Untold Story

I recently read Inside the Banking Crisis: The Untold Story by Hugh Pym. Hugh is a journalist with strong links to the British Labour party and the British government, so he gets to talk to many of the insiders during the Banking Crisis in the UK. Not surprising the tone is quite self-congratulatory or self-justifying, and perhaps both.

I find it amazing how totally unprepared the bankers, the bureaucrats and politicians were for what happened. The bureaucrats in the Financial Services Authority, the Bank of England and the Treasury with responsibility for managing the banking system were totally surprised by the crisis. They were supposed to be the experts, but they were unprepared.

The Bankers were equally blind. They kept on pretending that things would come right, even as they were falling apart around them. The CEO of the Royal Bank of Scotland argued that is bank did not need more capital, a few months before the government had to supply £20 billion of capital to keep it from crashing.

Hugh Pym makes the bureaucrats seem clever, because they were able to prevent total collapse of the banking system. However, they had committed £300 billion of taxpayers’ money into the banking abyss to achieve it.

How is that a great achievement?

It is a strange notion that spending the money of ordinary people to rescue the rich and powerful from their errors.

The worst thing is that the same people are still running the system.