The Bankers’ threats to a Chancellor who thinks ‘they’ve got away with it’
I have now read almost all of Alistair Darling’s memoir. Most of the press for it has been dominated by his uncharacteristically acerbic asides about his colleagues.
The stuff about bankers is far, far more important and of direct relevance today, as our politicians could launch the biggest shake-up of Britain’s banking system in decades. Darling was, after all, the man who signed the cheques. There’s some astounding detail.
* The angry phone call from one of the world’s top bankers after Darling brought in the bonus tax, where the banker seems to threaten not to buy UK Government debt. Extraordinary.
* HBoS trying to buy Bradford & Bingley, even as it was in deep trouble itself.
* HBoS requiring £16bn of overnight funding to keep going.
* Confirmation that RBS cash machines were two hours from closing in October 2008.
* Darling overruled official Treasury advice to bailout £7bn worth of savings in Icelandic internet accounts.
I interviewed him today, and he went further, saying that “some bankers have got away with it, because the architects of some of these problems are still around”.
On ring fencing he said: “The idea floated about that putting off bank reforms till 2019, you might as well not do it.”
But most damningly he contrasted the lack of reciprocity from the banks that expected help when they were on their knees, but refused to help clean up the mess from Northern Rock and Bradford & Bingley.
“They said no, they think government is a nuisance until they needed to be bailed out,” he told me.
Food for thought at a time when the social contract between banks and taxpayers is up for grabs as never before.
Follow Faisal Islam on Twitter @faisalislam
* Declaration: my brother-in-law is publisher of Back from the Brink, and I got an acknowledgement for some journalistic advice.