Wednesday, 5 November 2008

The New Normal 2

In a recent post (see post), we argued that part of the New Normal would be a greater control of the banking system by the governments that had bailed out the system. In a quirk of expert timing (or sheer luck), it was announced this week that the UK Government is to set up a separate body - UK Financial Investments Ltd - to oversee the governmental holdings in UK banks, and to monitor their adherence to the terms of the bailout (see report).

This just needs one more step, one further act of foresight to make it a truly "Yipee!" moment. The act of foresight would be to relinquish political control of the company - a bit like the UK Lottery - and to desginate the company as the UK Sovereign Wealth Fund.

This would be an act of foresight for which our children and grandchildren would thank Alistair Darling (the UK Finance Minister). We could even name a public holiday after him!

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