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Categories:Politics

Cable: 'I can see another crash happening'

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Business Secretary Vince Cable is warning another financial crash could be on the horizon because Governments have collectively failed to grasp the seriousness of the last one.

In an interview with the New Statesman, Cable says not enough is being done internationally in terms of financial regulation and the structure of the banks.

He says whether or not another crash can be avoided is what concerns him most.

He says: “I was very impressed with that Warren Buffett metaphor that asset-backed mortgage lending was the atomic bomb, and that there are hydrogen bombs out there. I just don’t think that collectively governments have got to grips with this at all.

“It is not imminent but you can see another bomb going off.

“You have got bits and pieces of regulation being put in place but it is very piecemeal. The structure of banks is being addressed in the UK but nowhere else. There is a bit happening in terms of complex derivatives, in terms of clearing house arrangements, though it is a bit limited.”

Reiterating comments he made in the Guardian on Saturday, Cable says there is a lack of popular understanding about how serious the repercussions of the recession and the banking collapse are, citing Indian billionaire Ratan Tata’s description of a wartime feel in Indian Industry.

He says: “We do not have that. There is not the recognition, to my mind, of the seriousness of the problem.”

Since coming to power in May last year, the Government has repeatedly blamed the deficit on Labour profligacy, but Cable says it is a “consequence of the banking collapse”.

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Readers' comments (7)

  • It is interesting that no one on the labour side of things have held there hands up and said sorry. After all we all no it is a global recession but what labour did with selling the gold, paying billions in benefits, eating our war chest and digging the biggest whole of debt during a time of boom. Labour compounded the global situation and must hold up there hands to this. What worries me more is that the cuts haven't come in yet, we will bumble business wise through this year but in 2012 watch out there's trouble ahead. Batten down the hatches pay off any debt and keep cash rich if you can.

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  • Cable is the most miserable 'glass is half empty' person on this planet. So what do we do with him?

    Business Secretary. Effectively promoting British Business interests. Unbelievable!

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  • Can a crash test dummy see any crashes ahead?

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  • I hope he tells Hoban and his team who are creating the 'New and Improved' regulators.

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  • That's it Vince create panic in the public.

    Fool.

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  • "Since coming to power in May last year, the Government has repeatedly blamed the deficit on Labour profligacy, but Cable says it is a “consequence of the banking collapse”."

    And who failed to regulate the banks adequately, if at all?

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  • This problem has been caused by successive Governments each time the economy went into recession. All Governments then seek to stimulate the economy through increasing the availability of debt but alas this cannot go on forever. We have now reached the point when debt must be reduced and we need to recognise that our faltering economy will continue to falter until debt is once again under control. This is likely to take many years and will also depend on whether we encourage new businesses to flourish.

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