Why we need a truth commission

This is what Mervyn King, Governor of the Bank of England, said in his speech to the Trade Union Congress on 15th September 2010.

‘There was nothing fair about the financial crisis. It was caused not by problems in the real economy; it came out of the financial sector. But it was the real economy that suffered and the banks that were bailed out. Your members, and indeed the businesses which employ them, are entitled to be angry.

But however legitimate, anger will not produce change unless its energy is harnessed to a cool analysis of what happened and why’.

And these are some of the conclusions of the US Financial Inquiry Commission, which reported in January 2011

‘We conclude this financial crisis was avoidable. The crisis was the result of human action and inaction, not of Mother Nature or computer models gone haywire. The captains of finance and the public stewards of our financial system ignored warnings and failed to question, understand, and manage evolving risks within a system essential to the well-being of the American public. Theirs was a big miss, not a stumble. While the business cycle cannot be repealed, a crisis of this magnitude need not have occurred.

We conclude there was a systemic breakdown in accountability and ethics. The integrity of our financial markets and the public’s trust in those markets are essential to the economic well-being of our nation…….. we witnessed an erosion of standards of responsibility and ethics that exacerbated the financial crisis. This was not universal, but these breaches stretched from the ground level to the corporate suites’.

George Osborne, Chancellor of thr Exchequer, presenting the Merlin Agreement to the Commons on February 9th 2011

The anger at the terrible mistakes of the banking industry and the failure of those who regulated it will long remain, and rightly so, but let us as a country confront this hard truth: anger and retribution will not bring one percentage point of economic growth or create one single new job. The anger will remain, and I understand that, and we must never make the same mistakes again, but Britain needs to move from retribution to recovery.

There is little evidence that the banks and financial markets intend to change the way they do business.  The wider public and those within other professions need first to understand, and secondly to try to influence the values and behaviours of a sector that has lost touch with the real world.

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