Thursday, 13 December 2012

Queen Talks of 'Lax' Bankers and 'Toothless' Regulators behind Financial Crisis

THE DAILY TELEGRAPH: The Queen has spoken about "lax" City workers and a banking regulator which "didn't have the teeth" to intervene as she discussed the causes of the financial crisis during a visit to the Bank of England

With her face on every banknote and coin in circulation, it is only natural that the Queen takes a sharp interest in the nation's finances, as she showed on a visit to the Bank of England today.

Her Majesty suggested the financial crisis of 2008 had happened because the Financial Services Authority “didn’t have the teeth” to rein in the biggest risk-takers.

The Duke of Edinburgh, meanwhile, had a typically blunt piece of advice for the Bank’s executives: “Don’t do it again!”

The Queen and the Duke grilled Bank of England staff during a visit which included a tour of a vault stacked with £27 billion worth of bullion.

Suit Kapadia, one of the Bank’s financial policy experts, said he wanted to answer a question the Queen asked academics at the London School of Economics in 2008 about why no one saw the financial crisis coming.

“Oh!” said the Queen, looking slightly taken aback.

Mr Kapadia said the City had got “complacent” because it thought risk was being managed better than it was, and the financial system had become too interconnected.

The Queen agreed: “People got a bit lax … perhaps it was difficult to foresee.”

She asked if the financial system was less interconnected now and concurred with a suggestion that part of the problem had been the lack of powers given to the Financial Services Authority. “They didn't have the teeth,” she said. » | Gordon Rayner, Chief Reporter | Thursday, December 13, 2012