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Monday, 20 October 2008

Desperate stuff from the FSA

Watch Hector Sants of the FSA on the Andrew Marr Show, saying the FSA knew
all about the risks in the banks and after the problems arose they had done
a good job of working with the banks to sort out the mess.

http://www.bbc.co.uk/iplayer/episode/b00f1w9b/The_Andrew_Marr_Show_19102008/

Which sort of overlooks the point of bank regulation, which is to ensure
that that bank losses are minimised and banks are not reckless. A good
banker doesn't just lend money in the expectation that if it goes wrong they
can work things out. They lend on the basis that they are only taking
moderate risk and that they are adequately rewarded for the risk. The FSA
should have pulled them up short when they are not doing so.

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