Northern Rock and Banking Reform

I entirely agree, and I think the hon. Member for Sevenoaks (Mr. Fallon) made the same point in slightly different terms. It is clear that people were behaving like a collection of greedy lemmings. The problem with that is that it is not only they who go over the cliff; does everybody else. If I may mix my metaphors, the lemmings who go over the cliff have a $20 million parachute, but the rest of us go crashing down to the bottom without the benefit of anything to cushion us. I do not accept the point the hon. Member for Sevenoaks made in comparing Northern Rock unfavourably with Morgan Stanley, however. Has Morgan Stanley done a good job in this situation, as it has lost $9 billion on sub-prime mortgages? By many standards, the people running Morgan Stanley were just as stupid, ignorant and greedy as those running Northern Rock. Another problem is that no one knows what the real exposure is of any of the American banks that committed the original stupidity or the people who then stupidly bought up the liabilities thinking—apparently—that they were assets. Consequently, banks are now frightened to lend to, or borrow from, each other because they fear default as they do not know the extent of one another's exposure. Over the past couple of months, however, we have not been hearing from the paid representatives of the banking industry about this fundamental problem that threatens people all over the world. Instead, they appear on television shows to say, ““Oh, wouldn't it be horrid if we forced non-dom rich foreigners actually to pay some tax?”” or ““Oh, don't make people who disguise their income as capital gains actually pay anything like a fair share of tax.”” Those two issues, both to do with personal taxation, have been a godsend to the bankers because they have used them to distract everyone's attention from the fundamental problems they have dragged us all into. The banks have failed the global economy, the credit rating agencies fell down on the job and the monoline insurers failed in their job, so we now have the credit crunch. Sadly, the banking industry is not paying the price of its own failure. If people in other industries now lose jobs as a result of the credit crunch, it will be the fault of the banking industry—of the overpaid and greedy people who were running it worldwide.