The Riff-Raff Element Posted February 19, 2008 Share Posted February 19, 2008 Using Base Rates as the sole moderator always was an idiot concept.Using other mechanisms (such as Special Deposits AKA The Corset) ismuch better.IMHO the B of E ought to have invoked the Corset some years before unsecured personal loans reached their epidemic proportion.But then again, if both the B of E and the FSA had have been doingtheir jobs properly, the Northern Rock fiasco would never have happenedsince they would never have been allowed to build up such a negativeliquidity position, if their Liquidity Ratios had been kept in balance.You and I John are obviously monetarists: like the late Milton Friedman.I thought dear old Milt rather disapproved of things like controlling other people's liquidity positions on the basis that it was an act of government interfering in matters that were better left to the "free" market. Perhaps we would do better to return to a more Keyneian model since it is now abundently clear that the self-proclaimed Masters of the Universe cannot be trusted with the keys to the drinks cabinet let alone control of the world economy?Still, quite a lot of people did get very, very rich, and for the most part it was only the moronic Sids who got turned over and there are plenty of those born every minute. Link to comment Share on other sites More sharing options...
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