Sponsored by
Leading article: A black day for the banks
AS Chancellor, Gordon Brown defended the integrity of global financial markets in a way that was unthinkable to previous Labour occupants of 11 Downing Street.
Yet, in his 15 months as Prime Minister, he has now stepped in twice to prop up the banking sector. Faced with the prospect of dire economic and political consequences, this one-time champion of the Square Mile has now been forced to acknowledge its limitations in the most dramatic of circumstances.
HBOS may not have been nationalised as Northern Rock was, but the Government's signal that competition law will be weakened to allow the bank's merger with Lloyds TSB to go ahead is an equally significant intervention. Consumer choice in the long term has been sacrificed in order to ensure there is not even the remotest possibility of HBOS following in Northern Rock's footsteps.
It is not just consumers who will suffer a raw deal if the merger is completed following banking's blackest day. The two banks' staff also face an uncertain future. Unemployment figures rose yesterday to a 10-year high and the convulsions in the banking industry could add thousands more. At both high street and head office level, the new bank will duplicate effort in many areas, not least high street branches. Redundancies appear inevitable, possibly in their tens of thousands. A swift response by Yorkshire Forward to help those affected find alternative employment is essential.
Yet, despite the chaos witnessed in the City and on Wall Street in recent days, there will be stubborn resistance to any attempt to regulate the financial markets more tightly in future. It will be argued that the market is working because unwise business strategies are resulting in losses and failures.
However, the fallout from the credit crunch is not simply being felt by those who profited from combining sub-prime lending with complex financial instruments.
The victims of this crisis disproportionately are ordinary people far removed from the source of the problem. Past decisions taken in boardrooms and on trading floors mean affordable mortgages are now hard to come by, houses are difficult to buy and sell and jobs
are being lost.
The growth of the financial services industry has brought huge benefits to Britain, but its shaky foundations have been ruthlessly exposed, and it is the hardworking families Gordon Brown insists he wants to help that are paying the highest price of all.
Email to a friend
Print this page- Three-inch blanket of snow heading our way today
- Alan Shearer in list of favourites for Leeds and England jobs: Latest odds
- Barnsley’s Keith Hill invokes Fawlty Towers over link with Leeds job
- McCormack feels United search can be narrowed down
- Redfearn throws down gauntlet as queue builds at Elland Road
- Rival chips in with £500,000 to restore the original Harry Ramsden’s
- Visit from Princess as Serbian culture celebrated
- SportsTalk: Leeds United’s manager search, Super League and Calcutta Cup
- Libraries aren’t like supermarkets, they are magical places where dreams begin
- Strategic review will lead to job losses at Yorkshire Bank
Looking for...
Featured advertisers
Jobs
Search for a job
Motors
Search for a car
Property
Search for a house
Weather for Yorkshire
Sunday 12 February 2012
Today
Light rain
Temperature: 1 C to 6 C
Wind Speed: 8 mph
Wind direction: North west
Tomorrow
Sunny spells
Temperature: 4 C to 8 C
Wind Speed: 16 mph
Wind direction: West
