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Sterling has today picked up sharply after weeks and weeks of pressure and selling by investors. This comes just ahead of the MPC meeting to decide their next move on UK base rates and until just a...
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Tuesday 22nd July 2008
There are many in the UK who blame the reckless tactics and strategies of the UK banking sector for the ongoing economic downturn. Traditionally the banks might be expected to bring us out of the slowdown but it seems as though the government and the regulators have different ideas.
While there is no point introducing stricter guidelines with the economy struggling at low levels, it seems almost inevitable that increased regulations and stricter guidelines will be introduced to the banking sector over the weeks, months and years ahead. We have already seen the Bank of England call for increased contributions to compensation funds but this may just be the tip of the iceberg.
The UK government cannot allow the banks to rule the roost again, as they have done in the past, and reckless lending will be something which will be monitored very carefully. In a free market economy it is near impossible to clamp down on the problem with new laws, but careful pressure in the right places will ensure that the message is received loud and clear.
Gordon Brown famously stated that he had beaten the boom and bust cycle, but like King Canute he failed. Regulations are the only way of controlling the sectors such as the banks, but even this method is not fool proof. |
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