Just as it gets its act together, it is to be disbanded and its powers handed to what City minister Paul Myners calls the \”bookish\” Bank of England, whose record of both spotting asset price bubbles and handling bank crises is dire.
Lessee.…..the Bank of England was responsible for handling banking crises for the entire 20th century (at least I think it was anyway) up until 1997….or was it 2000 when the FSA took that over?
Pre- Northern Rock the last bank run in the UK was the Bank of Glasgow in 1878.
Now it has to be said that between 1878 and 2000 there were indeed banking crises: BCCI, Barings, the secondary banking stuff of the 1970s and so on. But none of these led to the falling over of the entire system, none of them led to bank runs. They were managed actually.
The FSA takes over and the first bank to get into trouble under their regime does indeed crash the system, does indeed produce a bank run.
Now I agree, it\’s all a little more complex than that: but would you really take that background and say that the Bank of England\’s record of handling banking crises is \”dire\”?
Well, you would if you were Will Hutton, but now let\’s ask the question of reasonable people without ideological axes to grind shall we?