Looking around at what everyone\’s saying and doing about the banking thingummebob I\’m seeing a possible disconnect with what the problems were and what the proposed solutions are.
RBS fell over because it bought ABN Amro for a vast price. Lloyds fell over because it bought HBOS without checking the loan book. But no one seems to be arguing that bank takeovers should never happen.
Crock failed because it had a run on it: and we know that banks without deposit insurance are subject to possible runs (note that it wasn\’t the retail depositors, who were largely insured that did for it, it was the wholesale depositors who were not).
The solutions all seem to centre around bonuses and whether Adair Turner should have more or less power. Neither of which seem to address the problems above really, do they?