The Banking Mess

Over on Comment Central today, there is a fascinating tidbit about how Mervyn King warned Gordon Brown and Tony Blair that it was a disaster to seperate out regulation of the banking system from the Bank of England. Brown, however, went ahead and created the FSA. And a disaster it has proved. Plenty of people warned about that at the time. You can't split central banking from supervision of the banking system, because, in a crisis, there are the same thing. As we deleve deeper into what looks like the worst recession of our lifetimes, the blame is going to shift more and more onto Brown - and of course on Ed Balls as well.