The UK was at the gates of a pen


Although the news has not been outstanding, I feel strongly about the news published yesterday that Britain’s Guardian newspaper, which reflects the Spanish press. The FSA, the Financial Services Authority in the UK, was to hours of declaring a “playpen” financial in October 2008.

In those moments he lived the worst of the financial crisis. Lehman had gone bankrupt, and the United Kingdom was hatched against the clock banking rescue plan. The situation was the limit on the weekend of October 10-12. So much so that if the plan did not materialize, the FSA was prepared to make a pen, yes, only applicable to banks RBS and HBOS. If he had come to a drastic situation on Monday, 13 October had not allowed these banks do not withdraw deposits or, indeed, the ATMs have closed.

Instead came the rescue and did not reach the blood stream. What would happen if two of the largest banks in the United Kingdom have closed their doors to depositors? Is the panic generated would have thrown the country into a playpen general, as happened in Argentina in the late 90s?

What’s more, once at that point, we provided the moral dilemma: was convenient bail out the banks, thereby rewarding bad managers, to avoid greater evil, as it could have been a playpen, or should have let the market correct its own excesses? The general tone of the decisions is that the bailouts were the lesser evil. I agree. The evils could have been much worse.

Photo: matze_ott

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