Thursday, 19 March 2009

Lord Turner is Wrong (...and so is Radio 4!)

So I scanned the detail of the FSA's announcement yesterday. Two things struck me:

First, Lord T and his crew have ruled out the separation of retail banking from the riskier business of investment banking. Mistake. It seems that the fundamental way to stop banks exposing themselves to too much risk is to do just that. Wheels within wheels. Bankers looking after bankers, methinks.

Second, that for once Radio 4's Today programme got it wrong and the FSA is not suggesting limiting mortgages to a multiple of three times salary (as I blogged about yesterday). Instead, the report said that the idea of regulation in the mortgage market should be debated but that it was too early to put forward specific action. Thank the living Lord. Sense won out. A rare win.

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