Missing the point | 25 November 2009

The Today programme really let Paul Myners off the hook this morning. The interviewer obsessed with why the loans had remained secret for so long. It’s a fair question, and it seems bizarre that we only learn of them ten months after the borrowing was repaid in full. However, there are more important questions.

As I wrote yesterday, these disclosure’s most potentially volatile revelation is that Gordon Brown was propping up HBOS whilst urging Lloyds to purchase the ailing giant. Was this issue examined in any depth? No, though it must be determined whether the Lloyds’ board understood HBOS’s predicament in its horrific entirety. The equally crucial question of how the government is addressing the banking system’s continued frailties received scant attention. As John Redwood notes there is nothing wrong with the lender of last resort conducting private bail outs. The danger is that financial hocus-pocus, forged in smoky backrooms, provide such a sensational story that more pressing but less glamorous issues are ignored.