I'm a huge fan of Alastair Darling, I think the bloke is top. He's has just the right balance of ideology and managerialism for me, and a good dry sense of humour.
In his day job, he looks after our economy. And does a bloody good job actually.
His piece here he gives his account of what happened, what didn't, and why.
This is key: "Lehmans' collapse plunged several UK banks into trouble. But that one of our major high street banks could be allowed to collapse would have been unthinkable. Life savings could have been wiped out and the economy would have come to a halt, with cashpoints seizing up and business credit drying up. It would have been irresponsible for us to stand by."
Firstly, my mum supports propping up the banks as letting such important institutions go to the wall would have terrible consequences for far too many people. I agree with her on that.
There is also the issue of how so much banking is based on air, as one bank collapsing took so many others (people and banks) to the edge.
On Fiscal and monetary stimulus: (paraphrase) we woz right, Tories woz (and are) wrong. He's correct about that.
On reform: "We must reform global financial markets so that they can better serve society. Internationally, that means obliging banks to build up bigger reserves in the good times. There must be rules on how global financial companies can be wound up quickly, using a "living will", and without having to turn to the taxpayer."
Quite right. No institution should be too big to fail, certainly not in private hands. It is unacceptable that profits are privatised but losses socialised (publicised is the wrong word).
I am critical of the New Labour approach to competition though:
"A strong, stable financial system also depends on effective competition, essential to make sure consumers have choice and no one faces excessive fees and charges."
A 'competitive' market has lead to excessive charges and fees, there needs to be far greater regulation and intervention to protect consumers, especially those most vulnerable.
on the availability of credit:
"If there is one lesson to be learnt from this crisis, it is that credit must never be allowed to dry up because of reliance on a small number of banks. In the same way that big companies can access funding directly from capital markets, by issuing bonds or commercial paper, I want to start creating a different financial model in the future, in which small companies get funding from sources other than banks. Our goal is to make finance the servant, not the master, of the real economy."
very interesting, and something I support as it's going down the micro-finance route, which has the power to do great good and re-connect the borrower with the lender, which i feel is a good thing.
In conclusion, Ali D rocks