Financial collapse & regulation

8.00.00am GMT Thu 18th Mar 2010

Ordinary mortals find it hard to fathom the way high finance works. The detail is horrendous. Lehman Bros, one of the biggest global players in finance, collapsed in 2008 and the official report on that event runs to 2200 pages. It is also boring, except when you remember that it is ordinary people who are paying for this: with their jobs; their homes & their taxes. The transactions that led to collapse were signed off by the law firm Linklaters & the accounts approved by auditors Ernst & Young. In essence Lehman's came up with a type of financial window dressing that was not illegal but the spirit of the rules has certainly been sidestepped. Although Linklaters assert that "there was no finding that its' opinions were wrong or improper" confidence in the system has again been shaken. Six and a half years ago the then Chief Executive of the Financial Services Authority said " [the FSA] would provide an early warning of products that may be about to be launched or are circulating in the market that present particular dangers to consumers" What happened? Not a lot. Can we rely on Brown or Cameron to really fix things? In your dreams. Lib Dems will. One other thing is sure. The more the financial services industry protests & howls with pain the more you can be sure the proposed political action is the right action.