Times letter: Bankers to blame, not politicians

by Dr. Ros Altmann

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Sir

Anatole Kaletsky (Aug 4) is too kind to the banks. Suggesting that our fiscal and economic crises were not caused by bankers, but by politicians, is like saying the drunk-driver was not responsible for causing the motorway pile-up when he crashed his car; instead blaming the authorities who failed to stop him drinking, allowed him to drive away afterwards and did not adequately tend to the crash victims’ injuries.

Surely, the current crises resulted from irresponsible lending based on flawed risk analysis, compounded by self-serving bonus incentives. This lending artificially boosted short-term economic growth, which, of course, also benefited politicians, whose biggest error was trusting the bankers’ judgment.

Rather than enforcing lending targets in an oligopolistic market, perhaps a better solution to maximise economic prosperity would be for governments lend directly to small businesses, on reasonable terms, thus taking profits wholly for taxpayers, instead of constantly underwriting potential banking losses while borrowers and savers are held to ransom.

Yours faithfully

Dr. Ros Altmann
London School of Economics governor