"CULPABILITY BROWN'S" BANKING BLUNDERS
PM ADMITS LABOUR'S RESPONSIBILITY FOR ECONOMIC CRISIS
Commenting on Gordon Brown's admission that he bears responsibility for the banking crisis and the wider economic crisis and recession which have followed, SNP election campaign coordinator Stewart Hosie said:
"Gordon Brown has merely admitted what everyone already knows, namely that he and his Labour colleagues carry a huge responsibility for everything that has happened to the UK economy in the last couple of years.
"For too long Labour have been trying to pretend that the economic crisis has had nothing to do with them, but the Prime Minister has finally given up that ridiculous charade.
"Gordon Brown has previously blamed the recession on the problems in the banking sector - and has now admitted that those banking problems are a direct result of his handling of things when he was Chancellor.
"He has confirmed that the Downing Street Downturn is of his and Labour's own making. For Scotland, the question now is how long we can afford to remain hitched to 'Bankrupt Britain'.
"Independence offers a vision of a brighter, better future and on May 6th people will have the chance to elect SNP local and national champions who will help protect Scotland from London cuts and help secure that independent future."
Past examples of how Gordon Brown failed to regulate the financial sector properly:
1. A speech Gordon Brown gave to the CBI Conference in 2005 where he called for "limited" regulation and even suggested whether there should be regulation at all.
The better, and in my opinion the correct, modern model of regulation – the risk based approach - is based on trust in the responsible company, the engaged employee and the educated consumer, leading government to focus its attention where it should: no inspection without justification, no form filling without justification, and no information requirements without justification, not just a light touch but a limited touch.
The new model of regulation can be applied not just to regulation of environment, health and safety and social standards but is being applied to other areas vital to the success of British business: to the regulation of financial services and indeed to the administration of tax. And more than that, we should not only apply the concept of risk to the enforcement of regulation, but also to the design and indeed to the decision as to whether to regulate at all. In the new legislation we will publish before Christmas we will make this risk based approach a statutory duty of the regulators."
2. The resignation of Sir James – one of the prime ministers key advisors - followed revelations that when he was chief executive of bank HBOS he sacked a whistleblower who warned that banks were heading for disaster. Sir James was knighted on the recommendation of the UK government, and later appointment as deputy chairman of the FSA.
3. The warnings by the HBOS whistle blower reflect similar warnings given to the FSA and the Prime Minister about Icelandic banks months before the UK Government took any action - and which is now seen as being so heavy handed it precipitated an even more rapid collapse.
Links to news articles showing how the FSA and Gordon Brown were similarly warned about the Icelandic banks months in advance can be read here:
PM knew of problems with Icelandic banks in March
http://www.independent.co.uk/
FSA was warned not to allow Kaupthing to take over Singer
http://business.timesonline.
4. Details of the House of Lords Economic Affairs Committee report on Banking Supervision and Regulation can be found here:
http://www.parliament.uk/
5. In March - A National Audit Office inquiry into the handling of Northern Rock, found that the tripartite regulatory structure created by Gordon Brown was seriously flawed, and that Treasury officials decided it was not a priority to fix it.
6. “Brown told us not to question banks on risky practices, says City watchdog”:
http://www.dailymail.co.uk/
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