Surely this misses the point of private enterprise operating in a free market, allowed to succeed or fail based on individual business acumen.
Surely taxpayers shouldn’t be forced to pay billions of pounds to bail out companies that have been run into the ground by masters paid generously for their expertise, or lack thereof?
I can’t see the capitalist model changing drastically any time soon, so therefore it must be the regulators that change the way they govern the system to help prevent history repeating itself…again.
As a US bailout inches closer and closer to congressional approval, it looks more and more likely that the financial services sector will be held accountable for any government losses.
Is this a move to encourage confidence in the capitalist system, which has come under fierce scrutiny in the past few weeks?
Informed Choice managing director Martin Bamford says it’s essential for the financial services sector to be forced to cover any losses.
He says: “If capitalism is to work properly that has to be the case. It is wrong for the management of banks and big financial institutions to benefit when times are good but for the taxpayer to suffer when times turn bad. I hope the same situation will occur in the UK.”
But Bamford points out that the tentative US agreement hasn’t as yet had a stabilising effect on the UK markets.
He says: “The market has dropped this morning and there’s still a degree of nervousness. Markets are reacting cautiously as they should do.”
Conservative Shadow Chief Secretary to the Treasury Philip Hammond hit us with news yesterday that the financial crisis in the UK is worse than that facing the US.
He said: “I think there are very many factors that suggest the situation in the UK in the medium term may very well be more grave than in the US, principally because our economy is so unbalanced compared to the US economy which has a much broader base and is much more likely to be able to weather a sectoral storm than we are.”
Whether this is a political tactic or a genuine concern is debatable, but things certainly look set to remain shaky for the foreseeable future.