SIR – The Labour Party were in government when the financial crisis overwhelmed the world’s banks, but the roots of the crisis belong back in October 1986.
The Thatcher government de-regulated the banking industry in what became known as ‘the big bang’. Those of us old enough to remember know that our great building societies were allowed to de-mutualise and become banks and that banks were encouraged to offer mortgages and to extend their investment banking operations.
For a while it all seemed to work; except that levels of personal debt rose astronomically as banks lent to anyone who asked for it, regardless of ability to repay the debt. Banking became transaction and not client-based. The computer always said ‘yes’.
We ought to pause and realise that governments often inherit situations not of their making, and this was a classic example of that – Gordon Brown was a victim of the financial crisis, not its cause.
I remember that George Osborne was calling for even less regulation only a few weeks before the crash happened. Beware of blaming the victim. Thatcher and voodoo economics were the real villains.
Ian Parsons, Alexandra Road, Eccleshill
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