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

[Paul Foyster]

The Regan era removed any financial
controls Wall Street believed were
unnecessary. The government of the day believed implicitely that the market would always correct itself. Allan Greenspan did everything in his power to sustain the ever lengthing business cycle and prevent any major corrections from occurring. The finale change in law that started this avalanche was the law that required lending institutions to lend to anybody that had an acceptable credit score. Lenders were not allowed to consider cultural problems that were attached to certain minorities or itinerant workers or seasonal effects on a workers income. Demand for real estate exceeded supply and prices escalated dramatically. Europe followed a similar path with rediculously low interest rates and people paid outrageous prices for houses because the interest rate was so low that they could carry the payments.

[michael durham]

Blair / Brown and Darling. FSA supervision over past 11 years lamentable. They now want more powers!!! They already planty of investigative and arrest / closure powers...which they have not used.

[Jane]

Well, obviously the trigger for the whole debacle was the US. Years of low interest rates (one per cent for a long time), encouraged debt and imprudent house-buying. Then, the US started putting interest rates up, ultimately to five and three quarter percent. Obviously a fivefold increase in interest rates was unsustainable to the lower echelons of society. These were the targets of the last desperate gasp of salesmen, who, on commission-only in a society with no free health-care and little welfare, would do anything to survive. And their insanely (no metaphor intended) greedy bosses. Next, the dud mortgages were disguised and sold on as financial products, again with big benefits to bankers and middlemen. They percolated into other countries' economies.

Meanwhile, the US stopped making things and relied more and more on retail as the driver of economic growth.

Of course there was going to be a come-uppance. Now we come to Gordon Brown's part in the fiasco.
Throughout his ten years as chancellor he proudly presided over an economy which increasingly followed the flawed US model, with low interest rates, an etiolated manufacturing base, hardly anybody making anything, and an enormous mountain of debt sustaining a retail and mortgage splurge, which, exactly as in the US, hit the buffers when interest rates finally went up.

So when the US sub-prime poopy started hitting the fan, there was nothing in the kitty to stave off disaster.

British citizens have lost the savings habit, aided and abetted by GB, who stealthily filched 5 billion a year from the pension funds in his first budget, a move which was largely implicated in the frantic move into houses as pensions, which fuelled the unsustainable housing bubble.

[Phonk]

the scarcity of the liquidity, in which bank is it diposited.
UK gov't injected 500 billions of public money to bail the banks that is roughly £20 000 each working person in the UK.
The gov't is giving this momey to the banks to lend it to us and make a profit from interest.
wouldn't be reasonable if this £20000 is given to the working population and we put it in the bank and earn interest from while the bank makes use and profit and everyone is a winner.

[Phonk]

Whats the point commenting when it is not shown.

[tony]

It's hard to blame greed because the greedy have not benefited. It's just a stuff up.
Firstly, there is not a broad enough understand of basic economics so that banks and others have made bad decisions on what and to whom they are prepared to lend and what debt obligations they can safely take on. Freddie and Fanny were set up in a way which effectively encouraged them to make bad loans. Secondly, there is a lack of regulation needed to avoid unstable situations which led to the problems and there is not enough central data available for the regulators to make proper decisions. For example, nobody seems to know even now to what extent banks are exposed to credit default swaps.

[Mad 'un]

Blame Germaine Greer and the other Seventies' feminists. Besides all the good that it may have done, allowing and encouraging women to enter the workplace on a large-scale and gender-equal basis has completely up-ended established housing-values and established ideas of familial income and expenditure. This is not to say that equality is in any way a bad thing, but after centuries of inequality, it is naive to expect all the repercussions to have finished echoing three decades later. We still haven't really sorted out how increased competition for jobs, and dual-income families, will actually affect housing values.

[keith brown]

the mattress who I trust for it will not lie, cheat or steal the mattress I beleve will not go on vacation, resort or gamble my money alway the mattress will not retire or get fire with a large amount of my money(severance pay) my mattress I trust

[Richard Harris]

The whole mess started here in the USA with this sub-prime lending instigated by the Democrats in Congress and implemented by Fanny Mae and Freddie Mac. All other elements of the fiasco are subsidiary to these initiating events.

[John]

Excellent summary, Jane.All I can add is that the people at the top who got us in to this mess ,in government,banks and the regulators are not really going to suffer as they deserve. Hornby, Goodwin and others pride may be hurt but they are not going to struggle to pay the mortgae or energy and food bills.Brown , Darling and their acolytes are in the same position . Similarly in The USA.

[Frindon]

So if it is raining and you don't like it who is at fault, Brown and Darling. Look, the public can see through this sort of comment and making it just makes Cameron look like a loser.

[Anne Robertson]

Kleptocracy - USA

Listen and weep

http://www.informationclearinghouse.info/article21041.htm

[Mark]

All this trouble started centuries ago when paper money ceased to be 100% backed by commodity. New Money was created only via savings before, now it is created out of thin air through bank debt in a giant Ponzi scheme which is now collapsing. Zillions of new money pumped these days only make it worse.

[Jonathan Wheatley]

The lending practices of Freddy Mac and Fanny Mae in the US clearly went beyond the levels of prudence with which, many years ago, banks were rightly associated.

What is astonishing is the level of participation in the trading of derivatives of these loans by British and other European financial institutions. The replication of granting 100% plus mortgases without due diligence having been conducted then became an affliction of the demutualised building societies (Northern Rock and Bradford & Bingley in particular), playing at being international bankers without the slightest understanding of what they were dealing and the risks associated with such activity.

This cavalier approach to shareholders interests, stimulated by prospects of short-termism, was allowed to take place under the "light regulatory touch" of the FSA, with the Bank of England closing its eyes to everything bar meeting inflation targets.

Responsibility for inadequate behavious by both these institutions cannot be ignored.

However,who sat above all this for ten years, pulling the strings and determining what was "prudent"? None other than the Chancellor of the Exchequer, one Gordon Brown. Where was Blair during this time - keeping his own council next door in Downing Street and fearful of the wrath of his neighbour if any interference was even contemplated.

Brown presided over a period of unsustainable boom in which spending was financed with excessive levels of personal and corporate credit.The UK's disastrous incursions into the US sub-prime market lets him think that he can blame "global circumstances". What nonsense! What arrogance" What hubris!

[Richard Allen]

I blame Gordon Brown for negligence. He was in the treasury long enough to have seen what might have resulted if the big banks carried on the way they were going.

[Francis Brown]

America. Period, as those dozy yanks might say.

[James Arthur]

There are many people responsible but it seems to me that the order of guilt is as follows:

1.The US brokers who gave commissions to employees to sell loans to people who couldn't afford them.

2. The people who took out loans that they never could afford.

3. The bankers who did all sorts of funny business with bad debt in the pursuit of short term profit.

4. The executives at the banks who didn't understand what was happening and creative the incentive structures to reward excessive risk taking.

5. the credit rating agencies who gave these debt products better ratings than they deserved becasue they were getting money to do so.

6. The regulators who didn't stop any of the above.

7. The too laissez fair governments who didn't understand or want to understand the sytemic risks in the financial system.

Simple really.

[Johnny Lyell]

Easy credit.
The banks have given the money away too easily.
There has got to be more regulation - not too much - but more. Both the USA & the UK got their lending wrong. Brown knows he could have done somthing about it when he was Chancellor and I think he is hoping this crisis will give him the chance to correct his mistakes "by the back door" . Lets wait and see!

[NGU]

An 8-lettered word: congress

[stephen toms]

Sorry to upset every one, I don't mean to be a prophet of doom. I have 3 interesting points to
make.
1)The Holy Bible clearly states that near to the end of the world there will be a global financial collapse to quote Jesus Christ- "a piece of bread will be worth a bag of gold".
2)Holy Bible states that the temperature will be 7 times
hotter almost at the end of the world(what
scientists predict and fear and call global
warming).
(3)Holy Bible states that every one will be forced to take an i.d. chip and that you cannot buy or sell without the i.d. chip (the i.d. chip is probably the verichip - type verichip into google video to see it).
That's 3 clear prophecies written in the holy bible that will all come true at about the same time near the end of the world.
To look at it from a different angle, the bible predicts certain clear specific things will happen
all at about the same time, as a warning to people to repent of their sin and to turn to God and
worship him.
The Holy Bible says many very specific things that will happen near the end of the world. 3 of them will happen all around the
same time frame. So logically if we know the Bible Prophecy and find 2 of the 3 things on the verge
of happening we can assume the 3rd will also soon happen. The 3 things predicted to happen are
(1) Government marking i.d..system (2) Sun burns 7 times hotter
(3) Financial collapse.
So lets consider current news stories over the past year and see if any 2 of these things are ccurring together then logic states the 3rd will also happen.
So over the last year in the news there have been reports that
(1) Governments want and plan to introduce an i.d.chip within the next 18 years.
(2)Scientists
fear global warming on a massive scale in next 20 years.
(3)there is the prospect of world global financial disaster.
We clearly have all 3 things in the news that the Holy Bible states will happen towards the end of the world. So i would suggest everyone take a bit of notice of the bible prophecies about the end of the world, as clearly at least 3 of the 2000year old bible prophecies are on the verge of coming true all at the same time. This is really no surprise the most intelligent people of our time believe the bible even Einstein and Kepler and Isaac newton 3 intellectual giants believed the bible.
Clearly the Holy Bible's prophecies written 2000 years ago as a warning from God to mankind warning of disaster and the end of the world if people don't stop their evil ways and turn and worship god are seeming they will come true within the next 40 years. We will probably get over this financial problem for the short term but the next one the Bible Predicts will happen about the same time as the governments introduce the i.d. chip and that will be the big financial collapse to worry about.
If there is anything to learn from this it is to take good notice of Holy Bible predictions and warnings, and probably if you have not got a bible i would suggest getting one and reading the many prophecies spread through its pages.

[Frederick]

Just imagine Brown was telling the City financiers about 2-years ago what geniuses they were. I blame Brown, Brown and Brown and most of all Blair Blair and Blair. Labour like repeating themselves so thought I'd have a go.

[Barry Bunn]

Hayek, Ragan, Thatcher started this. Let us not forget, that pre 86 Thatcher et al removed the need for 33% deposits on HP's. Post 86 we had chaos.
Deregulation created a race to the bottom.
because the 'market' became not just King but God, we lost so much; Trade Unions and their under reported benevolent discipline, aprenticships and their ability to infure self esteem, we lost park keepers, bus conductors, we lost swathe after swathe of uniformed intermiedery discipli. Society fractured and now we have a lost generation and the police. That is it, that is where they two tribes meet.
Of course Brown et al have been just as bad, but the bullet had already been fired by the former

[Graham Sargen]

We are all responsible: we, ie the UK public, demanded vast amounts of credit from our banking system and the banks supplied it. It's not just investment bankers who were greedy, so was everybody who wanted to gear up and buy bigger houses, fancy cars and fashion-house bling. We should not be looking for scapegoats because responsibility is widely shared amongst Government, commerce and the public. We got into this mess together; we'll only get out of it by working together.

[A N Townly]

A Three letter word describes Gorden Brown. DUD.
He is responsible for the mess we are in.If he contiues he will bankrupt the Nation.He has no moral code.
He has taken 130Billion over the last 11 years from the private pensions,he has taken 25 billion for 3G licence's.He has removed Widows Serps.He inherited a balanced budget from the conservatives,he has increased taxation on those who work.The off balance sheet has not been shown. He has allowed personal debt to grow with his mismanagement.He removed the authority from the bank of Engalnd and allowed the FSA to fall asleep on the job.His stealth taxes begger belief especially retrigrade car tax.No one Globally asked Northern Rock or Bradford and Bingly to lend money out to people who could not pay. He is a privileged DUD.

[Grumpy]

Who to blame?
Supply and demand
Supplier or customer/punter?
Banks and credit card companies feeding the want now brigade whether it be for bigger houses or consumer goods?
The government and its money tree of direct and indirect taxes to throw cash at public services without consideration of outcomes?
In general, the mentality of live now, pay later and, if one can't pay the instalments, shout "foul" and blame somebody else, like the previous chancellor of the exchequer, regulators and auditors.

[Deepak Dhawan]

There are many accessories to the crime. Lets be clear about one thing. A crime has been committed.
Defendant No 1. The Banking System. You were supposed to be the conservative guys. Dark suits and narrow ties. The businessman took the risk. You advised caution, wanted to see cash flows, projections, current income. The depositor was an important customer. They trusted you with their money. You cheated them, took stupid risks and left no check and balance in the system and no protection for the depositor. You cleverly used globalisation to evade regulatory scrutiny. Guilty as charged. You should hang for having destroyed my wealth.

Defendant No 2. Government Regulatory Bodies. Where were you.? Out for lunch.? In hindsight it now appears that there was enough evidence that this was coming. Why did you not see it and do something to reign in your friends.? Free market is not an ideology, its an economic system over which you had oversight responsibility. If the Bankers had become crooks was it not your responsibility to protect the depositor.? Guilty as charged. Life imprisonment.

Defendant No 3. The missing king. Who is managing these monkeys.? In a global world with strong interdependencies the galactically stupid in one part of the world can impact lives of people in another part in a pretty viscous manner leaving them wondering. "What did I do wrong.?' "How come I have to pay the bill for this expensive lunch.? I was not even invited to the party.?" The hearing will be held and evidence presented once we find the missing King.!

Deepak Dhawan

[tone]

Gordon should be very very careful (even for him). Many people blame him for this mess in the UK, and his glee in pretending that he is the only one who can resolve it is rubbing salt into very sore wounds.

[LynxEffect]

The key thing is that the market will correct itself. Well, now it is. The money was given away with nothing to back it up. The banks didn't know what they were doing and are now suffering. To stop the suffering being passed on to everyone we have to loan them money.
What annoys me is that a failing business is still paying out bonuses.

[Tony]

Who will you vote for... in this impartial poll where we put a grinning Gordon Brown at the top?

[Maurice Smith.]

The Treasury has to be responsible through sheer negligence.

How it was that such experienced mandarins failed to question the asymetrical nature of the economy defeats me. They are supposed to be the financial elite, able to interpret past and future trends and thereby protect our economy.

And they are still sitting there, waiting for their gold plated pensions !!

In truth, there is far more wisdom scattered throughout these posts than ever graced the corridors of Horse Guards Road.

[Pete limb]

Maggie Thatcher and the destruction of heavy industry, manufacturing, and the drive to trap people into the ethereal world of property equity all fuelled by reliance on cheap imports and the notion of consumerism payed for by cheap finance with wages earned in the very strategically weak service industry.

[Paul Gibbons]

I am in 100% agreement with Barry Bunn.

[Joel Kara]

If people cannot manage their own financial situations, that cannot be blamed on Gordon Brown; surely?

[Karen D]

To those who blame the democrats in the US congress - they only just came back into power after years of Republican control. It was not just Fannie and Freddie but the whole unregulated mortgage industry. As for the people taking loans they couldn't afford - the brokers were trawlling for them with adverts such as 'no job no credit history - don't worry we can help you get a loan!' As for the bundling of bad mortgages - buyer beware. Now we need to move back to greater regulation and plain and simple common sense at the lowest levels - ie the loan desk.

[Bill Peter]

Why aren't the rating agencies on the list? They assessed "toxic debt" as "AAA". Were they just complacent or complicit in a world-wide fraud?

[Bobo]

Personally it makes me feel better to blame greedy, irresponsible, short-sighted American Bankers who tried to make their balance sheets look good by by lending billions to lazy, worthless and probably overweight American trailer-trash so they could get a house without wheels whilst not actually insisting that they get off their fat backsides and find a job so they can actually be responsible and pay the money back.

Thanks for listening to my therapy session.

[Corbo]

I agree with Phonk. No point commenting unless you are in the club. However, all the above were to blame with the government the worst culprit as they want to rule our lives so should take the blame for events that happened under their watch.

[Edward Synge]

So many excellent comments.Sub prime certainly a trigger.BUT for the UK,Blair and Brown not the wretched Darling who is doing his best.Consider 1997.£25,000,000,000 in credit,gold,pensions etc...
Brown and Blair's profligate spending and TOTAL inability to admit to error.Blair was lightweight,Brown is a well meaning disaster.

[Leo]

Brown and the banks have rightly been on the receiving end of a lot of the opprobrium in the aftermath of the crash. However, personal irresponsibility by individuals has been underplayed, and politicians must not create too much of a moral hazard in enabling people to shirk the consequences of their decisions in the quest to retain votes.

Anyone with an ounce of common sense should have known that borrowing 8x your salary to buy a grossly overvalued one-bedroom flat equals financial suicide. I had saved enough for a deposit by 2003, realised that property was overvalued (relative to historical norms) even then, continued renting a tiny studio flat and saving like mad. Many colleagues, friends and relatives chided me for being too 'timid' to get on the ladder, and told me that I'd regret not doing so while they financed an unsustainable lifestyle (new cars every year, 2-3 foreign holidays, the latest consumer electronics etc. etc.) on cheap credit.

A lot of these people are now in deep trouble, while I'm sitting on £75k of savings and intend to continue doing so until house prices reach the bottom. If they are bailed out by governmnent-backed mortgage support or any other use of taxpayers' money, it will create a clear moral hazard and an incentive for financial irresponsibility and against saving. If anything, the rules need to be toughened up (e.g. the recent relaxation in the bankruptcy rules reversed). This would also have the benefit of making it harder for irresponsible lenders to sell destructive 'financial products' (as the industry euphemistically calls these stupid loans) in the future.

[Darien Project]

The rating agencies, shurely....?

[Mr C]

The lot of you for believing that unbridled capitalism was any better than communism or its variants. It's not as if the kind of people you blame were hiding their intentions: The well-known quote "It is immoral to allow suckers to keep their money" sums it up nicely.

[Fred Brough]

Follow the thread and you find the public untimately are pulling the strings

[Scott]

I blame institutionalized dishonesty, it has taken over in politics, financial services, corporations, government, policing, wherever. Almost everybody lies, very few differentiate between right and wrong, all common sense and logic have been turned upside down. Our politicians lie to us daily, salesmen lie, council staff lie, bank staff lie, builders lie, almost everyone lies because they can get away with it and it helps them make money out of you or gets them off the hook in order to avoid doing something for you. In the past twenty years it has become far worse and the example from the the very top is the reason . The politicians lie about everything, that is what spin is, it is refined disinformation, simply telling lies.

The bank's financial statements are lies, Government figures are lies, the press continually lies, sales brochures are lies, history books tell lies, we live in a World of deceit. Often we like the lies because they make us feel good but eventually the lies unwind and we end up in a situation such as we have now.

Dishonesty is now so rampant through the whole framework of the country it is difficult to see how the mold can be broken. Only a revolution will cleanse the system but the powers that be know that and that is why our civil liberties are being eroded minute by minute, the justification even more lies.

[John Williams]

You should have allowed multiple answers because no single answer from those available makes sense in isolation.

[smlaing]

City traders were only ever to blame. I have traded derivatives on margin. The potential risks are huge. The sub-prime problem was merely the trigger. This would have happened anyway. It needed to happen. Traders were taking hugh leveraged positions and ignoring the risks.

This still has a long way to go!

[Andrew Piercy]

Gordon Brown, the governors of the BoE, and the directors of every UK bank are to blame for the UK getting caught up in this disaster. They should all either resign or be fired.

[Gareth Price]

@Stephen Toms. Did you actually read what you wrote? Your submission is so illiterate I find it hard to believe that you can even read the bible, let alone interpret the ramblings of Revelation.

[Arthur Norton]

"Who do you blame?" Don't you mean "whom do you blame?" or have you abandoned all pretense of being an English-language newspaper?

[Andrew]

Central Banks. All financial implosions in history have been preceeded by an explosion in money supply. This one is no exception. Central banks around the western world allowed money supply to increase geometrically, it had to find its way somewhere - it was into housing.

Bankers were just the conduit for this increased supply of money, they were actors not directors, reacting to the incentives inherent in a system of easy money set up by central banks.

The scale of the crisis has been compounded by reckless fiscal spending on both sides of the atlantic. Governments should share some blame.

This has left politicians no choice but to make ever greater claims on our future productivity and siphon these funds into the failing financial system. A terrible shame, and a blight on bankers' reputations.

There should, tehrefore, be no doubt that any bank that has accepted tax payer funds will not pay bonuses. The banks have, in effect, failed. They continue to survive only for tax payer funds. The are currently a drain on wealth, not a creater of value. If they are not creating value they should bot be rewarded with bonuses.

A bigger concern should be how all of this government action will change the risk/reward dynamic in the future and hence affect the allocation of capital. The critical immediate term fixes will profoundly impact the way the economy works for the foreseeable future. Lets hope politicians do not make an even bigger mess of it - history does not fill me with hope.

[mike cassidy]

PM Brown & co should have taken steps to 'cool' the economy
2, they kept interest rates low to fuel the economy on cheap debt
3, this encouraged more and more people to gte into too much debt ect ect
all this has made UK problem worse
brown &co have spent in good times now we have to borrow and pay back later when it will make make matters much worse

[Hall]

Gordon Brown is most to blame for spending all the country's money during good economic times and leaving nothing for an economic downturn, and he is to blame for fiddling the guidelines for the setting of interest rates that encouraged personal debt and fueled the housing boom.

Gordon Brown is not to blame for the world-wide credit crunch, but he is to blame for making the credit crunch particularly difficult for the UK and he will be to blame for the depth of the recession we are entering because of the lack of financial reserves that the UK now has due to his excessing spending and promotion of a debt culture over the past decade.

People will understand that there is a distinction between the world-wide credit crunch that is nothing to do with Gordon Brown, on the one hand, and, on the other hand, the overspending and debt problems that the UK faces due to Grown Brown which puts the UK in a more perilous position that most other nations.

[victor compton]

I blame the World Banking Cartel families, who have always used deliberately manipulated depressions to increase their wealth and influence. Don't believe it : see 'The Money Masters" film on the internet.

How The Fed Creates Money at : http://www.themoneymasters.com/faqs.htm

Who are the secret owners of The Federal Reserve at : http://www.fdrs.org/federal_reserve.html

SECRETS OF THE FEDERAL RESERVE:
http://www.apfn.org/apfn/reserve.htm

You will find that the Fed is owned by Private Family Banks, and that half of those banks are of European Origin. This world crisis is part of their struggle to finally take complete control of the American Government away from the American People entirely. The world crisis is peripheral to this great Battle and is truly Good against Evil in the best Tolkien sense. Wish us luck for they have eyes and ears everywhere.

[J M Dorset]

Once deregulated the financial sector was always going to "push the boundaries" in search of advantages over their competitors and to satisfy sahreholders and other investors in their businesses. The so called "Fat cats" who sought ever more sophisticated (in the true meaning of the word) solutions were working as they saw fit within this framework. At fault are the government. Imagine the first day conversation. Brown: "How does the finacial sector work?" Civil servant or banker: "Oh Mr Brown you don't have to trouble your head over that. Just look at how much lolly they make for the British economy!" Brown: "Oh fine. Whats the next item on our agenda?" The point being - If he did not know what was going on, who else should!!

[Foo Foo]

@Gareth Price: LET HIM WHO IS WITHOUT SIN CAST THE FIRST STONE!

Your unhelpfulcomment speaks for the hollowness of non-Belief.

[Peter]

Surely the newspapers should also be listed as co-culprits for the fact that they have revelled in talking down an already unsteady econonmy and have continued to chip away at any confidence that may have still existed. What is the purpose of this poll, for instance?

[am]

It may all be triggered by the problems in the USA but we have been stoking up the same problems in our economy, and the government while claiming to be running the economy well and appointing and trusting regulators and the boe, stripped the country of its assets then shut its eyes crossed its fingers and waited for the oncoming whirlwind to miss or hit them. I saw the economy was malfunctioning 5 years ago or more (as did many others) and that spending and notional financial transactions were fuelling the economy, not real growth or manufacturing so why couldnt our so called genius of a chancellor / PM ? Now we all pay for his incompetence. Yes we would have been affected by whats happening internationally, but with an intelligent, strong hand at the controls it would have been easier to weather it with less damage.

[Richard]

I blame Robert Peston.

[Katie]

Barry Bunn & Pete Limb are so right - Thatcher started the rot. She made people greedy and stopped them caring for other people. “Money for me” was the gospel – sod other people, don’t worry about anyone else, buy your own council house (or your parents house) and a nice car. So what if some people need a house over their head & can’t afford to buy and private landlords are too expensive – it’s not MY problem!

The sense of community has gone, looking out for other people and other peoples kids has gone. Now people are scared of drug dealers living in their street and to talk to lost kids in case they are branded a paedophile. Society is not just fractured but busted wide open. The younger generations don’t respect each other or their parents so how can they be expected to respect the police, teachers etc.

I don’t know how to put it right now it is so badly wrong – but I’m sure there are experts out there who could by consensus build a plan to mend the country – but shall we leave most of the politicians out of it?!

[Julian]

No surprise to see there isn't an option for "the media" in the poll. That's who I blame. Not in full, but they certainly do seem to be enjoying fanning the flames at every opportunity. Irresponsible at best.

[Derek]

It is quite complicated to assess blame in this situation, however, I have :), so here goes:

1. Alan Greenspan: His answer to the weak economy of the dot-com bust era was rampant consumerism fuelled by cheap debt. This is where it started folks.

2. Most other countries in the world: needed to be competitive with the US, and Greenspan's trick seemed to work, so they followed suit and lowered interest rates time and time again.

3. Gordon Brown: wanted to attract the financial industry to London in a big way, so he decided the best way to do that was to massively reduce regulation in the UK. He wanted to tell banks that they could do whatever they wanted in blighty and the FSA wouldn't interfere.

4. The Banks: Brown's plan worked and all was good. (For a time.) Banks raised money through the use all sorts of debt based securities, often looking the other way when considering risk. After all, the economy was hot and the riskier stuff paid better.

5. Us: we wanted to buy houses as fast as possible and thus drove up demand and therefore prices. Soon, we were borrowing at dangerous levels and using the money to pay for houses that were overpriced.

6. The FSA, The Fed, Gordon Brown, George Bush, etc: Failed to heed the many, many warnings and act to curb irresponsible lending.

7. Gordon Brown: wanted to become PM and, as chancellor of the exchequer, he decided the best way to do it was to spend tons of cash on the NHS, education, etc while reducing taxes. After all, debt was cheap and he needed to be popular. This made it hard for him to preach about responsible borrowing / lending without making himself look like a hypocrite.

So, we are all to blame, but only our leaders could have prevented it.

[cww]

I blame both Brown's 'Age of Irresponsibility' and the MPC's 'Nice Decade' of artificially low interest rates for this very unnecessary crisis. They quite simply failed to learn from history and the last boom/bust wasn't that long ago either...

[Bob]

Stephen Toms: "(3)Holy Bible states that every one will be forced to take an i.d. chip and that you cannot buy or sell without the i.d. chip (the i.d. chip is probably the verichip - type verichip into google video to see it)."

fascinating, where do we read of this technological wonder in the Bible?

[Chris]

There's lots of blame to pass around, but the source is surely Maggie- her policies unleashed the culture where buying a home is the ultimate sign of success, and the Big Bang of 1986 deregulated the City. Her ideas were, of course, highly influential across the Atlantic.

The belief that the future lies in service industries, not making ever more attractive and capable things has surely been shown to be a strategic blunder. Most of the time it just results in pushing money around, rather than generating new value. It's easy to make computers, say, 10 times more quickly than before; it's somewhat harder to cut hair 10x more quickly.

Lets rebuild our manufacturing base, starting with a bullet train network up and down the spine of the country. The shape of our country is perfectly suited to that endeavour, and these weather-beaten isles are also fantastic candidates to massively build our renewable energy capacity.

[Ian Jardine]

One word: Leverage

Financial institutions took up risky leveraged illiquid plays and individuals personally leveraged themselves to historic highs, especially and significantly in the UK (far more so than in the USA). Rampant "buy too let" as a viable product and 100% mortgages were always suspect. Supervisory bodies were 100% asleep at their desks accepting massive degrees of leverage as normal and safe!

[Chris]

I'd like to ask when the Labour government could have tightened financial regulation without howls of rage from the Tories and the Tory press. I'm not a Labour supporter, but I feel the unfairness of blaming Gordon Brown for not making changes the Tories certainly didn't see as necessary until it was too late. As many of them have a job on the side in Banking, they too should have noticed what was happening.

Everything has collapsed like a pack of cards because of the irresponsible mortgage lending in America and the idea that it was good to package and sell on bad debts to suckers. If these mortgage vendors were individuals they would now be heading to court.

[Chris Coles]

The cause goes back a long way. In part to the days of Slater Walker who introduced the idea that you can make more money from dealing in companies rather than from founding them. That in turn changed our savings institutions view of long term from investment into equity and low overhead business to investment into short term Mergers and Acquisition, M&A. From then onwards, every change was a ratchet onwards to further deregulation.

But then someone decided that, to be able to achieve even higher rewards from these M&A activities, they should create new "Investment Banks" and they started to print their own "Bonds".

But even that was not the final final straw. The final straw was that they decided to add what America calls "Leverage" and instead of simply printing bonds to reflect the savings they had passed on into new M&A, they started to print multiples. In the end, they were taking in a dollar and printing up-wards of 35, yes thirty five dollar bonds for every dollar they had as original income.

If you or I set up a printing press and created say, $100 billion of new money, we would be immediately jailed and the key thrown away. But the Central Banks turned a blind eye and governments even encouraged it. Why? Because they were creating so much new money and paying so much tax on their grossly inflated incomes, the whole thing gave the appearance of prosperity.

Now, the investment banks have been hurriedly re-configured to become ordinary banks to bring them under regulation to stop the printing presses.

We do not live in free market economy and this was not classic capitalism, investment of equity capital into new industry. If anyone is to blame, then I say we should look at the last four Governors of The Bank of England.

[Martin Hargreaves]

Who's to blame? Everyone.

But I think there is a blame order-of-merit that goes something like this:-

1. Bankers, who really should have known better.
2. Gumment (especially Gordon Brown) who didn't know better.
3. Everyone else. ...I.e UK media (TV and print) who've ramped house prices ridiculously, greedy house vendoes who failed to recognise it was all a bubble, BTL landlords who again poured petrol onto the fire, estate agents who stoked the whole thing, MEWers and all other frivolous loanees, etc, etc, etc.

Everyone is to blame. ~ Herd mentality.

[D, S.Hatfield]

The Chinese for refusing to have a level playing field.

If the yuan was allowed to float freely, do you think corporates would have willing invested so much into this Dragon?

It over stimulated their economy at the expense of ours, so it became too good to be true.

[R.C. Barber]

The answer is in the very first headline link above: "Ten people who predicted the global meltdown".

Economic downturns are caused by loss of confidence. This recession has been talked up for over a year now, and the dire predictions of respected economists become true simply because they are believed, and those who believe a recession is coming lose confidence and create one. My immediate response to a government minister saying "it's going to be worse than we thought" is that they should be sacked for making it so with that very utterance. So I blame those who predicted meltdown, and I blame the media for whipping it up.

[John Scholfield]

Ifeel that the Accounting Profession should take some of the blame. A few more qualified accounts might have helped, especially as it was very obvious, even several years ago that banks were making unethical deals, just to make their accounts look good. Also the FSA was totally ineffective, what a sham.

[Michael Lamb]

Not much of a choice of vote for a straight X system. Where is the option for Thatcher-Reaganomics?

If this were a preference voting system I would put that at 1, as the source of all evil, GB as chancellor at 2, as the Great Brain and Advocate of the "New Labour" espousal of that evil, hedge fund managers and investment bankers at 3=, as the spivs who needed no encouragement to take advantage of the grotesque opportunities handed them by the abovementioned monomaniacs, and the regulators at 5, as they were merely doing their non-job.

[Anthony Pippet]

I blame President Clinton in the first instance for encouraging the US mortgage banks Freddie Mac etc to sell mortgages to those who could not afford them in the long term. These mortgages had such a low rate of interest initially everyone was encouraged to do so. Of course after 2 years fixed interest the rates went up and these folks could not afford it. In the second instance the government of the day should be alive to the issues. In that respect Prime Minister Brown plus Cabinet failed abjectly.

[Thorrun]

Gordon Brown's expertise at Monopoly during rowdy student days was clearly insufficient training for bigger things. I suspect T.Blair constantly lost to him thus planting the seed he would excel as Chancellor. Now we all pay and it is sad that not one of them understands that they are not fit for purpose.

[S Bell]

The blame is diverse as many have pointed out:

Greedy bank sales people rewarded for short term gains made by selling inappropriate mortgage products to people who could not repay them and secured against properties which were not worth the amounts advanced against them.

Greedy bank sales people rewarded for short term gains using derivative products which they and their managers did not understand, nor did they care that they did not understand them.

Greedy bank managements who were happy for their sales people to sell anything that created a short term illusion of profit so that they could be rewarded handsomely and ultimately not care that they were destroying the businesses for which they worked as they could simply walk away with the already 'earned' rewards to repeat the deception elsewhere.

Weak regulators who did not understand what they were regulating and were happy with the easy life the illusion of success provided them.

Gordon Brown who could bask in the glory of the 'never ending' boom cycle which he 'had created'.

Us for believing any of these liars and cheats who all either knew the lie or were too stupid to understand the lie that they were between them creating.

There is of course worse to come for us, the tax payers and workers in the real world who did not benefit from the profits that all the bankers and politicians have been able to hide away for themselves securing their futures.

Compounding the problems we all have is that Gordon Brown, despite his prudence and during the most benign financial period in history, has managed to increase the proportion of our income he has taken in taxes. He has spent even more than he has taken in taxes so the national debt has been increased to unsustainable levels, and now has had to throw huge sums of cash at simply keeping the financial sector afloat enabling us just to survive (can anyone imagine what would happen if the banking system actually closed down?). The Government wants to adopt a Keynesian approach and to 'spend' its way out of trouble, the right thing to do. The problem is that the Government has altready spent everything we have and some more - and the world knows it, so despite the brave talk of Gordon and his cronies in this greatest of crimes against us the rest of the world knows that the UK has one of the weakest positions there is to get out of the hole he has made for us. We can look forward to a lot of pain coming to us now: higher unemployment, higher mortgage rates, higher taxes as well as the self satisfied look on the face of Gordon Brown as he proclaims himself the healer of the troubles 'that someone else caused' and for for which he is the saviour. At least we can be sure that this last pain will go away in only a couple of years as he cannot delay the election for much longer.

[db]

The state now employs one in five of the UK work force all on index linked pensions and people wonder why we have high taxes and high public debt. I am sure you can all work out who is to blame for this and the current recession, and more importantly who will be to blame when unemployment hits 3 to 4 million in the next 2 years. A lot of the non jobs in the state sector will have to go. Perhaps we can get more people to train in real trades like plumbing etc instead of pen pushers in local and national government giving out fines to the elderly for putting coffee jars in the wrong recycling bins.

We have lost the plot and are heading for a Jim Callaghan winter of discontent. The crazy thing is it is the very people that are employed by the state that are going to bring down this government by striking for more pay due to the high inflation all this debt and public spending has caused. Talk about bite the hand that feeds you.

[F.George]

Blair, Brown (Mr. Tax and Spend)and the greedy negligent Bankers for ignoring the signs of impending disaster. Why aren't the latter being prosecuted for negligence or at least made to pay back some of the fat pay and bonuses they awarded themselves because they must have seen this coming. Also their fat 'pension pots' should be confiscated as a lifetime lesson to them and others. If a normal citizen carried on like this they would probably be prosecuted for fraud. The rich look after the rich and MPs look after them too, and themselves of course.

[Elizabeth]

Brown - a fish rots from the head, as they say.

Ultimately, it is the government's job to take the long term view, as Brown forever claims to be doing, but for 11 years he didn't.

[Stephen Wood]

The prime culprit for the crisis in the UK has to be Gordon Brown and his Government. They have encouraged the excess growth of credit and boosted Government spending beyond all common sense. Yes, international events have brought problems but the folly of Brown & Co has exacerbated the problem. As Warren Buffet would say "We have found ourselves naked when the tide went out"

[Chris]

R.C. Barber- that is a joke, right? Financial services holds enormous power over the economy, but we can't criticise *in any shape or form* the work financiers do, or express our doubts or fears, because it might cause the markets to throw a wobbly and cause devastation? Yup, we should run our economy as if we had been taken hostage by a two year-old.

At least 1970s unions were composed of adults.

[jim]

Brown takes responsibility. He deceived UK voters on 3 key points, among many:
1. Brown changed RPI to CPI. So inflation was measured far too low.
He boasted how clever he was.
Interest rates followed inflation as far too low. Housing boom
2. Brown boasted endlessly over he had ended Boom and Bust. He conned many into taking on huge risk loans.
He tried to deceive and was wrong.
3. Brown removed proper effective regulation of banks. So huge risks and overlending.
Result huge bust with millions of lives ruined, all Brown's fault. He is a deceiver. Fake Scottish
prudence hides reckless egomania.
He boasted to have 'ended the economic cycle'. That is insane stupid delusion. Is he so stupid to think he changed a cycle running over 3,000 years?

Brown said when labour was caught deceiving over Ecclestone: I lied, I lied, I lied, I will be destroyed'. His view was formed by the way Labour destroys reputations through smears and spin. These are repeated endlessly focussing media onto opponents. As in the Mandy/Osbourne farce. Mandy of Sleaze passes EU rules that benefit his Russian 'friend' by millions of Euros. Pure total corruption. Osbourne is asked if he wants donations, and he refuses. Brown and Labour media attack Osbourne.
Brown has deceived the UK endlessly. His fiasco over the 10 pence tax rate shows the real Brown. He taxed the poor to buy middle income votes. Worse he boasted/ lied he was helping the 'poor working family'. Brown will be seen as the worst Chancellor and PM in a century.

[jim]

Brown takes responsibility. He deceived UK voters on 3 key points, among many:
1. Brown changed RPI to CPI. So inflation was measured far too low.
He boasted how clever he was.
Interest rates followed inflation as far too low. Housing boom
2. Brown boasted endlessly over he had ended Boom and Bust. He conned many into taking on huge risk loans.
He tried to deceive and was wrong.
3. Brown removed proper effective regulation of banks. So huge risks and overlending.
Result huge bust with millions of lives ruined, all Brown's fault. He is a deceiver. Fake Scottish
prudence hides reckless egomania.
He boasted to have 'ended the economic cycle'. That is insane stupid delusion. Is he so stupid to think he changed a cycle running over 3,000 years?

Brown said when labour was caught deceiving over Ecclestone: I lied, I lied, I lied, I will be destroyed'. His view was formed by the way Labour destroys reputations through smears and spin. These are repeated endlessly focussing media onto opponents. As in the Mandy/Osbourne farce. Mandy of Sleaze passes EU rules that benefit his Russian 'friend' by millions of Euros. Pure total corruption. Osbourne is asked if he wants donations, and he refuses. Brown and Labour media attack Osbourne.
Brown has deceived the UK endlessly. His fiasco over the 10 pence tax rate shows the real Brown. He taxed the poor to buy middle income votes. Worse he boasted/ lied he was helping the 'poor working family'. Brown will be seen as the worst Chancellor and PM in a century.

[Peter Murray Kenmore]

The brighest and the best of the PhDs and MBAs from the university finance schools (including my own) who made the derivatives more and more complex and riskier and harder to understand: they have to bear a lot of the blame.

Next the regulators who are useless. There are eleven thousand of them in the principal regulatory body of the US Government - what did they do to justify their salaries?

The financial advisory industry who have been paid an enormous amount of money to "advise" people and whjo were were too dumb to understand what had to happen.

And finally the rating agencies who were and are dishonest unethical and cretinously stupid.

Together they have wrecked the capitalist system for a decade - and by then there will not have been enough time for my generation to recover.

[paul eastleigh]

Shouldn't the auditors take a lot of the blame for signing off accounts that didn't reflect a true and fair view?

[STEPHEN LE COUTEUR]

As so many have pointed out there are many causes for the problems the UK and the rest of the world now find themselves.

Jane,Jonathon,Deepak,Scott and a few others have made some very good points. However, instead of looking back and seeing who we can blame there needs to be some urgent action to fix these all too obvious gaps in procedures. The banking practices on mortgage lending, the FSA regulatory controls on monitoring the Banks, the Accountancy bodies that have allowed off balance sheet liabilities to still exist. Then there is the need to address the Oil companies and other energy utilities who through almost monopolistic control of the markets are driving the average earner into poverty and fuelling inflation while making excessive profits. There is also the urgent need for tax simplification which hass created such an overhead for corporates and driving some to other countries and frustrating the average taxpayer with over complex filing requirements.
There is also regulations governing the real estate agents and property conveyancing that is in need of overhaul to remove such unsavory practices as gassumping.
one could go on but simply there is already too much fiddling while Rome burns.

[Anselm]

We sat in our kitchen long ago, expressing disbelief at Northern Rock's 125% "Together" mortgage. We read countless anecdotal reports of High St banks offering loans to those on benefits or loans to "help out" those already unable to manage existing debts. We still do not understand why no bankers, seemingly, queried the AAA rating of CDO subprimes. The fact is that there were 3 lines of defence, one behind the other - the banks' own management, the FSA and the government, and each of these failed. Countless financial journalists deplored the debt-fuelled boom. Yet no-one did a thing. These were, in the main, not obscure technical failings - any thoughtful person cpould see there were problems piling up. Therefore, in the main, the buck must stop with the government

[HoraceManoor]

central banking, which started in 1694 in england, is to blame

[Alex]

Monetarism and deregulation are to blame. The idea that the market will always act in everyone's best interest was clearly nonsense from the start. Government exists so that the collective can put some kind of brake on greed. How much of a brake is open to discussion, but until now, it was deemed that no brake was necessary. Thatcher and Reagan promulgated this view, Major and Blair and Brown have continued it. The markets act with a herd-like mentality, either up or down. You didn't have to be a genius to understand that if consumption is fuelled by ever increasing personal debt, the end has to come eventually. Well it has. Are we surprised? No.

[Eric Gilmore]

All of this can be blamed on the international banking cartel. The US Federal Reserve, IMF, and World Bank. It is built into the fractional banking and monetary systems employeed by these and other central banks around the world.

[Brendan Egan]

Blame goes to:
1. US congress for pushing so hard to get poor folks to buy homes which they could not afford.
2. US congress and Wall street for making credit default swaps legal back in 2000. The law did not allow for any kind of regulation. CDS's were illegal for a long time.
3. The Fed printing so much money and lowering interest rates in support of item 1 above.

[Eric Worthen]

Lack of individual ethics and character at all levels.

[HAROLD HAZELL]

People are blaming others for their own folly.Those who racked up large credit card bills with no ability to pay off, who took out 100% mortgages, who bought top-of-the range luxury 4x4s when living in a modest housing estate on a barely average income are responsible for their own fate. Why should government makes rules to stop people from jumping off a cliff ?When things return to normal I hope that those issuing credit cards will impose a 20% minimum monthly payment.

[Michael A. Clem]

The Fed, largely, for its continual inflation and artificially low interest rates.
Government regulations and 'safety nets', most of which people are clearly unaware, that prevented the markets from responding properly when situations changed. For example, too many houses should have led to lower house prices, but the government did all it could to maintain high house prices.
These regulations are numerous, and sometimes subtle, but always cumulative, and apply to various businesses and industries, such as the banks, Wall Street, housing, etc., as well as the Fed's actions. It's absurd to think this crisis occurred because of a lack of regulation, when so much of it exists wherever you look.

[David H Vesty]

As chancellor, Gordon Brown, allowed the finacial sector to have a free-hand in concocting any type of dubious practice. This allowed Gordon Brown to take the credit for his handling of the economy.
He, and the FSA ignored the greed and the malpractices of the city and the banks,and ignored the plight of small business altogether. The greed still exist as shown by the arrogant attitude of the CEO of Lloyds TSB, who informed staff bonuses would still be paid.
It is time for the Prime Minister to stop enjoying his resurrected status, and put into practice identifiable schemes on employment,and restricting house reposessions by the banks.

[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

[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?

[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?

[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

[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.

[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.

[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