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Wednesday, June 03, 2009

Brown's Failed Tripartite System

In February 2008 I wrote:

"As long as Gordon Brown is Prime Minister, and that looks likely for the next year or so, the current failed tripartite regulatory mechanism will not be changed for the better. He is the arrogant architect of this failure, but will never admit to it."

In March 2008 I wrote:

"The fundamental failing of the current tripartite regulatory system, created by Gordon Brown ten years ago, is that no one is actually in charge of it.

Until Brown goes, that situation will not change, and the tripartite system will continue to be ineffective
."

Later that same month I wrote:

"Unfortunately, because this dysfunctional system was created by Gordon Brown, until Brown is removed from office there will be no change to the tripartite system and the UK's financial system will continue to remain exposed to failures such as Northern Rock."

I am pleased to see that people are finally waking up to the disaster of a Chancellor/PM that is Gordon Brown (as another cabinet minister resigns), and the regulatory shambles that he imposed on the City in 1997.

The Times notes that the House of Lords Economic Affairs Committee has stated that the tripartite arrangements had failed. Lord Vallance, its chairman, said, "in part because it was not clear who was in charge in a crisis and because not enough attention was paid to macro-prudential supervision".

Sir Martin Jacomb, a former chairman of Prudential and director of Barclays, also weighed in and criticised the Prime Minister for his "disastrous" decision while Chancellor to strip the Bank of responsibility for banking supervision and hand it to the newly created Financial Services Authority.

However, as I have noted before, the tripartite system will be with us as long as Brown is PM. Fortunately his tenure in office looks as though it is rapidly coming to an end.

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