommend that Lloyds, which has already been told to sell 600 branches to comply with European competition law, goes further by selling off parts of its business and allows small, or new, rivals to buy up its assets.

The ICB report is also expected to propose making it easier for people to switch their current accounts. At present, just 10 per cent switch each year, compared with about a third of energy customers. One idea is a single “portable” current account number for customers. Banks are likely to be required to hold at least £10 of shareholder equity for every £100 lent out — compared with £7 at present — and set up legal “firewalls” to ensure that savers’ deposits are separated from riskier investment banking divisions. This would allow an investment arm to fail, while freeing up the Government to save the retail arm.

However, the interim report, which will be subject to further consultation, is likely to shy away from recommending an end to so-called “free banking”, where customers face opaque and often “extortionate” charges and fees but do not pay to open an account or hold a debit card or chequebook.

Oliver Bretz, a partner at the law firm Clifford Chance, said: “The current business model means that 20 per cent of the customers end up cross-subsidising free banking for the other 80 per cent.”

The findings of the review are likely to set Conservative and Liberal Democrats on a collision course. At last month’s Lib Dem spring conference, party activists voted for a complete break up of the banks and their “casino” investment arms. Vince Cable, the Business Secretary, has been very vocal about attacking the banks and in particular curbing bonuses.

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In recent history, you have Thatcher offloading council housing for a song, gifting the banks a 20 year bounty on lending, then Blair/Brown, let the banks regulate themselves.

Ahh, what a grand mess we are all in. Totally fvcked. Fubar.

gordon-looking-barmy.jpg?w=240&h=174

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In recent history, you have Thatcher offloading council housing for a song, gifting the banks a 20 year bounty on lending, then Blair/Brown, let the banks regulate themselves.

Ahh, what a grand mess we are all in. Totally fvcked. Fubar.

Sad but true.

What happens to politicians, they must start off with good intentions to get into it - or are they forever stooges.

Just how did we get to the point that a 'utility' that should lubricate the economy, grew so powerful that it could become such a negative and debilitating force, have such influence?

Is it just that money is the root of all evil. So greed is rewarded.

For the record, Gordon Brown was an absolute disaster for this country. The most disappointing thing about Mew Labour and the idea of socialist fairness is that instead of reining in the excesses and mistakes of Thatcherism, they took it further. And the buck stops at Brown (and Balls).

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In recent history, you have Thatcher offloading council housing for a song, gifting the banks a 20 year bounty on lending, then Blair/Brown, let the banks regulate themselves.

Ahh, what a grand mess we are all in. Totally fvcked. Fubar.

gordon-looking-barmy.jpg?w=240&h=174

Well yes and the current government will sell it's council housing stock to councils using bank loans (at 5.5%) over the next 30 years. This will all start in April 2012. Those councils which resist will have to sell their stock the HAs so more money for banks. (Labour would have done the same).

It's clear now that the government and banks are the same.

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Brown was chancellor of the exchequer of the UK from 1997 - what did he learn over those years?

What sort of nutters in Parliament let him anywhere near running the UK as Prime Minister?

The Queen and her 'advisors' also have a lot to answer for!

Scam-a-lot

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Mr Brown is expected to face criticism in the ICB report for relaxing competition rules which allowed Lloyds TSB, as it then was, to merge with HBOS, following the collapse of Lehman Brothers.

....he didn't relax competition rules...he circumvented and ignored them ....criminal ....Lloyds shareholders must have a strong case in suing..... <_<

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....What sort of nutters in Parliament let him anywhere near running the UK as Prime Minister?.....

...simples ... :) you know and we know....the Labour Party in Government foisted him on the country..... :rolleyes:

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..... Gordon has his lecture fees and first class air travel - sometimes needs to bump people off planes but hey hoo, 4k in MPs expenses over the last couple on months ...

...and that's while he is 'playing hooky' and sticking two fingers up to Westminster while he bides at home in Scotland..... :rolleyes:

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Sad but true.

What happens to politicians, they must start off with good intentions to get into it - or are they forever stooges.

Just how did we get to the point that a 'utility' that should lubricate the economy, grew so powerful that it could become such a negative and debilitating force, have such influence?

Is it just that money is the root of all evil. So greed is rewarded.

For the record, Gordon Brown was an absolute disaster for this country. The most disappointing thing about Mew Labour and the idea of socialist fairness is that instead of reining in the excesses and mistakes of Thatcherism, they took it further. And the buck stops at Brown (and Balls).

>> The most disappointing thing about Mew Labour and the idea of socialist fairness is that instead of reining in the excesses and mistakes of Thatcherism, they took it further.

Too true. Although I think Blair had more to do with it.

Bless the good old british public though, their response is to vote in her very spawn. On goes the managed decline, just at a faster rate. Very sad, unless you are one of the handful of winners in which case it's brilliant, presumably.

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Banks are simply the mechanism the Gubbermint uses to get money into the economy. Brown didn`t make a "mistake", he wanted to increase the amount of credit available.

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Brown's mistake was taking on a job he was unqualified to perform.

His lack of understanding of how money works led to his belief that an economy can self-perpetuate without any effort in terms of production and services that led to production. By dismantling manufacturing in favour of banksterism he created a fools paradise where, for a moment, there was only boom and no bust. All the while a dangerous housing bubble was forming that he promised would not be allowed to get ot of control. But how could it not get out of control when the very thing that was creating it--the unregulated bankster boom--was feeding on it.

I agree.

Edited by Realistbear

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It's clear now that the government and banks are the same.

Indeed. The banks bought the government long, long ago (about 300 years ago).

He focused on the Financial Services Authority (FSA), which he established in a surprise move on his first day as chancellor in 1997. It was widely criticised during the financial crisis for failing to predict and manage the turmoil.

His first day?? Oh yes, so he did. They didn't waste any time in implementing their nefarious plan, did they. One might suggest that this was a condition of them being appointed to government... I mean being voted in through our democratic election process. "Things can only get better" indeed. For Bliar, Brown, thieving VI property flipping, second home owning, BTL politicians and the banks, that is.

Also, interesting timing of this piece too, don't you think?

The crisis in 2008 saw the rapid spread of problems from one bank to another because of how interconnected the global financial system had become. George Osborne, the current Chancellor, has announced that he is breaking up the FSA and giving most of its regulatory powers to the Bank of England. Mr Brown’s comments will help him to justify that decision.

The Bank of England. The privately owned, shareholder profit-driven Bank of England is going to be tasked with the regulation of the banking sector. That should undoubtedly improve the situation (for another 80 years at least). And now that Brown's comments have been heard - on the same day as the release of a report on the financial crisis and future regulation of the sector by the Banking Commission (a group of five individuals in the employ or previous employ of banks) - this should give politicians just enough time to pretend to discuss it in parliament before agreeing to it and then going off on their nice long summer holidays somewhere hot, sunny, and where the wealthy like to spend their ill-gotten gains.

The former prime minister also said that the opportunity to secure a global agreement on financial regulation had probably passed.

Like it ever existed in the first place, Gordon. What a load of shit.

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but...but...I thought the problems were all caused by the sub-prime crisis in America! That's what Brown & Darling told me, anyway...

What an utter twunt he is.

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but...but...I thought the problems were all caused by the sub-prime crisis in America! That's what Brown & Darling told me, anyway...

What an utter twunt he is.

Just a glove Puppet,,

Blair was selling us short for years,, house price increase the only way anyone made any money in the UK over the last 10 years..

Those days are gone,,,

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Sad but true.

What happens to politicians, they must start off with good intentions to get into it - or are they forever stooges.

Just how did we get to the point that a 'utility' that should lubricate the economy, grew so powerful that it could become such a negative and debilitating force, have such influence?

Is it just that money is the root of all evil. So greed is rewarded.

For the record, Gordon Brown was an absolute disaster for this country. The most disappointing thing about Mew Labour and the idea of socialist fairness is that instead of reining in the excesses and mistakes of Thatcherism, they took it further. And the buck stops at Brown (and Balls).

just listened to Nick Clegg on R4

said nothing.

nothing at all.

the guys at the top seem to have no opinion on anything at all.

what they all repeat, is the need for reform, for fairness, for change for the better and taking difficult decisions.

In my mind, you need to have an opinion to even start looking at making a decision.

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The Bank of England. The privately owned, shareholder profit-driven Bank of England is going to be tasked with the regulation of the banking sector. That should undoubtedly improve the situation (for another 80 years at least).

Er, the BoE isn't privately owned. It was nationalised in the 1940s.

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“I do believe we’re going back to a race to the bottom,” he said, referring to countries competing to have the lightest regulation. Regulators are faced with the challenge of how to make the global financial system safer without prompting banks to leave for a country where financial regulation is seen as less onerous. “There should be an international agreement, otherwise you’ll just have banks threatening to move from one country to another,” Mr Brown told the audience.

Gordon Brown really is such an odious piece of poo. He complains about lack of coordination, but he himself was the largest obstacle to international cooperation before 2008, all the while making sure London became the off-shore banking capital of the world through lack of regulation. He was the prime practitioner of the race to bottom, now he's complaining about that very tactic. During his entire term as Chancellor, he attended not one single summit of EU finance ministers.

Anyone want to hazard a guess as to how much he raked in for giving this particular speech?

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For the record, Gordon Brown was an absolute disaster for this country. The most disappointing thing about Mew Labour and the idea of socialist fairness is that instead of reining in the excesses and mistakes of Thatcherism, they took it further. And the buck stops at Brown (and Balls).

They were very impressive in the way that they managed to merge the most unappealing aspects of both traditional Labour and Conservative ideals into one unholy disaster. You could probably form really good policy by combining the bits of both that New Labour ignored.

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Er, the BoE isn't privately owned. It was nationalised in the 1940s.

Course it was.

And since then...

BBC: 1997 - Brown sets Bank of England free

The Chancellor, Gordon Brown, has given the Bank of England independence from political control.

His surprise announcement - coming only four days after Labour's landslide election win - is being described as the most radical shake-up in the bank's 300-year history.

...

The chancellor went straight from that meeting to a news conference at which he unveiled his plans to give the bank freedom to control monetary policy.

Broad welcome

He said: "I want to set in place a longterm framework for economic prosperity... I want to break from the boom bust economics of previous years."

<_<

It is understood Mr Brown and his economic adviser, Ed Balls, put the final touches to their plans to give the bank independence over interest rates in a London hotel only 36 hours before the party's election victory.

Within hours of celebrating the party's win, Mr Brown was at the Treasury. Officials had to work through the bank holiday weekend to get the paperwork ready for the most sweeping reform in the bank's history.

Swift work. I don't remember reading about all this in their election manifesto.

All the dots are there if you care to join them. It doesn't paint a particularly pleasant picture though.

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Brown was chancellor of the exchequer of the UK from 1997 - what did he learn over those years?

What sort of nutters in Parliament let him anywhere near running the UK as Prime Minister?

The Queen and her 'advisors' also have a lot to answer for!

Scam-a-lot

He learnt that you could redistrubute income through taxation, boost the economy through borrowing and mistook it for growth and wealth generation.

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It doesn't paint a particularly pleasant picture though.

No it doesn;t - it amounts to a finacial coup, where the bankrupt fo england run the system for the benefit of a few bankers and crew the rest of the economy to boot, enslaving the population and miring in debt for generations - with no electoral mandate and no means to kicking out the fukkers at the ballot box.

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No it doesn;t - it amounts to a finacial coup, where the bankrupt fo england run the system for the benefit of a few bankers and crew the rest of the economy to boot, enslaving the population and miring in debt for generations - with no electoral mandate and no means to kicking out the fukkers at the ballot box.

Correct.

The generation before us (20 somethings then, 40 somethings now) blamed the Conservatives and Fatcher.

Our generation (20 somethings then, 30 somethings now) blamed Labour and Bliar / Brown.

The generation after us, the next generation, will blame the Coalition - although the LibDems seem to be faring worse (I suspect because their parents taught them to expect it from the Conservatives).

The truth is, it doesn't matter which political party is in power, or who the prime minister is, because we do not live in a democracy. We live under a plutocracy. The politicians are the middlemen who do the bidding of the wealthy and they are rewarded handsomely for it. They create the environment in which they profit, they create and repeal the laws of the land as they are instructed and you - you, little man - get to suck it up while also etching your scrawl in a box once every four or five years, like a prole who cannot write their own name, to maintain the pretence that you actually have a say.

The policies and events of the past 14 years is all the proof you need. If it wasn't Gordon Brown doing it it would've been Ed Balls... or, indeed, John Major or Hague.

I'm afraid to say that had the Conservatives won the 1997 election the only thing that would be different now is my HPC username.

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Correct.

The generation before us (20 somethings then, 40 somethings now) blamed the Conservatives and Fatcher.

Our generation (20 somethings then, 30 somethings now) blamed Labour and Bliar / Brown.

The generation after us, the next generation, will blame the Coalition - although the LibDems seem to be faring worse (I suspect because their parents taught them to expect it from the Conservatives).

The truth is, it doesn't matter which political party is in power, or who the prime minister is, because we do not live in a democracy. We live under a plutocracy. The politicians are the middlemen who do the bidding of the wealthy and they are rewarded handsomely for it. They create the environment in which they profit, they create and repeal the laws of the land as they are instructed and you - you, little man - get to suck it up while also etching your scrawl in a box once every four or five years, like a prole who cannot write their own name, to maintain the pretence that you actually have a say.

The policies and events of the past 14 years is all the proof you need. If it wasn't Gordon Brown doing it it would've been Ed Balls... or, indeed, John Major or Hague.

I'm afraid to say that had the Conservatives won the 1997 election the only thing that would be different now is my HPC username.

Wise words.

But... this bit... I do wonder...

>> because we do not live in a democracy. We live under a plutocracy.

Public's response to the banking crisis ? Elect the party calling for less regulation all the way through the build up. We don't exactly make things difficult for them do we.

You could reasonably argue we had no sensible choice left, I suppose.

Most days I think we're too thick to realise what's going on.

Edited by mattT

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Correct.

The generation before us (20 somethings then, 40 somethings now) blamed the Conservatives and Fatcher.

Our generation (20 somethings then, 30 somethings now) blamed Labour and Bliar / Brown.

The generation after us, the next generation, will blame the Coalition - although the LibDems seem to be faring worse (I suspect because their parents taught them to expect it from the Conservatives).

The truth is, it doesn't matter which political party is in power, or who the prime minister is, because we do not live in a democracy. We live under a plutocracy. The politicians are the middlemen who do the bidding of the wealthy and they are rewarded handsomely for it. They create the environment in which they profit, they create and repeal the laws of the land as they are instructed and you - you, little man - get to suck it up while also etching your scrawl in a box once every four or five years, like a prole who cannot write their own name, to maintain the pretence that you actually have a say.

The policies and events of the past 14 years is all the proof you need. If it wasn't Gordon Brown doing it it would've been Ed Balls... or, indeed, John Major or Hague.

I'm afraid to say that had the Conservatives won the 1997 election the only thing that would be different now is my HPC username.

i think there may have been minor differences in that the gini coefficient would be even more fcked up and the public sector slightly less fcked up but not much else

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  • 312 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% +
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      • Even
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      • up 5%



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