Thursday 26 March 2009

Architects of the crisis

Gordon Brown
UK Prime Minister and former Chancellor

1997-2007: "No more boom and bust."

1997: "I will not allow house prices to get out of control and put at risk the sustainability of the future."

2005: "The new model we propose is quite different. In a risk-based approach there is no inspection without justification, no form-filling without justification, and no information requirements without justification. Not just a light touch but a limited touch. Instead of routine regulation attempting to cover all, we adopt a risk-based approach which targets only the necessary few."

2007: "Over the ten years that I have had the privilege of addressing you as Chancellor, I have been able year by year to record how the City of London has risen by your efforts, ingenuity and creativity to become a new world leader … So I congratulate you Lord Mayor and the City of London on these remarkable achievements, an era that history will record as the beginning of a new golden age for the City of London …

"So let me say as I begin my new job, I want to continue to work with you in helping you do yours, listening to what you say, always recognising your international success is critical to that of Britain's overall and considering together the things that we must do - and, just as important, things we should not do - to maintain our competitiveness … [such as] enhancing a risk based regulatory approach, as we did in resisting pressure for a British Sarbannes-Oxley after Enron and Worldcom …

"The financial services sector in Britain and the City of London at the centre of it, is a great example of a highly skilled, high value added, talent driven industry that shows how we can excel in a world of global competition. Britain needs more of the vigour, ingenuity and aspiration that you already demonstrate that is the hallmark of your success."

David Cameron
Conservative Party Leader

2006: "The growth of the modern City as we know it was shaped by three critical Conservative decisions. First, because of our attractive tax regime, in the 1970s, US bonds were traded in London - the so-called 'euro-bond' market. Then the big bang of the 1980s removed a huge swathe of regulation that allowed the City to expand and removed restrictive practices. And by being open to competition from banks from anywhere in the world, we injected an enterprising spirit into the City.

"The success of the City helps to drive the UK economy and provides huge benefits for our wider society... It is also highly innovative. You cannot simply set in stone a tax or regulatory regime for the City as it is today because it's always changing, adapting and mutating.

"[We need] to build a flexible economy with low tax, light regulation and open markets...

"Many on the left-of-centre still seek to solve problems through more taxes, more laws and more regulations… But we, on the centre-right, prefer to step out of the way of business."

2007: "When I studied economics, 20 years ago, arguments raged about the most basic principles of how to run the economy [and]...there was a vast gulf between left and right as to how this could best be achieved. The left advocated more intervention and government ownership. Those on the right argued for monetary discipline and free enterprise. That debate is now settled. Over the past 15 years, governments across the world have put into practice the principles of monetary discipline and free enterprise. The result? A vast increase in global wealth. The world economy more stable than for a generation...

"Our hugely sophisticated financial markets match funds with ideas better than ever before."

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