Weak foundations

The G20 conference heralded a new “Dunkirk spirit” in the UK. Only perhaps the British can claim that a massive defeat is a victory. The casualty list is long and includes Northern Rock, Credit Lyonnais, Bear Stearns, Lehman Brothers, AIG Corp, Bradford & Bingley, and Dunfermline. Throw in Iceland and Bernie “Made-Off ” and we have some idea of the international scale of this disaster.

We are told that reinforcements in the form of $1.1trn will turn our Dunkirk into a D-Day victory—we even saw President Obama gesticulating “V for Victory” with the reversed middle fingers of his right hand.

Running parallel is, of course, Lord Turner’s review of the banking crisis and his anticipated thesis that the answer is centralisation and regulation of the banking system. The cry is apparently greater liquidity and increased capitalisation. In the interim low interest rates and renewed borrowing thus fuelling “dependency”. However, none of this seems to deal with the fundamental flaws