Wednesday, July 07, 2010

'Asleep at the wheel'

...the missed opportunity was after the bail-out, after we the Western taxpayers wrote these huge hundred-billion-dollar cheques. Some of the banks paid back their loans, and even some of the nationalised banks are heading back towards profitability, but the fact is that the rest of the economy is paralysed, and in the longest recession since the 1930s – and that was directly triggered by the banks. The amazing and appalling thing is that none of that has been addressed. It’s been addressed purely through rhetoric, but there’s no legislative instrument anywhere that’s done anything to change that. If Barclays tomorrow were to announce, ‘Really sorry, we’ve just lost a trillion dollars betting on whether the Chinese renminbi would appreciate, and it hasn’t, and can we have our bail-out now?’, the state would have no choice but to say, OK: they’re too big, and too systemically important. The implosion was more than a year and a half ago, and it’s all completely unfixed. It’s as if they’d performed some heroic feat of steering and then immediately fell asleep at the wheel.
-- John Lanchester.

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