Brown admits mistake over bank regulation
By politics.co.uk staff
Gordon Brown has admitted he made a ‘mistake’ in not regulating banks enough when he was chancellor.
Speaking on ITV’s Tonight programme, the prime minister, who was chancellor for ten years between 1997 and 2007, said he should have been tougher on financial institutions – even though the banks were calling for less regulation.
Mr Brown said: “In the 1990s, the banks, they all came to us and said, ‘Look, we don’t want to be regulated, we want to be free of regulation’.
“All the complaints I was getting from people was, ‘Look you’re regulating them too much’. And actually the truth is that globally and nationally we should have been regulating them more.”
He added: “So I’ve learned from that. So you don’t listen to the industry when they say, ‘This is good for us’. You’ve got to talk about the whole public interest.”
Mr Brown still carries a reputation for refusing to apologise, although he has previously admitted making the wrong decision on the 10p tax debacle.
“Some of our most financially educated bankers around the world got this one wrong,” Ed Balls – who was City minister for a year before becoming health secretary – told politics.co.uk at Labour’s morning press conference.
“A risk-based approach to regulation is the right way to go, which means you are light-touch when the risks are low and you are very tough when the risks are high. In retrospect regulators, bankers and governments around the world underestimated quite how severe those risks of contagion were… In retrospect, everybody got wrong the nature of that risk.”
Liberal Democrat Treasury spokesman Vince Cable said: “It’s not enough just to hold your hands up and say sorry without having a plan for making sure that the same thing doesn’t happen again.
“Gordon Brown’s admission that he was swayed by the pleas of the City shows the danger of Tory plans to base economic policy on the wishes of vested interests.
“The Liberal Democrats have clear plans to break up the banks so that the recklessness of some bankers can never again hold the taxpayer to ransom.”
