The banking crisis will happen again unless penalties are introduced
Mervyn King, the Bank of England’s governor, has said that the banking system may need a 'fundamental rethink'. This is unlikely to come come as much as a surprise to you. "Well, thanks for that Merv although I think that most of us may have already worked this out for ourselves." King also said that the banks needed ‘more boredom’, and I think that we all agree he’s a man quite capable of bringing it.

The problem with people such as King, the MPC, the government, FSA or any of the others in positions of authority in the financial sector is that none of them, not one, appears prepared to take responsibility for what has taken place. The banking system has been destroyed and western supremacy in economic matters might well follow, as countries such as China gain the upper hand. It has gone because of the outrageous greed of a relatively small amount of individuals and the failure of those in positions of authority to do anything about it.

Nouriel Roubini, a professor of economics at New York University, predicted this mess over two years ago. Nobody paid him much attention and he earned the nickname ‘Dr Doom’, a deeply unfair epithet as the real Dr Dooms were busy running the banks and making a commission for their trouble. Since the crises he has won acclaim for his analysis and has addressed Congress and other institutions. But while many are paying him lip service, is his message really being taken on board.

Roubini doesn’t think the worst is over and a lot of economists are agreeing with him. Stock markets will be shut, the housing crash will continue and unemployment will be severe, they predict. Also, without measures to restrain those traders there’s little to stop them doing it all over again in the future and creating another crisis. Individuals must be brought to account for their part in this and then they need to be punished in as public way as possible. It is the only way that others will be dissuaded from doing the same in the future. The banking system might need to become more boring but it also needs to be restrained and only the force of criminal law can do that.