Quote:
Originally Posted by mr_flibble
While the bank of england probably should be in charge of regulating credit etc it would not have done anything to help the current financial problem. The problem we are facing now is not a shortage of money in peoples pockets or the amount of debt people as individuals are in but a problem stemming from banks not trusting each other any more.
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It certainly would have helped the current financial problem massively. You say yourself this is caused by debt (then shortage of credit as banks don't trust how bad each others debts are, so stop lending). Regulating banks which was the case until the 1998 Bank of England Act, would have reduced the impact on the British economy. They were allowed to get out of control with lending.
There's no doubt we're in a global recession. But if this had been left alone, banks regulated and government had kept its own debts down, during the sunny days, we'd be much better prepared to weather the recession. Unlike today, where we remain the least prepared according to the IMF.