The Financial Services Authority’s Lord Turner had admitted that the FSA didn’t do nearly enough to control the big banks and ensure they were operating safely in the years leading up to the credit crunch. Speaking at a dinner in the City of London, Lord Turner got as close to issuing an apology from the FSA as we are likely to get.
He claimed that the signs of the forthcoming economic crisis were visible long before it actually hit, but that those who saw them had failed to do anything to stop it: “It arose from poor supervision, from bad rules and structures, from dangerous cultures – and the errors were made by regulators, economists, central bankers and public policy makers, as well as bankers themselves.”
He was also clear that it was the general public who had suffered most and that the banks and regulators owed a lot to them, especially after the taxpayer bailout that stepped in and rescued some of the biggest failing banks in Britain.
The FSA has already received plenty of criticism for not doing enough to control the banks. Outside observers saw the culture of greed growing within Britain’s biggest lenders and investors, but the FSA failed to do anything to stop them. Lord Turner also addressed this, saying that the banks had begun failing their customers, caring more about bonuses and profits than delivering a good service.
As the extent of the fraud and deceitful practices at the banks gradually becomes revealed, people have found themselves amazed that the same businesses that supply them with loans, mortgages and savings accounts, important aspects in anybody’s financial world, could also be lying through their teeth staggered many.
Lord Turner is one of the favourites to replace Sir Mervyn King as the head of the Bank of England, and this speech and admission may do him favours in that regard. Whether anybody believes anything will actually change is a different matter.