Who do you blame for this financial mess?

Billions of pounds have been wiped off the value of shares. Pensions and investment funds have plumetted in value. Good value mortgages are few and far between and people's confidence in banks is at an all time low.

There is no denying that times are tough, but who do you blame for getting us into this financial mess. The investments bankers who could not control their greed? The Financial Services Authority for failing to spot the dangers ahead? Gordon Brown and his sidekick Alistair Darling for failing to act sooner, or the high street bank bosses who have threatened the whole financial system by gambling with our savings.

It's an important question, and not just because people are looking for a scapegoat for their misfortune. Determining who is to blame is essential if people are going to feel confident in the financial system again. Trust will only return when the bad apples have been removed. Let us know what you think...

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Comments

[Marc]

Brown removed supervision of the banks from the Bank of England, and replaced it with a tripartite system which didn't work. From that time, banks started lending more than they were taking in savings deposits, and leveraging debts took off.

What's worse is that Brown denied his new supervision system wasn't working, and he didn't seem to understand the problem. Listening to him recently, he still doesn't understand what he did wrong.

Of course I blame Gordon Brown.

[SteveK]

Gordon Brown ended Boom Bust, replacing it with Boom Boom Crash.

Not sure whether he allowed house prices to rise & rise, debt to increase & increase, and lending criteria to ease, out of stupidity or intent.

Will we call the "bad bank" for toxic debt "Newold", short for the New Old Labour Nationalised Bank.

Seem to remember Labour wanting to nationalise banks in the 70's. Well Gordon's gone & done it (by accident?).

[Alison Holder]

Although I ultimately blame the Brown government for failing to recognise what was heppening and addressing the issues, I think that the Banks' auditors should be taken to task for failing to see that the banks were taking unsustainable risks.

[SteveD]

Crises will occur from to time. The job of a government is to be in a position to lessen their effect when they occur. That is why I blame the Labour administration and Gordon Brown in particular. They overborrowed, through carelessness or in order to convey an illusion of a boom, and thereby left us with too little in the kitty to defend ourselves when the credit crunch arrived.

[Daphne Groves]

Rupert Murdoch

[Ron Griffiths]

Whilst the ultimate blame must go to Gordon Brown for failure to regulate the financial system (probably due to his desperate need for the tax receipts from it), the cause has to to be due to the uncontroled greed and way that the City Stock Market operates. The slightest hickup in the market, and it avalanches. Something needs to be done to prevent the market being used as a Gambling Den for short term profits. (undoubtedly because of this incessant demand for GROWTH at ANY COST. I really believe that at the first sign of the impending crash they should have closed the Markets Worldwide. But coming back to Gordon! who was obviously turning a blind eye to the insane lending in the mortgage market has to be considered as criminal. And he obviously condones it by the insane borrowing which he is now doing himself. I do not know how he could call himself Prudent when He was Chancellor!

[Andy Kirby]

I agree with all comments but lets not forget Mervyn King and his efforts to cure the effects of global inflation with high UK interest rates. It was obvious to most people that high rates would drive us into recession. And then the credit crunch..... He should be strung up with all the bank executives and Brown and all their personal assetts should be seized and given to those who have lost everything.

[R Hellemans]

Market mechanics has work on morgage lending and house prices long enough for most to know: house prices (UK&others)have been driven by bankers money available for "new business":
Client who sells creates more business(debt)by buying bigger and he brings a new client(debt)to the banks in form of his buyer. This has been working for a very long time. Simple economic mechanics: put one in turn the handle and get two out.....

Now to the current crises.
Yes greed has a lot to do with this but one mechanical effect seems to be overlooked by many;
Speculation on the commodities markets by all banks. How many B$ did it take to get the barral to $200, Copper to $8/kg and wheat to $..... This where our "institutions" were looking for a certain winners (read: quick$).
Effect is the same:
1) Share holders get used to high returns.
2) Managers get used to high bonuses.
3) Industies financial performance is judged wanting causing them to declare profits that are may be not there.
Now that banks etc have stopped speculating commodities values go back to 2003 values. Ever wondered how banks can loose thaaaat much?

More seriously the effect on what is a realistic return on investment in an manufacturing organisation needs to be reviewed.
Why is it that the Japanese bank rate is near zero for so long??
Investers (our pensions) have been taken for a ride for the glory of .....their bonuses??

[harbinger]

The Government knew what was happening and encouraged it. It was the "feel good factor", "you've never had it so good".

The whole tenure of this Nu-Lab government is full of waste, full of lies and and full of incompetant ministers doing incompetant things.

[Steve]

Well, the government spent 10 years getting us into this mess, so who else? Brown takes the main blame (Blair was his puppy anyway)with such arrogance that it is truly breathless. How could we, in a democracy, have a Prime Minister who was given the job by someone other than the electorate? Brown got us here and he sure as heck has now made it so bad that he cannot get us out of it. That will take years - many years!

[Ray Nipper]

Blame Bill Clinton who gave every poor person the right to own their home in the US without any thought about repayment.
Then blame the regulators both sides of the 'pond' who are paid large salaries to limit over indulgence by the financial institutions.
Ray.

[SP2 boy]

Virtually everyone is to blame.
Greed is not good.

[Emlyn Thomas]

The present global crisis has been caused by the simultaneous interaction of a number of precipitating factors. Much of the blame obviously rests with the much - vaunted "Anglo Saxon" model of international financial and investment management and the almost total lack of regulatory oversight that goes with the current model.Add to this a massive over-dependence on debt and the US housing bubble - also replicated in the UK, Ireland and other western economies - and it was inevitable that the chickens would eventually come home to roost.

National regulatory bodies and Central banks have also been seen to be asleep at the helm. Not only were they asleep but their actions whilst awake were totally inept and ineffective. They just did not understand what was going on in the "forward-thinking and innovative" financial institutions of Wall Street and Canary Wharf.Come to that, neither did the financial wizards who devised these wonderful financial products which they sold on to the unwary punters with such gay abandon!

And what about the politicians? These public representatives who promise so much at election time also failed us miserably.

At the end of the day greed played a major role in this debacle.The shakers and movers of the financial industries of the Western world, earning super-inflated salaries and bonuses ( immoral earnings, maybe?)are now going cap-in-hand to governments(and tax payers)to be bailed out.In the UK to a so-called socialist government!

I wonder what Ollie would say to Stan about the current mess we're in?

[john bentley]

Blame in this order: All Mortgage lenders(Banks; Bldg Societies) lending 100%+; Gordon Brown for splitting the BofE from the FSA so neither government agency did their overseeing job; Estate Agencies for over inflating values; buy for let speculators; and speculative housebuilders.The general public just got conned. My solution: make banks non profit organisations; get rid of existing bank directors and Gordon Brown and have a constant borrowing and saving rate.

[Stevie]

Labour is significantly to blame; we now know that the "boom" people thought they were enjoying was a mirage, created by far too much government borrowing before the "credit crunch" ever became an isue, with a hugely increased public sector. In essence, Labour risked the economy in order to buy themselves into another term. We are now all paying for that. Labour must be given a lesson they will never forget and be removed from power for at least a generation.

[Gordon Lyon]

Ultimately the government has to shoulder the responsibility for the crisis.
The growth of the UK economy during Labour's term in office has been driven largely by retail sales/ consumer spending.
In turn the consumer spending has been possible because of easy credit and irresponsible lending. One aspect of easy credit has been unsustainable house price rises (greater than the rises in the US between 1997-2007) which in turn has given consumers the collateral for further borrowing.
The banks and mortgage providers should have been more careful with their lending but they weren't.
The FSA should have stepped in long ago to control the financial institutions but didn't.
Finally, the government, which is responsible for ensuring the correct operation of the FSA, did nothing. So the government is ultimately to blame, but let's not inflict all the loathing on Gordon Brown - after all - Tony Blair presided over this unfolding crisis for 10 years and did nothing.

[Tim D-R]

Who is to blame? The most evil terrorist nation on earth. The USA.
Now is the time to introduce the ICU like the ECU, the forerunner of the Euro. Then the USA, the British, whoever wants can print all the money they need for their own internal needs BUT BUT BUT...when they do they will discover that their paper is worth VERY LITTLE on ghe international market. The USA has totally lost the right to be the World's Reserve currency. Finally, those countries that are fiscally responsible will not have their economies ruined because of the excesses of the most selfish people on earth.

[Tim Phillips]

i think that the mess we are all in today is caused by speed of communication, linked to the experts not being the experts at all. Too much time using computer profiling and computers and not enough brain power. That coupled with greeed makes a bad house mate. Then along comes the lodger - the press- who continually report the bad helping to make matters worse, then when they get worse, they say look how bad it has got. The markets need to rebuild trust in each other by talking and doing not hiding behind their computer screens.

[Dean Fox]

The cause - de-regulation of the financial markets, the Building Societies Act, and a failure by all Governments of the last 28 years to take control. The Bank of England didn't step up to its responsibilities after the failure of 3 investment banks in the 80's and 90's and the FSA didn't spot the signs of a repeat performance over the last few years.

The irony is that the UK will now return to a mixed economy, and it is the Conservatives that will have to dismantle Thatcherism.

[diddley]

allowing tax relief on mortgage repayments for buy-to-let investors to continue was a serious error. It favoured the greedy (middle-aged money-for-nothing bandits) over the needy (young families), and raised property prices to ridiculous levels. The greedy borrowed too much, because they were blinded by their greed. The needy borrowed too much because they had no choice, if they wanted to buy a house to live in.

[lucy]

Andy Hornby of HBOS for ruining a good bank. Swept away with complicated financial instruments, drive for bonuses,getting staff to pester customers to buy services they never wanted ; unable to answer shareholders' questions at last AGM re fall back strategy if rights issue flopped (as it duly did). Why is he still there???? He should be turfed out and never work in banking again.

[christine b]

The more you hear the more it is clear that all financial dealings nowadays are illusions. World problems can't surely be down to poor little Jonny spoilsport who couldn't afford to pay back his pocket money.
Get real!

[Ramesh Thakrar]

I blame Gordon Brown fo not taking action against rising house prices by raising interest rates or reckless borrowing by house buyers and reckless lending by fiancial institutions.

[Derek Edgley]

Most of the adverse comments levelled at Gordon Brown are in the main true - however he has not finished yet - in an attempt to finally gain self actualisation as his govt. has failed in every other respect he is deliberately reducing interest rates whereby sterling will come close to equalling the euro - we already had notes introduced sometime ago to look like Euros - then he can become the PM to go down in history as leading us into the single currency which will give him a lead over Blair who failed. But Blair saw the writing on the wall as to what we are facing now and decided to bail out when his vision of himself as President of a Federalised Europe started to vanish.

[Merlin]

Blame?

The private banking cartel set up in 1694 with backing from the Vatican, (who funded William of Orange) plus a few other royalties.

BofE, Fed, BofCanada, etc - a PRIVATE banking cartel, misnamed to fool the sheeple; fractional reserve lending of money (debt) created out of thin air; repeal of Glass-Steagall legislation; and in Europe, the Basel 2 banking regulations that loosened the regs on Bank gearing; the Yen carry trade, through London to the Caribbean, to provide Hedge Fund gearing at anything up to 100:1; and the outright corruption of crony capitalism in the US which is still rampant.

Fundamental problem:-
All central banks that issue DEBT, that we think of as "Money", to pay interest to the Rothschilds and a few other parasites including royal families.

Further injections of DEBT at this point will create NEGATIVE GDP. Brown is a total fool, a naive idiot, and his economists,...well, enough said!

Remedy?
Abolish ALL global "private", for-profit banking cartels, legally mandate max gearing of 5:1 for ALL lending, issue "money", not "debt", to create a stable society, not burdened by inflation that is the hidden tax of EVERY BANKING CARTEL.

Mathematically, all fiat systems must ultimately collapse under the weight of compounding interest payments. (National Debt). We are now at that point, which is coincident, quite appropriately, (characterised by the growing gap between the rich and poor, despite the best efforts of socialism) with the demise of western economic culture.

Gordons Fabian government, which feeds on capitalism, but pukes out communism, will implode this country irrespective of his bailouts. In fact they hasten our demise!

[earl]

Putting the blame on Brown and the government is as dumb as giving them credit for the past decade of good times. We might as well blame human nature especially our herd instinct. We are also very poor judges of the future beyond 6 - 12 months at most. Most so called experts were predicting modest house price growth a year ago. Now they say 10% or more falls. The herd will soon calm down and then a bit of greed mixed with good old human optimism will resurface. If you want to make a million start buying property in January and then wait a couple of years. Only the brave will do this. The rest of the herd will just keep plodding along. Thats why most people are relatively poor and only a few are very well off. Its all to do with human nature and sod all to do with Gordon. At least he's cut VAT. Most morons whinge that £2 off a £100 telly isn't much help without realising the effect over time. Throughout the year a family spending around £20K - £30K will save around £500 - £750 in VAT or enough to buy a couple of tellies and a new washing machine. This together with interest rate cuts of around 50% will start to kick in around spring next year. That is why the savy will start buying in January.

[peter c]

it has turned out that Globalisation, so much vaunted by Bliar was about as good a thing as a global flu pandemic. I BLAME BROWN and his smug, arrogant ignorance

[Keith]

Who to blame? Two words..........Gordon Brown.

[Ian]

Just look at France. Last time I looked they were still growing and unemployment dropping. But then their banks are better regulated - something Gordon chose not to do. All Browns talk of international regulation etc. is a side track to the fact that other countries have managed and if he cannot then maybe he should seek other work.

The "help mortgage payers" is both ineffective and very dangerous. The damage done to savers is a big long term problem and the more pressure brown puts on the banks the bigger that problem becomes (e.g. in 6 years). By the time you take out people on fixed rate deals, people renting, people who have paid-off their mortgage (remember the all pensioners), people with floors on their trackers, etc. it actually affects few people - but it does make good headlines which i maybe what Gordon is all about.

[chaz]

The blame firmly lies at the gov't door,they should have had stricter control over the banks,and seen this coming when consumer debt was getting out of control.

[He who points]

How about the media driven frenzy?

The lust created to own many houses followed by the absoultely crazy doom and gloom headlines following?

See Y2K, Asian flu, bird flu, food crisis for other examples.

[Paul]

There are three groups to blame (in this order)

1. Bank of England Monetary policy Committee. What were they thinking? They have been ignoring inflation in favour of targeting house prices and the nation became hooked on cheap credit. Their latest answer? More cheap credit. In fact, Charlie Bean recently admitted the BoE shouldn't have chased house prices with their rate cuts. More booze might help a dying alcoholic but don't pretend it will make them better - like the UK's central bank does.

2. Vested interests in the media talking up property. Unfortunately, the very same middle-aged and senior buy to let investors are also the people who manage the BBC and other media, and decide things like programming schedules, BBC website articles, and whether to commission new series of "Propertyporn" or whatever. For the nearest comparison, if you were giving share tips in the media and also buying the shares on the quiet, you'd be arrested.

3. Government. The chancellor had a number of opportunities to reign in the credit boom but it didn't because it was growing fat on swollen tax coffers. There are just so many metaphors and analogies you could apply here that I can't start to list them. Basically, the current answer is to give the alcoholic more booze - see point 1.

4. Regulator. Three words that the FSA should have on its epitaph "Light Touch Regulation".

Investment banks are - surprisingly - not to blame. They are doing what they always do, in a climate that permits it (see point 4). Blaming them is like blaming footsoldiers for a war instigated by their generals and politicians. Investment bank behaviour is the effect, not the cause of our problems.

[CAMERON]

@stephen toms
Please don't confuse belief with logic. It was only a matter of time I suppose before someone waved the 'armaggedon' flag. Keep the Da Vinci Code mumbo-jumbo to the religious rags. Besides, everyone knows the world ends in 2012...*ahem*

[grumpy1]

Carol Vorderman

[TeePee]

Brown was briefed regularly by Bankers. I knew one of them.
Why would they tell him of the possible problems?They weren't there to do that, and some would have been after a gong at some point.
The bankers are the problem, and Brown and Darling , and of course Blair, on who'se watch the seeds of this were sown.

[JDS]

The destruction of the manufacturing sector by the Thatcher Government reaps it's rewards....... eventually.

[Findlay]

Blame socialist governments in America and Britain that told everyone they could have everything, greedy bankers that sold packaged debt rubbish as good, financial watchdogs that did nothing and the press that parroted the Government line that the economy was good. Blame the Government again for destroying our economy by selling our gold at bottom, for over taxing our people, regulating our businesses and making a bloated public sector so there is nothing left to fall back on. Don't be surprised, this government went to University to find out how to destroy the Western economy to build a brave new world. Still waiting! Last and least, blame the punters, who were permitted to bite off more than they could chew! Why are the bankers not in court for fraud? They were either useless and should be on the dole or complicit and should be in jail. Remenber Wilson 3day week, no taking money out of the country, additional tax per employee, coming to a town near you soon.

[John G]

I always felt the housing market was always going to end in tears as the prices kept going up and up until eventually they get to a stage where only the wealthy could afford them and especially those greedy 'Buy to Let' purchasers. I felt something should have been done to stop this 'Greed' so that house prices could be more stable and relistically priced so that first time buyers could get on the ladder - instead prices got higher and higher and mortgages became bigger and bigger until the market couldnt take any more and the whole system collapsed which then had a knock-on effect on the rest of the economy. This seems to be the case both in the US and here in the UK.

[Lui]

In your preamble you omitted to point to the public getting themselves into financial trouble by taking on too much debt.

[laurie. Tunbridge Wells]

Mr. Brown is unchallenged as the author of most of our woes; he took no action when it was obvious that people were borrowing too much, that house prices were too high, and that tax receipts were being squandered. When he took over as Chancellor the U.K. was one of the strongest economies in Europe, and now it is among the weakest.

[Mark Vickery]

Gordon Brown

The man, apparently 'prudence personified', has been in Chancellor of the Exchequer for 10 years and presided over this mess with both eye firmly closed whilst droning on about his achievements of hiking taxes in ever more hidden ways whilst claiming we were all better off under Labour.

We have seen a housing bubble before with unsustainable property price rises followed by a sharp correction. It was obvious to a 10 year old that a housing boom on cheap credit was only going to last as long as the economic cycle was strong. If you lend vast sums of money (some banks and building societies were lending 6 times income!) at low rates it is going to come back and bite you when rates go up.

And he also sat by as the FSA fell asleep on the job not reigning in this madness.

This mess will not go away quickly and my greatest fear is that having presided over this mess in the first place Gordon Brown will somehow manage to present himself as the saviour and manage to get himself re-elected for a 2nd term.

[A Walton]

We use to vote a administration, with a mandate to govern,but Brown as side step this minor issue.
The Government sits regularly to either fix main issues or fine tune, before they become a crises. This administration have behave like deaf-dumb monkeys on this point.
Like a football manager, it is no good blaming past systems, when players- managers -coaches have changed. They are all in the results business. If the results are poor then the person in charge has to go. Brown is incompetent:changing a starting debt of GDP from 43% to a future 57% on their figures and the pound falling like a stone, with a future high inflation.
This not the tea ladies fault!

[R Turbin]

I go along with all those who blame Gordon Brown for this mess. I have no mortgage (paid off)or credit card debt because I was taught thrift by my parents i.e. if you do not have the cash don't buy it! Brown's first surreptitious act was to destroy the final salary pensions scheme to the tune of £5 billion a year (now worth £100 billion or more in real terms) I was lucky - I was already drawing mine. Next, Blair and cohorts went along with an increase of nearly 700,000 public "servants"
- at what cost? Public spending is now double what it was when this lot came to power and what improvements have we seen? I shall leave it at that as I may have a seizure when I contemplate where we could have been had we had the good offices of Ken Clarke and his successors at the treasury!

[John H Webb]

Gordon Brown is to blame for our problems - starting from his spell as Chancellor. HE is the one responsible for raiding our pension funds - and it continues. Many good sound UK companies report "PENSION FUND BLACK HOLES" because of Gordon Brown's unfair taxes NOT because the employers are mean or that the insurance companies have failed to deliver results.
This was the thin end of the wedge. Since then Gordon Brown has continued to borrow LARGER AND LARGER AMOUNTS OF MONEY to fund the ridiculous labour con-tricks like the Ministry of Silly Rules. They get away with it because they talk in BILLIONS (of our tax money of course) and nobody really knows what a billion looks like. To be honest, I've never seen one.
People really must stop voting for them !!!!!!!!!!!!!!!!!
John

[David]

I amoungst many of my friends are not currently destitute.This is due to the fact that we didnt fall for the propoganda of no more bust.Every level is to blame,however it is irresponsible of the leaders of the country to lie and decieve. That includes government,banking etc.However anyone who thought a 7 times your joint salary mortgage was sensible should get trouble.

[sm]

Unbalanced world growth.
Uncontrolled money supply.
People,manipulators not least politicians.
Short term interests of individuals/insiders overiding thelongterm stakeholders ,electorates interests.Same individuals bearing no or limited personal downside risks.

Gravy trains of 'Yes men' in EU, governments and quangos.

The public for being manipulated.

[Mark]

central banking!!!
central banking!!!
central banking!!!

with paper money and loans created out of thin air and money not backed by any commodity

with commercial banks not holding 100% reserves for demand deposits

http://www.federal-reserve.net/whatisthefederalreservebank.htm

[Alan]

Dotted among the pointing fingers I'm heartened to see the odd finger here and there pointing in the right direction - central banking, specifically the Federal Reserve of the US, itself based on the Bank of England. Funny that wasn't an option on the poll?

[robert grainger]

Browns view that this is resultof an international problem,......didn't he have any input into global financial issues over the last ten years?
As usual, chippy socialists will imply that the situation is about brown having as much to do with the issues as he is responsible for the weather. How can people buy that?

[Stephen Portman]

It's hard for anyone of the public to know precisely who, or which group really had the power to control lending practices. It is, however, incredible that any knowlegeable authority could not see that giving 125% mortgages in a market that increased by double figures year after year was going to end in disaster. There was such an overwhelming rush to riches that noone in authority during the heady flood of booming /markets wanted to signal the restrictions necessary.

In fact, I would hope that this invitation to discern the blame might reveal who it really was that had the power to avert this, and then did nothing. I know that wiser commentators were writing warnings intermittently, but they had no control. Who did?

Yours,

Steve Portman