Darling: Memoirs expose how he came close to sacking Meryvn King

1st September 2011

The Telegraph is one of many national newspaper to have reported on leaked excerpts from Alistair Darling's book Back from the Brink: 1,000 days at No 11.

Darling appears to blame the banking crisis on the "prickly" relationship between Sir Mervyn King, the Governor of the Bank of England, and Lord Turner, chairman of the Financial Services Authority (FSA).

The former Chancellor apparently came close to sacking the Governor in 2008 but could not find a suitable alternative but The Telegraph notes that since 2008 Sir Mervyn has not only been knighted in office but has won a battle to win back some of the FSA's regulatory powers.

Excerpts from the book have been leaked on the Labour Uncut website.

The BBC News website reports how Darling attacks 'stupid' bankers in his memoir. He said they were "so arrogant and stupid that they might bring us all down".

He also says bankers displayed a complete lack of gratitude for the multi-billion pound taxpayer bailout that saved much of their industry, comparing Sir Fred Goodwin's attitude to the crisis as more in keeping with someone "off to play a game of golf".

According to Labour Uncut Andy Hornby, former chief executive of HBOS, is accused by the former chancellor of "looking like he was about to explode" when confronted with the magnitude of what had happened on his watch.

Fred Goodwin, former chief executive of RBS, comes across as every inch his public stereotype. His nonchalant attitude to the catastrophe seemed to Darling more in keeping with someone "off to play a game of golf".

The former chancellor goes so far as to say "Goodwin deserved to be a pariah" when he later refused to slash his pension after being fired by the RBS board.

In an exclusive interview with trade website FTAdviser.com last year Mr Darling told writer Simoney Girard that: "Making sure we reform how our banks are regulated, so that we learn the lessons of the financial crisis, is important.

"This announcement isn't about making the changes we need to improve the quality of our regulation. It's a hastily cobbled together deal, the price of a coalition, that doesn't know what it's doing.

"Far from abolishing the FSA, they are keeping it, but instead emasculating it. Far from clarity there is confusion, which runs the real risks of mistakes being made. What we need is high quality regulation."

"What's needed is increased capital requirements and implementation of living wills to deal with any future failures."

Mindful Money's resident pyschologist blogger Kim Stephenson says that Darling is no different to many politicians in blaming bankers rather than looking at possible political solutions.

"If they hammered out basic assumptions and agreed that the source of the ideas didn’t matter, it was economic recovery and not political point scoring that was important there might be some hope"… more

 

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Banking: Could ecological thinking have prevented the crisis?

 

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