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IMF Basel Lord Turner

In an apparent reference to the IMF’s u-turn this week on government austerity programmes, Lord Turner mocked the body’s “confident assertion” before the crisis that innovation in the financial system had “helped make the banking and overall financial system more resilient”. 

“That assumption turned out to be profoundly wrong and dangerous, a major intellectual failure,” he said.

Lord Turner also had harsh words for the FSA’s own conduct in the years leading up to the crisis and said the regulator had “made huge mistakes”

“The rules on bank capital and liquidity were woefully deficient - an entire global banking system allowed to run with equity capital resources and liquidity buffers which we now believe were a small fraction of safe levels,” he said. 

 Harry Wilson, Banking Correspondent, Telegraph 11 Oct 2012

Basel Economic theory discredited

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