Yahoo Finance / Sky News, Monday 11 April 2011
Gordon Brown has admitted he made a "big mistake" on financial regulation before the banking crisis - but has emphasised he did not act alone.
 |
| Gordon Brown |
The former prime minister said the regulatory framework he put in place as chancellor failed to address the "entanglements" of different institutions and "how global things were".
Mr Brown said at a conference organised by the Institute for New Economic Thinking in Bretton Woods, New Hampshire, that he accepted his responsibility for the mistakes, but added that he was not alone in making them.
He said in the 1990s and the years up to 2007, when he was chancellor, he was under "relentless pressure" from the City not to over-regulate.
"We know in retrospect what we missed. We set up the Financial Services Authority believing that the problem would come from the failure of an individual institution," he said.
He explained that the "big mistake" was the creation of a monitoring system looking at individual institutions.
"We didn't understand how risk was spread across the system, we didn't understand the entanglements of different institutions with the other and we didn't understand even though we talked about it just how global things were, including a shadow banking system as well as a banking system.
"That was our mistake, but I'm afraid it was a mistake made by just about everybody who was in the regulatory business."
The aftermath of the 2008 banking meltdown had made people think again about regulation, Mr Brown said.
"I have got to accept my responsibility and I do, and I have been very open about saying we made mistakes on that," he added.
"But in a world where the understanding of what global meant was incomplete, I think many writers as well as many regulators made exactly the same mistake."
Related Articles:
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.