So much for Tory boasts of their prowess at financial regulation. One year on from the birth of this government and financial investments of the world’s major institutional players are just as entangled and interwoven as they were at the time of the crisis. The fog has not cleared. If anything, it’s thickened into a pea-souper.
If Greece were to default on her bonds, no one knows what the effect will be. We know who holds the bonds; that’s a public record. But we don’t know who has insured against their default, because apparently, that’s not.
What happened to the promise of a clearing house so that all the investments and all the so-called “complex financial instruments” are in the public domain? Why is it that four years on from the financial crisis, this idea has yet to be realised?
Gordon Brown did a good job of heading off the crisis itself, but since he left office, it seems as if there has been no real progress. It beggars belief that we still don’t know our position if Greece defaulted.
The Tories had great fun portraying Mr Brown as incompetent for creating his tri-partite financial regulation system. Their answer is to hand powers back to the Bank of England, even though the BoE previously oversaw the collapse of Barings and the BCCI scandal, never mind stock-market chaos such as the Polly Peck scandal.
The Tories have also ruled that a red line should exist between the Retail and the Investment branches of our banks. They tell us that Investment Banks engage in casino gambling while Retail Banks are risk free, but this ignores the fact that the Credit Crunch was caused by bad mortgage lending by the retail side of the banks not by the investment side.
It also ignores the fact that the balance sheets of these banks have been returned to the black by the success of the Investment Banking operations, not by the Retail side.
When you take into account that the Tories got elected on their argument that the Labour party is incompetent on financial regulation, then holding them to account on this issue must surely be the primary goal of opposition scrutiny.
We should be exposing their incompetence on the issue they claim to have the public’s trust over. Let’s tell the electorate that the billions of pounds that they have poured into the Greek economy should have been used to pay down our own deficit. It would have been if they had done their job and created the clearing houses that everybody said was needed.
Come on Labour Party. Let’s start hitting them where it hurts. Let’s expose them for the incompetents that they are.