The Spectator’s Notes | 7 November 2009

Only a little more than a year ago, Gordon Brown was considered very clever when he had a word with Sir Victor Blank at a cocktail party and encouraged him to merge Lloyds and HBOS to help save the British banking system. Not long afterwards, Sir Victor was forced to resign after the merger produced chaos and stupefying losses were exposed. Mr Brown, however, is still here, and this week, with equal brilliance, he has ordered the break-up of the bank he merged, in order to help save the British banking system again, while he puts a further £5.8 billion of government money behind it. It is not easy to resist Mervyn King’s recent suggestion that the relationship between government and the banks is the greatest system of moral hazard ever created. I do not understand why this long-running crisis is said to have been caused by ‘market fundamentalism’. The concept of being ‘too big to fail’, which dominates the crisis, is the biggest anti-market idea there is.