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Brown didn't give bank enough power, says minister
Nicholas Cecil, Chief Political Correspondent24 Oct 2008
Gordon Brown failed to give the Bank of England sufficient powers to ensure financial stability in Britain, the City minister admitted today.
Lord Myners praised the Bank, which was given independence after Labour swept to power in 1997, for keeping a lid on inflation with the monetary policy committee's role in setting interest rates. But he believes its hands have been partly tied in maintaining financial stability.
Lord Myners said: "The Bank of England has two core responsibilities: monetary policy and financial stability. With monetary policy, it has clearly performed its role to extraordinarily high standards.
"On financial stability, it has been hampered by the limited instruments available to it, which is one of the reasons we're proposing new legislation to give the bank more power to perform its statutory obligations."
The peer spoke out as former Federal Reserve chairman Alan Greenspan admitted he had made a mistake and had been "partially wrong" over the regulation of the banking industry.
Reader views (4)
I hope those who have been lambasting the Tories for attacking the Government will have the good grace to apologise. The Conservatives have regularly drawn attention precisely to this flaw in the Government's general regulatory regime.
- James Elliott, Eastbourne UK, 24/10/2008 15:07
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Crash Gordon should resign and admit his experiments and handouts have been what it is - a huge failure to our country.
- Georgie, Kensington, London, 24/10/2008 13:04
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Sense at last. Brown is more guilty then the bankers. He removed proper bank regulation. So no control. Then he changed to CPI so inflation measured was too low. So interest rates were too low. Housing boom. Brown boasted 'I have ended the economic cycle, No More Boom and Bust'. Crash. He can play 'rescuer' role. Having nearly drowned the victim, he boasts about insulation, and says bankers can retrain to install home insulation.
So he conned millions into thinking no risk, take a huge loan. By 2010, Brown will have destroyed millions of lives. He also loaded the taxpayer with billions of state loans, and off balance sheet debts and extra pensions, about £1 trillion. Brown now spins, via Peston and co, that he is not at fault. Brown wants the taxpayer to pay off Labour's £40m debt. It is like the economy he has twisted and wrecked. Brown is the worst Chancellor and PM in 100 years. During the Ecclestone crime he said 'I lied, I lied, I will be destroyed'. Instead he will have destroyed millions.
- Gordon, kirkaldy, 24/10/2008 11:51
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Mervyn King has been getting a lot of stick lately for not doing enough to ward off the financial crisis, but his hand has been stayed by the brief that was given him by who? Gordon Brown.
The function of the BOE was reduced to tackling inflation only, using a set of criteria that did not include house prices to measure it! Using CPI instead of RPI and excuding house prices meant interest rates were held too low for too long. this fuelled a debt binge the like of which has never been seen.
The Prime Minister Gordon Brown has a lot to answer for. He has claimed the plaudits for the banking rescue but will not admit to have caused our problems wreaked by runaway house prices. He is not to blame for the international banking crisis caused by the securitisation of dodgy mortgages originating in the 'States, but there were plenty of warnings that were absolutely ignored or scorn poured on them by him. His tripartite soltion to banking supervision has absolutely failed in its job and allowed bad banking practice to spread.
The act to re-capitalise the banks is not a success as he is claiming but an absolute failure of regulation and supervision. These have been recommended in the past but staunchly resisted by good ol' Gordo, who, only last year in his Mansion House speech praising the city and promised continuation of his 'regulation light' hands off approach to the financial sector.
The great 'Gordo' has much to answer for.
- Chris Simmonds, herne bay, kent, uk, 24/10/2008 11:51
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