I remind the House of the interests recorded in the register.
I want to say something about the origins of this crisis, the structure of the economy that we are now left with and the state of our public finances. So far as the origins of the crisis are concerned, I fundamentally agree with my hon. Friend Mr. Maples. It is not a crisis of markets; it is a crisis of regulation and controls. It is Governments who control the allocation of credit through the central banks to which they give their mandates; it is Governments who control the holdings of capital through the capital adequacy rules that they require banks to follow; and it is Governments who have controlled lending, in effect, through the supervisory regimes that they have established.
Ten years ago, the amount that the major British banks lent out was covered almost exactly by the deposits that they held. By 2007, the gap was £625 billion and their assets—or perhaps we should say their loans—amounted to three and a half times our GDP. I think it was my right hon. Friend Mr. Redwood who put it so well: this country has become a banking business with a medium-sized state attached to it. Who allowed all that? Who encouraged it? Who cheered it on? It was the Prime Minister, as Chancellor, who set up and welcomed light-touch regulation.
"Capital markets can and should help us manage risk more efficiently between sectors, over time and across national boundaries...there is a need to remove barriers to diversification of investments across borders" in Europe. In other words, he wanted more American-style investment houses here. He wanted more Lehmans in Europe. It was the regulator that he set up that failed us so badly and the rules that he agreed to under Basel that encouraged pro-cyclicality, drove the search for yield off the balance sheets and, by incorporating self-serving rating agencies into the regulatory process, helped to downgrade the role of risk management. Those failings are now well understood.
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