‘Read this and weep’: lessons not learned from Slater Walker

Richard Northedge has unearthed confidential papers that reveal the Bank of England and the Treasury at loggerheads over a banking collapse 35 years ago 

In the permanently uneasy truce between Threadneedle Street and Whitehall, Bank of England governor Mervyn King has never been shy of publicly criticising the Treasury. But confidential files on a banking crisis of 35 years ago show that private comments between the two institutions can be even more caustic. A civil servant’s handwritten note on a letter from the Bank during the Slater Walker crisis in 1975 says, ‘Read this and weep.’ His boss scribbles back: ‘I have read — and spat blood at this unjustified complacency.’

Over the previous decade, the firm of Slater Walker had grown spectacularly to become not only a bank but also an investment and insurance empire with stakes in industrial companies. Its bubble burst when the group could not refinance its debts in the aftermath of the secondary banking crisis of 1973-74.