Quote:
Originally Posted by pip08456
The banking crash in this country was due to the lack of regulation of the banks by the government in power. The US sub-prime mortage funding was a disaster waiting to happen and it did. For the ordinary working man it would have been better if the stupid banks had been allowed to go bust rather than a bail out. It would have certainly cost less. As always though those that had more money prevailed to protect their investment.
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It's a bit hypothetical I think. You could also argue that given what was to come that in hindsight Lenham should have not been allowed to fail.
I don't think they could have let the banks fail. There are too integrated into the financial system and the dominos would have continued to fall into businesses that depend on them and ordinary people's savings and accounts.
People forget that in the US, UK and some European nations the immediate impact wasn't as catastrophic as it could have been. The intervention did stem the crisis but as time has gone on the economy has been stagnant as we've failed to ever really move on and the impact has had a long, latent, effect instead. So maybe a short, sharp, shock might have been better. I don't know.
As I said though it was a global thing. Labour are to blame for leaving the economy in a state where the reaction to it was more expensive and for the lack of regulation. That said I think the Conservatives would have gone with the austerity approach, it ideologically suited them as a response, rather than the Obama style stimulus anyway. Successful governments on both sides of the pond are to blame for the lack of regulation.