Nanny, in the shape of Gordon "Smiler" Brown and his chum Darling, has been loudly harrumphing recently about the banking crisis and how the banks have behaved disgracefully. Nanny has been particularly vocal recently about
bonuses (ie rewarding failure), and Sir Fred "The Shred" Goodwin's pension of £650K per annum.
Needless to say Nanny is so cross that she has demanded that Sir Fred stop drawing on it (or face "legal" action), that the banks restrain their bonuses and is threatening a tougher regulatory regime.
Now, in the midst of all of this political spin (so willingly regurgitated by the ever so compliant and malleable media) designed to tap into people's latent disgust over the size of some bankers' pay packets, and the destruction of value by some of Britain's "leading" banks, lies a little problem for Nanny.
Can you guess what that is children?
Yes, that's right, she was in charge of the system during the years of boom:
1 Brown set up the
tripartite regulatory system, which has proven to be such a
failure.
2 Mervyn King (Governor of the Bank of England) and Hector Sants (CEO of the FSA) have both stated that Nanny insisted on a
"light regulatory touch" during the boom years.
3 Sir Fred has stated that his pension
was approved by the government, in the shape of Lord Myners.
4 Were Nanny to completely nationalise the "naughty" banks, as her media dogs and political midgets who support her are urging her to do, shares in every other bank in the UK would fall to zero, as people realised that their bank would be next. The result being the complete collapse of the capitalist banking system in this country.
5 Nanny allowed 100% mortgages in the boom years, now she wants them banned. Ironically, Northern Rock (now owned by us) has now been given
Treasury approval for 90% mortgages. Isn't 90% almost as bad as 100% in a falling market?
Bottom line, the banking system needs to be saved (the people who destroyed value can be shot after it is saved) and Nanny knows this full well.
Why is she so vocal in her harrumphing then?
Why doesn't she speak more honestly about why the system needs to be saved?
The answer is simple, she is every bit as culpable as the bankers for this crisis; as it happened on her watch, as a result of her "light" touch and her tripartite system.
By the way, isn't it strange that at the very moment Mervyn King and Hector Sants publicly start having a go at Brown and his tripartite system, the details of Sir Fred's pension pot (agreed by Myners in October 2008) are leaked to the press via Peston?
Isn't it odd that Sir Fred's pension is making the lead in the media, such an easy story because it involves a hated banker, instead of the failure of Brown's tripartite system?
It seems to me that Nanny is trying to divert our attention again.
FYI, if you want to read my daily thoughts on finance and issues relating to this crisis pop over to
www.loanbuster.net.
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